15-00019_JA_2014_12_04_REDACTED_FOR_FBO.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 office for this requirement is AFSC/PZABB. The purchase request number supporting this contracting action is FD2060-15-00019.

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

Due to the circumstances described herein, the activity requests authority to acquire the engineering services 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 will result in a new predominantly Cost Plus Fixed Fee (CPFF) C- type engineering services contract, the first of its kind for this item. A Cost Plus Fixed Fee (CPFF) contract type was determined for this development effort due to circumstances and uncertainties which do not allow the requirement to be defined sufficiently for a fixed price type contract. The period of performance will be 36-month basic with no options or ordering periods (FY15-FY17). The sole source requirement will be obtained from the following source:

Exelis Inc 77 River Road Clifton, NJ 07014

CAGE: 28527

Large Business

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

AGENCY’S NEEDS

The LRU-4, NSN 5865-01-533-9874EW is used as a component of the AN/ALQ-172(V)2 Countermeasure Set (CMS). These components are used on the Air Force Global Strike Command (AFGSC) B-52H platform. Under the contemplated contract, the contractor will provide the following services which are required to support the B-52H aircraft:

CLIN NSN/Description Noun CLIN Type QTY Estimated Unit Price Estimated Total Cost 0001 Engineering Services LRU 4Redesign CPFF 1 LOT 002 Prototypes CPFF 5EA 003 Data 1 LOT 004 Travel CRNF 1 LOT

Estimated Total Contract Value $17,450,000

TOTAL ESTIMATED DOLLAR VALUE $17,450,000.00

Prices for the engineering services, prototype development, and fabrication were based on comparison to previous engineering projects for LRU redesigns.

Requirements for development and redesign, particularly those unique to the Government, usually result in a greater risk assumption by the Government. This is true for developmental type contracts when performance uncertainties or the likelihood of changes makes it difficult to estimate performance costs in advance and with sufficient accuracy for use of any firm pricing arrangement. After prototypes have been produced, and as production begins from redesign of the item, the cost risk should shift to the contractor and a Firm Fixed Price (FFP) pricing arrangement should be considered.

The type of appropriation that will be used to fund this effort is the Consolidated Sustainment Activity Group-Engineering (CSAG-EN).

This contract will require engineering services for the form, fit, function, and interface redesign of the ALQ-172 LRU-4, delivery of prototypes, and successful testing at the system and aircraft level based upon contract performance parameters in Section 2.0 of the Performance Based Work Statement. These prototypes will qualify a form, fit, function, and interface redesign that will replace the current legacy ALQ-172 LRU-4.

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

If this requirement went to another vendor, the Government estimates that it would take three years to bring the vendor up to speed on the ALQ-172 system before the vendor can begin to manufacture the item. Qualifying a new source would include new supplier startup, performing qualification, first article testing, acceptance testing and flight test. This cost would exceed

. These time and cost estimates are based on previous engineering projects to develop additional sources.

Since production drawings cannot be furnished, the new supplier would have to reverse engineer the existing ALQ-172 LRU-4 and develop procedures and equipment to test a new ALQ-172 LRU-4. The Government also does not have a LRU-4 available to furnish to another vendor for reverse engineering purposes. The Air Force has continuous requirements with Exelis, not only for repair support, but for support of all types. Specifically, hardware modification, R&M projects, and both hardware and software engineering support. Another contractor must fabricate an EMTS/Hot Mockup, all ALQ-172(V)-2 LRUs, and LRU-21 Test Set. This effort requires an update to the EMTS, which is the depot level tester used for repair. Exelis is the OEM for the

EMTS. This workload will remain organic based on the core decision in SORA 09-154. Another source cannot acquire an EMTS due to obsolescence and the amount of GFE required to support the setup for the EMTS. The cost and time involved in having another source acquire the equipment and expertise would not be cost effective and feasible. The Government doesn’t have additional equipment to furnish a new source.

The Government did request on 2-Apr-14 a Rough Order of Magnitude for the data and Exelis quoted million for the entire ALQ-172 system. The Government would incur a substantial duplication of costs. It would be uneconomical to buy the current data because the redesign includes the requirement for a full technical data package, which will include everything the Government is lacking currently to support LRU-4. The technical data package for the redesign was quoted for million. The cost difference is significant because it is less costly to create a new data package versus overhauling a legacy package. It would take another vendor three years to become familiar with the ALQ-172 system due to its complexity. This estimate is based on prior contracting efforts with vendors, including prior OEMs, for ALQ-172 items, that have been asked to assist on other projects, but have not supported the ALQ-172 for a significant period of time. A three year delay is unacceptable to the USAF because this delay would put the Government past the need date for a redesigned LRU-4. Without the LRU-4, the ALQ-172 system cannot be utilized and leaves the B-52H aircraft defenseless against threats.

Based upon the information above, the Government would incur a substantial duplication of cost and an unacceptable delay. As such, the OEM has the unique technical expertise, experience, specialized test equipment and knowledge to support the form, fit, and function redesign at their facility.

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 components 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 source 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 15.403-4, 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 and indirect rates will be negotiated by the Government based on recommendations from the Defense Contract Audit Agency (DCAA), the Defense Contract Management Agency (DCMA) and expert technical 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, in accordance with FAR Part 10, was conducted in July 2014 for the proposed acquisition, advising industry of the pending acquisition and soliciting inquiries from interested parties. Internal knowledge possessed by the AN/ALQ-172 engineering staff was queried.

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.electrobase.com/app/flC/niprd/wsprdall http://www.electronics-oems.com/products.html http://www.datasheetlocator.com/ http://www.globalspec.com/ProductFinder http://www.eem.com/ Review of Govt-proprietary component product data-base (Haystack)

Research revealed that there is no commercial application that can fulfill the ALQ-172 components requirement. Research identified Exelis as the only source available with the unique experience and expertise to satisfy the requirements. Market research also consisted of reviewing previous contractor support efforts for the ALQ-172(V) system and contacting knowledgeable individuals, including the system engineer, equipment specialist, and program manager regarding market capability of other known possible sources. The research provided no additional sources.

Market Research has identified Exelis as the only source with the required capabilities and knowledge to meet the Government’s requirements and delivery schedule. Exelis Inc. is the original equipment manufacturer for the ALQ-172 system and is the only vendor with the technical data and expertise to support the procurement of the LRU-4.The LRU-4 is the high-power Radio Frequency (RF) transmitter for Pulse Doppler (PD) and Continuous Wave (CW) jamming signals. The PD/CW transmitter is installed on B-52H aircraft in fore and aft locations, and it consists of nine printed circuit boards, two Yttrium Iron Garnet (YIG) – Frequency Oscillator Mixer (FOM) (YIG-FOM) assemblies, three RF trays, a High-Level Traveling Wave Tube Assembly (HLTWTA), a Low Voltage Power Supply (LVPS), and a filter box assembly.

EXELIS INC is the only source with the data for the current configuration of the LRU-4. The LRU-4 is part of the ALQ-172 Countermeasures set. ALQ-172 system will not function without use of the LRU-4. LRU 4 (Transmitter) functions would be non-existent, rendering the system useless.

The unreliability and obsolescence issues within this item are a major issue and need to be resolved using modern, more reliable components. Based on the health analysis, there are 87 obsolete electronic parts. The Government was notified in January 2014 that the RF Trays could no longer be procured. In November 2013, the Government was notified that the YIGFOM was obsolete during the contract proposal process. The RF Trays and YIGFOM are the top replacement items during the repair of the LRU-4. Currently, there are 16 backorders and 22 in work and 9 'F' condition assets. 13/22 assets in work are in awaiting parts (AWP) status for the obsolete SRUs. It can no longer be sustained at depot to reduce its negative impact on fleet readiness.

Therefore, market research reveals that there is only one qualified source, Exelis that can meet the Government’s schedule for this urgent requirement.

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

Currently, the Government does not have a technical data package to provide to other vendors.

This effort requires the timing specification between other LRUs and that is proprietary to Exelis. The Government requested a ROM in April 2014 and Exelis provided a rough order of magnitude for . A full technical data package is required as a deliverable for this effort. The technical data package that will be procured under this effort will be able to support competition for future acquisitions. Therefore, future acquisitions for the LRU-4 will be competed. The B-52H is scheduled to fly until 2048.

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)).