J A_FEDBIZOPPS.pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

Liquid Propellant (LP) Intercontinental Ballistic Missile (ICBM) Silo Decommissioning, Dismantlement, and Elimination (DDE) Project

1. Nature and/or Description of Action

The Defense Threat Reduction Agency (DTRA) contracting activity proposes to execute a sole source contract with the Russian Federation (RF) Closed Joint-Stock Company (ZAO)

HOLDING-ROSOBSCHEMASH (Rosobschemash) without using full and open competition.

The implementation of this contract is essential to accomplishing a task set forth by the Office of the Under Secretary of Defense (Policy) (OUSD(P)), with the ultimate goal of eliminating the threat posed by RF liquid propellant ICBM launch silos, launch control centers (LCCs), and supporting infrastructure as directed by the Department of Defense (DoD), Cooperative Threat

Reduction Directorate (CTR).

2. Description of the Supplies/Services Required

The LP ICBM Silo DDE Project is an ongoing effort of the DTRA CTR Strategic Offensive

Arms Elimination (SOAE) Program. This project assists the RF in the decommissioning, dismantlement, and elimination of liquid propellant ICBM launch silos, their respective LCCs, training silos, support buildings, and infrastructure at various RF-designated Strategic Rocket

Force (SRF) Bases. The objective of the project is to efficiently provide such assistance for all silos, LCCs, and respective infrastructure that the RF makes available.

The LP ICBM Silo DDE is a mature effort with a well-defined set of requirements. Due to the maturity of the project activities, the majority of the concept of operations and methods of execution currently incorporated in the project have proven highly successful, and DTRA would like to continue with similar success. The optimal objective for completion of the project is to eliminate, or at least decommission and dismantle from an operational state, the full SS-18 and

SS-19 ICBM silo inventory. At the time of this Justification and Approval, a combination of one hundred and seventeen (117) SS-18 launch silos and respective LCCs, and one hundred and twenty-two (122) SS-19 launch silos, LCCs, and training silos remain in various operational states. Some have been decommissioned and dismantled, but still require final elimination.

The release of SS-18 and SS-19 silo inventory for decommissioning, dismantlement, and/or elimination are not within the DTRA’s control. Therefore, the quantity and specific activities will be defined on a yearly basis in accordance with the RF State Defense Order and the approval for assistance from DTRA and OUSD(P). The period of performance for this follow-on procurement is anticipated to extend from 1 April 2012 to 31 March 2017, with an estimated maximum dollar value of $46.4 million.

DEFENSE THREAT REDUCTION AGENCY

8725 John J. Kingman Road, Stop 6201

Fort Belvoir, VA 22060-6201

AIC: CTO119924921

3. Statutory Authority:

The statutory authority for this non-competitive action is derived from 10 U.S.C. 2304(c)(1), as implemented by Federal Acquisition Regulation (FAR) 6.302-1, Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements, and further defined by

FAR 6.302-1(a)(2)(iii), for DoD, NASA, and the Coast Guard, services may be deemed to be available only from the original source in the case of follow-on contracts for the continued provision of highly specialized services when it is likely that award to any other source would result in (A) Substantial duplication of cost to the Government that is not expected to be recovered through competition; or (B) Unacceptable delays in fulfilling the agency’s requirements.

4. Applicability of Authority

The RF Government through Executive Order No. 1728-r, dated 25 November 1999, designated

Rosobschemash as the integrating contractor for decommissioning, dismantlement, and elimination of launch silos and launch control centers. The RF Federal Space Agency (FSA), the host nation Executive Agent for this program area, designated Rosbschemash as their trusted performer for LP ICBM Silo DDE activities again in a FSA Letter No. 291/648, dated 15 August

2011. DTRA has agreed to honor that designation in conjunction with the above application of statutory authority.

Additionally, Rosobschemash has the unique capability and access to the sites and information required to perform the tasks. They possess the required valid licenses, clearances, site access, and permits to perform work at all designated SRF Bases and silo sites. The company is comprised of key professional personnel and specialists responsible for the previous LP ICBM

Silo DDE effort, as well as in the construction and operation of the weapons system facilities.

The personnel possess complex system knowledge and complete information about the condition of the silo sites, on which the work is estimated to be performed, and they possess the necessary management and technical documents which address the various activities at the silo sites, and will enable completion of this project at a high technical level of performance as well as in compliance with safety requirements. Finally, Rosobschemash is immediately available to perform all estimated activities.

Further, the RF considers the design and capabilities of the respective ICBMs and their launch silo systems to be state secrets and tightly restrict the number of companies that are authorized to handle and operate on them. LP ICBMs located in silos; use unsymmetrical dimethyl hydrazine

(UDMH or “heptyl”) as fuel and dinitrogen tetroxide (“amyl”) as oxidizer. Both of these substances are highly toxic and are lethal in small concentrations. The ability to safely handle these substances is specialized knowledge that few enterprises possess. Rosobschemash has experience handling these substances in support of this CTR program area since 2001, and has not had a toxic release or any other safety incident for the duration of their efforts.

5. Effort to Solicit Potential Sources

As Rosobschemash is identified as the only acceptable performer by the host nation Executive

Agency, FSA, DTRA did not attempt to solicit other potential sources within the RF. However, on 5 August 2011, DTRA published a Sources Sought/Request for Information (RFI) to the four

Indefinite Delivery Indefinite Quantity (IDIQ) Cooperative Threat Reduction Integrating

Contracts II (CTRIC II) prime contractors (Bechtel National, Inc. (BNI); URS Federal Services

International, Inc; Raytheon Technical Services Company, LLC; and Parsons Global

International, LLC). The RFI sought information regarding the ability and interest of the

CTRICs to assist with the LP ICBM Silo DDE Project.

The RFI provided the overall project background, current project concept of operations, a draft statement of work, and a request that all responses should include, as applicable, an in-country subcontractor management approach, a short summary of any similar work, and a summary of the terms of any current work and/or access agreements between the CTRIC and the SRF ICBM Silo

Regiments and/or the associated ministry, the Ministry of Defense, and the FSA. Additionally, the RFI requested that responses should address the value added a US integrator would provide with regard to cost, schedule, and quality of performance.

6. Fair and Reasonable Costs

The anticipated price will be determined to be fair and reasonable, based on an assessment against an independent government cost estimate (IGCE) that incorporates actual costs from the implementation of the previous LP ICBM Silo DDE effort. The IGCE was developed using historical data as well as current prices for relevant labor, materials, and transportation costs.

DTRA will additionally conduct a detailed technical evaluation of Rosobschemash’s proposal.

The Contracting Officer has preliminarily concluded that contract negotiations will lead to a fair and reasonable price and their signature on the resultant document will constitute the determination required by FAR 6.303-2(a)(7).

7. Market Research

As noted in Section 5, DTRA performed preliminary market research outside of the current performer in the form of sources sought/request for information. Market Research results suggest there may be other contractors and/or integrators who have the technical skills to perform the various tasks; however, not without substantial increased cost to the Government

(traditionally incurred by CTRIC management operations) that is not expected to be recovered through competition; or without unacceptable delays in fulfilling the agency's requirements due to the six to twelve month process to obtain the required permits, clearances, site access, as well as preparation of the necessary documentation. Additionally, gaining approval for each of these requirements is not guaranteed. Preliminary estimates provide additional un-recoverable cost in the range of 10% to 15% greater than estimated total cost when utilizing Rosobschemash as the sole source.

No other source options are beneficial to the government, as adding an additional layer is inherently more costly, and waiting up to a year for access would prohibit accomplishing any work in 2012. DTRA's determination is that the other sources would not provide significant value added with regard to cost, schedule, and quality of performance. Coupling the above with

RF executive order designating Rosobschemash as the performing contractor for silo decommissioning, dismantlement, and/or elimination activities, and FSAs endorsement of them, as well, a sole source contract award is the most beneficial to the government.

8. Other Facts

The acquisition approach to awarding the previous contract was identical to the approach described in this Justification and Approval due to the same factors as described above. As the circumstances surrounding the LP ICBM Silo DDE effort have not changed, DTRA believes this is further justification for a sole source acquisition with the current performer, Rosobschemash.

9. Interested Sources

As noted in Section 5, the CTRICs may be interested if this requirement. However, as also noted, DTRA’s determination is that the CTRICs would not provide significant value added with regard to cost, schedule, and quality of performance. Further, as FSA has designated

Rosbschemash as their trusted performer for LP ICBM Silo DDE activities, to date no other sources within the RF are identified by the FSA, or have expressed in writing an interest in supporting these activities.

10. Subsequent actions:

No action will be taken.

Technical Certification

I certify that the data and information forming the basis for this justification are accurate and complete to the best of my knowledge and belief.

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Date

Project Manager

Contracting Officer Certification

I certify that this justification is accurate and complete to the best of my knowledge and belief.

Lisa A. Murphy Date

Contracting Officer

General Counsel Coordination

This justification is/is not legally sufficient

Associate General Counsel

Competition Advocate Coordination

-S-_____________________________________ ________________

Competition Advocate

Approval

Based on the above justification, I hereby approve accomplishment of this acquisition by means other than using full and open competition.

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Head of Contracting Activity