JA_Gear_Spur_3010010541271YP_4_April_2016_REDACTED.docx

FD2020-16-00418

4 April 2016

JUSTIFICATION FOR OTHER THAN FULL

AND OPEN COMPETITION

LIMITED NUMBER OF RESPONSIBLE SOURCES JUSTIFICATION AND APPROVAL

*REDACTED*

I. CONTRACTING ACTIVITY

UNITED STATES AIR FORCE

OO-ALC/PZABB

6050 Gum Lane BLDG 1215 Hill AFB, UT 84056 Contracting Officer: Leslie Westcott Phone Number: 801-586-3964 PR Number: FD20201600418

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

A. Upon approval to use other than full and open competitive procedures the Government will issue a follow-on contract to procure 94 each F-16 Gear Spurs. This requirement is in support of the 309th Depot Maintenance at Hill Air Force Base that directly supports the F-16 Secondary Power Systems program. The only two sources qualified to provide the parts are:

UNICAL DEFENSE INCORPORATION

680 S. Lemon Avenue City of Industry, CA 91789-2934

(909) 348-1512 Cage Code: 7CNG1

B. Contract Type & Structure: A Firm-Fixed Price (FFP) supply contract will be issued. The estimated award date is 27 May 2016. The contract will not contain any options.

C. Type of J&A: Individual

III. DESCRIPTION OF THE SUPPLIES/SERVICES REQUIRED MEETING THE AGENCY’S NEEDS:

A. Under the contemplated contract, Unical Aviation Incorporation will provide the following replenishment of spares in sustainment of the F-16 Secondary Power Systems, specifically the Torque Converter subassembly which is installed in the F-16 Accessory Drive Gearbox (ADG).

B. The estimated production lead time is 180 days after acceptance of the contract.

C. The Total Estimated Cost: $309,474.32 (no options). The estimate is based on the Automated Budget Compilation System – Buy Load List, from the D200A requirements determination system. This action will use 64 7312 appropriated Material Support Division Working Capital funds.

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 and No Other Supplies or Services Will Satisfy Agency Requirements.

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

A. The above authority was selected because the follow-on contract is for replenishment of spares to produce 94 each F-16 Gear Spurs. Competition is not available because the Government does not own the data rights to produce the highly specialized equipment; and there would be substantial duplication in costs of reverse engineering the part that the Government would not recover from. Therefore, this acquisition will be a follow-on contract for the continued production of highly specialized equipment.

B. The F-16 Gear Spur is a component generally termed as Turbines and Gears Assembly that is highly specialized equipment of the F-16 Accessory Drive Gearbox (ADG) gear train. The ADG supplies hydraulic and electrical power during F-16’s flight operation. The F-16 Gear Spur is unique to the F-16 aircraft with a total of 1 each per aircraft.

C. The Original Equipment Manufacturer (OEM), Hamilton Sundstrand Corporation (UTAS) (Cage Code 99167), owns the data rights to the F-16 Gear Spurs. The Government has made multiple attempts to obtain the data rights from UTAS but has only been successful in obtaining limited rights to perform minor repairs. The most recent attempt was on 25 February 2016. The Government e-mailed a letter on 25 February 2016 to UTAS’ Military Customer Support Manager to inquire whether UTAS would be willing to sell or license the data required for the Government to conduct a competitive procurement for the required parts. UTAS responded that they are not willing to sell or license the required technical data for a competitive procurement to the Government at this time. Furthermore, on 16 March 2016 UTAS informed the Government via e-mail that they have licensed the data rights exclusively to Unical Defense Incorporation (Cage Code 7CNG1) to produce and sell the F-16 Gear Spurs.

D. The Government has determined award to any other sources would result in substantial duplication of cost to the Government that will not be recovered through competition. According to engineering estimates, the upfront costs to reverse engineer the F-16 Spur Gear, including cost of equipment, development of special testing requirements, software development for the test equipment, and creation of technical drawings

F. Accordingly, Hamilton Sundstrand and Unical Defense are the only firms capable of providing the supplies described in Section III above without the Government experiencing unacceptable delays and substantial duplication in costs that is not expected to be recovered through competition.

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

A. A Sources Sought Synopsis (SSS) was posted on FedBizOpps from 30 December 2014 to 20 January 2015. The SSS number is SPRHA1-15-R-00531. The SSS notified interested parties of the Government’s intention to procure the F-16 Gear Spurs and requested any interested parties to contact the contracting officer. When the SSS closed out, the Government only received one response, Patriot Dynamics. Patriot Dynamics indicated that they intend to submit a proposal when the solicitation is posted however, Patriot Dynamics is a surplus dealer and can only provide overhauled items; they do not own the data rights to produce the required F-16 Gear Spurs.

B. The requirement will be synopsized on FedBizOpps as a notice of proposed contract action IAW FAR Part 5.201 for 15 days followed with a solicitation that will be posted for 30 days. In addition, for transparency, the approved redacted J&A will be posted with solicitation. If other sources express interest as a result of the synopsis or solicitation they will be listed in the official contract file and be given the opportunity to be a qualified source.

C. Other Actions: None.

D. Qualifying Country Sources: None.

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

IAW FAR 6.303-2(b) (7) the following steps will be taken to ensure that the proposed price of the acquisition will be fair and reasonable. The Contracting Officer will comply with the procedures in Subparts 15.4 – Contract Pricing and the guidance of the Contract Pricing Reference Guides. In addition, the Contracting Officer will obtain other than certified cost and pricing data IAW FAR Subpart 15.403; perform proposal analysis and price analysis; and negotiate the proposed rates. The results of the negotiation will be documented on the Pricing 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 MARKET RESEARCH CONDUCTED AND THE RESULTS OR A STATEMENT OF THE REASONS MARKET RESEARCH WAS NOT CONDUCTED:

A. As described in Section VI above, market research, in accordance with FAR Part 10, was conducted by posting a synopsis of the proposed acquisition, advising industry of the pending acquisition and soliciting inquiries from interested parties. The SSS was posted on FedBizOpps from 30 December 2014 to 20 January 2015. In addition, an internet search for “manufacturing, repair, and overhaul of aircraft engine parts” was done. A few vendors came up in that search having the knowledge or manufacturing capabilities to meet the government’s needs however, the did not possess the technical data necessary to manufacture the F-16 Gear Spurs.

B. In addition, during the month of November 2015 seven companies that produce Turbines and Gears Assemblies were accessed by the F-16 engineering team to determine if they could produce the F-16 Gear Spurs. The details of the assessment are in the market research report. The results of the assessment concluded that even though they possess the “know-how” to design, build, and manufacture gears and turbines they do not have the required data to manufacturer the F-16 Gear Spurs. Nonetheless, the Government will continue to seek any and all methods of procuring and finding F-16 Gear Spurs to support the F-16 ADGs Secondary Power. Surplus actions continue to be investigated and searched.

C. Based on the thorough market research conducted, there Government is confident there are no additional sources capable of satisfying the agencies need for this proprietary item nor are there any other commercial or non-developmental items which could be utilized to meet needs or which could be modified to meet the needs.

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

This is a follow-on contract. Since the Government has never owned data rights sufficient enough to allow competition and has determined it is uneconomical to reverse engineer the part the Government has been sole sourcing their requirement to the OEM Hamilton Sundstrand since inception of the F-16, in 1980. Below is a snap shot of the acquisition history from Hamilton Sundstrand:

Note: On 16 March 2016 Hamilton Sundstrand informed the Government they licensed the manufacturing and selling of the F-16 Gear Spurs exclusively to Unical Defense Incorporation (CAGE Code 7CNG1).

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

Patriot Dynamics indicated that they intend to submit a proposal when the solicitation is posted however, Patriot Dynamics is a surplus dealer and can only provide overhauled items; they do not own the data rights to produce the required F-16 Gear Spurs.

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.

None.

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(a)(12)).

XIII. TECHNICAL/REQUIREMENTS PERSONNELS 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)).