Redacted MB1 AIU JA.docx

COORDINATION AND APPROVAL DOCUMENT

Contracting Activity: OC-ALC/GKSKH 3001 Staff Drive, Suite 1AE1 104A Tinker AFB, OK 73145-3020 PR Number: FD20301130210 Program Name: E-4B Mod Block One Obsolescence Upgrade Estimated Contract Cost: Not to Exceed $32,935,000.00 Type Program: ACAT III Authority: 10 U.S.C. 2304(c)(1), as implemented by FAR 6.302-1 Type J&A: Class

COORDINATION: DATE

GKSKH

Competition

Aerospace Sustainment

Senior Center

COORDINATION AND APPROVAL DOCUMENT Page 2

Program Name: E-4B Mod Block One Obsolescence Upgrade

APPROVED:

Head of the Procurement Activity: ________________________________________ ____________ OC-ALC/CA Date Signed

JUSTIFICATION FOR OTHER THAN

FULL AND OPEN COMPETITION

I. CONTRACTING ACTIVITY

OC-ALC/GKSKH

3001 Staff Drive Ste 1AE1-104A Tinker AFB, OK 73145-3020

PR Number: FD20301130210

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

The proposed actions are Cost-Plus-Fixed-Fee with an estimated total amount of $32,935,000.00 for the design, kit, Technical Orders, training and installation/certification using a “C” type contract. The period of performance for this acquisition will be from contract award until 01 Dec 2012.

III. DESCRIPTION OF THE SUPPLIES/SERVICES REQUIRED TO MEET THE AGENCY’S NEEDS

1) Under the contemplated contracts, the Raytheon Corporation will provide an engineering design, kit purchase, Technical Orders, training, installation and certification of the Mod Block 1 (MB1) Audio Infrastructure Upgrade (AIU) Obsolescence Upgrade. Installation will occur between November 2011 and December 2012 with 3010 appropriations being used to fund the effort.

2) This MB1 AIU Obsolescence Upgrade is highly specialized equipment which provides access to the Defense Red Switch Network (DRSN). DRSN is the Department of Defense’s (DoD) global senior level secure voice telephone and conferencing system. The MB1 AIU Obs Upgrade addresses the obsolete AIU components to ensure mission capability. In addition, this prototype design, installation and certification will provide the E-4B aircraft with continuing secure voice and conferencing capabilities.

IV. STATUTORY AUTHORITY PERMITTING OTHER THAN FULL AND OPEN COMPETITION

10 USC 2304 (c)(1), as implemented by FAR 6.302-1(a)(2).

V. DEMONSTRATION THAT THE CONTRACTOR’S UNIQUE QUALIFICATIONS OR NATURE OF THE ACQUISITION REQUIRES THE USE OF THE AUTHORITY CITED ABOVE (APPLICABILITY OF AUTHORITY)

Raytheon is the only supplier of multilevel security (MLS) switch with Voice Over IP (VOIP) capabilities to the Defense Red Switch Network (DRSN). No other MLS switch is DRSN approved. Due to size, weight, power and cooling restrictions aboard the aircraft, the E-4B requires a DRSN approved MLS to support mission requirements. The DRSN is unique in that its switching systems provide the capability for multilevel secure (MLS) calling and conferencing as well as multilevel precedence and pre-emption (MLPP). Raytheon owns proprietary software technology that is required to meet certain secure communications requirements. Raytheon provides a proprietary Time Divisional Multiple Access (TDMA) Backplane to allow processing at multiple classifications simultaneously, Enhanced Control Console software to configure the Red Switch with preloaded and on-the-fly mission profiles for Secret and Top Secret SCI point-to-point secure communications.

As the AIU subcontractor to the Boeing MB1 effort, Raytheon designed and produced the Audio Infrastructure Upgrade for the E-4B. This required Raytheon proprietary software to manufacture the AIU equipment, specialized knowledge/training to perform integration of the kit components as well as testing to insure operational viability. At the time of the MB1 installation the Government did not purchase the software data rights as it was not deemed cost effective. The MB1 AIU Obsolescence Upgrade will build upon the legacy AIU architecture with proprietary software and data.

An installation contract award to someone other than Raytheon would still require a contract with Raytheon for ship-side engineering since this is a prototype modification of a system that was developed by Raytheon with Raytheon Proprietary information.

This upgrade requirement resulted from substantial obsolescence discovered during procurement of the final Mod Block 1 (MB1) AIU Sub Kit. As a result, an E-4B Equipment Obsolescence Study was initiated to determine appropriate courses of action to overcome component shortfalls. The findings of the study determined the need for the MB1 AIU Obsolescence Upgrade in order to return a mission capable aircraft to the user. Kit procurement includes several components with 12 month lead times. The software that accompanies many of these components also has a 12 month lead time. Due to the small fleet size and aircraft availability concerns, the kit assembly must be complete at the same time the window of aircraft availability opens. The time required for engineering design, integration and test development does not lend itself to reverse engineer the Raytheon Proprietary software. If addressing the AIU obsolescence does not meet the ACC need date for Return to Service, the E-4B program is left without coverage to fulfill this requirement and faces severe operational impacts. The program will experience day-for-day schedule slips along with substantial cost impacts.

The proposed actions are Cost-Plus-Fixed-Fee with an estimated total amount of $32,935,000.00. $22,539,420.00 of this amount represents a Not To Exceed (NTE) price for the design, kit, Technical Orders, and training portion of this effort contemplated to be purchased as an Undefinitized Contract Action (UCA) with a tentative award date of 15 Apr 2011. The remaining $10,395,580.00 represents the estimated amount for the installation/certification portion of this effort planned to be awarded Sept 2011.

VI. DESCRIPTION OF EFFORTS MADE TO ENSURE THAT OFFERS ARE SOLICITED FROM AS MANY POTENTIAL SOURCES AS DEEMED PRACTICABLE

The Government has limited rights to use Raytheon’s proprietary technology because it was developed exclusively with private funding. To date the Government has been unsuccessful in attempting to purchase additional rights which limits competition. The UCA portion will not synopsized due to the exception cited in FAR 5.202(a)(2) as an unusual and compelling urgency exists. The installation requirement will be synopsized and the solicitation posted to FedBizOpps.

VII. DETERMINATION BY THE CONTRACTING OFFICER THAT THE ANTICIPATED COST TO THE GOVERNMENT WILL BE FAIR AND REASONABLE

The Procurement Contracting Officer (PCO) will obtain Certified Cost and Pricing Data. Defense Contract Management Agency (DCMA), Defense Contract Audit Agency (DCAA), and OC-ALC technical and pricing experts will assist the PCO in evaluating Raytheon proposed costs. The PCO will consider all inputs and formally determine proposed costs are fair and reasonable.

VIII. DESCRIPTION OF THE MARKET RESEARCH CONDUCTED AND THE RESULTS

The E-4B program office leverages DRSN program initiatives but maintains market awareness of secure communication capabilities. Raytheon Network Centric Systems develops and sustains the AIU capability (also known as the E-4B Audio Infrastructure Upgrade Sub Kit or AIU SK; Part Number: 62-01008-004) through the integration of Commercial Off The Shelf (COTS) Information Technology systems and commercial fasteners with Raytheon proprietary hardware and software. The program office has historically procured the AIU Modifications through Boeing from Raytheon as a subcontractor. Since Raytheon Network Centric Systems is required to accomplish this upgrade, continuing the contract strategy of procuring these services through the Boeing PSI contract will drive significant added expense (up to 36% additional cost) but not significant value to the execution of the modification. The previous acquisition history coupled with the proprietary nature of the AIU design validates that Raytheon is the only responsible source to procure the MB1 AIU Obsolescence Upgrade due to the proprietary software. Market research has also shown there is no available commercial application suitable to meet the Government’s requirements.

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

None.

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

Raytheon Network Centric Systems 8333 Bryan Dairy Road Largo, FL 33777

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

Currently there is no other technology that provides the capabilities being performed by the Raytheon proprietary systems. Future technologies will be developed to duplicate the capabilities provided by the Raytheon equipment which would allow competition; however, we cannot predict when the technology will be developed or become available.

XII. CONTRACTING OFFICER’S CERTIFICATION

The contracting officer’s signature on the Coordination and Approval Document evidences that he has determined this document to be both accurate and complete to the best of his knowledge and belief (FAR 6.303-2(a)(12)).

XIII. TECHNICAL/REQUIREMENTS PERSONNEL’S CERTIFICATION

As evidenced by their signatures 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 (FAR 6.303-2(b)).