FINAL_HSEP_JA_201600304_V2_posted.pdf

PR Number: FD2020 16-50183

JUSTIFICATION AND APPROVAL (J&A) FOR OTHER THAN FULL

AND OPEN COMPETITION

Contracting Activity: AFNWC/PZBC Purchase Request Number/Local Identification Number: FD2020 16-50183 Estimated Program Cost: $ M Authority: 10 USC 2304(c)(1), as implemented by FAR 6.302-1, Only One Responsible Source Type Program: PEO Program Type J&A: Individual

SUBMITTED BY:

DATE

AFNWC/NIE Program Manager

DATE

AFNWC/PZBC Contracting Officer

DATE

75 ABW/JAQ Program Counsel

DATE

AFNWC/PK Competition Advocate

APPROVED BY:

DATE

Major General, USAF Air Force Program Executive Officer for

Strategic Systems

1231512175C Highlight

JUSTIFICATION FOR OTHER THAN

FULL AND OPEN COMPETITION

I. CONTRACTING ACTIVITY

United States Air Force ICBM Systems Division Directorate of Contracting (AFNWC/PZB) 6008 Wardleigh Rd. Bldg. 1580 Hill AFB, UT 84056-5802 Contracting Officer: Brent Michelson/AFNWC/PZBC

DSN: 777-9494

Purchase Request Number: FD2020 16-50183

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

A. Upon approval to use other than full and open competition procedures, the Air Force (AF) will enter into a follow-on contract with General Dynamics Government Systems Corporation to perform services for the Hardness Surveillance Electromagnetic Pulse (HSEP) Program. This is in support of the Minuteman III (MMIII) Intercontinental Ballistic Missile (ICBM) Weapon System.

This sole source requirement will be purchased from the following company:

General Dynamics Government System Corporation 77 A Street Needham, MA 02494-2806

CAGE: 04655

Large Business

B. Contract Type and Structure: This is a follow-on services contract and the anticipated pricing arrangement will be Firm-Fixed Price and Cost Reimbursement. Approximately 96% will be Firm-Fixed Price and 4% Cost Reimbursement. The Period of Performance will be a one (1) year base period with four (4) option years. The Option to Extend Services Clause, FAR 52.217- 8, will be included, evaluated, and priced in the resulting contract.

C. Type J&A: Individual.

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

AGENCY’S NEEDS

A. Nuclear hardness testing is required to verify the integrity of the ICBM weapon system.

Failure to test would cause weapon system vulnerability to Electromagnetic Pulse (EMP) and problems would go undetected increasing chances of enemy weapon success. Nuclear “hardness assurance, maintenance, and surveillance program” is to be implemented if system requires hardening to survive against nuclear threats, in accordance with AFI 63-101 Para. 5.4.26.3.

Additionally, AFI 10-2067 Para. 1.1.2 directs that “The Lead Command/Sponsor must ensure nuclear systems, nuclear command and control (NC2) systems, and associated facilities and equipment are hardened against Chemical, Biological, Radioactive, or Nuclear (CBRN) attacks and have a continuing nuclear hardness maintenance and hardness surveillance (HM/HS) program.” The HSEP program also provides data for the Weapons System Effectiveness Report used by STRATCOM War Planners. Without HSEP testing, the MMIII Weapon System would be in violation of current regulations and SECDEF direction.

B. Nuclear Surety and Safety testing is accomplished at individual missile Wings. Prior to beginning work at a site, contractors must have an approved Personnel Reliability Program (PRP) Implementation Plan, training package, and be certified by the responsible authority on PRP status. Certification is an extensive process; the estimated time to establish PRP certification is 180 days. Prior to testing, detailed reports on safety compliance and engineering, along with nuclear safety analysis, must be approved through Defense Nuclear Surety (DNS).

This requires a highly specialized knowledge of the ICBM Weapon System and approval by DNS requires 120 days. The contractor is responsible to identify the items that could result in decertification of the test site. Currently, there is no way to recertify a decertified site. When testing is complete, the contractor must demonstrate to DNS that testing did not compromise the certification of the site.

C. Under the contemplated contract, General Dynamics will perform HSEP services for the nuclear hardness testing of MMIII launch and alert facilities located at F.E. Warren AFB, WY, Malstrom AFB, MT, and Minot AFB, ND. The contractor will be performing HSEP testing of nine (9) missile sites, including seven (7) Launch Facilities (LFs) and two (2) Missile Alert Facilities (MAFs) per contract year. The objective of the effort is to obtain data and analysis to determine the current EMP site hardness, project future hardness, and identify replacement and refurbishment needs prior to failure, loss of safety margin, or system degradation. The contractor will identify conditions that degrade EMP hardness through testing and inspection.

All EMP hardness data will be stored in a database and the results documented in reports. New data, along with prior EMP hardness data, will be stored in a database and results documented in required reports. The overall effort includes engineering and technical services to collect EMP hardness data, repair of government furnished equipment, hardness reports at the Wing level, over and above problem resolution directly related to hardness testing, and updates/maintenance of the HSEP database. The total cost for this effort is estimated to be $ M for a one (1) year base period and (4) one year option periods with a six month option to extend services.

The cost is based on the previous contract plus inflation and an independent cost estimate by government cost estimators. Approximately 126,203 staff hours will be acquired for this effort.

The appropriation funding type is Air Force Appropriation Code 3400/Operations and Maintenance. Below is the estimated cost and quantities per year:

FY16 FY17 FY18 FY19 FY20 FY21 FY22

IV. STATUTORY AUTHORITY PERMITTING OTHER THAN FULL AND OPEN

COMPETITION

10 USC 2304(c)(1), as implemented by FAR 6.302-1, Only One Responsible Source

V. DEMONSTRATION THAT THE CONTRACTOR’S UNIQUE

QUALIFICATIONS OR NATURE OF THE ACQUISITION REQUIRES THE USE OF

THE AUTHORITY CITED ABOVE (APPLICABILITY OF AUTHORITY)

A. An essential, core requirement of the HSEP program is High Altitude Burst (HAB) testing, per ICBM Weapon System Specification (WSS) S-133-128D. General Dynamics owns a HAB pulser capable of meeting the WSS requirement. The General Dynamics pulser is capable of producing simultaneous transients at twelve penetration locations as required by the WSS. The pulser was developed, built, and is owned by General Dynamics. They maintain exclusive intellectual property rights on the equipment and software. Any contractor besides the incumbent would need to build a similar pulser to perform all required aspects of HSEP testing.

An independent government evaluation forecasted an approximate 6 month period of performance to build the pulser with an additional 6 months required to gain nuclear certification. The cost of pulser procurement was estimated at $500,000.00. It is expected that a competitive HSEP contract would need to be awarded one year before service is required to allow for pulser construction/certification.

B. In order to conduct HSEP testing, a company must possess PRP qualified personnel. PRP qualification can only be initiated once a contract with valid PRP requirements is in place. If not already PRP qualified, the process to get PRP qualification takes approximately 12-months from when the individual is submitted (submission requires an existing TOP SECRET clearance).

General Dynamics currently has PRP qualified personnel and is certified in all aspects of testing.

If there is a break in contractual service greater than 60 days, PRP qualification expires and all personnel must be recertified.

C. General Dynamics is the only firm capable of providing the services described in this action without the USAF experiencing duplication of cost that could not be recovered through competition and causing unacceptable delays in fulfilling its mission requirements.

VI. DESCRIPTION OF EFFORTS MADE TO ENSURE THAT OFFERS ARE

SOLICITED FROM AS MANY POTENTIAL SOURCES AS DEEMED PRACTICABLE

A. In preparation for contract ending 31 December 2015, a Sources Sought Synopsis (FA8204- 14-R-HSEP) was released 10 September 2014. Prospective vendors were asked to provide company information, experience with EMP requirements, information on equipment required to fulfill the requirement of the effort (i.e. HAB pulser) and current PRP status. Responses were received 16 October 2014 from four (4) companies: The Boeing Company, General Dynamics, Serco Inc., and Electro Magnetic Applications (EMA) Inc. The responses received from industry did not adequately address HSEP specific questions.

B. A follow-up Request for Information (RFI) was posted and quality responses were received on 17 December 2014 from Boeing and General Dynamics. Serco Inc. did not respond to this RFI and it was confirmed via telephone conversation that Serco Inc. would not pursue this effort due to unfamiliarity with ICBM weapon system requirements. EMA initially expressed willingness to compete if HSEP was considered a small business set aside. However, after further discussions, EMA communicated their intentions not to bid on the HSEP program based on the requirement for a contractor provided pulser. It was determined that two companies, Boeing and General Dynamics, could potentially compete for the follow-on contract. A competitive Acquisition Strategy was approved 19 May 2015.

C. The requirement was synopsized on 29 September 2015 and a draft Request for Proposal (RFP) was posted to FBO.gov on 29 October 2015. The responses from Boeing and General Dynamics were received 17 November 2015. Response from Boeing identified the timeline to procure and certify the required HAB pulser and furnish PRP qualified individuals. The schedule Boeing provided indicated a likely break in service. A letter was issued to Boeing on 15 January 2016 asking them to clarify the Government’s concerns. A meeting was held between the AFNWC ICBM Systems Directorate and The Boeing Company on 20 January 2016.

During this meeting, The Boeing Company informed Government representatives that Boeing could not meet the requirements of the WSS and that the company would no longer pursue the HSEP program. This was formally documented in a letter provided to the Government by Boeing on 22 January 2016.

D. As a result of market research, General Dynamics has been identified as the only viable source of supply for HSEP services.

VII. DETERMINATION BY THE CONTRACTING OFFICER THAT THE

ANTICIPATED COST TO THE GOVERNMENT WILL BE FAIR AND REASONABLE

The following steps will be taken to ensure that the anticipated cost of this acquisition will be fair and reasonable. The Contracting Officer will comply with the procedures and criteria contained in Federal Acquisition Regulation (FAR) under Part 30 - Cost Accounting Standards, Part 31 - Contract Cost Principles and Procedures, Subparts 15.4 - Contract Pricing and 12.209.

The Air Force will obtain prior sales data and/or prices paid for same or similar commercial items. A technical evaluation will be accomplished as appropriate. Additional steps to ensure price reasonableness will be under the guidance of the Contract Pricing Reference Guides, jointly developed by the Federal Acquisition Institute and the Air Force Institute of Technology. The final step is to include the Price Negotiation Memorandum (PNM). This detailed documentation and justification of price reasonableness will be disclosed in the official PNM, to be prepared upon completion of negotiations.

VIII. DESCRIPTION OF THE MARKET RESEARCH CONDUCTED AND THE

RESULTS, OR A STATEMENT OF THE REASONS MARKET RESEARCH WAS NOT

CONDUCTED

A. As mentioned in Section VI above, market research, in accordance with FAR Part 10, was conducted for HSEP testing to determine commercial application and the possibility of alternate sources. The techniques used were internet searches, discussions with other government technical employees that are/were directly involved with HSEP, Requests for Information (RFI), and releasing a Sources Sought Synopsis (SSS) and Draft RFP on FedBizOps. Based on the information received, Boeing was identified as a potential vendor other than the incumbent that could reasonably compete on the HSEP contract. However, in order to perform on the contract, Boeing would need to purchase a High Altitude Burst (HAB) pulser that would not be provided as Government Furnished Equipment (GFE). Boeing originally stated they were willing to absorb the cost of a pulser, but it was unclear if the acquisition of this equipment would have adverse schedule impacts to future HSEP testing. Boeing ultimately removed itself from consideration due to concerns of the high cost of acquiring required equipment, and required nuclear surety assurance testing.

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

OPEN COMPETITION

A. General Dynamics is the current contractor and has been providing HSEP services since 2001.

The current contract is FA8204-11-C-0014 and was awarded sole source on 30 Jun 2011. The 6-month option to extend services was exercised and all support on the current contract will expire 30 Jun 2016.

B. Loss of HSEP testing would result in a significant degradation in nuclear hardness surety.

The need to evaluate sites is the minimal statistical sample size required to ensure % reliability with % confidence. If sites instead of were tested, the ability to evaluate site hardness for EMP would be reduced by ~ %. Evaluation of sites would reduce the ability to evaluate site hardness for EMP to %.

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

ACQUISITION

The Boeing Company General Dynamics Serco Inc.

Electro Magnetic Applications (EMA) Inc.

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. The primary barriers to competition are construction and certification of a High Altitude Burst (HAB) pulser, and the availability of Personnel Reliability Program (PRP) qualified individuals. Future HSEP contracts can be fully competed once existing barriers are eliminated.

A non-incumbent contractor would need approximately12 months before HSEP service is performed to construct/certify a HAB pulser and gain PRP certification for personnel. The acquisition strategy for future competition will be to award a follow-on contract one year before the end of the contract authorized by this J&A. The contract that results from the follow-on competition will have contract Line Items (CLINs) that will cover the transition from this sole-source effort to the new contract. Additional ‘phase out’ verbiage will be added to the Performance Work Statement (PWS) outlining the transition responsibilities of the incumbent to ensure a competitive environment for the follow-on effort.

B. In 2017 the Minuteman III ICBM system will begin to follow a regular Programmed Depot Maintenance (PDM) schedule. Execution of PDM will require that a missile site be taken off alert. As HSEP also requires that a site be taken off alert, synergies are currently being explored which would minimize total off-alert time. A 60 month contract with General Dynamics will allow the program office to evaluate impacts of PDM implementation on HSEP execution. The current plan is to modify HSEP testing to be performed in conjunction with PDM. This could require that the HSEP testing to expand where it would be necessary to perform testing at multiple locations at the same time. In order to do this testing either the government or a contractor would be required to make an investment in additional equipment. At this time these alternatives are being considered. If the required equipment were to be purchased by the government, it would be provided to the contractor as GFE. Having the government procure the required equipment and provide it to the contractor as GFE could significantly lower one of the main barriers to competition.

XII. CONTRACTING OFFICER’S CERTIFICATION

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