16-00025_J_and_A_LRU-1_for_FBO.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: Requirements Generator AFSC 638 SCMG, 408 SCMS/GULB, Contracting Office AFSC/PZABB

Purchase Request / Local ID Number: FD2060-16-00025

Program / Project (and PE, if applicable): AN/ALQ-172 Electronic Warfare System

Program Type (PEO or Other Contracting): Other Contracting

Authority (include full title): 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

Estimated Contract Cost (including options): $57,000,000.00 J&A Type: Class Individual

COORDINATION (AFFARS 5306.304(a) )

APPROVAL (AFFARS 5306.304(a) )

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

FD2060-16-00025.

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 48-month basic with no options or ordering periods (FY16-FY20). 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 supplies/services required to meet agency needs.

The purpose of this effort to acquire non-recurring engineering (NRE) services to redesign and qualify four

(4) AN/ALQ-172 Line Replaceable Unit (LRU) - 1 in order to resolve Diminishing Manufacturing Sources and Material Shortages (DMSMS), obsolescence issues for the legacy LRU-1. The AN/ALQ-172 LRU-1 is used as a component of the AN/ALQ-172(V)2 Countermeasure Set (CMS).

This effort will have a period of performance of 48 months

TOTAL ESTIMATED DOLLAR VALUE $57,000,000.00

This estimate was derived and based on the Rough Order of Magnitude (ROM) submitted by the contractor and an analysis of the ROM based on prior LRU redesign projects accomplished by similar Electronic Warfare programs.

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 a future production is contracted for on a separate basis after redesign of the item, the cost risk should shift to the contractor and a Firm Fixed Price (FFP) pricing arrangement should be considered.

This contract will require engineering services for the form, fit, function, and interface redesign of the ALQ-172 LRU-1, delivery of prototypes, and successful testing at the system and aircraft level. The prototypes will qualify a form, fit, function, and interface redesign that will replace the current legacy AN/

ALQ-172 LRU-1.

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 (applicability of authority).

This agency's minimum needs can only be satisfied by the unique supplies or services available from only the above cited qualified source that possesses unique capabilities demonstrated as follows:

ITT which is now 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-1. Exelis is the original designer and developer of the AN/ALQ-172 Countermeasures System (CMS); Exelis owns the proprietary data, has the skills, knowledge, and documentation needed to complete this effort, and has expressed significant reluctance to release this data to competitors. AFLCMC/WNYEBA does not possess a full data package for the AN/ALQ-172(V) System. Extensive knowledge and expertise of the AN/ ALQ-172 system is required to complete this effort and the Government does not have and cannot provide this data to competitors because of the lack of drawings. Furthermore, the AN/ALQ-172 components, from Software design to Hardware components, are tightly intermingled with most system documentation, creating barriers to sanitizing information for release. The Exelis proprietary components are so widespread that many small redesign efforts would be required to eliminate proprietary items, with no benefit to the government other than the removal of the proprietary items. The impact to drawings, software, and hardware would be monumental and unlikely to be recouped by competing software sustainment of the system.

Since production drawings cannot be furnished, the new supplier would have to reverse engineer the existing ALQ-172 LRU-1 and develop procedures and equipment to test a new ALQ-172 LRU-1. The Government also does not have a LRU-1 available to furnish to another vendor for reverse engineering purposes. The Air Force has continuous requirements with Exelis Inc., not only for repair support, but for support such as hardware modification, Reliability & Maintainability projects, and both hardware and software engineering support. Another contractor must fabricate an Enhance Maintenance Test System/Hot Mockup, all ALQ-172(V)-2 LRU Test Set. This effort requires an update to the EMTS, which is the depot level tester used for repair. Exelis Inc. is the OEM for the EMTS.

This workload will remain organic repair based on the core decision in SORA 09-154. Another source cannot acquire an EMTS due to obsolescence and the amount of Government Furnished Equipment required supporting 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 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-1.

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-1.

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 practicable.

A Request for Information (RFI) was posted to Fed Biz Ops in Jul 2015 and completed August 2015. No responses to the RFI were received from any potential sources/vendors.

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.

In addition to the RFI addressed in Section VI above, market research was conducted in May 2015 as outlined by FAR 10.002 using the following methods: reviewing industry reports, trends and product developments; discussions with industry representatives; internet searches; and industry knowledge possessed by the ALQ-172 Engineering staff. Engineering is actively engaged in component product sustainment, staying abreast of industry developments by reviewing industry reports, trends and product developments, talking with field personnel, and maintaining an active dialog with Exelis Inc. Sources without experience with the AN/ALQ-172 were not considered due to the complexity of the system as detailed in paragraph titled “Background”. If the search displayed any hits, the first few hits of each search site were reviewed for potential vendors. Each vendor webpage was then examined for their service capabilities and for services they are currently providing or have provided in the past. Vendors that do not provide software engineering services were eliminated from the vendors list due to the need for software updates. Next, vendors who have no AN/ALQ-172 system operation knowledge were eliminated. As noted above, a Request for Information (RFI) was posted to Fed Biz Ops in Jul 2015 and completed August 2015. No responses to the RFI were received from any potential sources/vendors. The team conducted a review of several industry-wide searches on the Internet, using the following search engines. The key terms used in the search were: LRU-1; Receiver, Countermeasures:

· http://www.aerospace-technology.com/contractors/index.html,

· http://www.globalspec.com/ProductFinder,

· http://www.eem.com/,

· http://dsbs.sba.gov/dsbs/search/dsp_dsbs.cfm

Therefore, market research reveals that there is only one qualified source, Exelis Inc. that can meet the Government's schedule for this 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 paragraph 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.

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 Inc.

A full technical data package is required as a deliverable for this effort.

This effort is to acquire non-recurring engineering (NRE) services to redesign LRU-1.

XII. Certification by the Contracting Officer.

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. Certification by the technical/requirements personnel.

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)).