J A_FA8509-16-C-0004.pdf

JUSTIFICATION FOR OTHER THAN

FULL AND OPEN COMPETITION

I. CONTRACTING ACTIVITY

Contracting Agency: AFLCMC/WIUKA Organizational Activity: AFLCMC/WIUAB, Robins AFB, GA PR Number: FD2060-15-94265

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

Source: Cobham Mission Systems (CMS), Brook Road, Wimborne, Dorset, BH21 2BJ, England. CAGE: U1918

Requirement Type: Depot-level sustainment, repair and material management services In support of the MC-130 Aerial Refueling System (MCARS) applicable to the Air Force

Special Operations Command (AFSOC) MC-130H Combat Talon II aircraft.

Type Requirement: Air Force Special features: 12-month basic with four 12-month options Period of Performance: 1 Jan 16 – 31 Dec 20 Contract Type: Cost Plus Fixed Fee, Firm Fixed Price, Cost Reimbursable

This will be awarded as a new contract for Contractor Logistics Support (CLS) in support of the MC-130 Air Refueling System.

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

AGENCY’S NEEDS

This effort will be funded with 0100 Operational and Maintenance (O&M) dollars. The source of the funding is USSOCOM MFP-11.

Estimated cost: $18.5M Basic: $3.5M Option 1: $3.6M Option 2: $3.7M Option 3: $3.8M Option 4: $3.9M

Under the sole-source contract, the contractor will provide the following services:

Provide depot-level repair and full sustainment support for all MCARS-unique hardware/software components associated with the system. This includes total life cycle sustainment support for approximately 80 unique line replaceable units (LRUs) and 150 unique consumable line items. The contractor will be expected to have repair capability within the United States and United Kingdom (UK) and will use transportation, cost, repair turnaround, and other factors to make best-value determinations and support decision making.

Accomplish material management tasks for MCARS-unique components using Contractor Supported Weapons System tenets. This will require the contractor to be an Air Force Material Command (AFMC) certified Contractor-Inventory Control Point (C- ICP). The contractor will be required to provide full asset visibility in Government legacy systems of all MCARS unique components. The contractor’s responsibilities will include monitoring of retail and wholesale stock levels, identification of spares requirements, operation/management/control of stored inventories, distribution, and administration of CLS material requirements.

Provide long-term interior storage and satisfy annual maintenance inspection/serviceability requirements for up to 18 MCARS pods & pylons designated for long-term storage. The contractor will also provide sufficient interior warehouse space for shipping containers, pod trailing components, support equipment, and system LRUs as directed by the Government.

Provide engineering/technical reach-back support applicable to all unique MCARS components/consumable parts.

IV. STATUTORY AUTHORITY PERMITTING OTHER THAN FULL AND OPEN

COMPETITION

10 U.S.C. 2304(c)(1) as implemented by FAR 6.302-1(a)(2), “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)

MCARS is a highly specialized system requiring highly specialized services in terms of CLS for depot-level sustainment support. MCARS is a self-contained underwing system that delivers fuel from an aircraft system to a receiver aircraft in the air. The pod is controlled by commands sent from the aircraft to the Refueling Pod Controller in the pod. It employs a digital electronic system to control and monitor all the various mechanical and electrical functions within the pod, including fuel pressure, flow venting, transfer, trailing and winding. The system also includes an electronic built-in-test capability for ensuring the integrity of the control system and to enable rapid and accurate fault diagnosis. One pod, one pylon and one refueling control system (RFS) have a total of 80 line replaceable units (LRUs) and 5 piece part assemblies. The air refueling system is comprised of two pods, two pylons and one RCS.

MCARS is a proprietary system requiring a sole source agreement with CMS, system original equipment manufacturer (OEM), for CLS. CLS is designed to be a lifetime support concept often for commercial or commercial-derivative systems. MCARS is a non-developmental system. CMS designed and developed the system and is the sole owner of the design data. The

Source of Repair Assignment Process approved “Contractor supplied Depot Level Maintenance for life of the system” due to the contractor’s unwillingness to supply proprietary data, drawings and specifications for the air refueling pod at any cost. MCARS CLS is based on the concept of integrating the OEM’s technical capabilities for depot support/repair with its sub-contractor’s supply support infrastructure to optimize customer support of MCARS-unique items. The CLS requirement is split 85/15 between depot-level repair/sustainment support and material management, respectively. In a letter dated 14 Oct 98 to then Flight Refueling Limited (FRL), Aeronautical Systems Center expressed “desires to acquire Level III drawings and associated technical data for the MC-130 Air Refueling Program.” The 19 Oct 98 response from FRL cited, “The equipment that FRL are proposing for the program has been developed using FRL internal R&D funding…. Accordingly, it is not FRL policy to make manufacturing and reprocurement data available to any other party.” The Government reengaged with CMS again in Nov 09 as to their willingness to sell the data and they declined. The Government readdressed the data rights issue again in Jan 15 and was advised by the CMS contracts manager “the proprietary data relating to our MCARS 902 pods is not for sale.” The WR-ALC/XPX Cost Assessment/Cost Benefit Analysis completed in Apr 99 determined it was not possible to establish a reasonable, cost effective, organic capability without the data. CME is the only contractor with the required technical expertise, support equipment, data, and training available to provide CLS for this system, warranting a sole source award.

The Special Operations Forces (SOF)/System Program Office (SPO) considered reverse engineering MCARS as an option for removing competitive barriers, but dismissed the idea as cost and schedule prohibitive. The SPO determined the complexity and sheer number of system components requiring attention would result in a substantial duplication of cost that would not be recovered by competition.

The SPO contacted the organic reverse engineering section, 402 EMXSS, on Robins AFB, to assist with the basis of estimate for reverse engineering MCARS. The level-of-complexity comparison cited on-going work with reverse engineering a single LRU associated with the ALQ-213 Electronic Warfare Management System. The LRU contains 4 circuit card assemblies.

The cost for completing the level 3 drawing package for the single LRU is estimated at $3.2M (roughly $800K per circuit card), taking about 2.5 years to complete. Applying this logic to the 80 LRUs associated with MCARS, even at the lowest level of complexity, some LRUs are far more complex than others, the SPO estimates the cost to develop the level 3 drawing package for associated LRUs at approximately $60M. This excludes the additional cost for reverse engineering the general pod/pylon structural components, plumbing, trailing components, electrical harnesses, depot-level support equipment, pod test facility and approximately 200 unique consumable parts.

The MC-130H has approximately 10 years of service life remaining. The fleet is currently scheduled to be retired by 2025. The cost for CLS is estimated at approximately $3.5M per year, or $35M over the next 10 years. This is roughly half the estimated cost of reverse engineering the system. It took depot 2.5 years to reverse engineer a single LRU. Based on this, the consensus of the SPO is it could take up to 7 to 10 years to completely reverse engineer and develop a full level-3 drawing package for MCARS to make the requirement competitive.

Under these circumstances, the substantial cost to the government is not expected to be recovered through competition. Therefore, this acquisition will be a follow-on contract for continued CLS for MCARS to the OEM.

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 citing conditions which preclude F&OC.

VII. DETERMINATION BY THE CONTRACTING OFFICER THAT THE

ANTICIPATED COST TO THE GOVERNMENT WILL BE FAIR AND REASONABLE

Certified cost or pricing data shall be submitted with the proposal. A DCMA technical analysis along with a Ministry of Defense audit and field reports shall be conducted to assist in determining the anticipated cost 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 (MR) was performed by questioning engineers and system experts as well as industry. The following MR tools were used: Internet search, telephone, E-mail, past experience and professional knowledge with C-130 refueling systems and company capabilities for other SOF/PR C-130 aircraft. These companies included CMS, Omega Aerial Refueling Services, Inc., Northrop Grumman, DIMO Corp, Sargent Fletcher Incorporated (SFI), Boeing, Lockheed Martin, Raytheon, BAE System and the Navy Hose Reel Depot system. The market research concluded that all suppliers queried and surveyed were found to be not capable of providing CLS for the MCARS. This was based on conclusive findings that no other contractor meets the data, support equipment, experience, or facility requirements for providing CLS. In the end, Market Research determined that the only supplier capable of satisfying the requirements for this effort is CMS. They are also the only contractor with the experience necessary to integrate their propriety technical capability with supply support infrastructure to optimize customer support.

Pursuing any other strategies would result in high potential for an unacceptable gap in CLS coverage and significantly impact operational support.

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

OPEN COMPETITION

The SPO gave consideration to the possibility of other sources providing MCARS CLS. For the reasons cited herein regarding the OEM’s unwillingness to sell data rights and the prohibitive cost/schedule impacts associated with reverse engineering, open competition is not considered possible or in the best interest of the Government.

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

The SPO will continue to monitor market information and technical publications to determine whether any other source can meet the requirement for sustaining MCARS

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 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)).