SB_J&A_Redacted.pdf

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

I. Contracting Activity.

This Justification and Approval to request authority for Other Than Full and Open Competition supports requirements generated for the Air Force Life Cycle Management Center (AFLCMC)/WWQEC. The contracting activity for this requirement is AFLCMC/WWQK. The purchase request supporting this contracting action is FD2060-17-30158.

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) as 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 new contract. This will be a Requirements type contract which will be a firm fixed price, cost plus fixed fee and cost reimbursable contract with a one year basic plus three one-year options and the inclusion of FAR 52.217-8, Option to Extend Services up to six (6) months. This sole source requirement will be purchased from the following company:

The Boeing Company DBA: Boeing 6200 JS McDonnell Blvd.

Saint Louis, MO 63134-1939 CAGE Code: 0PXV4 Large Business

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

Background: The Silver Bullet program was originally part of the Eagle Talon program. It was pulled out in order to provide quick reaction and recurring sustaining engineering services more efficiently and expeditiously than Eagle Talon. With respect to Silver Bullet requirements, the Government does not possess the technical data required to establish a secondary F-15 Original Equipment Manufacturer (OEM).

This F-15 Silver Bullet effort is to acquire post-production support tasks/engineering services unique to the OEM. The program is intended to be highly flexible and broad in scope in order to allow for quick reaction and adaptation to the demands of a highly dynamic and unpredictable operating environment. It is expected that these services will be required throughout the lifetime of the F-15 fleet. Under this contract, the contractor will maintain critical core capabilities and provide F-15 support to evaluate and respond to sustaining engineering problems, questions, and/or situations using the established Silver Bullet process.

The contractor services required for sustainment include but are not limited to the following:

• Provide Quick Reaction, Recurring, Sustaining Engineering Services for the United States Air Force (USAF), Air National Guard (ANG), and Foreign Military Sales (FMS) F-15 Fleets

• Support Accident and Incident Safety Investigations

• Provide Limited Technical Support

• Perform Material Improvement Projects

• Perform Ground and Flight Testing

• Develop/Produce/Maintain Engineering Data

These services are required to maintain an adequate level of continuous sustaining engineering and logistics support for the following F-15 aircraft fleets: USAF, ANG, Royal Saudi Air Force (RSAF) and Israeli Air Force (IAF).

The estimated period of performance including all options is one (1) 12-month basic ordering period, three

(3) 12-month negotiated options, and a six (6) month extension of services with a composite rate established. The funds appropriation for this requirement is Operation and Maintenance (3400) and FMS funds.

Projected Cost Breakout by FY USAF($K) ANG($K) RSAF($K) IAF($K) Other($K) Total ($K) Basic

(FY 18)

Option I

(FY19)

Option II

(FY20)

Option III

(FY21)

6-Month Ext Services (FY22)

TOTAL $16,587

In advance of exercising an annual option, the F-15 Division will reevaluate the acquisition strategy for the F-15 Silver Bullet program to ensure the current strategy and contract approaches are still viable for the option period. As described throughout this J&A, the F-15 Division will, where feasible, continue to seek competition.

The total estimate includes a requirement for “Other.” This estimated cost was included due to the uncertainty of unusual one-time requirements which can be covered by the broad scope of the Silver Bullet Performance Work Statement (PWS).

IV. Statutory authority permitting Other than Full and Open Competition.

10 U.S.C. 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 unique qualifications or nature of the acquisition requires the use of the authority cited above (applicability of authority).

The agency's minimum needs can only be satisfied by the unique services available from Boeing who possesses the experience and resources necessary to meet all performance requirements. Boeing has provided support for the F-15 Weapon System since award of the full-scale development contract in January 1970. Boeing is currently providing these services under the sole source contract FA8505-14- D-0002. This contract was awarded on 21 April 2014 with an effective date of 01 May 2014; it will expire on 30 April 2018.

The services identified in Section II are highly specialized and require in-depth and expert knowledge of the F-15 weapon system design. Silver Bullet tasks require Government furnished equipment, labs, and test capabilities sustained through this contract effort. Boeing has retained the data rights to F-15 production design and major modifications.

In 2013, AFLCMC/WWQ requested a quote from Boeing to purchase the data. Boeing declined to provide a quote to the Government. In 2015, the Government again requested a quote from Boeing for procurement of data. Boeing declined to offer a quote and advised the Government that they are not interested in selling the data. Again, in April 2016, via email, a request was sent to Boeing to purchase data. Again, they declined the request.

The data required to initiate the development of an alternative vendor must include all USAF F-15C/D and F-15E and FMS Israel, Saudi, Singapore, Korea and Japan design, specification, manufacturing, operational and sustainment infrastructure data. The USAF benefits from the unique OEM production line capabilities and knowledge, to include Singapore, Korea, and Japan, to enable insight into available parts substitutions, component improvement programs, system upgrades, and shared lessons learned.

Additionally, the rights to the entire data packages would have to be sufficient to allow for a contractor to design, develop and purchase F-15 variant aircraft. Currently, data available to the Government is not sufficient for AFLCMC/WWQ to independently conduct the design, production and major modification of F-15 aircraft required to sustain the capabilities to support this engineering services requirement. While the Government possesses data requisite for the production of individual piece parts of USAF aircraft, the Government does not possess comprehensive data packages related to production tooling or unique configurations for FMS variants. The modernization efforts for the FMS fleets have created additional technical data gaps that the USAF does not have knowledge.

The cost to pursue a reverse engineering effort is not cost effective based on the following analysis. A potential new source would be required to reverse engineer the current F-15 C/D and F-15E aircrafts, as well as, active FMS variants - Singapore, Saudi Arabia, and Korea - a total of five variants. The F-15C/D and F-15E aircraft are different platforms with unique qualities that would require manufacturing and design expertise. The Singapore, Saudi Arabia, and Korea, variants deviate further in unknown ways due to the USAF not possessing any data or insight into these airframes. A new contractor must acquire an in-depth understanding of the manufacturing and design of these various airframes in order to provide these engineering services.

Ultimately to qualify a new source, a first article for each variant aircraft would be required. The development and production effort of the most recent F-35 was estimated at $55.2B based on GAO publication in March 2013. Based on comparison to the F-35 development effort, the GAO estimate was determined to be a good representation of development and production cost for the F-15.

With two USAF variants (F-15C/D and E) and three FMS variants (Singapore, Saudi Arabia, and Korea) of aircraft, this equates to a conservative estimated total of $92B for development (1.67*$55.2B). As the F-15 is a mature platform, it is expected that a reverse engineering effort would realize significant efficiencies in development costs. As such, an 80% efficiency factor is applied resulting in an estimated cost of $18.4B for all five variants to reverse engineer, develop, and produce. The life of the F-15 program is projected through 2045. Based on this, the total remaining value of Silver Bullet support engineering services required after the current contract ends in 2018 is estimated to be $125M over the course of 27 years.

The breakeven analysis for this effort was developed at a conservative rate; assuming a 50% decrease in costs, ($2.5M versus $5M per year). Thus, the $18.4B development investment divided by $2.5M savings per year leads to over 7,000 years to recover the investment. Assuming the entire data package required to establish a new vendor for the USAF and FMS F-15 variants could be acquired at no cost, five variants of the F-15 would still be required to be produced to validate the new vendor. At an estimated cost of $150M per variant based on current production costs of ~$100M with a 50% factor for one-time production first article costs added, it is estimated to cost $750M for first article production. This type investment would take 300 years to recover ($750M/$2.5M per year savings) and is therefore not a feasible alternative. This estimate is conservative as the costs to establish the required tooling and production facilities are not considered in the estimated costs.

Accordingly, Boeing is the only source capable of providing total system integration services required as described in Section III above without the Government experiencing substantial duplication of costs that could not be expected to be recovered through competition.

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

This requirement will be synopsized on the Federal Business Opportunities (FedBizOpps) web page as required by FAR 5.201. It will cite the conditions which preclude full and open competition. Any sources who respond to the synopsis will be identified to the prime contractor as a potential subcontracting possibility.

A Request for Information (RFI)/Sources Sought Synopsis (SSS) under Solicitation Number FA8505-18- R-0001 was posted on 08 February 2016 regarding this effort. The RFI requested responses from interested sources that may possess the expertise, capabilities, and experience to meet the sustainment of all F-15 engineering service areas. The response date for the RFI/SSS was 25 March 2016. Two responses were received, one from the incumbent and the other from an interested vendor. The interested vendor was evaluated and determined to be not capable.

VII. Determination by the Contracting Officer that the anticipated cost to the Government will be fair and reasonable.

The overall price of this acquisition will 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 in supporting 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 and indirect rates will be negotiated by the Government based on recommendations from the Defense Contract Audit Agency (DCAA), Defense Contract Management Agency (DCMA) and expert technical personnel supporting the program. The contract price will be negotiated in accordance with the 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, in accordance with FAR Part 10.001 and 10.002, was completed on 1 November 2016.

Market research techniques included issuance of RFI/SSS, internet searches, vendor survey, and discussion with subject matter expert Government personnel.

A RFI/SSS Solicitation Number FA8505-18-R-0001 was posted 08 February 2016 to FedBizOpps. Two responses were received, including from the incumbent. The other interested source was evaluated for their capability to perform the tasks of this requirement. Due to the restrictive nature of the Silver Bullet tasks and proprietary data required to perform those tasks, this source was determined not capable of performing the tasks for this effort.

Vendors that were researched for this effort were selected based on the market research team's knowledge of the industry based on reading publications, attending conferences, attending contractor capability briefings and through professional contacts maintained within industry. Based on the resident knowledge, a focused review was conducted on prime contractors that offer same and/or similar type services for other weapon systems. A vendor survey identified two additional sources with OEM expertise, however those sources were found to not have any F-15 expertise, thus were not qualified for this work. With exception to Boeing, the other vendors were found to perform similar type work, however did not have the required data or access to the data necessary to support this requirement or in-depth knowledge of the F-15 aircraft.

Additionally, a query was ran using the Dynamic Small Business Search (DSBS) search engine. The search used criteria “Engineering” and NAICS “541330.” This query identified twenty-five potential vendors. The vendors capabilities were assessed using information found on their websites. Based on the information found on vendor sites, it was determined that none were qualified for this effort.

Commercial Opportunities: The F-15 is a tactical, military, fighter aircraft that is not commercially available or supportable through commercial means.

The F-15 Program Office currently utilizes other contract vehicles for Silver Bullet type tasks that do not require Boeing OEM expertise. In particular, the University of Dayton Research Institute (UDRI) engineering services contract (Contract # GS-23F-0143R) facilitates a number of reach back analysis hours to be utilized as required. Additionally, a Mechanical Equipment and Subsystem Integrity Program (MECSIP) engineering services contract established with KBR Wyle (Contract # FA8075-14-D0025;

Delivery Order: 0009; DS TAT: 1236) allows for targeted engineering services for analyses not requiring Boeing OEM expertise. The active F-15 UDRI and KBR Wyle contracts with Silver Bullet-type reach back in place were both awarded as competitive contracts.

Accordingly, the market research concluded as the designer, developer, integrator and sole manufacturer of the F-15 since the program's inception, Boeing is the only entity with detailed knowledge of: the proprietary design and manufacturing processes; unique manufacturing and integration facilities with critically skilled labor to integrate improvements and changes onto the F-15 aircraft; along with, possessing system sustainment support expertise.

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.

Historically, the Silver Bullet program was a part of the Eagle Talon program. It was pulled out in order to provide quick reaction and recurring sustaining engineering services more efficiently and expediently than Eagle Talon. With respect to Silver Bullet contract requirements, the Government does not possess the technical data required to establish a secondary F-15 OEM.

The life of the program is through year 2045. An investment of $18.4B is estimated for a reverse engineering effort. Based on breakeven analysis, it would take over 7,000 years to recover this investment.

Therefore, it is not economically feasible to conduct reverse engineering.

To establish a new vendor for the USAF and FMS F-15 variants, assuming the required data could be purchased and the tooling investment was discounted, would require an estimated $750M investment and take over 300 years to recover. Therefore, it is not economically feasible to establish a new vendor.

Consequently, due to the lack of technical data, unique F-15 design, including major modification, it is not feasible to pursue competitive acquisition for post-production OEM unique sustainment support. The nature of the required engineering support for this F-15 Sustaining Engineering Services effort is such that it must be obtained from the F-15 OEM.

Historically, the F-15 Program Office has competitively established engineering services contracts with reach-back capability to resolve emerging engineering fleet issues that do not required the unique expertise of the F-15 OEM. As discussed within this J&A, there is no cost effective scenario in which the development of a new F-15 OEM to break the barriers to competition would be in the best interest for the Government. The capability for dynamic reach-back to the only F-15 OEM is necessary for the life of the F-15 fleet to resolve emerging fleet issues at the benefit to the Government. The F-15 Program Office will continue to competitively award non-OEM engineering services contracts to foster competition for those requirements that do not require the unique F-15 OEM expertise.

In addition, a senior F-15 Division management team member will review all efforts being considered under the Silver Bullet contract. Before exercising each option, a request for data rights will be submitted to Boeing.

XII. Certification by the Contracting Officer.

As evidenced by my signature above, I have determined this document to be both accurate and complete to the best of my knowledge and belief.

XIII. Certification by the technical/requirements personnel.

As evidenced by my (our) signature(s) above, I (we) certify that any supporting data contained herein, which is my (our) responsibility, is both accurate and complete.