CET_24-405B-2_DEPException_to_Fair_Opportunity_JA.pdf

DMEA # 24-01

6/11/2018

Justification for Exception to Fair Opportunity Process For

Advanced Technology Support Program IV (ATSP4) Indefinite Delivery / Indefinite Quantity (ID/IQ) Task Order Contract

1. Agency and Contracting Activity:

Defense Microelectronics Activity (DMEA) Contracting Division/MEEB Attn: Amber Molina, Contracting Officer amber.a.molina.civ@mail.mil 4234 54th Street McClellan, CA 95652

2. Nature and/or Description of the Action Being Approved:

This is a new task order award being made to Northrop Grumman under the basic IDIQ contract, HQ0727-16-D-0004; CET#24-405 dated Oct-03-2023, for B-2 Data Entry Panel (DEP) Obsolescence Resolution Phase II

3. Description of the Supplies/Services Required To Meet the Agency’s Needs (including the total estimated value, including options, if any):

The B-2 Data Entry Panel (DEP) is a flight safety critical unit and primarily functions to provide avionics monitoring and control capabilities to the crew and maintenance personnel. Multi-function keys, keyboard and Cathode-ray tube (CRT) display are used for data input and processing. The DEP is suffering from known obsolescence. The Original Equipment Manufacturer (OEM) General Electric (GE)does not have spares available for purchase but is willing to work on reconstitution of the line replaceable unit(LRU) to resolve obsolescence issues and extend asset lifetime. This assertion comes from analysis and efforts performed by Northrop Grumman (NG) in the Phase I portion of this effort. The DEP is no longer in production by the OEM (GE) and has declining reparability.

Subcomponents of the LRU are obsolete and declining in spares, thus preventing purchase and replacement of throwaway parts. NG is the B-2 platform OEM and is responsible for the qualification of any configuration changes on the platform and the only approved source. The purpose of this project, Phase II of the overall effort, is to utilize the outcome of Consolidated Sustainment Activity Group (CSAG) project (Phase I Obsolescence Analysis) to design, build and qualify the B-2 DEP.

The scope will include delivery of Flight Justification Test (FJT) or production representative assets to support integration test, validation, and verification activities. In addition, this effort includes the design, build, and qualification of all the necessary support equipment for test and manufacturing of the DEP. Lastly, the Scope includes an update to the Technical Data Package (TDP) to provide unlimited data rights, update Technical Orders, 12R2-4-310-3-WA-1 and 12R2-4-310-4-WA-1 (if necessary) to support and enable future procurement and repair of the DEP. The B-2 DEP is a safety of flight critical asset and is in critical need of obsolescence resolution to prevent mission impact. The DEP has three serviceable unit and 6 unserviceable units. Obsolescence of the LRU prevents new procurement, so internal obsolescence must be addressed before more spares are purchased. The obsolescence has been confirmed by Northrop Grumman Defense Systems (NGDS). An initial obsolescence study of the 450 parts on the DEP in 2019 showed 21 parts not in production with no stock available, 18 without stock needing more research, and 114 parts with ambiguous production status or risk. There are currently three serviceable units with 3 current backorders. There are estimated to be 9 annual repairs on average between 2023 and 2025. If 25% of those repairs result in unserviceable units due to known obsolescence, the serviceable supply will be exhausted in two years. The current average back-order age on the DEP is 125 days. Failure to take immediate action could likely result in Mission Capable (MICAP) conditions and generation of spares requirements that the supply chain is unable to fulfill. This contract is planned for Cost-Plus Fixed Fee (CPFF), with a Period of Performance (PoP) of 42 months, with an estimated cost of $28,900,000. Under this contemplated contract, the Government is seeking engineering services from Northrop Grumman Systems Corporation (NG hereafter) who own the proprietary data rights to the B-2 DEP, to conduct an analysis of the current available manufacturing data, repair data, tooling, test equipment, etc. to identify and rectify gaps, and develop necessary repair procedure, Technical Data Package (TDP), and all required support equipment in order to allow B-2 DEP’s to be supportable until the B-2 aircraft sundown of 2058.

4. Identification of the Exception to Fair Opportunity (Authority Cited):

FAR 16.505(b)(1)(i) requires the Contracting Officer to provide each awardee under a multiple award contract, a fair opportunity to be considered for each order exceeding $3,500 unless one of the following statutory exceptions apply. The specific exception that precludes the fair opportunity process for this acquisition is:

FAR 16.505(b)(2)(i)(B), Only one awardee is capable of providing the supplies or services required at the level of quality required because the supplies or services ordered are unique or highly specialized.

5. Identification of requirement for the procurement of items peculiar to one manufacturer: N/A

6. Rationale for authority cited:

Northrop Grumman (NG) is the only known source that has access to the data, equipment, and expertise necessary to perform the engineering services required to develop a solution to obsolescence issues for the B-2 Data Entry Panel (DEP). General Electric (GE) is the Original Equipment Manufacturer (OEM) of the DEP, and subcontractor of NG. NG is the System Integrator for the DEP and holds proprietary data rights for the DEP and how it must interact and integrate with other parts of the weapon system. The technical data necessary to foster competition for this effort is not available to the Government presently, and it is not possible to draft adequate specifications for this work without such data. On May 2022, NG responded to the Government's request for a rough order of magnitude (ROM) estimate to obtain proprietary data and information related to the engineering services for 424 SCMS managed items. NG answered they are not willing to sell or provide the USG with data rights to the documents contained in CITIS, B-2 drawing repository.

The Air Force’s DEP requirement translates to real world operational requirement regarding aircraft availability. Due to obsolescence the DEP is currently unable to be repaired or acquired by other means affecting stock on hand and the supply posture of the B-2 fleet. Because of this obsolescence, several circuit cards within the DEP cannot be repaired or purchased currently. This means that the asset availability will diminish each time one of these circuit cards fail. Development of obsolescence solutions by any entity which does not have data rights for Northrop Grumman’s technical specifications for the B-2 DEP or GE's technical specifications of the B-2 DEP would require an estimated seven or more years of reverse engineering and redesign. Without this critical safety item, the B-2 aircraft will be grounded. Due to these specialized technical requirements, associated with the health of the B-2 Bomber fleet, Northrop Grumman is the only source capable of providing these engineering services for the US. Air Force.

7. Additional Facts Supporting this Justification:

Modification of weapons systems to incorporate current or emerging technologies to alleviate this requirement is impractical due to supply requirements and costs associated with such endeavors. To properly account for these obsolescence issues with another source, many of the efforts associated with Phase I would need to be replicated due to NG’s Data Right ownership, increasing both cost and timeline for the follow-on effort. NG is the B-2 platform OEM and is responsible for the qualification of any configuration changes on the platform and the only approved source, so even if the effort could be accomplished somewhere else (which it can’t) NG and their services would be required to complete this effort and make the effort bear a desirable result. In accordance with FAR10.001 (a)(2), market research via the internet was conducted, reaching completion March 2023. Market Research consisted of visits to various manufacturer websites and research in Haystack to verify Parts Manufacturer Approvals (PMA). The visits to other equipment manufacturer websites revealed/verified that these other manufactures lacked the capability to develop solutions for obsolescence and/or sustainment of the DEP P/N 160749-08-01, especially in nuclear hardness requirements. This effort is a follow on to a Phase I effort which already involved Northrop Grumman and will continue efforts which have already been accomplished to design, build and qualify future DEP’s.

8. Actions to Remove or Overcome Any Barriers that Led to this Exception to Fair Opportunity

No actions to develop future competition will be feasible during the period of performance of this acquisition because these engineering services are a pre-requisite to develop future competition. The engineering services sought in this contract will make competition feasible in future repair or acquisition actions for the B-2 DEP.

9. Redaction

IAW FAR 16.505, the justification must be posted within 14 days after contract award. Project Engineers shall check appropriate box based on coordination with the customer for screening IAW 16.505(b)(2)(D)(4):

__X__ No redaction is necessary. This J&A will be posted in its entirety.

____ This J&A contains information that cannot be publicly posted (i.e. proprietary contractor data).

A redacted copy will be sent to PCO for posting after customer input.

____ Disclosure of information contained in this J&A would compromise the national security (e.g., would result in disclosure of classified information) or create other security risks. As a result, this J&A will not be posted. Rationale has been provided to the PCO to document the contract file.

10. Technical / Requirements Certification (required on all J&As)

I certify that the supporting data under my cognizance that are included in the justification are accurate and complete to the best of my knowledge and belief.

NAME: ____Andrew Anselmi_________________ TITLE: Project Engineer

SIGNATURE: ____________________________ DATE: ______________________

11. Technical / Requirements Supervisor Certification: (required on all J&As)

NAME: ______John Cotterill__________________ TITLE: Chief, Systems Branch

SIGNATURE: ____________________________ DATE: ______________________

12. Contracting Officer Determination (required on all J&As)

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

I hereby determine that the anticipated cost or price to the Government for this contract action will be fair and reasonable. Actions to ensure reasonableness of the price will be accomplished using procedures and criteria contained in FAR 15.4. Cost and pricing data will be requested. Detailed documentation and justification of price reasonableness will be set forth in the Price Negotiation Memorandum.

NAME: _____Amber Molina__________________ TITLE: Contracting Officer/MEEB

SIGNATURE: ____________________________ DATE: ______________________

13. Chief, ATSP Branch (required on all J&As)

NAME: ___Erik Villarreal______________ TITLE: Acting ATSP Contracting Branch

SIGNATURE: ______________________ DATE: ______________________

14. Sr. Procurement Analyst / MECA (required on all J&As)

NAME: __Anna Madden_______________ TITLE: ______________________

SIGNATURE: ______________________ DATE: ______________________

15. Office of Counsel (required $500K; See MEC SOP 22)

NAME: ____William Davis_____________ TITLE: ______________________

ANSELMI.ANDREW.1556046723 Digitally signed by ANSELMI.ANDREW.1556046723 Date: 2023.11.21 09:59:28 -08'00'

SCHUBERT.WALTER.RODRIGUEZ.JR.118486595

Digitally signed by SCHUBERT.WALTER.RODRIGUEZ.JR.1184865951 Date: 2023.11.21 10:37:00 -08'00'

MOLINA.AMBER.ALBERTA MAY.1249214317 Digitally signed by MOLINA.AMBER.ALBERTA MAY.1249214317 Date: 2023.11.21 12:30:48 -08'00'

SIGNATURE: ______________________ DATE: ______________________

16. Chief of Contracting/Competition Advocate (required $700k-$13.5M)

NAME: ____Adrienne Strickland_______ TITLE: Chief, Contracting Division

17. Head of Contracting Activity $13.5M-$93M) (Designee IAW Delegation of

Contracting Authority Memo dated Sep 16 2013) (As req’d by FAR and/or MEC SOP 22)

NAME: ___Nicholas Martin___________ TITLE: Director, Defense Microelectronics Activity