INE_J&A_Approved_-_FINAL_Redacted.pdf

15 Aug 17

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

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APPROVAL (AFFARS 5306.304(a) )

Date

15 Aug 2017

Competition Advocate

Mr. Jeffrey L. Sorensen

AFNWC/PZ / (505) 846-1924

Signature

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I. Contracting Activity.

United States Air Force

AFNWC/PZNT

7330 Sentry Blvd, Bldg 469 Post C6 Tinker AFB, OK 73145-3032

(405) 739-8844

DSN 339-8844

PR# FD2030-17-31219

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

This individual Justification and Approval (J&A) is to authorize the use of Other Than Full and Open Competition procedures, as described under FAR Part 6.3, to obtain a contract from Northrop Grumman (NG) (Cage 5D172) to test the Reference Measuring Unit and Computer (RMUC) circuit cards to ensure technical design and performance specifications compliance and to confirm compatibility with the Air Launched Cruise Missile's (ALCM) Inertial Navigation Element (INE). In addition, a comprehensive plan is to be developed that lays out a viable plan for continued INE reliability and sustainability through 2030 with assessment through 2040.

A multiple year Cost Plus Fixed Fee (CPFF) and Cost Reimbursable (CR), Level of Effort Completion Indefinite Delivery/ Indefinite Quantity (ID/IQ) type contract is contemplated with a minimum order quantity. The total estimated dollar amount of this contract action is valued at $9,287,100.00 with an estimated award date of 29 September 2017. There are no organic capabilities. This is a new requirement.

Anticipated Period of Performance (PoP): 1 year basic with 2 one year options

Previous Contract Number: n/a Date of Award: n/a

III. Description of supplies/services required to meet agency needs.

This contract is to seek services provided by Northrop Grumman. The scope of this requirement is for Northrop Grumman to perform detailed analyses of all INE components and develop plan(s) to ensure INE reliability and the address sustainment issues identified in engineering analysis/studies to meet ALCM INE specification areas of Performance (reliability, availability, maintainability and hardness); Supportability (obsolescence and diminishing manufacturing sources and material shortages); and reparability (tooling, materials, capability, test/support equipment, environmental, cyber security. The contractor shall also investigate the potential use of Tomahawk RMUCs and Conventional Air Launched Cruise Missile INEs.

Basic: PoP 30 September 2017 - 29 September 2018; Total (3400 Type Funds) CLIN 0001 - CPFF - Recurring Engineering Tasks. This is usually a monthly CLIN. (IAW PWS Section II) (

CLIN 0002 - CPFF - Non-Recurring Engineering Services (IAW PWS Section III) ) CLIN 0003 - NSP - Data CLIN 0004 - CR - No Fee - Travel ( )

Option I: PoP 30 September 2018 - 29 September 2019; Total (3400 Type Funds) CLIN 1001 - CPFF - Recurring Engineering Tasks. This is usually a monthly CLIN. (IAW PWS Section II)

CLIN 1002 - CPFF - Non-Recurring Engineering Services (IAW PWS Section III) ) CLIN 1003 - NSP - Data CLIN 1004 - CR - No Fee - Travel ( ) CLIN 1005 - CPFF - Engineering Model (IAW PWS 3.2) )

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Option II: PoP 30 September 2019 - 29 September 2020; Total (3400 Type Funds) CLIN 2001 - CPFF - Recurring Engineering Tasks. This is usually a monthly CLIN. (IAW PWS Section II)

CLIN 2002 - CPFF - Non-Recurring Engineering Services (IAW PWS Section III) CLIN 2003 - NSP - Data CLIN 2004 - CR - No Fee - Travel ( ) CLIN 2006 - CPFF - Concept Development (IAW PWS 3.3)

*Rounded Total Estimated Contract Value: $9,287,100.00

Due to the circumstances described below in Sections V, IX, and XI, there are no immediate actions that could be taken to develop competition. Therefore it is considered appropriate to seek approval for more than one fiscal year. If other qualified or approved sources become known during the life of this contract, full and open competition will be utilized to the maximum extent practical.

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)(iii)

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

The service sought is highly specialized because this type of INE is unique, as it was specifically built for the ALCM.

It contains technologies that are no longer used and functionality experience that is uncommon in industry today.

The INE, including its Circuit Cards and gimbal gyroscope, were originally designed by Litton Industries with proprietary technology for an anticipated ten year service life span. INE components are unique to the ALCM and do not have dual use applications in other weapon systems. The INE's precise manufacturing processes and component material requirements are not open knowledge. Northrop Grumman (NG) has acquired Litton Industries and all of its assets, and is the only company with the special tooling, data, and testing capability of the INE to satisfy the Air Force's minimum need. NG is the only approved source of repair for the INE and possesses the unique test equipment required to execute this requirement. There are no Technical Orders or part-lists available and the complexity and unique technology of the INE make it unlikely for the data required to assess the INE to be duplicated by a third party in a timely of cost effective manner.

This requirement calls for the Nuclear Surety Certification to not be affected. Nuclear Surety can only be confirmed by the previously established testing parameters. Testing can only be achieved by utilizing purpose built test equipment. Only Northrop Grumman is in possession of functioning test-equipment. Test equipment is not Government Furnished Property (GFP), but property of the company. Diminishing manufacturing sources and material shortages further impede the viability of recreating functioning test equipment for either government or third party use. The Government issued a Request for data rights to NG on 24 May 2017, for a cost estimate and willingness of NG to sell and deliver the required technical data rights to the Government to support future acquisition activity. Northrop Grumman has expressed in an email and on letterhead on 30 May 2017, that they are not willing to share their intellectual property with either the Government or another contractor.

The AFNWC/NDM believes that 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. The Government has never repaired the INE organically nor has a depot level Technical Order (T.O.) been established.

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Since Northrop Grumman is unwilling to share or sell the data to either the government or other contractors, the entire system would have to be reverse engineered by a capable company. This would require a feasibility study contract to be awarded to identify the scope of effort and to gauge the viability of the recreation of no longer commonly used or available technology. The INE is a closed system and the Air Force has no Technical Orders to identify all parts and configurations. The software is proprietary to Northrop Grumman. A comparison with similar re-engineerings efforts indicate it would take another contractor three to six years to develop and the costs would be in excess of can be expected. Failure to respond to the INE testing failures now will cause reductions in fielded missiles and will create a gap in the nation's nuclear deterrence capabilities toward hostile nations and doubts in the continued viability of the nuclear triad strategy.

Accordingly, Northrop Grumman is the only firm capable of providing the services described in section III above without the U.S. Air Force experiencing substantial duplication of cost that could not be expected to be recovered through competition and unacceptable delays in fulfilling its requirements.

VI. Description of efforts made to ensure that offers are solicited from as many potential sources as practicable.

A Sources Sought Synopsis (SSS) was posted on 24 March 2017 under FA8128-17-SSS-INE_ENG_SVC on fbo.gov with a response date of 31 March 2017. Four (4) interested parties replied.

The following companies have responded to the Sources Sought Synopsis posted on the Federal Business Opportunity (FedBizOpps) website:

Marvin Heymann & Associates (MHA), 1393 Alligator Dr Alligator Point, FL 32346 is a consulting firm that assists businesses in finding, winning and performing U.S. Federal Government Contracts. MHA does not hold any insight or experience to the ALCM INE. In addition, MHA does not possess engineering drawings, tech data, or data rights for the INE.

BMT Consulting Inc. (BMT), 1337 Locust Rd Washington, DC 20012 is a consulting firm aiding businesses in researching and obtaining Federal Government Contracts. BMT does not hold any insight or experience to the ALCM INE. In addition, BMT does not possess engineering drawings, tech data, or data rights for the INE.

Northrop Grumman Corporation, Electronic Systems (NG) 211 W. North Temple Salt Lake City, UT 84116-2993 CAGE Code:

5D172 is the current Sole Source repair contractor for the Air Launched Cruise Missile Inertial Navigation Unit (INE), using a repair contract under the Original Equipment Manufacturer (OEM), Northrop Grumman, Navigation Systems Division 21240 Burbank Blvd. Woodland Hills, CA 91367-6675, CAGE CODE: 06481. NG possesses all technical data (proprietary), data rights, and test equipment for the INE.

The Boeing Company, 6001 S. Air Depot Blvd Oklahoma City, OK 73135 CAGE Code: 1N929 is the OEM for the Air Launched Cruise Missile (ALCM), and led the effort to develop all requirements to integrate the INE into the ALCM as well as achieved nuclear weapon system certification. Boeing currently does not possess engineering drawings, tech data, or data rights for the INE. Boeing would need specific data as well as testing parameters.

This acquisition will be synopsized in accordance with FAR 5.201 and the Request for Proposal will be posted to FedBizOpps website.

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. A detailed cost analysis and price analysis will be performed. The Contracting Officer may request a technical evaluation from Defense Contract management Agency (DCMA) to aid in the evaluation of the contractor's proposal. An evaluation for technical acceptability will also be performed by AFNWC/NDME.

VIII. Description of the market research conducted and the results, or a statement of the reasons market research was

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A multi-function team, consisting of the Program Manager, Engineer, Contracting Officer, and other personnel conducted and documented the market research effort.

The government engineering team conducted research in conjunction with the completion and review of AFMC Form 762, Contract Repair Screening Analysis Worksheet (CRSAW), in accordance with AFMCI 21-149. Additionally, in March 2017, engineers ran inquiries concurrently from available Air Force data systems, such as the Joint Engineering Data Management Information and Control System and the Military Engineering Data Asset Locator System, to verify what data the government possess. The 762 worksheet reflects that Northrop Grumman is the only source available to fulfill the government's requirements for this effort. The Screening analysis worksheet was reevaluated in March 2017 and yielded the same results.

Market research was conducted to include SSS, and inquiries of available data systems, such as System for Award Management (SAM), WB Parts Inc. (parts service), Department of Defense E-Mall, Logistics Installations Mission Support Enterprise View, Thomas Registry, Purchase Request Process System (PRPS), D043, and D200 Computation. Additional web searches included Google and Inventory Locator Service Market Intelligence. Results were cross-referenced with the North American Industry Classification System (NAICS) of 336414. Because this did not result in acceptable results, an Industry Day was organized to invite interested parties to showcase their ability and for the government to address questions in an open forum and available to everyone.

Northrop Grumman, The Boeing Company, Southwest Research Institute (SwRI), and Marvin Heymann & Associates (MHA)participated in the Industry Day. BMT Consulting did not attend the industry day, nor did they express any further interests. Accutronics inquired about the Industry Day posting via telephone to the Contracting Officer and was invited to participate in Industry Day, but was not in attendance. The company did not follow up on their inquiry. Industry Day was held at Tinker AFB at NDM's facility. Boeing promoted their intrinsic knowledge of the ALCM and work on similar items but acknowledged the schedule implications they would experience for setting up a new line of work and acquiring data. SwRI showed their history of performing contracts with TAFB and their expertise with doing related work. However, SwRI would also have to procure relevant data rights. Northrop Grumman is in possession of the original drawings, production, and test procedures and has been extensively involved in the life cycle service support over the course of the ALCM's service life.

Marvin Heymann & Associates (MHA), 1393 Alligator Dr Alligator Point, FL 32346 is a consulting firm that assists businesses in finding, winning and performing U.S. Federal Government Contracts. MHA does not hold any insight or experience to the ALCM INE. In addition, MHA does not possess engineering drawings, tech data, or data rights for the INE.

The INE has no commercial applications. Nuclear surety certification cannot be applied to commercial or non-developmental items.

Market research, SSS, and inquiries took place from January 2017 through March 2017 and is a continuous process.

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

A life cycle cost estimate could not substantiate a cost benefit for procuring data rights from Northrop Grumman for the INE testing and manufacturing procedures and duplication of the requisite test equipment. Nor would the additional time required to execute and qualify such duplication meet the agency requirements. Therefore, procuring data from the OEM was not further pursued by the Government for this action. Additionally, Northrup Grumman has been the center of excellence for development, fielding, and repairing of navigation systems for Air Force and Navy strategic assets for over 45 years. No other contractor provides the depth of knowledge, experience and years of data gathering to support the unique development and supportability effort required for the ALCM program.

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

1. BMT Consulting Inc. (BMT), 1337 Locust Rd Washington, DC 20012, CAGE Code 5FZ62

2. Northrop Grumman Corporation, Electronic Systems, 211 W. North Temple Salt Lake City, UT 84116-2993; CAGE Code 5D172

3. The Boeing Company, 6001 S. Air Depot Blvd Oklahoma City, OK 73135, CAGE Code 1N929

4. Marvin Heymann & Associates (MHA), 1393 Alligator Dr Alligator Point, FL 32346, CAGE Code unknown

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5. Southwest Research Institute (SwRI), 6220 Culebra Road San Antonio, TX 78238, CAGE Code 26401

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.

A review of life cycle cost estimates will be conducted periodically to capture any potential changes in market conditions and opportunities. Technical risk and cost benefit analyses will be part of future source and competition deliberations.

XII. Certification by the Contracting Officer.

As evidenced by her signature above, the Contracting Officer has determined this document to be both accurate and complete to the best of her knowledge and belief.

XIII. Certification by the technical/requirements personnel.

As evidenced by their signatures above the requirements personnel have certified that any supporting data contained herein, which is both their responsibility, is both accurate and complete.