JA PR 11-31092 MKII ADU and SAI 13 Apr 11 Rev.pdf

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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 GLOBAL LOGISTICS SUPPORT

CENTER (AFGLSC), 638 SUPPLY CHAIN MANAGEMENT GROUP (SCMG), 409

SUPPLY CHAIN MANAGEMENT SQUADRON (SCMS)/GUMBB. The contracting authority for this requirement is AFGLSC, 448 SCMG/PKHEA, C-5 Aircraft Support, Robins Air Force Base, GA. The purchase request number supporting this contracting action is FD2060- 11-31092.

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 will result in the award of a new contract, which will be a firm-fixed price, Indefinite Delivery requirements contract with a basic year plus four one-year ordering periods in which additional quantities may be ordered. This sole source requirement will be purchased from the following company:

Meggitt Avionics (CAGE K0100) 7 Whittle Ave Segensworth West Fareham

PO15 5SH

United Kingdom (int’l) 01489 483300

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

AGENCY’S NEEDS

a. This procurement is for repair of Best Estimated Quantities (BEQ) of the Mk II Standby Attitude system components, the Mk II Standby Attitude Indicators (SAI), NSN 6610-99- 593-8834UC and the Mk II Air Data Units (ADU), NSN 6610-99-131-6575UC. The SAI is a solid state, self-contained standby attitude indicator intended to provide standby attitude display for the C-5 aircraft. The SAI provides pitch and roll data displayed through a full 360-degree rotation. The ADU receives pilot and static pressures and

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calculations altitude, airspeed, and mach information that are displayed on the SAI. All requirements will be funded with MSD funds.

b. The following items are the NSNs and estimated requirements and values for those NSNs, including all options, and the estimated value of the entire acquisition. All requirements will be funded with MSD.

Mk II Standby Attitude Indicator (SAI)

Basic Ordering Period 1

Ordering Period 2

Ordering Period 3

Ordering Period 4

NSN 6610-99-593-8834UC

P/N 39220-01-01

Estimated Repair Qty 45 45 45 45 45

Estimated Repair Unit Price (U/P) $4,284.39 $4,466.48 $4,656.31 $4,854.20 $5,060.50

Estimated Total Repair $192,797.55 $200,991.60 $209,533.95 $218,439.00 $227,722.50

Mk II Air Data Units (ADU)

Basic Ordering Period 1

Ordering Period 2

Ordering Period 3

Ordering Period 4

NSN 6610-99-131-6575UC

P/N 27100-01-01

Estimated Repair Qty 45 45 45 45 45

Estimated Repair Unit Price (U/P) $2,196.99 $2,290.36 $2,387.70 $2,489.18 $2,594.97

Estimated Total Repair $98,864.55 $103,066.20 $107,446.50 $112,013.10 $116,773.65

Total Annual Estimate for contract: $291,662.10 $304,057.80 $316,980.45 $330,452.10 $344,496.15

TOTAL POTENTIAL CONTRACT VALUE $___$1,587,648.60___

c. Estimated repair unit prices (U/Ps) for the basic period on each NSN were determined by averaging the actual repair costs (from DD250s) on the items repaired from FY05 - FY10. That estimate was then inflated by 4.25%. All basic year prices used were inflated 4.25% in each of the option years.

d. This contract requires delivery to begin 60 days of each order at a quantity of 5 per month until completion.

e. The RMC/RMSC on both NSNs is R3R: Repair, for the second or subsequent time, directly from the actual manufacturer. The Government does not own the data or the rights to the data needed to contract repair of this part from additional sources. It is uneconomical to reverse engineer the part. The code is used when the Government did not initially purchase the data and /or rights.

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IV. STATUTORY AUTHORITY:

10 U.S.C. 23049(c)(1) as implemented by FAR 6.302-1, Only One or a Limited Number of Responsible Sources, 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

a. The Mk II Standby Attitude system is composed of safety of flight required instruments that are manufactured exclusively by Meggitt Avionics. The system was acquired without re-procurement or repair technical data due to the fact that the items are a commercial off the shelf (COTS) system. All data rights are proprietary to the Original Equipment Manufacturer (OEM), Meggitt Avionics. This is reflected in the repair method code or R3R assigned. A Source of Repair Assignment Process (SORAP) completed on 31 Aug 09 approved the recommendation of contract repair on both NSNs. Meggitt Avionics is the only repair source with the support infrastructure already in place for the both instruments. The company has notified the Air Force and their other commercial customers that they are introducing a new single unit system. Meggitt Avionics estimates a minimum of 4 years before SFD MKII production will cease and may extend this timeframe to cover any programs that forecast future repair and support needed beyond that period. Repair support by the OEM is needed during the next five years while the Air Force identifies, funds, and fields a replacement for the MKII system.

VI. DESCRIPTION OF EFFORTS MADE TO ENSURE THAT OFFERS ARE

SOLICITED FROM AS MANY POTENTIAL SOURCES AS DEEMED PRACTICAL

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 the repair services 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 considered fair and reasonable based upon FAR 12 negotiation procedures using price and cost analysis. Methodologies to assure this will be commercial pricing techniques utilizing publicly offered catalogs, comparison to historical contractor sales and/or analysis of limited cost and pricing information which could be made available by the contractor. In the event that limited cost and pricing information is made

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available, the Government’s negotiation objective will be developed using local technical analysis applied to direct and indirect rate factors recommended by the DCAA and/or DCMA.

VIII. DESCRIPTION OF THE MARKET RESEARCH CONDUCTED AND THE

RESULTS, OR A STATEMENT OF THE REASONS MARKET RESEARCH WAS NOT

CONDUCTED

The government did not purchase an engineering data package or repair data during the acquisition. Meggitt Avionics will not sell the repair manuals for the SAI or ADU to either the Government or private repair centers. Both the Mk II SAI and ADU are Modified (MCOTS) and Commercial Off The Shelf (COTS) instruments respectively. Their qualification on the C-5 was the result of a protracted 2003 market research study seeking a form, fit and function replacement for the Mk I system which was rapidly becoming unsupportable. The Mk II was the only system that met the criteria for a drop in form, fit and function replacement. Only the OEM has the technical data and engineering expertise to repair these instruments.

Repair services to be acquired meet the definition of a commercial item as per FAR Par 2 which can be acquired using the streamlined acquisition procedures under FAR Part 12.

A small business set aside award is not feasible due to the proprietary nature of repair data.

The Government is sharing market presence with other corporate users of Meggitt Avionics flight equipment. For instance, commercial aircraft manufactures and integrators are free to make individual contractual arrangements with Meggitt Avionics for repair. They may also make a contractual agreement with secondary source of repair for an exchange program. Market research discovered Dassault Falcon Aviation can provide civilian replacement display indicators.

However, the Government cannot contract with Dassault Falcon Aviation for item replacements because Dassault Falcon’s display indicator do not meet the minimum requirements for military display configuration of the indicator. In addition, Dassault cannot repair the military display indicator. Thus, Dassault should not be considered a source of repair for this item.

Market research techniques included a limited sampling via telephone contact with four FAA approved commercial aviation repair centers to determine any repair capability for the MkII SAI or ADU. A Google internet search of the applicable part numbers was also accomplished with no pertinent responses. Based on research accomplished and available data and engineering knowledge of the item and the aerospace industry, the recommended source for the repair of these parts is the OEM, Meggitt Avionics.

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

OPEN COMPETITION

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The OEM is not willing to sell data rights to the Government, which means the technical data package, specifications, and engineering description suitable for Full and Open Competition cannot be developed without reverse engineering. A request was sent on 9 March 2011 to the Meggitt point of contact for the current repair contract asking whether Meggitt would sell, license or partner with the USAF to allow us full access and use of the technical data package (drawings, parts lists, repair manuals, information/data on equipment, software and test programs (software or directions) used by Meggitt that would be necessary for the USAF to establish depot level repair capability for part numbers 39220-01-01 and 27100-01-01. Meggitt has acknowledged receipt of the request but as of 12 April 2011 has not provided a reply.

The Government determined that reverse engineering was uneconomical based upon data provided in January 2007 as part of the Source of Repair Assignment cost benefit analysis from the 523 EMXS which provided a cost estimate of $1.533M to obtain organic depot repair capability through reverse engineering (based on a "like item" system) due to the fact that data would not be available from the OEM. The cost estimate for the reverse engineering specifically stated that the proposed cost did not address any data that would be identified as proprietary so the cost would have been higher or the project not feasible based on the data being proprietary.

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

Because Meggitt has notified the Air Force and commercial customers that production and support of the MkII system will eventually be discontinued, we will be looking into replacement systems. Competition and cost will be taken into account in the market research and any future acquisition when a replacement is selected. No other actions are planned to attempt to remove or overcome the current barriers to competition on the existing MkII system.

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.

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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.