KS_252_KS_124_Final_Redacted_JA.pdf

COORDINATION AND APPROVAL DOCUMENT

CONTRACTING ACTIVITY: Cryptologic Systems Division, Contracting Branch

(ESC/HNCK) Lackland AFB, TX

PURCHASE REQUEST NUMBER: F2MTN72034B001

PROGRAM/PROJECT: KS-252 End Cryptographic Unit Follow-on Production and Sustainment

ESTIMATED CONTRACT COST: $24,963,077.00 (including all options)

AUTHORITY: 10.U.S.C. 2304(c) (1), as implemented by FAR 6.302-1

TYPE J&A: Individual

COORDINATION

Program Manager: ______________________________________ ___________ REDACTED ESC/HNCSS Date Signed

Contracting Officer: ______________________________________ ___________ REDACTED ESC/HNCKS Date Signed

Local Legal ______________________________________ ___________ Reviewer: REDACTED ESC/JA Date Signed

Competition REDACTED ESC/HNCK Date Signed Advocate:

APPROVED:

REDACTED Date Signed

JUSTIFICATION FOR OTHER THAN

FULL AND OPEN COMPETITION

I. CONTRACTING ACTIVITY

The Contracting Activity responsible for the proposed contracting action is the Electronic Systems Center (ESC) Cryptologic Systems Division (HNC), Lackland AFB, TX. The Organizational Activity is Cryptologic Systems Division Space COMSEC Sustainment Section

(ESC/HNCSS).

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

The proposed contracting action will be awarded as a new follow-on production and sustainment contract for Ground Operating Equipment (GOE), KS-252. The type of contract planned is an Indefinite Delivery/Indefinite Quantity (ID/IQ) Firm-Fixed-Price (FFP) and Time and Material (T&M) contract with a five (5) year ordering arrangement. This effort will be comprised of the following contract line item numbers (CLINs): (CLIN 0001) Software/Hardware/Firmware Modifications; (CLIN 0002) KS-252 Units; (CLIN 0003) Maintenance (Repair); and (CLIN 0004) Technical Support. CLIN’s 0001-0003 will be FFP, and CLIN 0004 will be T&M. There will be a base year and four option years for each of the aforementioned CLINs.

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

NEEDS

HNCS is both the acquisition and sustainment organization for all space cryptographic devices.

HNCSS will support the sustainment of the KS-252.

The operational mission of the KS-252 is to protect the vital radio frequency Telemetry, Tracking, and Control (TT&C) links between the DoD and intelligence community satellites and their ground control centers. These TT&C communication links carry health, status, and payload data (telemetry); position, speed, and direction data (tracking); and instructions to perform various functions (control). Space TT&C Aerospace Vehicle Equipment (AVE) devices onboard satellites and compatible GOE devices on the ground work in tandem to encrypt and decrypt the uplink control commands and downlink telemetry. These systems are primarily operated by Air Force Space Command (AFSPC) and the National Reconnaissance Office (NRO) and provide a wide range of military and civilian services to US and coalition forces, and civilian agencies worldwide.

The GOE I1 Program completed the System Development & Demonstration (SD&D) effort for the KS-252 on contract REDACTED with ViaSat, Inc. It was awarded as a Cost-Plus-Incentive- Fee contract. The total current contract value is REDACTED. The KS-252 successfully completed Acceptance Testing, Security Verification, Operational Assessment, and First Article Qualification Test during REDACTED. A successful Production Readiness Review was held in REDACTED and the KS-252 was assessed at a Manufacturing Readiness Level Nine. The KS- 252 received National Security Agency (NSA) Type I Certification in Oct 2010. The Production Option on contract REDACTED was exercised in REDACTED for a quantity of 442 KS-252 units. The Production Kick-Off Meeting was held REDACTED. The KS-252 contract will provide for the KS-252 production and sustainment requirements for the next five years. While providing for those requirements, this contract will provide for necessary NSA mandated policies on software updates to the KS-252 during this time. Thus, the costs of the follow-on production and sustainment effort are estimated to be $24,963,077.00. The program officially transitioned from acquisition to sustainment on REDACTED.

The KG-250 (predecessor to the KS-252) was developed at the expense of ViaSat, Inc. The KG- 250 Inline Network Encryptor (INE) is built around ViaSat's Programmable Scalable Information Assurance Model (PSIAM) which is a hardware based, fully programmable information assurance model. To meet the Government's requirements in developing the KS- 252, none of the KG-250 hardware was modified and REDACTED of the KG-250 software was reused. ViaSat maintains all rights to the hardware, and REDACTED of software which was modified at the Government's expense is restricted with limited rights as it contains proprietary code to run their PSIAM.

Due to the significance of the privately developed components that were used as the basis for the KS-252, technical data as whole preclude a third party from producing and sustaining the system.

This data is the essential information required to solicit proposals for production or modification to this highly specialized equipment. Any contractor other than ViaSat, Inc. would have to gain NSA approval after reverse engineering the KS-252 to develop a new product and sustain it.

There would be unacceptable delays associated with a new contractor acquiring NSA certification, as well as substantial duplication of cost related to the development of a new End Cryptographic Unit (ECU) with the KS-252 capabilities. Therefore, a sole-source contract to ViaSat, Inc. is in the best interest of the Government.

The Cryptologic Systems Division Space COMSEC Sustainment Section (ESC/HNCSS) will manage the KS-252 follow-on production, software/firmware/hardware modification (to include algorithm upgrades), maintenance (repair), and technical support contract efforts. This contract is for the additional KS-252 hardware required by the Space community supporting the warfighter. The contract will also procure future software modifications, maintenance (i.e., repair), and technical support needed to assist HNCSS with addressing customer’s integration concerns with the equipment.

Under the contemplated contract, ViaSat, Inc. (CAGE 47358) will provide the following projected supplies and services related to follow-on production and sustainment of the KS-252:

(CLIN 0001) This CLIN covers modification options. These modification options include implementing NSA directives associated with the NSA developed cryptographic algorithm REDACTED , correcting evaluation findings, and making changes to the KS-252 as required to widen the applicability of the product.

Each delivery order will require a final deliverable of updated software approved by NSA.

The ordering period for this effort will be from REDACTED through REDACTED.

Procurement (3080) appropriations will fund these efforts.

(CLIN 0002) This CLIN covers production units. The ordering period for issuance of supply delivery orders during the performance of this effort will be from REDACTED through REDACTED. Procurement (3080) appropriations will fund this effort.

(CLIN 0003) This CLIN covers (a) minor repair on approximately thirty-six (36) KS-252 units and (b) major repair on approximately eleven (11) KS-252 units. The period of performance of this effort will be from REDACTED through REDACTED. Operations & Maintenance (O&M) (3400) appropriations will fund this effort.

(CLIN 0004) This CLIN covers technical support to provide subject matter experts as needed for resolving complex integration problems on operating the system and application software/firmware and hardware. The CLIN associated with this portion of the contract will be T&M. The staff-hours associated with this work are planned to be utilized on an as-needed basis. All technical concerns will be resolved at the user lever first. If the KS-252 users are not able to solve an issue they will contact the KS-252 Government Sustainment team. The Government Sustainment team consists of individuals that are highly trained on and familiar with the KS-252 devices. Only in cases where both the user and the Government Sustainment team are unable to resolve technical issues will the technical support of ViaSat, Inc.’s engineers be utilized. The period of performance of this effort will be from REDACTED through

REDACTED.

O&M (3400) appropriations will fund this effort.

This contract will procure the required highly specialized KS-252 built to current NSA certification to satisfy requirements from REDACTED through REDACTED for AFSPC, NRO, and all other DoD agencies that utilize the Space Satellite network. It is more cost effective to do an option year contract because historical data of the KG-250 (predecessor to the KS-252) shows repairs and additional units will be needed for a number of years and the manpower burden of creating a new contract every year is not cost effective.

The anticipated cost for this effort from REDACTED through REDACTED is $24,963,077.00.

(See tables 1 &2) The pricing estimates are reflected in Table 1 while Table 2 shows production quantities for each FY.

Table 1

REDACTED

Table 2

IV. STATUTORY AUTHORITY PERMITTING OTHER THAN FULL AND OPEN

COMPETION

10 USC 2304 (c) (1), as implemented by FAR 6.302-1, Only one responsible source and no other supplies will satisfy agency requirements. The use of this exception is appropriate due to the following conditions: (1) a follow-on contract is necessary for the continued production and future sustainment, maintenance (repair) and technical support of a major system or highly specialized equipment, when award to any other source would result in substantial duplication of costs (which could not be recovered through competition), (see FAR 6.302-l(a)(2)(ii)), and (2) there is other reasonable basis to conclude that the Government’s minimum needs can only be satisfied by unique supplies or services available from only one or a limited number of suppliers with unique capabilities (see FAR 6.302-l(b)(i)).

V. DEMONSTRATION THAT THE CONTRACTOR’S UNIQUE QUALIFICATIONS

OR NATURE OF THE ACQUISITION REQUIRES THE USE OF THE AUTHORITY

CITED ABOVE

ViaSat, Inc.’s years of experience with the existing KG-250 commercial product and four years experience with the new KS-252 product identifies them as having unique, highly specialized capabilities and qualifications to continue manufacturing and sustaining the KS-252 unit. ViaSat is the only vendor capable of supporting the current production and sustainment of the NSA certified GOE KS-252 product.

ViaSat, Inc. is the only firm capable of providing the supplies and services described in Section III without the Government experiencing substantial duplication of cost that could not be expected to be recovered through competition. Awarding a contract to another vendor other than ViaSat, Inc. would require the Government and a new vendor to conduct the same acquisition process used on the original GOE I1 program which could result in a duplication cost as high as REDACTED. This figure is based on the amount the Government spent during the GOE I1 Engineering Manufacturing and Development (EMD) phase, and the cost to support the program during the acquisition phase to include, but not limited to, Advisory &Assistance Service (A&AS) and Government travel. The Government spent many hours supporting the development, environmental and security verification tests, NSA certification, and reviewing end item documentation. Moreover, the estimated cost to run a competitive source selection for a new developmental acquisition program is REDACTED based on the original GOE I1 source selection effort. (See Attachment 1)

ViaSat maintains all rights to the hardware and REDACTED of software which was modified at the Government's expense. It is restricted with limited rights as it contains proprietary code to run their PSIAM. This data is the essential information required to solicit proposals for production or modification to this highly specialized equipment.

VI. DESCRIPTION OF EFFORTS MADE TO ENSURE THAT OFFERS ARE

SOLICITED FROM AS MANY POTENTIAL SOURCES AS DEEMED PRACTICABLE

A Sources Sought Synopsis was posted to the Hanscom AFB Electronic Request for Proposals Bulletin Board (HERBB) on August 2011. The synopsis requested that sources capable of manufacturing, modifying or repairing KS-252 end cryptographic units contact the Contracting Officer to demonstrate their abilities and express interest in the Government’s KS-252 production and sustainment requirements. ViaSat, Inc. was the only company to respond to the Sources Sought Synopsis. The fact that ViaSat, Inc. is the sole company with the hardware and software data rights to complete the production and sustainment of KS-252 ECU reinforces the findings from the Source Sought Synopsis posted in August 2011. A copy of the Sources Sought Synopsis and ViaSat’s response is attached (attachment 2).

VII. DETERMINATION BY THE CONTRACTING OFFICER THAT THE

ANTICIPATED COST TO THE GOVERNMENT WILL BE FAIR AND REASONABLE

Cost and Price analysis and subsequent negotiations will be accomplished by the Contracting Officer to determine a fair and reasonable price. This requirement is not considered to be a commercial item IAW the definition of FAR 2.101. Certified cost or pricing data will be required. The Defense Contract Audit Agency (DCAA) will audit the contractor’s proposal and ESC/HNCS Special Projects Branch will perform a technical evaluation of the proposal. The Contracting Officer will consolidate the DCAA audit and HNCS technical evaluation in developing the Government objective and conducting negotiations.

VIII. DESCRIPTION OF THE MARKET RESEARCH CONDUCTED AND THE

RESULTS, OR STATEMENT OF THE REASONS MARKET RESEARCH WAS NOT

CONDUCTED

ViaSat, Inc. is the current vendor for all of the KS-252 hardware and maintains the only NSA certified production line. Although the Program Office was aware that Viasat, Inc. is the Original Equipment Manufacturer (OEM) for this product, market research was completed to verify this to be true. Market Research was completed on 09 September 2011. A Sources Sought Synopsis was posted on HERBB and FedBizOpps on 26 August 2011. ViaSat, Inc.

provided the only response from the Sources Sought Synopsis on 06 September 2011 (see Attachment 2). Market Research verified that ViaSat, Inc. is the sole provider and OEM for the

KS-252.

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

OPEN COMPETITION

The KS-252 was developed by modifying the software in the AltaSec KG-250 to meet the Government requirements of the GOE I1 program. As mentioned in Section III, the KG-250 is an INE which is certified by the National Security Agency (NSA) for use on classified U.S.

Government communication networks and was entirely developed by ViaSat, Inc. at their expense. The KG-250 INE is built around ViaSat's Programmable Scalable Information Assurance Model (PSIAM) which is a hardware based, fully programmable information assurance model. In meeting the Government's requirements for the KS-252, none of the KG-250 hardware was modified and REDACTED of the KG-250 software was reused. ViaSat maintains all rights to the hardware, and REDACTED of the software which was modified at the Government's expense is restricted with limited rights as it contains proprietary code to run their PSIAM. This data is the essential information required to solicit proposals for production or modification to this highly specialized equipment. The KS-252 proprietary data as a whole precludes a third party from producing and sustaining the system.

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

ACQUISITION

See Section VI above.

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

Despite the fact that the Government acquired a small portion of the KS-252 software drawings, there are no actions planned to remove or overcome barriers to competition because these drawings (as discussed in Section V) are directly linked to the KG-250, a commercial item owned by ViaSat, Inc., and cannot be released to another contractor.

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)).

ATTACHMENT 1: Cost of Conducting Competitive Effort

Attachment 2: Request for Information Response from OEM