FA810523D0002_KC-135_ESS_ JA_Redacted.pdf

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

CONTROLLED UNCLASSIFIED INFORMATION

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I. Agency and Contracting Activity.

Department of the Air Force

AFLCMC/WLTK

3001 Staff Drive Tinker Air Force Base, OK 73145-3021

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

This individual Justification and Approval (J&A) authorizes the use of other than full and open competition procedures to obtain a new contract for engineering services to support the C/KC-135 fleet. The contract will be a non-commercial services contract to provide engineering and technical services and data. The contract will be awarded to the aircraft original equipment manufacturer (OEM), The Boeing Company, doing business as Boeing Defense, Space & Security, Commercial and Government Entity (CAGE) code 0PXV4.

The estimated total value of this acquisition is $419,914,450. The contract will consist of firm-fixed-price (FFP), cost-plus-fixed-fee (CPFF), cost reimbursable-no fee (CR), fixed price incentive firm target (FPIF), cost-plus-incentive-fee (CPIF), and time and material (T&M) CLINs. This will be a ten year, Single Award, Indefinite Delivery, Indefinite Quantity (IDIQ) contract consisting of five ordering periods with a 2-year base and four, 2-year options. The period of performance will be stated on each individual order issued hereunder. The estimated award is March 2023.

Previous Contract Number: FA8105-16-D-0002 Contractor: Boeing Defense, Space & Security Commercial and Government Entity: 19N29 Estimated Contract Value: $237,885,965 Date of Award: 1 January 2016 Completion date: 31 March 2023 Basis for Award: Sole Source

III. Description of supplies/services required to meet agency needs (including the estimated value).

This will be a service contract with some supply to provide recurring and non-recurring engineering and technical support for efforts requiring access to Boeing proprietary rights data for the C/KC-135. Non-recurring work may also include prototype or first article to support proof of design or manufacturing capability.

These engineering support services include detailed design engineering, modification, maintenance engineering and systems engineering support, technical analyses, drawing and source data maintenance/updates, flight safety analyses, reliability/ maintainability analyses, liaison engineering support, stress analyses, field problem investigation, and in-flight emergency response support. The man-hours required for support of recurring services will be negotiated based on historical hours and consistent with the proposed contract line item structure. The required man-hours for nonrecurring work shall be negotiated on an "as required" basis.

The ordering periods, anticipated CLIN structure, and estimated values are below. Note, the CLIN structure allows for multiple engineering assignments to be awarded from single proposals and allows for multiple deliverables on an individual order without use of SubCLINs to facilitate multiple funding appropriations when required. The anticipated CLIN structure is not sequentially numbered, but instead allows for future CLINs if needed from CLIN XX18 through CLIN XX28. The estimated values include an additional 15 percent for variations in cost estimates and unforeseen requirements to support future non-recurring engineering assignments.

Ordering Period Estimated Period of Performance Estimated Value Basic 1 April 2023 - 31 March 2025 $ 75,188,886 Option I 1 April 2025 - 31 March 2027 $ 79,349,247 Option II 1 April 2027 - 31 March 2029 $ 83,739,810 Option III 1 April 2029 - 31 March 2031 $ 88,373,312 Option IV 1 April 2030 - 31 March 2033 $ 93,263,195

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Estimated Total Value $ 419,914,450

The United States Air Force (USAF) services will utilize 3600, 3010, 3400, 3740, 97X4930 (CSAG), 3840, and 97X0350 (NGREA) funds.

USAF CLIN Structure:

CLIN # CLIN Name CLIN Type XX01 Program Management FFP XX02 Maintenance Line Support FFP XX03 Engineering Maintenance Support FFP XX04 Request for Technical Information CPFF XX05 Request for Technical Information Material CR XX06 Aircraft Structural Integrity Program (ASIP) CPFF XX07 Integrity Programs CPFF XX08 Training FFP XX09 Big Safari Request for Technical Information CPFF XX10 Big Safari Request for Technical Information Material CR XX11 Data TBN XX12 Non-Modification Requirements Fort Walton FFP XX13 Modification Updates/Revision Fort Walton FFP XX14 Non-Modification Requirements OKC FFP XX15 Modification Updates/Revisions OKC FFP XX16 Travel CR XX17 Proposal Preparation FFP XX29 Non-Recurring Engineering Services T&M XX30 Non-Recurring Engineering Services FFP XX31 Non-Recurring Engineering Services FFP XX32 Non-Recurring Engineering Services FFP XX33 Non-Recurring Engineering Services FFP XX34 Non-Recurring Engineering Services FFP XX35 Non-Recurring Engineering Services FPIF XX36 Non-Recurring Engineering Services FPIF XX37 Non-Recurring Engineering Services FPIF XX38 Non-Recurring Engineering Services FPIF XX39 Non-Recurring Engineering Services FPIF XX40 Non-Recurring Engineering Services CPFF XX41 Non-Recurring Engineering Services CPFF XX42 Non-Recurring Engineering Services CPFF XX43 Non-Recurring Engineering Services CPFF XX44 Non-Recurring Engineering Services CPFF XX45 Non-Recurring Engineering Services CPIF XX46 Non-Recurring Engineering Services CPIF XX47 Non-Recurring Engineering Services CPIF XX48 Non-Recurring Engineering Services CPIF XX49 Non-Recurring Engineering Services CPIF

The Foreign Military Sales (FMS) service will utilize 8242 funds. The basic Letters of Offer and Acceptance were accepted, with amendments accepted.

FMS CLIN Structure

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CLIN # CLIN Name CLIN Type XX50 FMS - France Rapid Response FFP XX51 FMS - France Aircraft Structural Integrity Program (ASIP) FFP XX52 FMS - France Rapid Response CPFF XX53 FMS - France Aircraft Structural Integrity Program (ASIP) CPFF XX54 FMS - France Program Management (PM) FFP XX55 FMS - France Program Management (PM) CPFF XX56 FMS - France Proposal Preparation FFP XX57 Non-Recurring Engineering Services FFP XX58 Non-Recurring Engineering Services FPIF XX59 Non-Recurring Engineering Services CPFF XX60 Non-Recurring Engineering Services CPIF XX61 FMS- Turkey Rapid Response FFP XX62 FMS - Turkey Aircraft Structural Integrity Program (ASIP) FFP XX63 FMS- Turkey Rapid Response CPFF XX64 FMS - Turkey Aircraft Structural Integrity Program (ASIP) CPFF XX65 FMS - Turkey Program Management (PM) FFP XX66 FMS - Turkey Program Management (PM) CPFF XX67 FMS - Turkey Proposal Preparation FFP XX68 Non-Recurring Engineering Services FFP XX69 Non-Recurring Engineering Services FPIF XX70 Non-Recurring Engineering Services CPFF XX71 Non-Recurring Engineering Services CPIF XX72 FMS - Chile Rapid Response FFP XX73 FMS - Chile Aircraft Structural Integrity Program (ASIP) FFP XX74 FMS - Chile Rapid Response CPFF XX75 FMS - Chile Aircraft Structural Integrity Program (ASIP) CPFF XX76 FMS - Chile Program Management (PM) FFP XX77 FMS - Chile Program Management (PM) CPFF XX78 FMS - Chile Proposal Preparation FFP XX79 Non-Recurring Engineering Services FFP XX80 Non-Recurring Engineering Services FPIF XX81 Non-Recurring Engineering Services CPFF XX82 Non-Recurring Engineering Services CPIF

A ten year contract is determined to be most advantageous based on the success of previous efforts. The C/KC-135 is scheduled to remain operational , resulting in a continuing need for C/KC-135 ESS during this time, or until the government receives rights to all the data. As the OEM, primary C/KC-135 ESS efforts have been provided by Boeing, due to their proprietary data, historical knowledge, design and production data, experience, and expertise to provide this support. When possible, all deliverables resulting from these efforts will be provided with unlimited data rights to allow greater flexibility in future engineering or production activities. The government continues to pursue sufficient data rights to support competition of future efforts or, when possible, break out portions of acquisitions to enable competitive efforts.

If other qualified or approved sources become known during the life of this contract, full and open competition will be considered and utilized to the maximum extent practicable.

The estimated contract value is $366M. The contract minimum for obligation is $5M. The contract maximum for obligation is $420M and includes an additional 15 percent for variations in cost estimates, unforeseen requirements to support the Programmed Depot Management (PDM) inspection, maintenance and repair that only Boeing can provide and for unknown future engineering assistance to upgrade or maintain an aging weapons platform.

IV. Statutory authority permitting other than full and open competition.

10 U.S.C. 3204 (a)(1) (previously 10 U.S.C. 2304 (c)(1)), as implemented by FAR 6.302-1(a)(2) only one responsible source.

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V. Demonstration that the contractor's unique qualifications or the nature of the acquisition requires use of the authority cited above (applicability of authority).

The Air Force's requirement can only be satisfied by the highly specialized engineering sustainment support services described above. These noncommercial C/KC-135 specific services can only be supplied by Boeing, due to their technical/ proprietary data, historical knowledge, design and production data, and experienced personnel, as the OEM of the C/ KC-135. The C/KC-135 was developed and produced by Boeing between 1955 and 1964, as a military specific aerial refueling weapon system. Boeing has maintained their proprietary data throughout the life-cycle of the C/KC-135; the specialized data is an asset no other source possesses. The government has limited data rights; however, these limited rights are insufficient to satisfy the requirement. An award to any other source for this SCAT II Program 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 for the following reasons:

The engineering program requirements necessary to maintain the C/KC-135 series fleet as an operationally effective weapon system exceed the organic capability both in specialized skills and resources. Boeing owns the only complete source of engineering history, development design, qualification and test data for the C/KC-135 series aircraft. Access to the entire engineering database is required for the performance of engineering services applicable to this acquisition, all of which are proprietary to Boeing. Establishing competition for sustaining engineering would require development of in-depth engineering knowledge that is proprietary to Boeing. Boeing has declined to sell or lease the data to the government in response to the latest government inquiry on 9 Nov 2020. Therefore, this acquisition will be a follow-on contract for the continued performance of a highly specialized service.

Award to any other source would result in substantial duplication of cost to the government that is not expected to be recovered through competition. Establishing competition for sustaining engineering would require development of in-depth engineering knowledge that is proprietary to Boeing. Development includes generation of engineering drawings, stress notes, performance data, and technical manuals which is expected to have a high degree of schedule and engineering risk.

An estimated $440,000,000 and 4 years of development would be required for another contractor to provide only a fraction of the engineering services that Boeing provides today. The C/KC-135 aircraft is comprised of hundreds of thousands of components defined by drawings, specifications and standards. These drawings are used for modifications, PDM, repair/ replace dispositions, parts re-procurement, maintenance, and sustainment of the C/KC-135 fleet. The Government also utilized these drawings to perform business case analyses. Based on the Government’s analysis, it was determined that reverse engineering costs for drawing development, as previously stated would total $440M (10,000 drawings at 200 man-hours/drawing at $220/man-hour). This determination assumes only a small portion of the drawings (10,000) would have to be recreated to support this sustainment effort. Given that the duplicated costs exceed the total estimated cost of the 10-year effort to provide the engineering services contemplated by this contract, it is not anticipated that he government could possibly recover these duplicated costs through competition.

To accomplish stress analyses to ensure the acceptability of repairs, reworks and modifications, an Internal Loads Model (Finite Element Model) and External Loads Model similar to those currently in-use by Boeing today would have to be recreated. These models were developed over a 4 year period at a cost of $3.4M. If the models could be recreated, the ability to validate them may not be possible since the design loads for the C/KC-135 are Boeing propriety data. To accomplish Aircraft Structural Integrity Program (ASIP) analyses to ensure critical aircraft structural components are identified and inspected within prescribed time frames, a LifeWorks tool set was developed and validated over a 2 year period at the cost of $1.6M. This tool set would also have to be recreated but, the ability to validate it may not be possible since the design loads for the C/KC-135 are Boeing proprietary data. To accomplish comprehensive Mechanical Systems Integrity Program (MECSIP) analyses, Boeing developed fuel system and hydraulic system models over a 4 year period at the cost of approximately $1.9M that would have to be recreated.

The C/KC-135 limited rights/proprietary data for the KC-135 is critical to maintain the Operational Safety, Suitability and Effectiveness (OSS&E) of the aircraft. Some data could be reproduced using reverse engineering processes; however, this effort would be expensive and time consuming. Changes to C/KC-135 flight manuals could be made by interpolating current Dash 1 performance charts, but determining new performance curves or flight crew procedures would be impossible without Boeing involvement because the aerodynamic characteristics of the C/KC-135 (lift / drag coefficients, etc.) are proprietary to Boeing.

The recreation of source data, and drawings from a new source would create unacceptable delays, as stated above, which

April 2021 CONTROLLED UNCLASSIFIED INFORMATION Page 7 of 9April 2021 CONTROLLED UNCLASSIFIED INFORMATION Page 7 of 9 may not even produce the correct data due to Boeing proprietary information. The recreation of the required data could take 5-15 years depending on serial versus concurrent funding for necessary data, during which we would expect to see shifts in aircraft availability/mission capability rates, and overall fleet readiness levels without the data that Boeing currently provides. The KC-135 support missions all over the world daily. This contract provides timely support for all aircraft aspects for this 60 year old platform, any delay would be unacceptable as it directly affects the readiness levels of the fleet, specifically but not limited to, delays associated with proprietary data for stress analyses to ensure the acceptability of repairs, reworks and modifications. If the USAF did have to recreate the data that Boeing has already developed it would take years, and would severely and negatively affect aircraft availability and mission capability, as aircraft on ground rates increased while awaiting recreated source data and/or drawings.

Accordingly, Boeing is the only firm capable of providing the services described in Section III without the U.S. Air Force experiencing substantial duplication of cost not expected to be recovered through competition and unacceptable delays in fulfilling the requirements.

VI. 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.

A Sources Sought Synopsis was published on www.sam.gov on 11 January 2021 and closed 12 February 2021, synopsis number KC-135-ESS-CY19. The synopsis was titled C/KC-135-Engineering Sustainment Support. There were six responses received. Two responses were from small businesses, L2 and Pelatron Technologies (P-Tech (an 8a company)), and the remaining four responses were from The Boeing Company (Boeing), Northrop Grumman System Corporation (NGC), Support Systems Associates, Inc (SSAI), and Andromeda Systems Incorporated (ASI). Boeing 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.

Boeing has stated they will not sell, provide or allow access to the data. In an effort to increase competition for this effort, AFLCMC/WLTK (formerly WKK) sent a request to Boeing on 9 November 2020 requesting the right to purchase the required technical/ proprietary data for future C/KC-135 acquisitions. The letter also inquired as to Boeing's 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. Boeing responded on 24 November 2020 stating they are not willing to sell C/KC-135 proprietary data or allow other contractors access to the data through third party licensing agreements.

Only the OEM, Boeing, possesses the data necessary to accomplish C/KC-135 sustainment and support. In accordance with (IAW) FAR 5.201, a "Notice of Contract Action" will be synopsized to alert large and small businesses to potential subcontracting opportunities. The expected date of posting this synopsis is after approval of this J&A and Acquisition Plan.

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

The Contracting Officer will ensure that the items described herein are negotiated at a fair and reasonable price to the government. IAW FAR as supplemented, the contractor will be required to submit Certified Cost or Pricing Data and/or Other Than Certified Cost or Pricing Data. A detailed cost analysis and price analysis will be performed. The Contracting Officer will request a technical evaluation from the Defense Contract Management Agency (DCMA) to aid in the evaluation of the contractor's proposal. The Contracting Officer will seek audit assistance from the Defense Contract Audit Agency (DCAA) if necessary.

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

IAW FAR 10.001(a)(2), market research has revealed that this is not a commercial services acquisition. IAW 10.001(a)(3)(ii), it has been determined that the requirements contemplated in this acquisition cannot be restated to permit use of commercial services. As described in Section VI above, market research, IAW FAR Part 10, was conducted by synopsis of the proposed acquisition, advising industry of the pending acquisition and soliciting inquiries from interested parties. Interested parties are listed in section X. Due to lack of required data, none are capable with the exception of Boeing. The Market Research used to support this J&A is current and relevant. The

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Market Research Report, dated 26 March 2021, has been signed by the Program Manager and the Contracting Officer.

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

The government has unlimited rights to form, fit, and function data. The Government also has unlimited rights of source qualification, operations, maintenance, installation, and training; however, such rights are insufficient to satisfy the current need. Access to proprietary drawings is necessary to accomplish the engineering sustainment tasks for this acquisition.

Efforts by the government to acquire a license from the OEM have been unsuccessful. The most recent attempt by the government to acquire the data or rights to the data occurred on 09 Nov 2020 when the KC-135 Program Office requested to buy technical/ proprietary data and requested to grant third party access to use KC-135 Data. The KC-135 Program Office received a letter 24 Nov 2020 from the OEM stating “Boeing is uniquely and best qualified to provide engineering support for overall fleet maintenance and sustainment. Given the possibility of a competitive follow-on contract, releasing our proprietary data to others would erode Boeing's unique capability of providing comprehensive engineering solutions in support of the KC-135 fleet and undermine our strategic IP investments as the OEM.” This document also stated, “Therefore, we respectfully decline to offer additional access, sell, or transfer ownership of Boeing intellectual property assets at this time.”

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

The Boeing Company Support Systems Associates, Inc. (SSAI) 6001 S. Air Depot Blvd 304 S. Harbor City Blvd., Suite 100 Oklahoma City OK 73135 Melbourne, FL 32901

CAGE: 0PXV4 CAGE: 60877

L2 Aviation Pelatron Technologies (PTech) 2100 US-290 1464 West 40 South, Ste. 100 Dripping Springs TX 78620 Lindon, UT 84042

CAGE: 4JRP3 CAGE: 6TNJ7

Northrop Grumman System Corporation (NGC) Andromeda Systems Incorporated (ASI) 6401 S. Air Depot Blvd. 615 Lynnhaven Parkway, Suite 104 Oklahoma City, OK 73135 Virginia Beach, Virginia 23452

CAGE: 78JW8 CAGE: 46LE5

See section VI for more detail.

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

IAW the previous J&A, several actions were accomplished to remove and overcome barriers to competition. While an annual report was not generated according to Section XI of the previous J&A, this document outlines many of the results deriving from the identified actions. In addition, many of the results from the various analyses & other actions were utilized in developing the acquisition strategy for this requirement.

Other contractors have been, and will continue to be, utilized to accomplish specific C/KC-135 fleet support projects when the requirements can be accomplished without the aid of Boeing propriety data. As a result of continued refusal by the sole source contractor to provide or license data, as well as the duplication of cost (See Sections V and IX), there are no known additional actions which can be taken to remove barriers to competition and, therefore, specific actions and milestones cannot be established.

Per DFARS PGI 206.304(a)(S-70), as indicated by the signature on the Coordination and Approval Document, the previous J&A has been reviewed and the approval authority determines that, with the exception of the annual report, all stated actions to remove barriers to competition have been accomplished. These practices included engaging in an on-going

April 2021 CONTROLLED UNCLASSIFIED INFORMATION Page 9 of 9April 2021 CONTROLLED UNCLASSIFIED INFORMATION Page 9 of 9 process to find opportunities to work with third party contractors to team with Boeing as a subcontractor, by use of Propriety Information Agreements. The government reviews each requirement for suitability to compete based on the available government data rights. As required analysis will be conducted to determine the source and validity of classifying the original C/KC-135 data with limited rights, and elevated for transition to unlimited rights data. The government has used the Department of Defense Information Analysis Center (DTIC), multiple award, IDIQ contract vehicle to compete KC-135 engineering support previously sole source to Boeing to include structural analysis of specific components, and data analytics, with awarded task orders to KBRWyle for the KC-135 Wing Rivet Analysis, and the FSID (Functional Systems Integrated Database) tool. The KC-135 Program Office has additional engineering efforts under review for expected DTIC awards in the 4th Quarter of FY2021.

Data developed under the new effort will be negotiated with the intention of getting unlimited data rights. The contract will contain DFARS Clauses; 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 (Provision) Identification and Assertion of Use, Release, or Disclosure Restrictions, 252.227-7026 Deferred Delivery of Technical Data or Computer Software, and 252.227-7027 Deferred Ordering of Technical Data or Computer Software, when the a firm requirement of data deliverables have not been established. This contract will require the contractor to complete the Rights in Noncommercial Technical Data- Noncommercial Data worksheet to provide data rights assertions. This contract will establish a Data Rights CLIN to be negotiated. Task Assignments (TA) on this contract will state in the Ground Rules that "All engineering data delivered under this TA shall be marked IAW the appropriate FAR/DFAR; however, if any of the data will be marked with anything but Unlimited Rights or Government Purpose Rights data legends, the contractor shall stop work immediately and notify the Government. Work will not resume until direction from the PCO or COR is received." Furthermore, the Rights Guard agreement which allows third party contractors to manufacture replenishment spare parts for the C/KC-135 weapon system using Boeing limited rights data will be maintained.

The Government will continue to review efforts annually to remove barriers to competition, and continue to pursue those data rights currently held proprietary by Boeing. The Government will also challenge Boeing where non-commercial data may be mis-marked as Boeing Proprietary, when it is in the interest of the Government.

XII. Certification by the Contracting Officer.

The contracting officer's signature on the Coordination and Approval Document evidences that they have determined this document to be both accurate and complete to the best of their knowledge and belief.

XIII. Certification by the technical/requirements personnel.

By their signatures on the Coordination and Approval Document, the technical and/or requirements personnel have certified as accurate and complete all supporting data, which is their responsibility, contained herein IAW FAR 6.303-2(c).