B-2 FAST III JA - Redacted.pdf

Justification and Approval (J&A) for Other Than Full and Open Competition

Was a J&A approved for the preceding acquisition where that acquisition required a J&A7 181 Yes O No

I! Attach the preceding J&A in the staff package for this J&A. The preceding J&A will be used as a reference document.

Is this a new or amended J&A Document? lg) New O Amended ( Prior to Award Only!)

ls this aBridgeAction as defined at AFFARS5302.101? 0 Yes rgj No

Dollar Value of this Acquisition: 0 .$. $750K O > $ 750K and .$. $1 SM O > $ 1 SM and 5. $1 QOM rgj > $1 00M

Contracting Activity: AFLCMC/WBZ 8-2 Division

Purchase Request (if available)/ Local ID N umber: TBD

Program/ Project (and PE, if applicable): B-2 Flexible Acquisition and Sustainment Team (FAST) Ill

Program Type (PEO, Enterprise, of Operational): PEO

Supplemental Authority (if applicable):

6.302-1 - 10 USC 2304(c)(I), Only One Responsible Source - No Other Supplies or Services Will Satisfy Agency Requirements

Estimated Contract Cost (including options): $ 78 J&A Type: 181 Class O Individual

COORDINATION ( AFFARS 5306.304(a))

Date

Date

17 Jan 2023

13 May2022

OSF for Contracts (Bombers Directorate) E. Jean Smith

AFLCMC/WBK /

PEO

William S. Rogers

AFPEO/WB /

!! Provide estimated cost of all contracts.

r··· 20J,n 2023

Date Senior Contracting Official C. A. Braswell

AFLCMC/PK

Date Scott R. Calisti Associate, Deputy Assistant Secretary (Contracting)

24 Mar 2023 Assistant Secretary of the Air Force (Acquisition, Technology & Logistics)

APPROVAL < AF FARS 5306.304(al)

Date ANDREW P. HUNTER t1'"ft'/ 11' } Assistant Secretary of the Air Force l.

(Acquisition, Technology & Logistics)

13 May 2022 Page 2 of 15

I. Agency and Contrading Adivity.

B-2 Division (AFLCMC/WBZ) Bldg 556 2690 Loop Road West Wright-Patterson AFB OH 45433-7148

II. Nature and/or description of the adion being approved.

This Justification and Approval (J&A) is a class J&A authorizing other than full and open competition in support of the B-2 Weapon System that is assigned to the Air Force Program Executive Officer for Bombers (AFPEO/WB). The program is transitioning to a sustainment focus, and it is anticipated upgrades and capability improvements will be primarily executed via Integrated Functional Capability blocks;

preplanned product improvements; and form, fit, function activities versus Acquisition Category (ACAT) programs. Ongoing modernization activities that will continue on this contract include low-cost modernization efforts, Low Observable Signature and Supportability Modifications (LOSSM), Airborne Integrated Tenninal Group Replacement, Adaptable Communications Suite Upgrade, and Advanced Communications Integration spiral upgrades which will equip the aircraft with an open mission system architecture. This open architecture will allow future modifications to be executed more quickly and at a reduced cost. While there are currently no major modernization activities in the form of ACAT programs planned, it is always possible that a major ACA T program could be established to execute a future modernization initiative. Section III contains a candidate list of modifications, and those efforts could result in an ACAT program. If this occurs, the B-2 Division will follow the appropriate acquisition guidance for executing ACA T programs. All other sustainment and modernization programs are reviewed by B-2 Division senior leaders and PEO staff functionals, as required, and approved by the B-2 System Program Manager and the PEO, as required. Furthennore, it is a reasonable consideration the B-2 will fly longer than currently anticipated, and the fleet will require modernization efforts, regardless of how they are managed and executed, to meet mission requirements and remain a viable national defense asset against current and emerging threats.

To support future B-2 requirements, which will consist of both sustainment and modernization efforts, the Air Force proposes to award a new single award Indefinite Delivery/Indefinite Quantity (ID/IQ) contract with a five-year base ordering period and one, five-year option period. The B-2 program office is requesting a total of 10 years to allow for uninterrupted support of the B-2 allowing for adequate time for the replacement aircraft to be delivered and become operational. Additionally, the costs of changing contractors will continue to be prohibitive; the funding to pay for a change in contractors would come at the expense of other Air Force programs and capability, and it is unlikely this approach would be supported by the Air Force corporate structure. In accordance with 10 U.S.C. 3204 and FAR 6.302-1, only one responsible source and no other supplies or services will satisfy agency requirements, this contract will be awarded on a sole-source basis and be knomt as the B-2 Flexible Acquisition Sustainment Team (FAST) III contract for the B-2 weapon system. The program plans to award this contract in early January 2024 with the base ordering period beginning in May 2024. The five-year option period may be awarded five years from the initial contract award date. Deliveries may occur through a period of three years after expiration of the ordering period. The FAST III contract, like the FAST II contract, will offer the flexibility

13 May 2022 Page 3 of 15 of including various contract types e.g., firm fixed price, fixed price incentive firm target, cost reimbursable, cost-plus fixed fee, cost-plus incentive fee, time and material. The appropriate contract type will be defined by the acquisition strategy and requirement for each delivery order. This J&A also constitutes the determination required by FAR 16.504(c)(l)(ii)(D)(l), pursuant to the authority of FAR 16.504(c)(l )(ii)(D)(l )(iii), which states "No task or delivery order contract in an amount estimated to exceed $ l 00 million (including all options) may be awarded to a single source unless the head of the agency determines in writing that-Only one source is qualified and capable of performing the work at a reasonable price to the Government."

The B-2 FAST III ID/IQ contract is not a standalone ACAT program; each of the efforts utilizing this contract vehicle will have its own ACA T level or will be a non-A CAT effort and will follow the requisite acquisition processes. This ID/IQ contract will provide continuing support necessary to sustain and modernize the B-2 fleet while ensuring availability of combat capabilities to the war fighter. This contract will continue efforts presently performed by Northrop Grumman Systems Corporation, Northrop Grumman Aerospace Systems, as the prime contractor and its subcontractors.

After the conclusion of the B-2 Engineering and Manufacturing Development and production phases, Northrop Grumman continued to sustain and modernize the fleet while serving as the B-2 platform integrator. While the Government (B-2 Division) maintains configuration control at the system level, Northrop Grumman maintains control of the B-2 configuration baseline, notifying the B-2 Division of changes to the system baseline, as well as updating and distributing system documentation, including technical manuals, to all users. Northrop Grumman is also responsible for system performance in accordance with prescribed performance requirements while integrating associated weapon system components furnished by the Government, such as but not limited to, aircraft and mission planning, support equipment, engines, training equipment, test instrumentation kits, and other prime mission equipment, as defined in the System Requirements Document.

Maintaining Northrop Grumman in its current role as the sustainer, modernizer, and program integrator further capitalizes on the successful partnership formed over the years with the subcontractor vendor base as well as two major US Air Force Commands, Air Force Materiel Command (AFMC) and Air Force Global Strike Command (AFGSC).

Ill. Description of supplies/services required to meet agency needs.

The B-2 FAST III contract provides sustainment and modernization activities needed to support the B-2 weapon system at all CONUS and Forward Operation Locations (FOL). The B-2 FAST III contract scope includes sustainment support such as sustaining engineering, software maintenance, initial and replenishment spares provisioning, consumables management, support equipment replacement and repair, technical support, technical order maintenance, Programmed Depot Maintenance (PDM), Interim Contractor Support (ICS), Contract Depot Maintenance (COM), Diminishing Manufacturing Sources and Material Shortages (DMSMS) management and parts acquisition, software integration laboratory operations maintenance and upgrades, Contractor Field Team (CFT) support to include emergency fleet repair support and weapons system modifications to include development, design, test, production, and installation. The contract also provides Enterprise support which includes discrete activities such as flight test cadre support, training support, and quick reaction studies. Enterprise support also includes program planning and integration; enterprise process training; Operational Safety, Suitability, and Effectiveness

13 May 2022 Page 4 of 15

(OSS&E) support; DataLink support; transportation of materials; cost reduction program; and plant infrastructure.

The ID/IQ contract provides the overall construct for future delivery orders. The basic contract will contain all required clauses associated with Intellectual Property. Each delivery order will address the technical data requirements following the B-2's Intellectual Property Strategy as outlined in Appendix D of the B-2 LCSP, dated 24 July 2019. Each delivery order will determine what data rights the Government maintains, what new rights may be purchased, and the associated CLIN structure for said data.

Per LCSP paragraph D2.0, Rights, Access, or Delivery of Technical Data, FAST III delivery orders will require the contractor to provide all data and related rights IAW DoD FAR Supplements 252.227-7013, Rights in Technical Data --Noncommercial Items; 252.227-7014, Rights in Noncommercial Computer Software and Noncommercial Computer Software Documentation; 252.227-7015, Technical Data -

Commercial Items; 252.227-7017, Identification and Assertion of Use, Release, or Disclosure Restrictions;

252.227-7019, Validation of Asserted Restrictions --Computer Software; 252.227-7028, Technical Data or Computer Software Previously Delivered to the Government; 252.227-7030, Technical Data --Withholding of Payment; and 252.227-7037, Validation of Restrictive Markings on Technical Data. DFARS 252.227-7026, Deferred Delivery of Technical Data or Computer Software, and 252.227-7027, Deferred Ordering of Technical Data or Computer Software, are also included on each contract to support deferred delivery and ordering of technical data and computer software.

Northrop Grumman has been the system integrator since inception of the B-2 development program and, as the platfonn designer/developer, owns intellectual property and has proprietary technical information key to the aircraft design and manufacturing processes. Whereas the Government will generally have unlimited license rights in technologies developed exclusively with Government funds or Government Purpose Rights arising from technologies developed with mixed funding that will eventually convert to unlimited license rights, from a review of contemporaneous accounts, the program understands that many of the key technologies--stealth technology, low observables, fly-by-wire, curved surfaces, composite materials, and electronic intelligence--incorporated into the B-2 aircraft were developed independent of the B-2 program and were available before the first B-2 contract was awarded. As a result of this and other factors, the

Government, despite its ongoing efforts to obtain such, does not have sufficient IP rights in the entire platform to allow for a full competition in all aspects of sustainment.

In 1992, the B-2 program experienced budget reductions when the decision was made to reduce the number of production aircraft from 132 to 20. The Air Force, as a means of reducing development and production costs, chose not to acquire unlimited data rights for all aspects of the program. Based on a reasonable review of program records available, it appears for the remainder of the data rights, the Air Force either acquired limited/restricted rights or, in today's terms, Government Purpose Rights; however, limited/ restricted and Government Purpose Rights--even after converting to unlimited rights-are insufficient to support full and open competition for the scope of sustainment and modernization requirements that may be required for the B-2 moving forward. Similarly while the form, fit, function and operations, maintenance, installation, and training rights are valuable in many respects, they are discrete in nature, and therefore, they are also insufficient to support full and open competition. As a result, Northrop Grumman became the sole provider for most future modernization and sustainment activities through the life cycle of the B-2 weapon system. A review of archived software data claims information indicates the Government has restricted/limited rights for associated software and technical data which limits the Government's ability to

13 May 2022 Page 5 of 15 compete modernization efforts. Critical software components maintained and managed by various contractors include the Flight Management Operational Flight Plan (OFP) (Northrop Grumman), the Air Vehicle Interface OFP (Northrop Grumman), the Stores Management OFP (Boeing), the Defensive Management OFP (Lockheed), the Displays and Controls OFP {Northrop Grumman), and the Date Entry Panel OFP (General Electric). In addition to the constraints associated with limited rights to critical software components, the complexity of the software build process--converting all the various contractors' source code and libraries and object code images into a software load for the aircraft--is a major undertaking. Northrop Grumman is responsible for executing the B-2 software build process and over many years has successfully automated the process increasing both efficiency and effectiveness.

The complexity and uniqueness of the B-2 puts the need for integration at a premium. Nearly every modernization effort and many sustainment activities involve the key technologies including stealth, low observables, and composite materials. In addition to the key technologies, nuclear hardening is a critical and unique requirement that must be maintained. Northrop Grumman is the only supplier who can successfully integrate modernization programs and perform sustainment activities while maintaining the nuclear hardness and low observable standards for the overall B-2 weapon system. Northrop Grumman had as many as 60 vendors and subcontractors working the development and initial production contracts;

however, while each of these vendors provided critical systems, subsystems, components, processes, and other technology, none of these vendors had the required knowledge, intellectual property, or proprietary technical information key to the aircraft design and manufacturing processes to successfully perform as the integrator.

There are no plans to re-visit the original decisions regarding the purchase of the B-2 technical data, for several reasons. The original development and production contracts, awarded approximately 41 years ago, provided the initial and most economically advantageous time to purchase data rights, if not unlimited data rights then at least Government Purpose Rights, in order to foster future competitive procurement efforts, and now, for the reasons detailed in this J&A, it is just economically infeasible. Additionally, the B-2 program is in the operations and maintenance phase of the acquisition life cycle with a planned replacement on the horizon. As a result of these factors, it is unlikely the substantially duplicative costs described in Section IV would be recovered through competition. Lastly, given the current situation regarding the government's lack of technical data and rights to software, the B-2 Product Support Business Case Analysis (PS-BCA) (both the initial PS-BCA completed in December 2015 and the revalidation dated 9 January 2021) confirmed the "as is" product support strategy as a viable option for meeting B-2 mission requirements

The ceiling of the J&A is $7B. This ceiling value was derived from current programming activities and is based on in-house cost estimates for future sustainment and modernization requirements, including the candidate modernization efforts identified below and other modernization efforts required to keep the B-2 relevant and mission capable performing as the only manned, long-range, nuclear-capable, penetrating, Low Observable (LO) weapon system operated by the USAF. These sustainment and modernization efforts are appropriately included in this J&A ceiling because Northrop Grumman is the only supplier who can successfully integrate modernization programs and perform sustainment activities while maintaining the nuclear hardness and low observable standards for the overall B-2 weapon system. Individual modernization efforts will be considered and, to the extent appropriate, approved for inclusion in this ID/IQ as described in Section II of this J&A.

The yearly amounts reflected below are not considered yearly ceilings but represent funding requests based

13 May 2022 Page 6 of 15 upon the FY24 Program Objective Memorandum (POM) inputs to include approved programs and high interest new initiatives and are subject to change based on AFGSC priorities and available Air Force resources. The amounts below include adequate flexibility should requirements emerge that are unexpected in the current spectrum of future efforts. These program office projections assume that the B-2 will continue flying longer than anyone anticipates which will result in the need for sustainment and modernization activities for the entire contract period; therefore, there was no consideration of a retirement date (as none has been published) and an associated sunset period. The following appropriations will be used to fund projected requirements: 3600, 30 l 0, 3080, 3400, and Consolidated Sustainment Activity Group (CSAG) working capital fund.

FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY3 l FY32 FY33 Total

CSAG

CAM

$41.0 $41.7 $42.4 $43.2 $44.0 $44.8 $45.6 $46.4 $47.2 $48.1 $444.4

$407.7 $410.5 $418.0 $425.I $431.9 $409.0 $421.2 $433.9 $446.9 $460.3 $4,264.5 non-CAM 3400

$6.8 $7.0 $7.1 $7.2 $7.4 $8.1 $8.8 $9.7 $10.6 $11.6 $84.2

$156.8 $128.9 $105.9 $71.4 $72.7 $74.0 $75.4 $76.7 $78.1 $79.5 $919.5

$178.8 $134.7 $111.6 $129.6 $131.9 $134.3 $136.7 $139.2 $141.7 $144.2 $1,382.6

B-2 Requirements $791.0 $722.7 $685. 1 $676.6 $687.9 $670.1 $687.7 $705.8 $724.5 $743.7 $7,095.2

Current Candidate B-2 Weapon System Sustainment and Enhancements/Improvements: The following is a list of recurring sustainment activities that must be funded to maintain current/improved operational capability and candidate B-2 weapon system modifications derived from AFGSC priorities and current POM activities anticipated.

Recurring Sustainment and Ongoing Modernization Activities

a. Weapon System Support Center Software Integration Laboratory Upgrade and Operations

b. Programmed Depot Maintenance

c. Peculiar Support Equipment

d. Initial Spares (components, modifications, upgrades)

e. Special Test Equipment

f. Depot Activation

g. Low-Cost Modification Efforts

h. Flight Test Support

i. Low Observable Signature and Supportability Modifications

j. B-2 Display Modernization

k. Airborne Integrated Terminal Group Replacement

I. Identification Friend or Foe Mode 5/S

m. Adaptable Communications Suite Upgrade

13 May 2022 Page 7 of 15

n. Miniaturized Airborne Global Position System Receiver

o. Advanced Communications Integration (Spiral 1)

Candidate B-2 Modernization Efforts

a. Advanced Weapons Integration (e.g., ASK)

b. Advanced Communications Integration (future spirals)

c. MIDS/JTRS Integrated (Multi-Functional Information Distribution System/Joint Tactical Radio System

IV. Demonstration that the contractor's unique qualifications or the nature of the acquisition requires use of the authority cited above.

This proposed acquisition is a follow-on contract to contract F A86 I 6-14-D-6060 which was a sole source award to Northrop Grumman Systems Corporation, Northrop Grumman Aerospace Systems located in Palmdale, CA. The contract was awarded on 2 May 2014 and it expires 1 May 2024. The contract was awarded to support the 8-2 weapon system which is a highly specialized system designed to support a unique military mission. The B-2 serves as the only manned, long-range, nuclear-capable, penetrating, Low Observable (LO) weapon system operated by the USAF. The specific requirements and components that define the B-2 fleet as highly specialized include the application of material sciences for the purposes of increasing survivability and reducing vulnerability; nuclear certification, nuclear hardness, and nuclear surety; specialized avionics; advanced communications and integrated airborne networking; ordnance integration and management; highly complex electrical and flight systems; unique operational flight program software; and information assurance and cyber security requirements. Therefore, this acquisition will be a follow-on contract for the continued sustainment and modernization of the highly specialized B-2 weapons system.

Additionally, AFLCMC/WBZ has detennined that award to any other source would result in substantial duplication of cost to the Government that is not expected to be recovered through competition and unacceptable delays in fulfilling the Government's requirements. Duplication of costs and unacceptable delays would occur for aircraft maintenance (e.g., programmed depot maintenance) and modification efforts as well as software efforts.

Selection of a new source would require, at a minimum, the duplication of costs associated with tooling, machinery, capital investments, and specialized technical capabilities required to successfully perfonn the type of work required.

The B-2 is currently maintained by Northrop Grumman at Plant 42 in Palmdale, CA. Plant 42 is a Government Owned Contractor Operated facility. According to Air Force Accountable Property System of Record, the 2022 Plant Replacement Value for 8-2 facilities at Plant 42 totals $897M which retlects the estimated duplication of costs expected to be incurred if the contract is awarded to another source. The Government has a long-tenn lease with Northrop Grumman to operate the Plant 42 facilities that runs through 2046. The Acquisition Environmental and Industrial Facilities Division (AFLCMC/EZV) does not intend to tenninate Northrop Grumman's lease, as they report having no basis to tenninate the lease. At Plant 42, Northrop Grumman supports a variety of critical Air Force programs including B-2 and B-21, which share facilities that could not be separated to accommodate a new contractor. Plant 42 is part of the SAF/AQ industrial base portfolio, and there are no plans to sell or otherwise divest

13 May 2022 Page 8 of 15 the Plant 42 facilities. The long-term lease and the Government's plan to retain Plant 42 rule out any potential that a new B-2 source would simply take over the Plant 42 facilities from Northrop Grumman. Therefore, an award to another source would require the duplication of facilities costs, to allow for ongoing B-21 services to be provided at Plant 42 and B-2 services to be provided at another facility.

In addition to the duplication of facility costs, a new workforce would need to be employed, all of whom require unique skill sets and security clearances, the successful acquisition of which would require extensive efforts over a significant number of years and would result in program delays. Essentially, aircraft maintenance activities would halt until the new facilities were operational and personnel were sufficiently proficient with B-2 maintenance tasks. This, of course, assumes that another source could successfully accomplish the transition and become proficient enough to maintain and modify the B-2 fleet.

One of the biggest hurdles to a successful transition is the amount of proprietary data and processes that would be unavailable to a new source. Northrop Grumman has distinctive institutional knowledge and skills gained through decades of work on the B-2. This knowledge base includes an engineering team with unique competency in the B-2 system as a whole with particular emphasis on the LO components. This expertise is required to successfully perform the wide range of work required under this contract and cannot be replicated by another contractor without substantial duplication of costs and/or unacceptable delays.

While some of these personnel could be hired by a new source, it cannot be assumed that all individuals working on the B-2, including long-tem1 Northrop Grumman employees, will leave Northrop or a subcontractor and start over with the new source. The program office understands that the labor market in the defense aerospace sector is volatile, and Northrop Grumman has vacancies across the corporation. It is possible that even if the B-2 contract were awarded to a new source, Northrop Grumman would retain these individuals in order to fill vacancies internally, some of which might involve supporting other Government programs.

The B-2 software support concept consists of Northrop Grumman management and operation of software integration at the Oklahoma City Air Logistics Center Weapons System Support Center Software Integration Laboratory (WSSC SIL) as documented in paragraph 9.4.11 of the B-2 LCSP dated 24 July 2019. The WSSC SIL provides the infrastructure and manpower responsible for software supportability which includes correcting defects, modifying the system to incorporate new requirements, and changing the system to add capability and enhancing perfonnance. The WSSC reduces the amount of on-aircraft testing associated with the development, testing (including testing associated with the software build process), and integration of software and is a critical resource for reducing the amount of time for fielding software updates which correct existing issues or deliver new capability to the B-2 fleet. The WSSC is a Government Owned Government Operated (GOGO) facility which employs approximately 400 contractor personnel. Since the facility is a GOGO, there would be no facility costs associated with a new source;

there would, however, be manpower costs and unacceptable delays while a new source gains proficiency with the B-2 software. The government estimates it would take between 7 to 10 years for a new source to become proficient enough to produce a minimum viable product that could be deployed on the B-2 fleet.

Using historical costs as the basis, the estimated manpower costs to develop a new source would be between $504M (7 years) and $749M (10 years) during which time there would be zero return on investment, as software maintenance and development activities would be halted. There is also the underlying assumption that a new source could successfully transition given the Government has limited rights for software and associated data. A new source will require detailed knowledge of several Northrop Grumman primary software programs and major supplier software programs covering embedded air vehicle systems, ground systems, and support equipment; an in-depth knowledge of the methodologies and rationale for all the software as it exists today; and a comprehensive understanding of how independent changes affect the entire weapon system. The risk associated with a new software integrator and testing provider are unacceptably high due to potential gaps (7 to 10 years) in ongoing software maintenance

13 May 2022 Page 9 of 15 activities as well as timely testing of new modification software. Additionally, Northrop Grumman software development processes and utilization of commercial development tools are currently embedded in the software development activities. The current architectural data and software development models are essential to the modification and enhancement of existing software. The conversion of the development activities to a new set of corporate processes and development tool chains would require three to five years to recover current capability, and the conversion would significantly depreciate the value of the current modeling and development data gathered over the previous five years. Delays in any software activities will affect aircraft availability for combat missions as well as flight test, production, and installation of modifications providing enhanced combat capability to the war fighter.

As explained in section III, during the initial acquisition, the Air Force, as a means of reducing development and production costs, chose not to acquire unlimited data rights. In so doing, Northrop Grumman became the sole provider for most future sustainment and modernization activities through the life cycle of the B-2 weapon system. Northrop Grumman, as the sole designer, developer, and manufacturer of the B-2 air vehicle and single producer of the weapon system, is currently the only prime contractor in possession of the intellectual property, proprietary technical data, documentation, and detailed knowledge of the B-2 aircraft including operations, design, facilities and tooling, configuration, and manufacturing processes to successfully provide the weapon system support structure for the unique B-2 aircraft system/subsystems. No other source has access to, or is in possession of, the necessary intellectual property, proprietary technical data, and documentation to develop, design, and integrate modifications as well as sustain the B-2 fleet.

Accordingly, Northrop Grumman is the only contractor capable of providing the supplies and services described in Section III above without the Government experiencing substantial duplication of cost that could not be expected to be recovered through competition and unacceptable delays in fulfilling its requirements.

V. Description of efforts made to ensure that offers are solicited from as many potential sources as practicable, including whether a notice was or will be publicized as required by subpart 5.2 and, if not which exception under FAR 5.202 applies.

As required by FAR 5.2, a sources sought was released to advise industry of the pending acquisition and solicit offers from potential sources. The sources sought was posted to System to Award Management (SAM.gov) on 3 June 2022 soliciting potential sources interested in fulfilling the requirements for an Indefinite Delivery Indefinite Quantity contract for the flexible acquisition and sustainment of the B-2 weapon system. The posting remained open for 15 days and closed on 20 June 2022. Only one company provided an input to the sources sought synopsis, and that company was Northrop Grumman Corporation, Aeronautics Systems, located in Palmdale, CA. Infonnation from this sole response was included in the market research that was completed in accordance with FAR I 0.

For the purpose of increasing subcontracting activities, A Notice of Proposed Contract Action (NOCA) will be published in SAM.gov at least 15 days prior to issuance of the solicitation.

VI. Determination by the Contracting Officer that the anticipated cost to the Government will be fair and reasonable.

The Contracting Officer has determined the Government can obtain and negotiate fair and reasonable

13 May 2022 Page 10 of 15 prices for delivery orders associated with the FAST III contract. Thorough technical, price, and cost analyses will be performed as necessary by the B-2 Division, and Defense Contract Audit Agency (DCAA) and Defense Contract Management Agency (DCMA) support will be requested as needed. Northrop Grumman will be required to furnish certified cost and pricing data for delivery orders meeting the threshold for submission of such data. Assist audits, rate reviews, and other evaluations of major subcontracted efforts will be accomplished, as necessary, by the cognizant DCAA and DCMA organizations. DCAA and DCMA analyses will be combined with B-2 Division analyses and used in the substantiation of fair and reasonable costs.

VII. Description of the market research conducted and the results, or a statement of the reasons market research was not conducted.

As described in Section V above, a sources sought synopsis was posted to System to Award Management (SAM.gov) on 3 June 2022. The Government required qualified sources to have an in-depth knowledge of the B-2 aircraft design and have the existing capability to perform all of the stated requirements commencing I May 2024. The Government required interested sources to submit the following information for Government evaluation: (a) Description of existing weapon system experience relative to flexible acquisition and sustainment support activities to include an outline of previous work performed; (b) Description of capability to design, develop, integrate, fabricate, test, install, and support improvements to weapon systems including the ability of the contactor to provide cleared personnel up to the TOP SECRET SPECIAL ACCESS REQUIRED (SAR) level; (c) Organizational structure, with emphasis on how this program fits into the company's overall weapon system acquisition and sustainment processes; ( d) Information on existing laboratory, test, and production facilities needed to accomplish these requirements including TEMPEST facilities needed to develop and test hardware and software; (e) Any deficiencies in capabilities, a proposed fix to those deficiencies, and a timeline for completion of deficiencies before 1 May 2024; and (f) If subcontractors are utilized, similar information as requested above for the prime contractor is required for each identified subcontractor.

The posting remained open for l S days and closed on 20 June 2022. Only one company provided an input to the sources sought synopsis, and that company was Northrop Grumman Corporation, Aeronautics Systems, located in Palmdale, CA.

The Government reviewed the information Northrop Grumman provided, and based on that information, concluded Northrop Grumman can successfully perform the FAST III requirements. Summarized details from the Northrop Grumman response follow.

In 1999, Northrop Grumman was awarded the original Flexible Acquisition and Sustainment (FAST) IDIQ contract, and Northrop Grumman has been the prime contractor and system integrator responsible for the design, development, test, production, modification, upgrade, support, and sustainment of the B-2 weapon system since 1981. Northrop Grumman has established processes and systems for effective management and oversight of the B-2 acquisition and sustainment activities. Northrop Grumman has maintained the Prime Integrator role for all design, integration, upgrades, software development and support, depot maintenance, and repair support for the entire 41-year development, production, and sustainment phases of the B-2 lifespan. One of Northrop's critical and proven core competencies is with "Stealth"/Low Observables materials, processes, techniques, testing, composites, and depot maintenance. Northrop Grumman has over thirty years of history providing operational support to the B-2 weapon system. This

13 May 2022 Page 11 of 15 support has included elements such as ICS and Contractor Depot Maintenance (COM) repairs, Software Maintenance, Sustaining Engineering, and Programmed Depot Maintenance (PDM). Northrop Grumman currently manages the repair of more than 400 Line Replaceable Units (LRU) and Line Replaceable Modules (LRM) being repaired by more than 40 Original Equipment Manufacturer (OEM) repair facilities.

B-2 Contractor Logistics Support (CLS) provides supply chain management of approximatelyl0,000 B-2 unique consumable parts and materials. Northrop has an active Diminishing Manufacturing Sources and Material Shortages (DMSMS) program that identifies obsolescence issues, supports DMSMS Management Team (DMT) meetings, and provides obsolescence resolution recommendations. The ICS repair effort integrates repair operations at 13 OEM repair facilities across the country, supporting 43 B-2 unique LRUs and Shop Replaceable Units (SRUs) that support the B-2 enterprise and the Weapon System Support Center (WSSC).

Northrop Grumman's skilled and appropriately cleared work force includes experienced, B-2 designers, testers, logisticians, and support personnel. Northrop Grumman used its technical expertise to provide leveraged technical upgrades of avionics, innovate the materials and design for survivability, and convert to modem Agile System and Software development and release processes resulting in faster delivery and increased operational performance with reduced risk. For over 30 years, Northrop Grumman has developed, managed, and enhanced the software and hardware technical baseline of the B-2 weapon system, ensuring full operational readiness and integration of new capabilities to meet rapidly changing threat environments. Northrop Grumman leverages a wide range of competitive US-based suppliers to support refreshed hardware and updated software. Northrop Grumman test personnel at Edwards have combined with 419th Test Squadron personnel and partnered with the Operational Test (OT) testers at the 72nd to test more onsite at Whiteman to enable efficient test and faster times to field B-2 software.

Aggressive use of the WSSC and simulation capability has allowed Northrop Grumman to gain insight into new software and capabilities via demonstrations and mission rehearsal resulting in successful OT completion and reducing Deficiency Reports.

Northrop Grumman structures the B-2 Program as an Enterprise, divided into four Operating Units (OUs).

The OUs are defined to support the lifecycle of the B-2 weapon system and include Advanced Development, Development, Production and Sustainment. The Program Director of each particular OU is responsible for the performance of all contracts awarded to the OU including the management of cost, schedule, and technical performance. The Northrop Grumman B-2 enterprise also includes functions and shared services that provide direct support to the program in tenns of people, process, and tools, ensuring the programs have the necessary staff and required defined processes and supporting tools to be successful during program execution.

Northrop's lab support and Engineering Task Assignment (ET A) is responsible for the operation, maintenance, and sustainment of the B-2 Weapon System Support Center (WSSC) laboratories in support of B-2 Operational Flight Software development, test, integration, and certification, reducing both risk and expensive B-2 flight testing. Lab Support and ET A efforts provide lab modernization to overcome system obsolescence and deliver capabilities which provide higher quality software to the field and decrease development and testing time, thereby reducing cost and schedule for B-2 sustainment and modification programs. These efforts were integral to the development and maintenance of the B-2 Software Factory, implementing a major USAF initiative with the objective of shortening response time for capabilities to warfighters utilizing the DoD enterprise DevSecOps framework and technology stack. Northrop Grumman has been performing depot-level maintenance and modifications on the 8-2 fleet for nearly 23 years and is

13 May 2022 Page 12 of 15 a key contributor in providing Aircraft Availability (AA) for the Air Force's small fleet of 20 aircraft.

No deficiencies were identified as the contractor has existing facilities at various locations (Palmdale, CA;

Edwards AFB, CA; and Tinker AFB, OK) and personnel are successfully executing the requirements _for the FAST II contract.

Northrop Grumman has subcontractor relationships with a team of OEMs who produce B-2 aircraft components. The OEMs identified were AAR Hermetic, Amtek, BAE Systems, Ball Corporation, BF

Goodrich (now Collins), Boeing Aircraft Company, Carleton Technologies, General Electric, GE Aerospace, Hamilton Sundstrand, Honeywell, ITT Aerospace, Kearfott, Lockheed Martin, L3 Communications (now L-3 Harris), Miltope, Ophir, Parker Hannifin, Raytheon, Rockwell Collins, and Yardney Technical Products (now Eagle Picher). Northrop Grumman indicated the B-2 OEMs have the required manufacturing and technical capabilities, facilities, Special Test Equipment (STE), and infrastructure to manufacture existing and future B-2 components and subsystems.

This sources sought pre-solicitation synopsis provided valuable market research and provided a reasonable basis to conclude that the agency's minimum needs can only be satisfied by unique supplies or services available from only one source or only one supplier with unique capabilities supporting a sole source award to Northrop Grumman.

Northrop Grumman provided sufficient information in their response in each of the required evaluation areas to give the Government confidence they can continue to perform to successfully meet the requirements associated with follow-on FAST III contract. As the designer, developer, integrator, and sole manufacturer of the B-2 since program inception, Northrop Grumman is the only entity with detailed knowledge of the proprietary design and manufacturing processes, and possession of unique manufacturing and integration facilities with critically skilled labor to sustain and integrate improvements and changes into the B-2 weapon system. Therefore, in the interests of the USAF financial resources, AFGSC operational priorities, and the 509th Bomb Wing combat operations, it is not prudent to award this contract to any provider (to include small or disadvantaged business) other than Northrop Grumman.

VIII. Any other facts supporting the use of Other Than Full and Open Competition.

None.

IX. List of any sources that expressed, in writing, an interest in the acquisition.

See Section V above.

X. A statement of the actions, if any, the agency may take to remove or overcome any barriers to competition before any subsequent acquisitions for the supplies or services required.

In Section XI, Steps to Fostering Competition, of the FAST II J&A, the B-2 Division committed to search for opportunities to compete or break out components from the B-2 prime contractor. In keeping with this commitment, the B-2 Division awarded contracts to other vendors in an attempt to bring competition to the program. A detailed description of these initiatives follows.

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Initiative 1: B-2 Antenna Support (Ball Aerospace and Technologies Corporation) - Development, Modification, and Production of B-2 Antenna Updates. Antenna support was previously provided by Ball Aerospace as a subcontractor under NGAS. The B-2 Division successfully broke out this requirement via a Basic Ordering Agreement (BOA) and individual orders with Ball Aerospace, thereby saving pass-through and allocated costs.

Initiative 2: Common Very Low Frequency Radar Increment 1 (CVRil) (Collins Aerospace) Development, Production, and ICS of CVRil LRUs. LRUs were integrated into the B-2 fleet via collaboration with NGAS and the B-2 Division acting as integrator; Collins Aerospace developed/produced the LRUs while NGAS tested/incorporated them on the jet. By acting as integrator, the B-2 Division was able to save pass-through and allocated costs on the LRUs while also maintaining NGAS expertise in incorporating into the fleet.

Initiative 3: Next Generation Zonal Radar (Resonant Sciences) - Development and Production of a mobile, fieldable system for performing high-precision RCS measurements for applications requiring high fidelity position repeatability. WBZ utilized an Other Transaction (OT) vehicle with two contractors through the development phase; a contract was awarded to Resonant Sciences for production.

Initiative 4: Adaptable Communications Suite 3.2 (Crystal Group, Inc.) - Classified Requirement

Initiative 5: Adaptable Communications Suite 4.0 Development and Production (Sierra Nevada Corporation) - Classified Requirement

In the FAST II J&A, the B-2 Division's BCA initiative was discussed as an effort to increase competition.

The premise was the BCA would assist in determining the technical level of data necessary to support competition and identify the costs associated with various alternatives of data procurement. The BCA focused on identifying the best product support strategy for the B-2 fleet and not on a specific technical data solution. Since the time of the FAST II J&A, the initial B-2 BCA was completed and has been revalidated. The specifics follow.

In December 2015, the B-2 Program Office and Whitney, Bradley & Brown, an independent contractor, completed the Product Support Business Case Analysis (PS-BCA). The 2015 BCA analyzed seven product support strategy alternatives including the "as is" or current state. The alternative that ranked the highest was a performance-based logistics (PBL) contract with Northrop Grumman because it addressed one of the key support deficiencies-•supply chain support--by shifting that responsibility to NG. The 2015 BCA also included an option where the program office would award a third-party logistics performance-based logistics contract. This alternative had significantly higher risk and cost because it included non-recurring costs for the acquisition of a technical data package which is required in order for the alternative to be viable. Upon review of the analysis and recommendation, the program office elected to continue with its current product support strategy. This decision was contingent on the AFSC's commitment to re•orient to a more "weapon-system centric" approach, including the establishment of a B-2 Weapon System Liaison Officer. The current Product Support Strategy (PSS) was reassessed and revalidated by AFPEO for Bombers on 9 January 2021. The reassessment found the current PSS to be effective and affordable with aircraft availability and operational cost per flying hour remaining relatively constant. One key factor highlighted by the BCA is the need for the continued requirement for a long-term relationship and

13 May 2022 Page 14 of 15 partnership with Northrop Grumman in order for the B-2 to successfully execute its mission; this is another data point supporting the market research conclusions and the decision to sole source the FAST III contract to Northrop Grumman.

The Intellectual Property Strategy is addressed in the B-2 LCSP dated 24 July 2019. The LCSP acknowledges that decisions made during the initial acquisition of the B-2 system to not procure sufficient technical data and source-code software to develop alternative competitive sources impacts the acquisition of current sustainment and modernization efforts. To combat the negative impacts of prior decisions, the LCSP outlines an overarching intellectual property strategy for new B-2 programs. That strategy requires that, at a minimum, the B-2 Division ensures data acquired for new programs is sufficient to support, maintain, repair, operate, train on, and dispose of all program components throughout the entire life cycle.

Additionally, the data strategy requires that data is acquired consistent with the level of maintenance concept for each program and addresses specific maintenance data requirements through the Depot Maintenance Activation Working Group (OMA WG) process. The entire strategy is outlined in Appendix D of the LCSP.

The B-2 Division will continue to foster competition as follows.

The Competition in Subcontracting (FAR 52.244-5) clause as well as the Limitation on Pass Through Charges (FAR 52.215-23) clause will be included in the B-2 FAST III contract. For the purpose of increasing subcontractor activities, a Notice of Contract action will be publicized on SAM.gov to alert large and small businesses to potential subcontracting opportunities with Northrop Grumman. A Master Subcontracting Plan and yearly Individual Subcontracting Plans will be incorporated under the FAST Ill contract; B-2 contracting and SBO will review and monitor Northrop Grumman goals to ensure small business subcontractors are utilized to the maximum extent possible.

The B-2 Division will continue to implement the technical data strategy as defined in the B-2 LCSP, and the B-2 Division will continue to identify and implement opportunities to compete or break out components from the B-2 prime contractor as the viable options for fostering competitions.

XI. Certification by the Contrading Officer.

As evidenced by my signature above, I certify that this justification is accurate and complete to the best of my knowledge and belief.

XII. Certification by the technical/requirements personnel.

As evidenced by my (our) signature(s) above, I (we) certify that any supporting data contained herein, which is my (our) responsibility, is both accurate and complete.

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