16-00525_JA-FINAL_Redacted__LegalEdits_Redacted.pdf

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

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.

Choose the funding level for this J&A Document:

< $700K > $700K and < $13.5M > $13.5M and < $93M > $93M

Contracting Activity: AFSC/PZAAC

Purchase Request / Local ID Number: FD2060-16-00525

Program / Project (and PE, if applicable): AN/USM 670 Joint Service Combat System Tester

Program Type (PEO or Other Contracting): Other Contracting

Authority (include full title): 10 U.S.C. 2304(c)(1), as implemented by FAR 6.302-1, Only One Responsible Source and No Supplies or Services Will Satisfy Agency Requirements

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

COORDINATION (AFFARS 5306.304(a) )

Date Program Mgr

Signature

Date

09 Sep 2016

Contracting Officer

Date

14 Sep 2016

Local Legal Reviewer

APPROVAL (AFFARS 5306.304(a) )

Date

14 Sep 2016

Competition Advocate

Date: 2016.09.09 12:35:42 -04'00'

I. Contracting Activity.

This Justification and Approval is to request authority for Other Than Full and Open Competition to support requirements generated for the 638 Supply Chain Management Group (SCMG), 410 Supply Chain Management Squadron (SCMS)/GULA. The contracting authority for this requirement is AFSC/ PZAAC. The purchase request number supporting this contracting action is FD2060-16-00525.

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

Due to the circumstances described herein, the activity requests the repair of items described below be acquired 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 an award of a new contract, which will be a Firm Fixed Price (FFP) Requirements-type contract with a basic plus four one-year ordering periods. This sole source repair requirement will be acquired from the following company:

AAI Corporation DBA: Textron Systems 124 Industry Lane Hunt Valley MD 21030-3342 Cage Code 97384 Large Business

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

Under the proposed contract, AAI will repair Shop Replaceable Units (SRU) for the AN/USM-670 Joint Service Electronic Combat Systems Tester (JSECST) which is used to test F-16, F-15, and A-10 aircraft.

Consolidated Sustainment Activity Group (CSAG) Defense Working Capital Fund 97X4930 will be utilized. The period of performance will be from June 2017 to June 2022.

The estimated total price for this effort is This estimate was developed using the D200A requirements computation system and the last actual repair costs. The out-year ordering period estimates applied a 3% escalation factor to calculate the estimated price(s). The quantities are based on actual demand as well as projections computed by the September 2016 D200A computation cycle.

The items were screened and assigned Repair Method Code (RMC)/Repair Method Suffix Code (RMSC) of 3/R. This assignment is defined as follows: RMC 3: Repair, for the second or subsequent time, directly from the actual manufacturer. RMSC R: The Government does not own the data or the rights to the data needed to contract repair of the part(s) from additional sources. It has been determined to be uneconomical to buy the data or rights to the data. It is uneconomical to reverse engineer the part(s).

***See the attachment (Requirements) for list of National Stock Numbers (NSNs), Best Estimated Quantity (BEQ), and Estimated Prices for the basic and four (4) one year ordering periods.

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 AN/USM-670 provides an end-to-end (ETE) functional testing capability to determine the status of Electronic Combat (EC) system installed in or on operational aircraft. It automatically determines Go/No- Go status of the EC system with minimal technician interaction. In cases where the EC system has a critical fault, the USM-670 identifies the ETE test that failed and provides the diagnostics to isolate the failed aircraft transmission line path/component or Line Replaceable Unit (LRU). The USM-670 can be operated in an automatic or manual mode to provide the identification and isolation of failed EC systems.

The manual mode can be used when the built-in-test (BIT) of the EC system, the automatic mode of the USM-670, and other operational-level support equipment cannot determine the cause of the failure. The items to be repaired under this proposed contract are critical to the successful performance and operation of the AN/USM-670.

These items are highly specialized in nature and are only used on the AN/USM-670. They consist of a mix of power supplies, circuit card assemblies, adapter assemblies, heater assemblies, and digital computers.

They have historically been repaired by AAI under sole-source contracts. The current sole source contract, FA8522-12-D-0005 was awarded 13 June 2012 and expires 7 June 2017. This acquisition will be a follow-on contract for the continued performance of this highly specialized service.

AAI is the Original Equipment Manufacturer (OEM), owner of technical data/rights, and the only qualified source of repair. The Government sent inquiry to AAI asking if they would be interested in selling the technical data/rights to the Government. AAI responded 1 November 2015 saying they are unwilling to sell/release the technical data associated with these 16 NSNs.

The AN/USM-670 Program Office believes that award to any other source would result in substantial 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. The Government has limited technical data regarding the 16 NSNs performance requirements. The Technical Orders (TOs) owned by the Government are illustrated parts breakdowns with non-releasable Distribution D statements. There are no engineering drawings available in Joint Engineering Data Management Information Control System (JEDMICS).

The estimated reverse engineering cost for the 16 NSNs is $44.1M (Engineering $17.7M, Material $7.9M, Overhead $4.5M, Tech Data $4.75M & Testing $9.25M) and with 3 years required to qualify a new Source of Repair (SOR). This estimate is based on previous Maintenance Engineering Project Sustainment Tool engineering project of technical complexity similar to that of the items for this acquisition. An economic analysis was performed which showed that a reverse engineering project would not result in enough savings to recoup the investment costs. The estimated breakeven point does not occur until FY 2081 which far exceeds the expected life of the USM-60. The USM-670 is projected to remain in use until 2035.

The delays associated with award to another vendor are unacceptable as backorders would continue to accrue during the new contractor's reverse engineering effort, build-test, qualification, manufacturing start-up, and delivery phases. The overall mission capability of the AN/USM-670 would be detrimentally impacted, as would the aircraft they support.

Accordingly, AAI is the only firm capable of providing the 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 requirements.

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

This requirement will be synopsized in Federal Business Opportunities (FedBizOpps) web page as required by FAR 5.201, citing conditions which preclude Full and Open Competition. It is anticipated that sources having an interest in subcontracting may be identified through synopsis.

A Request For Information (RFI) was posted to FedBizOpps. RFI Solicitation Number FA8517-16-RF102, Repair of A/N USM670 components was posted 31 March 2016 with response date of 2 May 2016. No responses were generated.

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 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 support the Government's evaluation of proposed costs. The proposed cost elements labor, labor hours, materials, other direct costs, direct and indirect rates will be negotiated by the Government and may be based on recommendations from the Defense Contract Management Agency (DCMA) or information provided by the Defense Contract Audit Agency (DCAA), as well as local pricing 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 was conducted and completed on 1 June 2016 in accordance with FAR Part 10. Various methods were used to perform the market research to identify capable and potential sources. Techniques included researching CENTRA/ETIMS, JEDMICS, FED Log, Haystack/DO43, PRPS, J018/CIDs, and BINCS/SAM, and Google Website. The searches were queried using the manufacture part number(s), NSNs, item nomenclature, company name/cage code, and various combinations. Additional queries were done using the following web sites and no useful results were returned on these queries:

www.thomasregister.com Used search terms "TPS", "Test Program Set", "JSECST", “Electronic Warfare", "EW", "Electronic Combat", “USM-670", "USM", "RF Tester"

Dynamic Small Business search engine Used NAICS 541330 and search terms "EW", "0-level", "JSECST", "USM-670", “USM", "RF Tester" www.gsaadvantage.gov Used search terms "JSECST", "USM-670", "0-Level", "EW", "Electronic Warfare", "Electronic Combat", "USM", "RF Tester", "TPS", "End-to-end test"

The RFI FA8517-16-RF102 was published 31 March 2016 on FedBizOpps. No responses were received from this posting.

Commercial Opportunities: There is no commercial opportunity for this requirement. The USM-670 testers were produced specifically to meet the Government's requirements and the items being repaired are not commercially available. Additionally, there are no commercial items available in the marketplace that can be used to replace any of the NSNs.

Market research concluded AAI is the only company with the technical expertise, data/drawings, equipment, software and other utility programs needed to diagnose failures and repair these items.

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.

Based on market research, SORAP 99-019 and DMI 01-0005, which all state that this repair can only be performed by this contractor, the Government is unable to compete this effort at this time.

Although, AAI is unwilling to sell the technical data/rights to repair these items, the Government will attempt to break barriers to competition if at all possible. As discussed above, the projected life of the USM-670 is through 2035. It would cost an estimated $44.1M in reverse engineering investment which would not breakeven until the year 2081, therefore is not considered economically feasible.

While the current market research, SORAP and DMI indicated a sole source environment, the Government will take the following steps to overcome barriers to competition for future acquisitions:

(1) Prior to each ordering period, the Program Office will inquire with AAI on their interest in selling the technical data. A negative response will be elevated to higher levels within the company. In the event AAI agrees to sell the data and submits a proposal for Government acquisition, the Program Office will budget to procure the data if determined economically feasible.

(2) Ongoing market surveillances will continue through the review of technical literature, discussions with other engineers and collecting information from various expos for access new potential repair capabilities.

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.