J APosting.pdf

JUSTIFICATION FOR OTHER THAN

FULL AND OPEN COMPETITION

I. CONTRACTING ACTIVITY

This Justification and Approval (J&A) to request authority for Other Than Full and Open Competition supports requirements generated for the Air Force Life Cycle Management Center (AFLCMC) Tactical Aircraft (C-130) AFLCMC/WLNC organization. The contracting authority for this requirement is AFLCMC/WLNKA. The purchase request supporting this contracting action is FD2060-16-93572.

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

Due to the circumstances described herein, the activity requests authority to acquire the services listed in this document using Other Than Full and Open Competition (OTF&OC) prescribed by FAR 6.302-1, Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements. This action will result in the award of a Firm-Fixed Price (FFP) follow-on contract for Contractor Logistics Support (CLS) for Self-Contained Navigation System (SCNS) applicable to C-130 aircraft. The Period of Performance (PoP) includes a one-year basic with four one-year options. This sole source requirement will be procured from the following company:

GE Aviation LLC 3290 Patterson Ave SE Grand Rapids, MI 49512-1934 CAGE Code 35351 Large Business

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

AGENCY’S NEEDS

a. This procurement action will result in a follow-on contract to FA8504-15-C-0003. The previous CLS contract was awarded 30 June 2015 and expires 30 June 2016. It was awarded on a sole source basis. This follow-on CLS contract will provide depot-level repair, engineering analysis, technical support for Group A and Group B support equipment and piece parts required to maintain the operational integrity and logistics supportability of SCNS. This CLS contract will provide critical logistics management and technical skills;

design, development and integration of new capabilities; engineering and technical support;

historical knowledge; quality assurance; support of software upgrades; configuration control;

associated spares and support equipment; and repair of SCNS hardware. This will ensure the availability of SCNS Line Replaceable Units (LRUs), namely Bus Integration Computer Unit (BICU), Integrated Display Computer Unit (IDCU), and Data Transfer System (DTS) to support C-130 mission requirements. This acquisition supports United States Air Force (USAF), Air Force Reserve Command (AFRC), Air National Guard (ANG), Consolidated Asset Management (CAM) and Foreign Military Sales (FMS) requirements.

b. The C-130 SCNS is an integrated navigation system. It provides the flight crew with three

(3) independent navigation solutions: flight guidance, advisory information, and control over communications and navigation radios vital to C-130 mission accomplishment.

c. The expected period of performance for this effort is 1 July 2016 through 30 June 2021.

Total estimated cost of this effort is $33,727,310 utilizing 3400 type funds. The estimate is based on the previous contract price with a 5% annual escalation for Option Years 1 and 2;

however, the escalation for Options Year 3 and 4 was decreased slightly due to fluctuations in aircraft support associated with spare parts usage

Estimated costs are as follows:

Basic Year: $6,107,332 July 2016-June2017 Option Year 1: $6,412,798 July 2017-June2018 Option Year 2: $6,733,440 July 2018-June2019 Option Year 3: $7,060,361 July 2019-June 2020 Option Year 4: $7,413,379 July 2020-June 2021

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 requirements.

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. The primary SCNS contractor has been GE Aviation LLC since 1985. They possess considerable historical and unique knowledge relative to SCNS. GE Aviation LLC is the Original Equipment Manufacturer (OEM) and only known qualified source capable of maintaining total logistics and technical support of the SCNS/DTS Group A and Group B software, support equipment, and piece parts for depot repair capability. GE Aviation LLC designed, integrated, installed, produced and currently provides logistics support for SCNS throughout the world. Over 600 systems have been delivered to the USAF, ANG, AFRC and FMS users. The responsibility of system management and configuration control has been supported by GE Aviation LLC. They provide specific engineering skills, systems technical understanding and specialized logistics capabilities, as required, to evaluate system interfaces, monitor testing activities and verify the integrated performance capability of the extremely wide range of complex equipment resident in C-130 aircraft. No other source has the required data and support equipment for the repair of components at all levels of maintenance - e.g., flight line, back shop or depot-level – along with the knowledge of system integration.

b. The Government does not own sufficient (full data package) data nor the rights to the data required to support this requirement. Efforts to acquire the data were accomplished in October 2015. The OEM was requested to sell data rights to the Government. GE Aviation LLC responded on 12 November 2015 with a negative response for selling the proprietary data. Parts obsolescence and diminishing manufacturers will impact the configuration of hardware and software throughout the system’s remaining life because the system is no longer in production. The life of this system is estimated to be approximately 15 years (2030). This acquisition is for continued performance of a highly specialized service.

c. AFLCMC/WLN believes awarding to another source would result in 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.

On 12 November 2015, 409th SCMS/GUMBB performed a cost analysis which was based on similar engineering project data. The cost analysis identified costs which would be duplicated should another vendor be awarded the CLS contract. The analysis identified the cost to reverse engineer to be estimated at ~$5,069,938 in duplication costs. Analysis also identified the cost for non-recurring engineering to be estimated at $29,911,944. In order to support the depot-level repair and troubleshooting of the SCNS hardware, special test equipment and tooling are required.

The total value of equipment used to troubleshoot, repair, and test both LRUs and Shop Replaceable Units (SRUs) is estimated at $1,077,580, excluding development costs and associated software. Any contractor, other than GE Aviation LLC would need to duplicate this equipment to adequately support the CLS repair requirements.

Engineering test equipment owned by GE Aviation LLC is valued at $572,621. This test equipment would need to be duplicated should any other contractor be awarded the CLS effort. The new contractor would also need to provide the non-recurring engineering necessary to duplicate these resources as they represent capabilities unique to the C-130 SCNS platform.

To support the SCNS development programs, GE Aviation LLC designed, developed, and built a system simulation lab. It has since been used to support technical research, to assist in hardware fault isolation, and to evaluate reported aircraft anomalies. The GE Aviation LLC system simulation lab includes a high fidelity simulation of the C-130 avionics environment unique to SCNS. The capabilities of the system simulation lab are essential to providing the level of technical support required from the CLS contractor. The equipment and the simulation software are the property of GE Aviation LLC. The price of a single lab station, independent of the development cost, is valued at $530,019.

GE Aviation LLC designed, developed, and built the support equipment needed to field load the Operational Flight Program onto SCNS hardware components independent of the Navigation System Trainer Test Set (NSTTS). This capability is used today to support field recovery loading at remote sites. Independent of the development cost, the equipment is valued at $42,602. This equipment was built by GE Aviation LLC with no expense to the Government.

The bench stock necessary to support the existing CLS effort is valued at ~$501,200. Due to the non-availability of long lead-time items, a transition to a new contractor is expected to result in unacceptable delays in certain repairs. The associated downtime could exceed 3-months, creating the grounding of aircraft at 27 per month, per engineering estimates.

SCNS requires bench stock that is unique to the system, which already exists in GE Aviation LLC current bench stock. These items would not be present in another contractor’s inventory.

Reverse engineering requires an organization to have a sample of the equipment in order to perform the reverse engineering task. GE Aviation LLC has the only known examples of the Engineering Test Equipment and System Simulation Lab. Based on similar engineering project data, AFLCMC/WLNEA evaluated providing GE Aviation LLC equipment and lab to support a reverse engineering effort. This would be predicated on their agreement to release the equipment to the Government. It was determined it would take one to two years to design/develop/purchase and set up. CLS support could not be provided during this reverse engineering period therefore there is a high probability the majority of the C-130 fleet would be grounded due to lack of sustainment support before the reverse engineering effort could be completed.

Approximately 55 SCNS IDCU failures per month multiplied by 18 Months equal 990 failures. With approximately 350 spare IDCUs, you get 640 IDCU removed from operational aircraft. At three IDCUs per aircraft, 640 removals will result in 213 aircraft grounded.

A new contractor would take approximately 24 months to set-up and qualify said repair line.

The majority of the special equipment is one-of-a-kind and is required to support SCNS.

GE Aviation’s repair line would have to stay in operation until the new repair line is functional.

GE Aviation LLC has been the primary SCNS contractor since 1985, and has both considerable and unique knowledge relative to SCNS. There are no other vendors listed as an approved alternate source for C-130 SCNS CLS. SCNS interacts with a large number of other C-130 sensors and systems and is a complex system. CLS for SCNS requires a high level of expertise and experience that no vendor could obtain without data and engineering support from the OEM, mainly due to the system’s complexity and the lack of Government data rights. A projected cost for SCNS replacement approach was estimated to cost $1.2B in FY 13 dollars. The FY 13 estimate was reviewed and was determined still applicable in FY 16. It is neither cost-effective nor in the best interest of the Government to establish an alternate source of repair or compete this effort. The USAF, as early as 2011, has already begun the retirement of SCNS-applicable C-130H aircraft. Accordingly, GE Aviation LLC is the only firm capable of providing the supplies and 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 DEEMED PRACTICABLE

A Request For Information (RFI) for this effort was synopsized in October 2015 under RFI- FA8504-16-1-SCNS. This Market Survey/Request for Information (RFI) was conducted to identify potential sources that possess the expertise, capabilities, and experience to meet the requirement of the depot repair, engineering analyses, and technical support required to maintain the operational integrity and logistics supportability in the accomplishment of a CLS program supporting the C-130 Self-Contained Navigation System (SCNS). Currently the government does not have or own test procedures, bill of materials, or hardware data rights. Original Equipment Manufacturer (OEM) currently has identified hardware configuration under company propriety data rights. The levels of security clearance and amount of foreign participation in this requirement have not been determined. Contractors responding to this Market Research/RFI were placed on notice that participation in this survey may not ensure participation in future solicitations or contract awards. The government will not reimburse participants for any expenses associated with their participation in this survey. No responses were received from the RFI. This requirement will be synopsized on Federal Business Opportunities (FedBizOpps) web page as required by FAR 5.201, citing conditions which preclude full and open competition.

Any source that responds to the Government as a result of this synopsis will be identified to the prime contractor as a potential source for subcontracting possibilities.

VII. DETERMINATION BY THE CONTRACTING OFFICER THAT THE

ANTICIPATED COST TO THE GOVERNMENT WILL BE FAIR AND REASONABLE

The overall cost of this acquisition will be determined to be fair and reasonable to the government. In accordance with FAR 15.403-4, the contractor will be required to provide certified cost or pricing data to be used to support the government's evaluation of the proposed cost. The proposed skill mix of labor, labor hours, types and quantities of material, other direct costs, and direct & indirect rates will be negotiated based on recommendations from the Defense Contract Audit Agency (DCAA), AFLCMC expert technical personnel, Defense Contract Management Agency (DCMA). The contract price will be negotiated in accordance with procedures in FAR Part 15 ensuring the ultimate cost to the government is fair and reasonable.

VIII. DESCRIPTION OF THE MARKET RESEARCH CONDUCTED AND THE

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

CONDUCTED

Market research was conducted in accordance with FAR Part 10.001 and FAR Part 10.002. The Market Research report was completed on 14 December 2015. Market Research was conducted utilizing RFI, searches within Government databases, combined with various internet searches for logistics capability, technical and engineering experiences as well as skills. Qualified Government subject matters experts assisted with gathering background information. In October 2015, an RFI was released to solicit additional vendors for the SCNS CLS effort. No responses were received by the 12 Nov 2015 deadline.

AFSC/FZC-R provided a breakeven analysis on reverse engineering for organic sustainment for a full and open competition. The investment is very close to paying for itself within 25 years.

The projected life of the program (SCNS) is approximately year 2030. Savings/Investment ratio is 0.98, which means for every dollar invested, the return is 0.98 cents. In order to be feasible, a break-even ($1 in/$1 out or 1.00) is required. Payback period is 25.5 years. This is worst case analysis. However, repair requirements are expected to go down based on future legacy C-130 retirements, AMP Increment 2 and completed fielding of the C-130J aircraft. It is unknown at this time by how much, but it will reduce the total savings and delay the payback timeframe.

The Government has not procured the full technical data to support competitive procurements.

The OEM is not willing to sell data rights to the Government, which means that technical data packages, specification, and engineering description suitable for Full and Open Competition cannot be developed without reverse-engineering. Reverse-engineering is considered cost-prohibitive.

Internet searches using www.google.com were conducted to determine if another company might possess the required repair data and experience. The results of internet keyword searches are show below. References to “Smith’s Industries” and “Lear Siegler” that appear in the search results are just past names for GE Avionics.

“Self-Contained Navigation System”:

o 10,300 results. The first 30 (approximately) were reviewed for relevancy.

o There was one reference to KVH building a self-contained navigation system but that was for a navigation sensor that has nothing to do with the C-130 SCNS.

o There was one reference to an Esterline AN/APN-208 self-contained navigation system but this is a Doppler navigation system that has nothing to do with C-130

SCNS.

o There was one reference that is just a resume for their owner that says while in the Air Force he was involved in the C-130 SCNS program as a pilot.

“C-130 Self Contained Navigation System” o 38 results. About 30 of those were reviewed for relevancy. None of those were for a company other than GE Aviation.

“Self-Contained Navigation System Maintenance” o Two results that were not relevant.

“Self-Contained Navigation System Maintenance Contractor Logistics Support” o Zero results. The search results shown in the market research are all for an alternative search suggested by Google.

o In the alternate search results, one reference was for a modification done to Poland’s C-130s. The modification changed radios and GPS receivers on the aircraft and made a small change to the SCNS OFP (software). The actual software modification was done by the Government in the SCNS SIF/SIL at Robins AFB. It is not relevant to the SCNS CLS contract.

“Self-Contained Navigation System CLS” o Zero results. The search results shown in the market research are all for an alternative search suggested by Google.

o In the alternate search results, one reference for a modification that included a software mod to SCNS. The actual software mod was done by the Government in the SCNS SIF/SIL at Robins AFB. It is not relevant to the SCNS CLS contract.

"SCNS contractor logistics support” o 5 results. Results were either not relevant or relate to the SCNS work done by GE

Aviation.

"SCNS CLS”

o 19 results. Results were either not relevant or relate to the SCNS work done by GE Aviation.

A search using SBA Dynamic Search for NAICS codes 811219 and 541330 with navigation and repair resulted in 106 small businesses. No small businesses, including 8a, minority-owned, hub-zone, service disabled vet-owned, vet-owned, woman-owned, was determined to be suitable for this effort due to non-availability of sufficient data.

Market research clearly indicates that only GE Aviation can provide CLS for this effort.

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

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

As the OEM, GE Aviation LLC provides unique capabilities and data not available to any other contractor. Their specific repair procedures, unique data (tools, databases, and engineering notebooks) and obsolete parts resolution further support this justification for a sole source acquisition. Robins AFB contracting office (AFLCMC/WLNKA) sent a letter to request the purchase of Depot-Level data and repair procedures from GE Aviation LLC in Oct 2015. GE Aviation LLC replied on 12 Nov 2015, “that at this time GE Aviation LLC was not in a position to offer the Government any GE Aviation LLC owned equipment or data they utilize to manage the existing Contractor Logistics Support (CLS) contract.” The only known examples of the Engineering Test Equipment and System Simulation Lab are being used by GE Aviation LLC to support SCNS under the current CLS contract. In order to reverse engineer these examples it would require providing the organization doing the task a sample of the equipment to be reverse engineered. The equipment required could not be shut down to give the equipment to another contractor without shutting down CLS support for SCNS. Reverse engineering the equipment would take at least 18 months. Without CLS support, the majority of the C-130 fleet would be grounded before the reverse engineering efforts could be completed. The life of the program is expected to operate out to year 2030. While the current market research indicates a sole source environment, the following are steps the Government will take to overcome barriers to competition for future acquisitions:

The contracting officer will engage with GE Aviation LLC for sale of technical data/drawings for SCNS with a positive Return On Investment (ROI) or pursue third party engineering services, where feasible, for enhancement to data currently owned by the Government to render it suitable for a competitive repair effort or repairs performed by Government personnel.

Ongoing market surveillance will continue through the monitoring of technical literature, discussion with other engineers, and attendance at expos for potential repair sources/suppliers of SCNS.

Every three years (beginning from contract award date) the multi-functional team will again initiate a break-even analysis to determine if procuring repair data maximizes the lifecycle sustainment related support and/or supports reverse engineering initiatives.

XII. CONTRACTING OFFICER’S CERTIFICATION

As evidenced by his/her signature, the contracting officer 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, 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)).