Final_AGISS_J_and_A_Redacted.pdf

JUSTIFICATION FOR OTHER THAN

FULL AND OPEN COMPETITION

I. CONTRACTING ACTIVITY

This is a Justification for Other Than Full and Open Competition. The Air Force Life Cycle Management Center (AFLCMC)/WIUAA is the organizational activity responsible for this proposed contracting action. The Contracting authority responsible for this proposed contracting action is AFLCMC/WIUKA. The purchase request number suppo11ing this contracting action is FD2060-15- 30000.

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

Due to the circumstances described below, this will be a sole source acquisition.

a. Source: Boeing Company (Large Business) 626 Anchors Street NW Fort Walton Beach FL 32819-8907 Cage Code: 022Tl

b. Requirement: AC-130U Gunship Integrated Sustainment Support (AGISS)

c. This requirement is a new contract for Logistics Sustainment and Suppoti Services for the Special Operations Forces (SOF) AC-130U Gunship.

d. Type Requirement: Air Force

e. Contract Type: Cost Plus Fixed Fee (CPFF), and Cost Reimbursement with No Fee. Both Fixed Price Incentive Firm (FPIF) and Cost Plus Incentive (CPIF) were considered at the line item level. FPIF was determined to be inappropriate for this acquisition primarily because this sustainment support is not conducive to a fixed-price arrangement since the anticipated requirements cannot be reasonably defined from the onset. CPIF was determined inappropriate for the majority of the line items due to the inability to reasonably estimate program requirements. The scope of the contract is well defined, but the level of effort required throughout each period is unknown as the requirements and end-user demands are ever-changing. Therefore, CPFF is the best a1Tangement for this acquisition.

f. This J&A covers a basic contract period of 12 months (01 Jan 2016- 31 Dec 2016) and four

(4) 12 month option periods beginning 01 Jan 2017 - 31 Dec 2020.

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

AGENCY'S NEEDS

This requirement is for Logistics Sustainment and Support Services for the SOF AC-BOU Gunship. Logistics Sustainment and Support Services are required to meet operational needs and exceed end-user expectations at the best value and acceptable risk to the Government. The AC-130U Gunship fleet is a high demand, low density asset that requires rapid and agile sustainment support. The fleet consists of just seventeen aircraft and there are usually not enough Gunships to meet all the operational and training requirements. Any degradation of supp011 for the AC-130U Gunship could result in the ab01ting of combat missions and possible loss of life. In addition, minimal FSR assistance may be required and rendered to supp011 other SOF fixed wing aircraft on a non-interference basis with higher priority AC-130U tasks during times of operational contingencies/urgency.

The required contract line items (CLINs) are as follows:

XOO 1. One ( 1) Lot, Contractor Furnished Material/Contractor Acquired Property ( CFM/CAP) X002. One (1) Lot, Contractor Inventory Control Point (CICP) X003. One (1) Lot, Configuration Management Accounting/Management Supp011 (CMA/MS), Government Furnished Equipment/Government Furnished Property (GFE/GFP) Accounting and Maintenance X004. One (1) Lot, Field Service Representatives (FSR) Aircraft Maintenance XOOS. One (1) Lot, Intermediate Level Repair (ILR) X006. One (1) Lot, Over & Above (O&A) X007. One (1) Lot, Travel and Per Diem (T&PD) X008. One (1) Lot, Data in accordance with (IAW) DD Form 1423-1.

These services will be provided at Hurlburt Field, FL maintenance organizations, Boeing Company/Fort Walton Beach FL, Robins Air Force Base (RAFB) (on an on-call basis) and at other deployed locations around the world as required.

Cost estimates for each CLIN are as follows:

Fiscal Year (FY) 2016 Air Force Special Operations Command (AFSOC) funds apply to the basic contract period. Gradual decline in projected estimates is due to second phase of planned aircraft retirements beginning in 2018.

IV. STATUTORY AUTHORITY PERMITTING OTHER THAN FULL AND OPEN

COMPETITION

10 U.S.C. 2304(c)(l) as implemented by FAR 6.302-1, Only One or a Limited Number of Responsible Sources, 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)

Boeing is the design activity for the AC-130U Mission Design Series (MDS). It is not beneficial to compete this eff01i in terms of cost, schedule, and performance (quality). Converting this work to any business other than Boeing will result in wasteful duplication of costs, huge schedule delays, and a sharp decrease in performance (quality) until a new contractor fully establishes the ability to deliver for this complex integrated sustainment effort. Additionally, the AC-I30U is scheduled for retirement beginning in FYI 5 and ending in FY22. This impending retirement timeframe does not allow sufficient time for competition to overcome these barriers.

The following is a breakout of eight (8) elements of sustainment suppo1i, with rationale stating the contractor's unique qualifications in supporting this highly specialized supply/service.

(1) CFM and CAP - CFM work is tied to and supports the ILR element, and will remain with it. CFM purchases provide materials for the ILR element as well as other maintenance issues in the FSR element. CAP functions as a relief valve to allow for the last resort rapid purchase of items that are deemed critical to the gunship program. Any action to move this function to another source/contract would introduce a "middle-man" into the process resulting in additional (i.e., pass-through) cost and delay to repairs and support of user requirements. This sub-element directly supports or requires the supp01i of CMA, FSR, and

GFP/GFE.

(2) CICP - Costs would initially double if this work were transferred to another contractor. This assessment is based on estimated cost and time of ramping up to become a certified source of supply and obtaining access to and training on the use of required DoD supply management information systems. A new Contractor would need to develop infrastructure needed to insure the smooth flow of assets including Electro-Optical Sensor System (MX-15Di), and AN/AAQ-39 System vendor and Boeing repaired items to the customer, whether to meet routine or urgent requirements. During the same period, Boeing would need to be on contract to continue to perform the work until the new Contractor completes ramp up of their capability.

Schedule would be impacted. The CICP currently covers MX-15Di and AN/ AAQ-39 systems using the Air Force's Contractor Supported Weapon System (CSWS). The new Contactor would have to fully implement cataloging, inventory and asset management, Chief Financial Officer compliance, stock control and distribution system, requirements determination, readiness spares packages, disposal decisions, special items handling, requisition processing, asset visibility and reporting and customer services. Implementation would result in schedule impact due to the ramp up of capability. In addition, performance (quality) would be negatively impacted until the new Contractor developed and implemented full CICP capability.

(3) CMA-A new Contractor would have a monumental task of collecting, comprehending, and adjusting organization of a multi-faceted system for documenting the AC-130U aircraft configuration. By comparison, over a period of sixteen years, Boeing has maintained configuration control through the development/procurement/use of manufacturing drawings, vendor drawings, Engineering Change Proposals (ECPs ), Prime Item Development Specification (PIDS), Design Change Notices (DCNs), Engineering studies/reports, and Core Task Authorizations (CT As), etc.

This element was envisioned to move to organic suppo1i, but the Government is not postured to fully assume organic responsibility in the near term. Boeing utilizes 108 different individuals from various disciplines, averaging 72 personnel per day accomplishing various contract tasks and requirements. Under CMA, these individuals represent various disciplines including: engineering (various types covering electrical, electronic, structural, software, and testing), configuration management, quality, and property management.

Over a period of six (6) years, the Government has worked a great deal to shift reliance from Boeing to an organic capability, but is still unable to assume responsibility for that total transfer. This gathering of data literally required the compilation of tens of thousands of individual documents. A new contract would require additional cost, schedule, along with degraded performance to accomplish what the Government could not. Additional funds would have to be added to the current Boeing contract to ensure that the transfer occurred as efficiently as possible.

The current CMA CLIN consists of Engineering/Tech, Diminishing Manufacturing Sources (DMS) Studies, Program Management, Contracting and Administrative support. Break out would require the additional application of Government Engineering/Technical, Program Management, Contracting, and Administrative Support. On a matrix of support required to sustain the AC-130U, the CMA element directly suppmis or requires the support of other elements: FSR, CFM/CAP, GFP/GFE, ILR, Data, Technical Orders (TOs), and the 580th Software Maintenance Squadron (SMXS) EISE Laboratory. Any slow down or decrease in CMA will negatively affect the other elements of AC- l 30U sustainment support.

GFP/GFE Accounting and Maintenance is tied to the work being performed in the ILR element. Accomplishment of this work by another source would entail the Government purchase/development of data/equipment/software for the maintenance and calibration of many of the presently supported items as Boeing has developed/maintained/refined this capability, at their expense, in many instances. Additionally, the introduction of another source/contract would add cost and delays to repair and calibration support either by having outside personnel enter Boeing facilities or due to shipment of the equipment to outside locations. This sub element directly supports or requires the support of CMA, FSR, CFM/CAP, and ILR.

(4) FSR Aircraft Maintenance - The AC-130U fleet requires a very high degree of readiness to allow the accomplishment of many efforts in the Global War on Te1Torism (GWOT) around the world. A new Contractor would need to have the capability to stand up this level of FSR support capability with no allowance for let-down. Otherwise, the gunship mission is put at risk. Presently, there are no specific plans to develop organic capability or to move to a competitive status for this specific task partly due to the fact that the Gunships are slated for retirement beginning this year, but also due to the fact that AFSOC cannot tolerate any interruption to the high level of support they're accustomed to and cannot afford time for the steep learning curve that any new contractor would have to overcome. Any change in support must meet the exceptional standard now maintained by Boeing and demanded by the Air Force Special Operations Command (AFSOC), the customer.

New FSRs would need to become integrated with Boeing and the Government to prevent a reduction in support of the AC-130U fleet sustainment. FSRs are a quick reaction capability for urgent requirements, able to become intimately involved with the accounting of all aircraft changes ( data), regardless of the source/means of aircraft baseline change. FSRs must use Interactive Electronic Technical Manuals (IETM) as the primary source of technical data. As the resident experts, they can provide valuable feedback (to Boeing), from the area of responsibility (AOR) and home station in making corrections to IETM. This fact applies to software as well.

The task requires expert hands-on experience in the AOR, with immediate reach-back capability to engineering and logistics personnel and accurate accounting of aircraft configuration (seamless integrated suppmi and data). On a matrix of support required to sustain the AC-130U, the FSR element directly supports or requires the supp011 of other elements: CMA, CFM/CAP, GFP/GFE, and ILR, Data, TOs, and the 580th Software Maintenance Squadron (SMXS) EISE Laboratory. The customer cannot afford the slightest decrease in FSR capability. Therefore, it is prohibitive to consider shifting this supp011 element away from Boeing.

(5) ILR - In order to compete ILR for the components Boeing currently repairs, the new contractor would have to reverse engineer all of Boeings repair processes (which were funded by the Government utilizing Boeing facilities and equipment) and develop their own data and repair processes. The Test Program Set (TPS) hardware, test routines, and operating system used by Boeing to support the repairs was developed over a 19 year period, and duplicating this repair capability thru reverse engineering would be a monumental effort estimated to cost

This estimate is based on actual costs collected over the years without considering inflation. With the impending retirement of the AC-130U fleet, pursuing a reverse engineering effort of this magnitude is not in the best interest of the Government and is not practical due to cost and time constraints.

The impact in schedule to the ILR program would also be unacceptable and would jeopardize AC-130U combat capability. Boeing is currently repairing 213 different LRU s and SRUs in supp01i of the AC-130U Sustainment Suppo1i (ACUSS) program, completing an average of 1,000 repairs per year. Average tum-around-time is 2.4 days for Weapons items and

2.9 days for Avionics items. Even ifresources to reproduce the repair capability above were located then the next challenge would be transition. The AC-130U is a low density high demand weapon system and have very short repair cycle times. Even with all test sets and TPSs in place a persistent focused effort to transition from one (1) repair Contractor to another would exceed two (2) years. The variety and complexity of the items being repaired increases the time and difficulty of transitioning this work to another Contractor. A new Contractor cannot produce the level of performance (quality), as currently performed by Boeing, without high costs and schedule delays discussed in the preceding paragraphs. The warfighting customer cannot accept the resulting negative affect on actual combat capability. The ILR element directly supports or requires support of CMA, FSR, CFM, and GFP/GFE.

For the reasons stated above, competition at this time would cause substantial duplication of cost and unacceptable delays to this requirement.

VI. DESCRIPTION OF EFFORTS MADE TO ENSURE THAT OFFERS ARE

SOLICITED FROM AS MANY POTENTIAL SOURCES AS DEEMED PRACTICABLE

This requirement will be synopsized on the Federal Business Opportunities web page as required by FAR 5.201.

VII. DETERMINATION BY THE CONTRACTING OFFICER THAT THE ANTICIPATED

COST TO THE GOVERNMENT WILL BE FAIR AND REASONABLE

The anticipated cost will be considered fair and reasonable to the Government based on negotiations after cost analysis. After receipt of the contractor's proposal and certified cost and pricing data, the Contracting Officer will request audit and analysis from the Defense Contract Audit Agency (DCAA) and the Defense Contract Management Agency (DCMA). The Contracting Officer will conduct negotiations to reach a fair and reasonable price.

VIII. DESCRIPTION OF MARKET RESEARCH CONDUCTED AMONG ALL

AW ARDEES AND THE RESULTS OR A STATEMENT OF THE REASON MARKET

RESEARCH WAS NOT CONDUCTED

Market Research was conducted in accordance with FAR Part 10. In fact, Market Research has been done on a continuing basis since October 2005, when incremental transition of management responsibility was decided for the AC-130U Gunship. The Market Research Report for the AGISS program was completed on 26 September 2014, and utilized all available technical documentation that was publicly available. This included trade magazine studies, competing contractors, internet search engines queries, the Small Business Administration's (SBA's) Quick Market Search, Thomas Net, ASD, and discussions with various colleagues/Subject Matter Experts (SMEs).

The SBA Quick Market Search was queried using North American Industry Classification System (NAICS) Codes 334511, 336413, 541614 in conjunction with key word "repair, avionics, engineering or logistics." However, none of the sources were deemed capable of providing all of the requirements described in Section III above. Breaking up this requirement is not acceptable as it could negatively impact aircraft availability and could ultimately result in the aborting of combat missions and possible loss of life. A query was conducted on Thomas Net for "Aerospace, Aeronautical & Aircraft Engineering Services Suppliers". No companies were identified in the search that are capable of performing all of the requirements of this contract. A query was conducted on Thomas Net for "Aircraft Component Overhaul & Repair Suppliers". No companies were identified in the search that are capable of performing all of the requirements.

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

COMPETITION

Accomplishment of the above tasks by other sources was given extensive consideration before and during the development of these requirements. Between 2008 and 2012, the Reduction of Total Ownership Costs (RTOC) and Technical Order Maintenance (TOM) elements of sustainment support were eliminated from this contract portfolio. Since 2012, CMA and Operational Flight Plan (OFP) software maintenance elements were targeted to shift from contract to organic accomplishment. OFP software maintenance has been successfully shifted to the organically supported Extendable Integration Support Environment (EISE) Laboratory at Robins AFB, and AFLCMC/WIUEE has made significant progress with building an organic CMA database. However, this capability is not ready to fully replace Boeing CMA capabilities at this time. In CY 14 it was announced that the AC-130U aircraft is scheduled for retirement beginning in FYI 5 and ending in FY22. With the pending retirement, it will not benefit the Government to compete this effort in terms of cost, schedule, and performance. A warding this work to another Contractor will require wasteful duplication of costs, huge schedule delays, and a sharp decrease in performance until the new contractor fully establishes the ability to deliver for this complex integrated sustainment effort. For the reasons cited herein, fmiher breakout of any of the integrated support elements for competition is not in the best interest of the Government at this time. It is the intent of AFLCMC/WIUAA to utilize, to the maximum extent possible, the AGISS contract to continue the development of knowledge and to gather data to facilitate development of a more self-reliant posture where practical. However, the upcoming drawdown of the AC-130U aircraft will cause increased short-term reliance on AGISS until fleet retirement is completed, and the need for the Government to become more self-sufficient is now considerably reduced due to the retirement decision.

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 indicated in Section IX above, the Government has made significant progress between 2008 and 2014 with the long-standing goal of reducing or eliminating several of the major elements of this support structure, and posturing for continued reduction of that support and/or transition to a more organic overall support strategy. However, with the recent official decision to retire all AC-l 30U aircraft beginning this year (Sep 15), further efforts to reduce reliance on this support structure or promote competition will not benefit the Government in terms of cost, schedule and performance and is therefore not in the best interest of the Government. Additionally, with the impending retirement, pursuing a reverse engineering effort estimated at (as discussed in paragraph V(5) is not in the best interest of the Government and is not practical due to cost and time constraints.

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)(l 2)).

XIII. TECHNICAL/REQUIREMENTS PERSONNEL'S CERTIFICATION

As evidenced by their signatures on the Coordination and Approval Document, the technical and/or requirements personnel have ce11ified that any supporting data contained herein, which is their responsibility, is both accurate and complete FAR 6.303-2 c ).

COORDINATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

ACQUISITION >

CONTRACTING ACTIVITY: Air Force Life Cycle Management Center (AFLCMC)/WIUAA PR NUMBER: FD2060-l5-30000 PROGRAM NAME/PROGRAM ELEMENT: AC-130U Gunship Integrated Sustainment Support (AGISS) Program

ESTIMATED CONTRACT COST

TYPE PROGRAM: PEO

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

TYPE J&A: INDIVIDUAL

COORDINATION:

X

Program Manager

2/5/2015

Signed by

X

Contracting Officer

2/5/2015

Signed by 45 n

Acquisition Attorney

2/9/2015

Signed b

3/18/2015

Robins AFB Competition Advocate Signed

APPROVAL:

1 4 APR 2015