14-01308_-_JA_20150306_Redacted.pdf

JUSTIFICATION FOR OTHER THAN

FULL AND OPEN COMPETITION

I. CONTRACTING ACTIVITY

This Justification and Approval request authority for Other Than Full and Open Competition supports requirements generated for the Air Force Sustainment Center, 638 Supply Chain Management Group

(SCMG), 408 Supply Chain Management Squadron (SCMS)/GULA. The contracting authority for this requirement is AFSC/PZABB. The purchase request number supporting this contracting action is

FD2060-14-01308.

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

Due to the circumstances described herein, the activity requests authority to acquire the repair services listed in this document using Other Than Full and Open Competition as prescribed by Federal Acquisition

Regulation (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 an Indefinite

Delivery (ID)/Indefinite Quantity (IQ) with a basic and two, one-year ordering periods in which additional quantities may be ordered. The Teardown, Test, and Evaluation (TT&E) CLIN will be Firm

Fixed Price and the Repair CLIN will be negotiated at each individual Delivery Order. This sole source requirement will be repaired at the following company:

Pacific Design Technologies (PDT)

6300 Lindmar Dr

Goleta, CA 93117

CAGE: 1P7T0

Small Business

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

NEEDS

Under the proposed contract, PDT will repair Motor Driven Pumping Units/Liquid Cooling Systems which are required to support sustainment of the AN/ALQ-184 Electronic Countermeasures (ECM) Pod.

Consolidated Sustainment Activity Group (CSAG) funding will be utilized for NSN 4320015692102EW

PN G254008-1V4.

NSN 4320015692102EW PN G254008-1V4

FY CLIN

Quantity Estimated Unit

Price Total

MIN MAX

FY15

TT&E 20

Repair 20

FY16

TT&E 5 30

Repair 5 30

FY17

TT&E 5 30

Repair 5 30

The total estimated cost for this acquisition, including maximum quantities for all ordering periods is

. This estimate was developed using an estimate provided by PDT. Out-year Estimated Unit

Repair Prices were developed using a escalation factor. The quantities are based on actual demand as well projections computed by the March 2014 D200A computation cycle.

This item currently has 115 ea backorders, of which 24 ea are SURGEs and 74 ea are MICAPs. TT&E shall be completed within 30 days. Repairs shall begin four months after receipt of a funded delivery order at a rate of 10 ea per month.

According to the RMC/RMSC Contract Repair Screening Analysis Worksheet, the RMC/RMSC for this item is R4/D – Repair, for the first time, directly from the actual manufacturer. 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), 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/ALQ-184 is a self-protect Electronic Counter Measures (ECM) Electronic Warfare (EW) pod with widespread use in USAF combat aircraft. It provides electronic countermeasures against Surface to

Air Missiles, radar-directed Anti-Aircraft Artillery, and Airborne Interceptors for the A-10 and F-16 aircraft. The pumping unit is responsible for maintaining coolant flow to keep the temperature of the pod below the maximum operating temperature of the electronic components in all operating environments of the host aircraft. It is a critical component of the AN/ALQ-184, and as such, cannot perform its mission without this component.

PDT became the OEM through a competitively awarded redesign procurement contract. The contract was awarded in 2001 and the specific task order in 2006. The task order did include an optional CLIN, which was not funded, for a Technical Drawing Package. PDT has since stated that they are not willing to sell their proprietary technical data or the rights to the data. Also, the configuration of this item changed significantly in 2014. The Government did not fund this configuration change. Government

Engineering did approve this change as the current and only approved configuration. The original PDT drawings from the 2006 redesign project are no longer valid as they support an old, and now unapproved, configuration.

Since becoming the only qualified source for procurement, PDT has manufactured the pumping units on two sole-source contracts. They became the sole qualified repair source on the current procurement contract (SPRWA111D002) through a warranty repair process. The final ordering period of

SPRWA111D002 was awarded on 13 May 2014. Therefore, this acquisition is for continued performance of a highly specialized service.

These items to be procured under this proposed contract are highly specialized in nature. The rotary pump is a positive displacement pump utilizing a gerotor. Utilizing minimal moving parts, gerotor pumps allow constant and even discharge regardless of pressure conditions. The pump must supply 150 per square inch differential (PSID) system flow resistance and inlet volume of 3.0 gallons per minute (GPM) at 115

Volts/Phase (V/PH) and 400 Hertz (Hz). The pump must have no detrimental effects from intermittent operation at a flow resistance of 200 PSD for periods up to 15 minutes. These requirements must be maintained while under extreme environmental conditions and utilizing only Coolanol-20 coolant fluid.

The OEM, PDT, retains all proprietary data required to repair the pumping unit. Additional system level requirements and undocumented engineering knowledge of its operation are owned by PDT. According to the AFMC Form 762, Contract Repair Screening Analysis Worksheet, special tools/test equipment and special facilities are required, all of which PDT currently possesses. The Government does not own the technical data required to repair this item. On 23 Aug 14, PDT was contacted with a request to sell all data (or rights to the data) required to repair the pumping unit. PDT’s President stated they are unwilling to sell its Intellectual Property, including but not limited to, the drawings associated with the ALQ-184 pumping unit.

The AN/ALQ-184 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. Because PDT is unwilling to sell the propriety data required to repair the pumping unit, award to any other source would require a redesign and/or reverse engineering effort to develop internal technical data packages which would duplicate the existing propriety technical data owned by PDT. Based on the Air Force engineering staff’s experience with similar projects, a redesign and/or reverse engineering effort would expose the Air Force to unnecessary cost risk, schedule risk, and technical risks with no guarantee of success. Additionally, it would take approximately four years for another vendor to obtain the necessary tools/equipment and facilities, complete the redesign and/or reverse engineering effort, identify and rectify any obsolescence issues, deliver qualification reports, provide First Article assets for the Government’s review, deliver a technical data package, and begin deliveries. The estimated cost for such an effort, not including the cost of production assets, is $2.33 million. This estimate was obtained from a White Paper written by Georgia

Tech Research Institute on 15 Jul 13 for the ALQ-184 Program Office. Such an effort would not result in enough savings to recoup the costs required to award to another vendor. An Economic Analysis was conducted and the results show that the estimated breakeven point would not occur until FY61 with an estimated program completion date of FY22.

Upon completion of the final delivery order (Jan 2015) on the current procurement contract, this item will essentially be unsupportable. The delays associated with award to another vendor are unacceptable as the backorders and MICAPs will continue to accrue during the new contractor’s reverse engineering effort, build, test, qualification, manufacturing start-up, and delivery phases. The overall mission capable rate of the AN/ALQ-131 fleet would be detrimentally impacted, as would the aircraft they support. Accordingly, PDT 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 as well as unacceptable delays in fulfilling the Air Force’s 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 Federal Business Opportunities (Fed Biz Ops) web page as required by FAR 5.201, citing conditions which preclude full and open competition. Any source that 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 and 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 on recommendations from 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 NOTCONDUCTED

Market Research was conducted August 2014 pursuant to FAR Part 10. Thorough documentation searches were conducted within Government data bases, combined with various internet searches

(Thomas Registry, IHS Haystack, Google, etc.) for part/national stock numbers and manufacturers.

Correspondence with the OEM is on file to document the present status of the item. Qualified individuals, within the appropriate Government sections, were contacted and assisted with the gathering of product background information.

A search for HUB zone and service disabled veteran owned businesses was conducted using the Dynamic

Small Business Search Engine (http://dsbs.sba.gov/dsbs/search/dsp_dsbs.cfm), using criteria consisting of keywords pertaining to the item description. A total of twenty vendors were identified; initial analysis determined that most are not relevant. Further research was conducted through a vendor survey to identify which vendors possess the capabilities necessary to meet the Government’s requirements.

Multiple companies were researched and it was determined that PDT is the only company in possession of the proprietary data required to repair the pumping unit. An analysis was also performed to identify the cost, schedule, and technical risk associated with each of the potential vendors; it was determined that

PDT is the lowest risk vendor across all categories.

Market research identified PDT as the only qualified source to repair this item. They are the only company who has repaired this item. PDT currently possesses the proprietary technical data package required to repair this item and has stated that they will not sell the data and/or the rights to the data. A redesign and/or reverse engineering project for this item is not feasible due to cost, schedule, and technical risk. PDT is considered the only responsible source for this item and has the greatest likelihood of success from a cost, schedule, and technical risk perspective.

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

PDT is unwilling to sell the proprietary data required to manufacture this item. A redesign and/or reverse engineering project is not only uneconomical to pursue but would also result in unacceptable delays.

Again, such an effort would be considered high risk from a technical standpoint with no guarantee of success. It is anticipated that there will be follow-on repair requirements; however, the timeframe and quantities are unknown at this time. When known, the Program Office will make another attempt to purchase PDT’s proprietary data and determine the feasibility of pursuing a redesign and/or reverse engineering effort. Additionally, the future Pod Upgrade Program (PUP), which is currently in acquisition, will significantly reduce the number of AN/ALQ-184 pods in service and consequently reduce the need for this item. The potential return on investment of a reverse engineering project will decrease as demand decreases. As previously stated, an Economic Analysis was conducted and the results show that the Government would not recoup the estimated $2.33 million required to redesign and/or reverse engineer this item until FY61. The AN/ALQ-184 is only expected to remain in service until FY22.

XII. CONTRACTING OFFICER’S CERTIFICATION

The contracting officer’s signature on the Coordination and Approval Document evidences that she has determined this document to be both accurate and complete to the best of 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)).