Tab_2_Justification_and_Approval_of_C_KC-135_Avionics_Sustaining_Engineering_Services_Redacted_LEGAL.pdf

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JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

I. CONTRACTING ACTIVITY

AFLCMC/WKKPA

Tinker AFB OK 73145-5320 C/KC-135 Avionics Sustaining Engineering Services

II. NATURE AND/OR DESCRIPTION OF THE ACTION BEING PROCESSED

A. This individual Justification and Approval (J&A) authorizes the use of other than full and open competition procedures to procure Avionics Sustaining Engineering Services for the C/KC-135 aircraft from Rockwell Collins, in Cedar Rapids, IA.

Support is limited to the proprietary systems installed, replaced, and integrated by Rockwell Collins including integrated/interfaced systems. The C/KC-135 Avionics Sustaining Engineering Services shall include: avionics system engineering support, detailed design engineering, technical analyses, system integration, software operational flight program updates, generation of software code, drawings and technical order development, ground and flight test support, and mishap investigation support. AFLCMC/WKKPA plans to procure this effort with an Indefinite Delivery/Indefinite Quantity (IDIQ) contract.

B. This acquisition will be awarded as a new contract and modified as necessary over the life of the requirement. The estimated award date is November 2015.

This individual J&A shall authorize a seven year ordering period consisting of a one-year basic with six one-year options and a six month option to extend services.

C. These services are currently being provided by Rockwell Collins under contract

FA8105-11-D-0001 which was awarded 1 November 2010 and expires on 31 October 2015. The award amount was $45M for a sole source contract based on only one responsible source and no other supplies or services will satisfy agency requirements. The proposed contract ceiling of $225M is based on the number of aircraft configurations (increased from 3 to 9), the number of anticipated software sustainment activities, the number of regulatory and statutory requirements being imposed, the number of system and parts obsolescence issues that are known/anticipated, and the escalating costs of software and hardware development and sustainment.

D. Rockwell Collins shall be the contractor for the ordering period and extension period. The estimated value of the contract is addressed in Section III. This contract shall include a variety of specific avionics related integration, sustainment, and support efforts. The contract types that will be used on the C/KC-135 Avionics Sustaining Engineering Services acquisition are Firm Fixed Price (FFP), Cost Plus Fixed Fee (CPFF) and Time and Materials (T&M). T&M shall only be utilized when it is not possible to estimate the extent or duration of the work or to anticipate costs with a reasonable degree of confidence.

III. DESCRIPTION OF THE SUPPLIES/SERVICES REQUIRED TO MEET THE

AGENCY’S NEEDS

A. Under the Avionics Sustaining Engineering Services contract, Rockwell Collins shall provide recurring and nonrecurring avionics engineering services for the C/KC-135. These engineering support activities include avionics system engineering support, detailed design engineering, technical analyses, avionics system integration, software operational flight program updates support, drawing and technical order development, ground and flight test support and mishap investigation. Wherever possible, all deliverables resulting from these efforts will be provided with unlimited data rights to allow greater flexibility in future engineering activities.

B. The ordering periods for the basic award and options, as originally referenced in

Section II paragraph two, are shown below:

Basic: 1 January 2016 – 31 December 2016 Option 1: 1 January 2017 – 31 December 2017 Option 2: 1 January 2018 – 31 December 2018 Option 3: 1 January 2019 – 31 December 2019 Option 4: 1 January 2020 – 31 December 2020 Option 5: 1 January 2021 – 31 December 2021 Option 6: 1 January 2022 – 31 December 2022 Option to Extend: 1 January 2023 – 30 June 2023

C. The C/KC-135 is scheduled to remain operational until 2046. There will be a continuing need for C/KC-135 Avionics Sustaining Engineering Services during this time. Rockwell Collins is the original manufacturer and integrator for over 90% of the C/KC-135 avionics, which includes Block 45 (new autopilot, flight director, radio altimeter and engine instrument display), Global Air Traffic Management (GATM) and Pacer Compass, Radar and GPS (CRAG) avionics modifications that provide for a fully integrated avionics solution on C/KC-135 aircraft. The heart of the avionics systems is the dual Integrated Processing Centers (IPCs) that control the functions of all avionics and communications equipment on the aircraft. The IPCs, Multi-Function Displays (MFDs) and Control Display Units (CDUs) were purchased as Commercial Off-The-Shelf (COTS) or Non-developmental equipment, missionized to support the C/KC-135 operations, and the software, hardware, and integration documentation for these systems is proprietary to Rockwell Collins. In order to achieve avionics system integrity for the C/KC-135 aircraft, it is in the best interest of the Government to include the support for all C/KC-135 Avionics Sustaining Engineering Services under this contract. This enables the Government, responsible for total system operational suitability, safety, and effectiveness, access to the single source with technical knowledge and data for the C/KC-135 avionics/communication systems and its integration.

D. All of the C/KC-135 avionics data required to execute this contract is proprietary to Rockwell Collins.

E. The estimated funding under this J&A is shown below. The total for the effort is Various funding appropriations will be used on this contract including 3400, 0350, 3010 and 3600.

Basic:

Option 1:

Option 2:

Option 3:

Option 4:

Option 5:

Option 6:

Option to extend:

Total:

F. Funds identified above shall be used to support tasks defined by individual

Engineering Assignments (EAs). Tasks involve nonrecurring and recurring efforts as previously described in this section to support the Legacy Tanker Division and ensure all C/KC-135 avionics related performance, functional, and physical requirements are achieved.

G. Due to the circumstances described below in Sections V, IX, XI, there are no immediate actions that could be taken to develop competition. In addition to the effort described in Section XI below, the Legacy Tanker Division will explore options to remove barriers to competition for future C/KC-135 avionics sustaining engineering services. However, seven years is an appropriate timeframe to fully evaluate competitive opportunities and incorporate the results of the findings described in Section XI. As such, a seven-year contract vehicle (a one-year basic contract with six one-year options) is reasonable and appropriate for this effort.

IV. STATUTORY AUTHORITY PERMITTING OTHER THAN FULL AND OPEN

COMPETITION

10 U.S.C. 2304(c) (1) as implemented by FAR 6.302-1(a)(2), with an application pursuant to FAR 6.302-1(b)(2), Only One Responsible Source and No Other Supplies or Services will Satisfy Agency Requirements.

V. DEMONSTRATION THAT THE CONTRACTOR’S UNIQUE QUALIFICATION OR

NATURE OF THE ACQUISITION REQUIRES THE USE OF THE AUTHORITY CITED

ABOVE (APPLICABILITY OF AUTHORITY)

A. The Air Force’s minimum needs can only be satisfied by the highly specialized avionics engineering services described in Section III and 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 Air Force's requirements. These services can only be supplied by Rockwell Collins for the following reasons:

i. Rockwell Collins is the only qualified source capable of providing total avionics system sustainment for the C/KC-135 avionics suites. The software for the Flight Management System (FMS) and Multi-Function Displays (MFDs) is proprietary to Rockwell Collins and as such, Rockwell Collins is the only source which has the data, knowledge, and analytical tools to sustain these flight critical systems. Further, the complexity of interfaces, particularly in the area of software and integration, make it imperative that sustainment tasks are awarded to the original developer of the C/KC-135 Pacer CRAG, GATM and CNS/ATM (Block 45) suites, of which Rockwell Collins provides 93% of the software and 100% of the integration.

ii. Successful execution of this contract requires unlimited and unrestricted access to avionics related engineering data. The Government did not procure the drawings or software code for the Pacer CRAG or GATM program. Further, the government cannot obtain nor will Rockwell Collins release the proprietary rights to Block 45 Line Replaceable Units (LRUs), which are the foundation for avionics for the C/KC-135 following the Block 45 modification.

iii. For other contractors to be successful in reverse engineering the required products in an attempt to provide support would require intrusion into the LRUs. The Government purchased no rights to the LRU internal drawings or the software coding for any of the systems Operational Flight Programs (OFP). Rockwell Collins has stated that the core software programs in the C/KC-135 LRUs were developed by Rockwell Collins commercial division on internal funds. This information is vital to the continued success of Rockwell Collins as a commercial provider of Avionics and Communication Systems, and they are unwilling to sell any proprietary information regarding said products. Intrusion into the LRUs by other contractors would void the existing warranties (for material or workmanship failures), which provide repair for 10 years after installation.

Also, the nature of the equipment provides an Operational, Safety, Suitability & Effectiveness (OSS&E) avionics suite which Rockwell maintains through the repair process and verification on the Software Integration Laboratory. Intrusion into the LRUs releases Rockwell from ensuring OSS&E is maintained for the system components. The C/KC- 135 avionics suite is a fully digital integrated system where a loss of or malfunctioning LRU propagates failure criteria through the entire avionics suite. Without the proper operational verification of the LRUs, which Rockwell Collins retains the sole capability to do, the entire system is compromised. Further, it would cost taxpayers nearly $1.4B to replace the current avionics suite in the fleet consisting of Pacer CRAG and GATM equipment. This does not take into account the cost required to undo the Block 45 modification efforts.

iv. Rockwell Collins uses a KC-135 avionics system Block 40 Software Integration Laboratory to develop and test avionics system, at a private investment of over $20M in 2001 dollars. A new SIL developed and built by Rockwell for the Block 45 effort is an asset for providing engineering support for the new avionics suite. For another contractor to replicate both SILs in 2015 dollars would be over $150M, and take, at least, the three years Rockwell needed to complete each SIL, adding extensive time delays to providing engineering support to both the current and future avionics system.

Therefore, this acquisition is for continued performance of a highly specialized service.

VI. DESCRIPTION OF EFFORTS MADE TO ENSURE OFFERS ARE SOLICITED

FROM AS MANY POTENTIAL SOURCES AS DEEMED PRACTICABLE

A. In an effort to enhance competition for this effort, AFLCMC/WKKPA sent a letter to Rockwell Collins on 29 January 2014 requesting the right to purchase the required technical/proprietary data for future C/KC-135 avionics acquisitions.

The letter also inquired as to Rockwell Collins willingness to enter into third party licensing agreements. Third party licensing agreements would allow for the use of all data required to effectively sustain the C/KC-135 fleet. In a letter dated 18 February 2014, Rockwell Collins formally responded to the Government’s letter stating they are not willing to sell C/KC-135 avionics proprietary data or allow other contractors access to the data through third party licensing agreements.

B. A Sources Sought Synopsis was published on FedBizOps on 6 March 2014.

The synopsis was titled KC-135 Avionics Sustaining Engineering Services. The only response received was from Rockwell Collins Inc. Rockwell is the only qualified source based on their access to the specific C/KC-135 OEM proprietary data and engineering expertise required to perform the work. Rockwell has stated they will not sell, provide or allow access to the data.

C. In accordance with FAR 5.201, a “Notice of Contract Action” will be synopsized to alert large and small business to potential subcontracting opportunities.

VII. DETERMINATION BY THE CONTRACTING OFFICER THAT THE ANTICIPATED

COST TO THE GOVERNMENT WILL BE FAIR AND REASONABLE

The cost for this effort shall be fair and reasonable to the Government. Actions to ensure reasonableness shall be in accordance with procedures and criteria contained in FAR Part 30, Cost and Accounting Standards; Part 31, Contract Cost Principles and Procedures; Subpart 15.4 Contract Pricing. The contractor shall be required to provide certified cost or pricing data. The contractor’s proposal shall be subjected to Cost and Price Analysis in accordance with FAR 15.404-1 and technical analysis of the contractor’s proposal by the program office in accordance with FAR 15.404-2. In addition, field reports shall be obtained from the Defense Contract Management Agency (DCMA) and/or Defense Contract Audit Agency (DCAA). Both organizations will be requested to assist the Contracting Officer during negotiations as necessary. The combination of pricing data and field pricing support will ensure the negotiation of a fair and reasonable price.

VIII. DESCRIPTION OF THE MARKET RESEARCH CONDUCTED AND THE

RESULTS

As described in Section VI above, market research, in accordance with FAR Part 10 was conducted by a sources sought synopsis of the proposed acquisition, advising industry of the pending acquisition and soliciting inquiries from interested parties.

Furthermore, in accordance with FAR 10,001(a)(2), and 10.001(a)(3)(ii), market research has revealed that this is not a commercial services acquisition and the requirement cannot be restated to permit use of commercial services.

IX. ANY OTHER FACTS SUPPORTING THE USE OF OTHER THAN FULL AND

OPEN COMPETITION

Establishing competition for avionics sustaining engineering would require development of in-depth engineering knowledge that is proprietary to Rockwell Collins. Development includes generation of software code, engineering drawings and technical manuals which is expected to have a high degree of schedule and engineering risk. This would result in substantial duplication of cost as noted in the subsections of paragraph V of this document and summarized here: $1.4B for removal and replacement of Pacer CRAG and GATM systems, $245M for cancellation of Block 45 modification, $150M for both avionics laboratories. This only captures the higher-value duplication of costs. This does not capture the amount of duplicated man hours required to remediate the losses from such action or the amount of operational and mission capable flight hours lost.

X. LIST OF SOURCES, IF ANY, THAT EXPRESSED INTEREST IN THE

ACQUISITION

Rockwell Collins 400 Collins Rd. NE Cedar Rapids, IA 52498 Cage Code: 13499

XI. A STATEMENT OF THE ACTIONS, IF ANY, THE AGENCY MAY TAKE TO

REMOVE OR OVERCOME ANY BARRIERS TO COMPETITION BEFORE MAKING

SUBSEQUENT ACQUISITION FOR THE SUPPLIES OR SERVICES REQUIRED

The Government is not aware of any source other than Rockwell Collins that possesses the historical knowledge, design and production data, experience, expertise and facilities to provide this support. Long term efforts were initiated in 2012 to analyze every item installed as part of the avionics and communications suites on the C/KC-135 (Rockwell Collins installed or integrated) for feasibility to obtain all proprietary data for the purposes of competing the support for the system.

The final report has an ECD of July 2016. The amount of data and cost to obtain the data will include not only the aircraft documentation but the detail documentation to set up competitive repair facilities. This information will be provided to AFMC and AMC to program funding for the sustainment support. Establishing the technical expertise for software and hardware sustainment support is expected to occur within 5 years after funding is provided. This would coincide with the last option year of the sustainment contract.

XII. CONTRACTING OFFICER’S CERTIFICATION

The Contracting Officers’ signature on the Coordination and Approval Document evidences that she has determined this document to be both accurate and complete to the best of her knowledge and belief.

XIII. TECHNICAL REQUIREMENTS PERSONNEL'S CERTIFICATION

As evidenced by their signature on the Coordination and Approval Document, the technical and/or requirements personnel have certified that any supporting data contained herein, which is their responsibility, is both accurate and complete.