JA_Redacted.pdf

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

FOR OFFICIAL USE ONLY

FOR OFFICIAL USE ONLY14 Nov 2017

NOTE: If a Justification and Approval was approved for the preceding acquisition, a copy of the approved J&A for the predecessor action must be included in the staff package for approval of the instant J&A. This applies to J&A staff packages that are submitted for review and approval at a level above the contracting officer. The predecessor J&A will be used as a reference document by the approving official.

Is this a new or amended J&A Document? New Amended ( Prior to Award Only! )

Funding level for this acquisition: > > >

Contracting Activity: AFLCMC/WIUKA

Purchase Request / Local ID Number:

Program / Project (and PE, if applicable): Q-39 Contractor Logistics Support

Program Type (PEO or Other Contracting): Other Contracting

Authority: 6.302-1 – 10 USC 2304(c)(1), Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements

Estimated Contract Cost (including options): J&A Type: Class Individual

COORDINATION (AFFARS 5306.304(a) )

Date

16 Mar 2018

Project Lead / Program Mgr / Requiring Activity

Signature

Date

19 Mar 2018

Contracting Officer

Date

Local Legal Reviewer

APPROVAL (AFFARS 5306.304(a) )

Date

Competition Advocate

FOR OFFICIAL USE ONLY

FOR OFFICIAL USE ONLY14 Nov 2017

I. Contracting Activity.

This Justification and Approval is to request authority for Other Than Full and Open Competition supporting requirements generated for the Air Force Life Cycle Management Center (AFLCMC)/ WIUAA. The contracting activity for this requirement is AFLCMC/WIUKA. The purchase request number supporting this contracting action is FD2060-19-30127.

II. Nature and/or description of the action being processed.

Due to the circumstances described herein, the activity requests authority to acquire Contractor Logistics Support (CLS), Field Service Engineering support, and sustaining engineering support for the AN/AAQ-39 Sensor System used on the AC-130U Gunship listed in the document using Other Than Full and Open Competition 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 follow-on definitive C contract. This contract will be executed utilizing a Cost Plus Fixed Fee (CPFF) and Cost Reimbursement with No Fee (CRNF) line item structure and will consist of a basic contract period of 12 months and two (2) 12 month option periods. The Period of Performance (PoP) for the basic contract period is 1 January 2019 - 31 December 2019, with the option periods beginning 1 January 2020 through 31 December 2021, if both options are exercised.

This sole source requirement will be purchased from the following company:

Lockheed Martin Corporation (LMMFC-O) 5600 West Sand Lake Road #MP-265 Orlando, FL 32819-8907 CAGE Code: 04939 Large Business

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

This requirement is for CLS for the AN/AAQ-39 Sensor System installed in the AC-130U Gunship aircraft operating at, or deployed from, Continental United States (CONUS) locations. The CLS program establishes sustainment for all AN/AAQ-39 Sensor Systems. CLS services require the contractor to maintain a quantity of spares and make them available to the user through Contractor Inventory Control Point (CICP). The requirement for CLS will be to maintain 17 AN/AAQ-39 Sensor Systems to the AN/AAQ-39 configuration. The contractor will also be required to provide a repair capability both at the Main Operating Base (MOB) and the possibility of multiple Forward Operating Locations (FOLs). The contractor will provide the capability to deploy Field Service Representative (FSRs) in the event they are required. CLS will include numerous phases of maintaining the system, such as trend and failure analysis, engineering studies and design modifications, configuration control, performance reviews, obsolescence monitoring, and system efficiency increases. The CLS program will also require that all supportability issues be documented in a contractor format that will address software changes, technical order change submissions, as warranted, Acceptance Test Procedure (ATP) tracking along with Interface Control Document (ICD) and special diagnostic and repair techniques.

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The AN/AAQ-39 Sensor System began as a Combat Mission Needs Statement (CMNS) issued in 2002, with the effort for acquisition being led by Wright-Patterson Air Force Base-Aeronautical Systems Command (WPAFB-ASC). The AN/AAQ-39 Sensor System replaced the existing All Light Level Television (ALLTV) system with an updated and state-of the art Electro Optical (EO) system that provides positive combat identification of targets under all light conditions, without the aid of artificial illumination source(s) for weapon(s) delivery. The Source of Repair Analysis (SORA) that was initiated and completed in 2007 as a part of the acquisition strategy documented and recommended that the AN/AAQ-39 Sensor System be CLS for a projected system life expectancy of 20 years. The primary focus is to have assets ready for installation, replacement, and/or ready for deployment at any given time. Since then, the decision was made to recapitalize the AC-130U fleet with the new AC-130J aircraft. The current approved retirement date for the AC-130U is 30 September 2021 and the AN/AAQ-39 Sensor System will be retired with the aircraft.

Basic total cost Option I total cost Option II total cost Total estimated cost for basic and all options is

Air Force Special Operations Command (AFSOC) 0100 Operations & Maintenance (O&M) funding is being used for this acquisition. The PoP for the basic contract period is 1 January 2019 - 31 December 2019, with the option periods beginning 1 January 2020 - 31 December 2021, if both options are exercised. With AC-130U scheduled for retirement on 30 September 2021, the additional three months of support (01 October 2021 - 31 December 2021) is to support program closeout.

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 required by FAR 6.303-2(b) (4).

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 AN/AAQ-39 Sensor System is the primary targeting sensor for the AC-130U Gunship. This sensor is critical to mission capability and survivability of the AC-130U. Full and open competition is not practical since LMMFC-O owns all proprietary technical data and calibration/alignment processes and equipment. LMMFC-O has numerous sub-suppliers that also have proprietary rights to specific portions of the AN/AAQ-39 Sensor System, such as the L-3T Com Wescam MX-20 structure and resolver portions.

LMMFC-O is the Original Equipment Manufacturer (OEM) and sole manufacturer of the system and no other vendors possess the capability to perform system level CLS of the AN/AAQ-39 Sensor System. The AN/AAQ-39's Common Laser Designator Rangefinder (CLDR) was co-developed specifically for this application by LMMFC-O and Elbit Systems, in which LMMFC-O integrated it into the turret. The integration effort involved the design of the physical shape of the system (i.e.

packaging); as well as, the software and electronic interfaces. As a result of this and other unique design solutions incorporated into the AN/AAQ-39 Sensor System, LMMFC-O has proprietary rights for numerous critical portions of the system. LMMFC-O is the sole owner of the system's Technical

FOR OFFICIAL USE ONLY

FOR OFFICIAL USE ONLY14 Nov 2017

Engineering (TE) and Technical Data Package (TDP) drawings, which include the Acceptance Test Procedures (ATP) and operational processes to support the AN/AAQ-39 Sensor System. A prime example is the Line-of-Sight (LOS) measuring calibrations and alignments that can only be performed by LMMFC-O due to the complexity of the AN/AAQ-39 Sensor System, the stringent alignment requirements, and the proprietary data/procedures developed by LMMFC-O for the calibration/ alignment process. LMMFC-O also designed, built, and tested the Turreted Systems Electro/Optical Test Station to allow them to calibrate and align the AN/AAQ-39 Sensor System to system specifications.

This support is currently being provided by LMMFC-O on sole source contract FA8509-14-C-0005 set to expire in December 2018. The contract was awarded for one basic nine month period with four one year option periods. The contract PoP is 1 April 2014 - 31 December 2018.

The AN/AAQ-39 Sensor System is a highly unique and specialized system developed for the United States Air Force for installation solely on the AC-130U aircraft. It contains numerous proprietary items and processes which are not available except through the OEM, LMMFC-O. A SORA was completed in 2007 and the approved document established the AN/AAQ-39 Sensor System to be CLS for the life of the AC-130U fleet.

Award to any other source would result in substantial duplication of cost the Government is not expected to recover through competition and unacceptable delays in fulfilling the Air Force's requirements. A Technical Data Package (TDP) has not been procured due to the complexity of data agreements and relationships between LMMFC-O and its vendors. The cost of obtaining the data rights from LMMFCO is estimated to be This estimate was verified by the Government via telephone with LMMFC-O on 27 July 2017. LMMFC-O is the prime integrator for the AN/AAQ-39 Sensor System, but they do not own the TDP for the other vendor's components. As a result, they have limited data rights that allow them to integrate the other vendor's systems in the AN/AAQ-39 Sensor System configuration as installed on the AC-130U aircraft. LMMFC-O does not have authority to release other vendors' data to the Government. The estimate for LMMFC-O data does not include the cost to obtain the proprietary data for the other vendors associated with this system (Elbit- Kollsman, LM-Akron, Ruda-Cardinal, B.E. Meyers, and L-3T Com/L-3T Com Wescam). It is estimated that cost for data rights from these vendors is an additional based on the intellectual property rights and the original development costs. The total estimated data acquisition costs is estimated at . In addition, it is estimated to take a minimum of three years for LMMFC-O and their sub-vendors to develop, verify, and deliver the TDP. If the Government decided to buy the data, they would not be able to recover the investment based on the projected AC-130U retirement date of FY21. Accordingly, no actions are planned to buy the AN/AAQ-39 Sensor System proprietary data.

The AN/AAQ-39 Sensor System cost approximately to develop and the initial cost-per-turret was approximately . The time to develop the first prototype was 3 years and took an additional 3 years to complete production of all 24 turrets. The cost-per-turret for the production units was approximately . A comparable L-3T Com Wescam MX-20HADD with roughly the same capability costs less than . LMMFC-O received technical support from L-3T Com Wescam engineers for the development of the AN/AAQ-39 Sensor System, as such any attempts to reverse engineer the system could result in an adversarial environment with L-3T Com Wescam in which technical support could be hindered. Thus, the required to initially develop the AN/AAQ-39

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Sensor System would more than likely be insufficient and lacking necessary data for a reverse engineering project from scratch.

The cost to reverse engineer the AN/AAQ-39 Sensor System is estimated to be based on development of the Gunship Multi-Spectral System (GMS II) by WPAFB-ASC and would exceed the cost to purchase a new system to meet the requirements for the AC-130U. A high performance isolation and stabilization system would have to be developed such that LMMFC-O patents would not be violated, but yet be capable of supporting the extremely long focal length sensors that permit the long range target identification performance required by the end users. All software/firmware functions that are corrupted and irretrievable due to OEM anti-tampering measures would need to be reproduced. Some examples of these functions are image bleeding, laser function algorithms (range, designation, etc.), and the LOS reporting algorithms. The development, test, and verification of this software, along with the associated hardware integration effort, represent a substantial cost. An estimated schedule, based on the development of similar electro-optical/infrared turreted systems such as the GMS II and Low Light Level Television systems (LLLTV), has component testing taking place a minimum of three (3) years after contract award. Integration, re-qualification, and flight testing are estimated to take 4 to 5 years after contract award. If successful, the contractor may be capable of generating production units 5 to 6 years after contract award, long after the retirement of the AC-130U fleet. The reason for the high cost and the long testing and re-qualification period is because of the various unique and specialized turret configurations to meet user requirements. Additionally, unique support/test equipment, qualification testing and ATPs would need to be developed, necessitating an iterative process to develop the pertinent test requirements. At this point in the life of the AC-130U fleet, there is no other contractor that can provide sustainment support of the AN/AAQ-39 Sensor System. Pursuing a reverse engineering approach would be at substantial cost to the Government with no return on investment (ROI). A reverse engineering effort is not a viable solution based on schedule, cost, and the retirement plans for the AC-130U and the AN/AAQ-39 Sensor System. This AN/AAQ-39 Sensor System is the primary AC-130U weapons targeting system used for close air support of United States ground forces in the Area of Operations (AOR). If this system is not operational there would be substantial negative impact to United States personnel in areas of conflict.

Accordingly LMMFC-O is the only firm capable of providing the supplies and services described in Section III 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 practicable.

A Sources Sought (SS) / Request for Information (RFI) synopsis was posted to Federal Business Opportunities (FedBizOpps) on 18 August 2017 with a response date of 18 September 2017 under Solicitation Number FA8509-18-R-0002. The SS/RFI requested responses from interested vendors that possess the expertise, capabilities, and experience to meet qualification requirements to provide Contract Depot Level Repair, logistics, engineering support, configuration management, and program management of the AN/AAQ-39 Sensor System developed by LMMFC-O. There were no responses to the SS/RFI.

The requirement will be synopsized in FedBizOpps in accordance with FAR 5.201. It is anticipated that sources having an interest in subcontracting may be identified through synopsis. Any source who

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FOR OFFICIAL USE ONLY14 Nov 2017 responds to the Government as a result of this synopsis will be identified to the prime contractor as a potential subcontracting possibility.

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. 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 upon recommendations from the Defense Contract Management Agency (DCMA) and expert technical personnel supporting the program. The contract costs will be negotiated in accordance with the procedures in FAR 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 for CLS services for the AN/AAQ-39 Sensor System was conducted in accordance with FAR Part 10.001 and 10.002 and utilized all available technical documentation that was publicly available. This included trade magazine studies, other potential vendors, internet search engines queries, a SS/RFI posted on FedBizOpps website, and discussions with various colleagues/subject matter experts. The market research report was completed on 17 October 2017.

The SS/RFI was posted on FedBizOpps website on 18 August 2017 with a response date of 18 September 2017. There were no responses to the notice.

Several vendors were listed on websites under an Electro-Optical/Infrared (EO/IR) systems query.

However, none of the vendors were shown to have the capabilities to repair/support the AN/AAQ-39 Sensor System as they do not possess the specific proprietary technical data and processes necessary to support this effort.

Results from 14 individual searches using four different North American Industry Classification System (NAICS) codes (333314, 336411, 336413, and 541990) on the Small Business Administration Dynamic Small Business Search (DSBS) engine revealed no small businesses that are qualified to provide EO/Infrared sensor system support for the AN/AAQ-39 Sensor System.

The AN/AAQ-39 Sensor System was developed exclusively for military (Government) use on the AC-130U Gunship and has no commercial application.

LMMFC-O owns the system TDP. The Government does not own, nor can it provide specifications, drawings, or data for the repair of the AN/AAQ-39 Sensor System. The market research concluded LMMFC-O is the only source that has the capability to support this AN/AAQ-39 Sensor System effort.

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IX. Any other facts supporting the use of Other Than Full and Open Competition.

None.

X. List of any sources that expressed, in writing, an 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 cost of obtaining the TDP from LMMFC-O is estimated to be . This estimated cost was verified with LMMFC-O on 27 July 2017. As stated previously, it is estimated to take at least 3 years for LMMFC-O and their AN/AAQ-39 sub-vendors to develop, verify, and deliver the TDP in the proper format to allow for full and open competition. It is anticipated that the total time to award a contract and to receive all the data/equipment would be at least four years.

Reverse engineering is not an option as it is estimated to cost and take 4 to 5 years, after contract award, to build a prototype unit and to accomplish ground and flight testing. The total reverse engineering effort is estimated to take 5 to 6 years before production could start. There are only 3 years remaining for the AC-130U fleet and every fiscal year the fleet size will be reduced. Based on this, reverse engineering the system is not feasible as the Government would not receive a ROI.

This is the final contract required for AN/AAQ-39 Sensor System CLS. The AC-130U fleet is scheduled for retirement by the end of FY21 and the AN/AAQ-39 Sensor System will be retired with the aircraft. Accordingly, there are no plans to break barriers to competition.

The previous J&A included a plan to monitor market information and technical publications to determine whether any other source could meet the requirement for CLS sustainment of the AN/ AAQ-39 Sensor System. In addition, the plan outlined continued attempts to acquire the TDP from LMMFC-O. The team accomplished the previous plan, therefore higher-level approval in accordance with DFARS PGI 206.304(a) (S-70) (ii) is not required for this J&A.

XII. Certification by the Contracting Officer.

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.

XIII. Certification by the technical/requirements personnel.

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.

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FOR OFFICIAL USE ONLY14 Nov 2017