14-00013_JA_2015_08_03_FINAL_Redacted.pdf

JUSTIFICATION 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 Sustainment Center (AFSC), 638 Supply Chain Management Group (SCMG), 408 Supply Chain Management Squadron (SCMS) / GULB. The contracting authority for this requirement is Air Force Sustainment Center (AFSC)/PZABB. The purchase request number supporting this contracting action is FD2060-14-00013.

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

Due to the circumstances described herein, the activity requests authority to acquire the repair listed in this 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 is a new requirement and will result in the award of a firm fixed price requirements D-type requirements contract consisting of a 12 month basic period and four annual option periods. There will be Cost Plus Fixed Fee line items for the development of the test repair articles, supporting test repair article data and for a technical data package requirement in the basic period. The subsequent following option year(s) repair line items after approval of the test repair articles are Firm Fixed Price. This requirement can be purchased from the following source:

International Enterprises Industries 108 Allen Street Talladega, AL 35160-1302 Cage Code: 50218 Large Business

III. DESCRIPTION OF THE SUPPLIES/SERVICES REQUIRED TO MEET THE AGENCY’S NEEDS

Under the contemplated contract the contractor will provide repairs that are required to support the Line Replaceable Unit Flow Protect Valve (FPV) for the ALQ-155 system that supports the B-52H aircrafts. This effort will be funded with Consolidated Sustainment Activity Group-Supply Division (CSAG-SD) funds.

The requirements are as follows:

7-Nov-2014

BASIC

CLIN/sub-

CLIN

NSN Part Number Noun Estimated Unit Price Best Estimated

Quantity Total Cost

CPFF

0001 and 0001AA Test Repair Articles 4810-01-335-3160EW 029-001716-001 Flow Protect Valve $150,000 2

CPFF 0002

Test Repair Article Data (ELINs A001, A002, A003, A004, A005, A006, A008 and A009) 1 LOT

CPFF 0002AA CAVAF (ELIN A001) 1 LOT

CPFF 0002AB Maintenance Data Collection Record (ELIN A002) 1

2TOTAL POTENTIAL CONTRACT VALUE

This is the first repair effort for this item, so there is no prior J&A or cost history for repair. The basis for the pricing comes from prior screening and cannibalization efforts accomplished in the depot and the annual repair budget value. A 3% escalation rate applied to the out years.

408th SCMS requests that delivery requirements begin per the negotiated terms of the contract for NSN 4810-01- 335-3160EW. After Receipt of Order (ARO) or After the Receipt of Asset (ARA), whichever is the latest.

The RMC/RMSC is R5/D. The “R5” indicates repair for the first time, directly from a sole source contractor that is not the actual manufacturer. The “D” indicates that the data needed to complete contract repair is not physically available, it cannot be obtained economically, nor is it possible to draft adequate specifications or any other adequate, economical description of the repair for a competitive solicitation.

IV. STATUTORY AUTHORITY PERMITTING OTHER THAN FULL AND OPEN COMPETITION

10 USC 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

Due to the complex nature of the device, the low usage rate, unique performance specifications, and lack of government owned production facilities, knowledge and production level drawing packages, there are no other sources of repair for these NSNs other than International Enterprises Incorporated (IEI).

Northrop Grumman was the original system manufacturer of the ALQ-155 system. The Flow Protect Valve (FPV) was originally built by Honeywell. The Government pursued a form, fit, function, and interface redesign through a Consolidated Sustainment Activity Group-Engineering (CSAG-EN) project in FY08-FY11. The contractor delivered two prototypes, but D200A was not computing any requirements for procurement. The contractor provided a rough order of magnitude (ROM) of $65K per unit, which is higher than the listed repair cost. Procurement could not be justified without the Program Office exhausting all efforts for repair. In 2011, the Government began discussions with Honeywell on possible repair of the FPV at their facility. At the same time, a spares procurement package was also solicited to Honeywell. Honeywell evaluated both options and sent an email to the Government on 16 August 2012 stating all efforts made to possibly stand up production and a repair line and concluded that Honeywell could not support the Government’s requirement. The Government does not own any technical data for this item, so the Government pursued a bailment agreement with IEI. The bailment agreement allowed IEI to reverse engineer the FPV at their facility with their own company dollars. IEI’s ROM for repair was much lower than the production cost for the redesigned box, so the Government pursued repair with IEI. The technical data will not be developed by IEI since the data is proprietary from the OEM. The Government requested data from the system OEM 28 Aug 13, Northrop Grumman, but they do not have the data because Honeywell was the original OEM for the FPV.

Honeywell stated that they would also not sell the Government the data and that their data package is also incomplete because Honeywell had bought the original manufacturer (Grimes) and data was lost. IEI will continue to try to purchase the drawings from the OEM and has elevated to upper management. IEI has reviewed all available technical data, evaluated two USAF supplied sample FPV’s and has established a plan for depot support.

IEI developed a custom test stand alone with detailed test, repair and overhaul processes to ensure consistent quality repairs. IEI also developed test and support equipment for qualification. IEI is currently the only vendor with the knowledge, specialized skills, and equipment capability to repair the FPV. Other contractors were unwilling to reverse engineer on their own dime. IEI has done this completely on their own company dollars. It would take another contractor three years and around $8 million to reverse engineer this part. It would take another year and $500K to complete repair article testing. Since this is at the LRU level, the Government requires full repair article testing to include: shock, vibration, temperature, etc. It would be uneconomical for the Government to pursue another source based on the low usage for this item. The Government is currently supporting this asset through screening. The three to five year delay would not meet the Government’s schedule or need for this item. It would be a substantial duplication of cost and effort to invest in another company for development of repair capability. The Government has saved money by allowing IEI to reverse engineer on their own money and time. Further investment http://www4.law.cornell.edu/uscode/html/uscode10/usc_sec_10_00002304----000-.html in another source would cost would take at least three years for the vendor to become a qualified source. This is an unacceptable delay for the Government due to the growing amount of backorders.

Depot activation is currently not possible because there are currently no vendors that supply the piece parts for the FPV. Previous efforts to produce serviceable condition assets were supported through a screening and cannibalization effort. Depot activation will be revisited once IEI passes qualification and acceptance testing. Depot indicated that they could repair the item, if parts were available.

Based upon the above information, the government would experience a substantial duplication of cost and an unacceptable delay in fulfilling the Air Force requirements.

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 (FedBizOpps) web page as required by FAR 5.201. It is anticipated that sources having an interest in subcontracting may be identified through synopsis.

Although the Government does not own data to support acquisition of these items from any other source, any source who responds to the Government as a result of this synopsis will be identified to the prime contractor as a potential for subcontracting possibilities.

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 fair and reasonable to the Government. In accordance with FAR 15.404, it is anticipated that negotiations will be conducted using certified cost and pricing data from the contractor.

Thorough cost and price analysis will be conducted using available information and approved pricing techniques that will support the contracting office in making a determination that the price paid to the contractor is fair and reasonable to the Government. The Defense Contract Management Agency (DCMA) will be contacted to assist with audits and field reports.

VIII. DESCRIPTION OF THE MARKET RESEARCH CONDUCTED AND THE RESULTS, OR A

STATEMENT OF THE REASONS MARKET RESEARCH WAS NOT CONDUCTED

As described in Section V above, market research, in accordance with FAR Part 10, was conducted in December 2013 by inquiries of the proposed acquisition, advising industry of the pending acquisition and soliciting inquiries from interested parties.

Market research utilized the internal knowledge possessed by the AN/ALQ-155 engineering staff. Engineering is actively engaged in component product sustainment, staying current with industry developments by reviewing industry reports, trends and product developments, talking with field personnel, reviewing applicable company portfolios on a regular basis, and maintaining an active dialog with the sustainment parts suppliers. Review of several industry-wide searches on the Internet, using the following Acquisition Center of Excellence (ACE) recommended component search engines:

http://www.aerospace-technology.com/contractors/index.html, http://www.globalspec.com/ProductFinder, http://www.eem.com/, Review of Govt-proprietary component product data-base (Haystack).

As expected, none of the vendors provided or exhibited evidence of manufacture of the specific part number under consideration.

NSN and P/N review of the Government-Proprietary component product data-base HIS, for the specific item.

Market Research showed there are currently no vendors supporting the FPV. IEI is the only vendor that has the technical data to support the USAF. IEI developed a custom test stand alone with detailed test, repair and overhaul processes to ensure consistent quality repairs. IEI also developed test and support equipment for qualification. IEI is currently the only vendor with the knowledge, specialized skills, and equipment capability to repair the FPV. Other contractors were unwilling to reverse engineer on their own dime. IEI has done this completely on their own company dollars. The USAF does not have the data to provide another vendor. The Government has configuration control, but only possesses a specification and outline drawing that is not up to date to the current revision. The Government requested data from the system OEM 28 Aug 13, Northrop Grumman, but they do not have the data because Honeywell was the original OEM for the FPV. Honeywell stated that they would also not sell the Government the data and that their data package is also incomplete because Honeywell had bought the original manufacturer (Grimes) and data was lost. IEI is the only vendor with a current data package for repair as a result of a reverse engineering effort under a bailment agreement with the Government. IEI stated that they would develop a full technical data package for the Government under this repair effort. Since IEI is the only vendor with the current knowledge, specialized skills, and equipment to repair the FPV, market research concludes that this effort should be sole source to IEI.

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

COMPETITION

The required data and data rights for this item are not in the Government’s possession. The Government requested data from Northrop, Honeywell, and IEI. Northrop does not have access to the data because Honeywell is the OEM.

Honeywell indicated that they would not sell the data in 28 August 2013. IEI will not develop a technical data package under this repair effort. Honeywell was the original OEM for the FPV. Honeywell also stated that they would not sell the Government the data and that their data package is also incomplete because Honeywell had bought the original manufacturer (Grimes) and data was lost. IEI will continue to try to purchase the drawings from the OEM and has elevated to upper management.

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

The B-52 aircraft that this system supports is currently scheduled to fly through 2040. IEI will not develop a technical data package under this effort since reverse engineering was completed using the company’s dollars;

therefore, the Government has no right to the data. The Government will pursue depot activation after a source is stood up to support the FPV and its components. Honeywell stated that they would also not sell the Government the data and that their data package is also incomplete because Honeywell had bought the original manufacturer (Grimes) and data was lost. IEI will continue to try to purchase the drawings from the OEM and has elevated to upper management. The Government will continue to perform market research to support competition for any future requirements. Depot activation will also be pursued once IEI’s test repair articles are qualified and accepted by the Government. Depot activation schedule has not been established yet, but the Government anticipates depot capability at the end of this contract (FY20).

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)(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(c)).

http://farsite.hill.af.mil/reghtml/regs/far2afmcfars/fardfars/far/06.htm