JA_12-31144_Redacted.pdf

JUSTIFICATION FOR OTHER THAN

FULL AND OPEN COMPETITION

PR FD2060-12-31144

I. CONTRACTING ACTIVITY

This Individual Justification and Approval is being executed to request authority for Other Than Full and Open Competition to supports requirements generated by the Air Force Sustainment Center (AFSC), 448 Supply Chain Management Wing (SCMW), 638 Supply Chain Management Group (SCMG), 409 Supply Chain Management Squadron (SCMS) /GUMAB. The type program this action is supporting is Other Contracting. The contracting authority for this requirement is the AFSC/PZAAA located at Robins Air Force Base, GA. The purchase request number supporting this contracting action is FD2060-12-31144

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

The action is to obtain overhaul services for C-5 Dewar assemblies. The action is requesting a new firm-fixed price requirements contract that will consist of a basic year and four one year options for a total performance period of five (5) years. Firm-fixed price is being requested due to the fact that the sole source vendor developed the overhaul procedures and has enough data to determine cost. Due to the circumstances described herein, the activity request authority to acquire the overhaul services 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 sole source requirement will be acquired from the following company:

Parker Hannifin Corporation Parker Aerospace 14300 Alton Parkway Irvine, Ca. 92618-1814 Cage Code: 59211 / Large Business (Facility Cage Code 92003 replaced with Facility Cage Code 3H889)

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

AGENCY’S NEEDS

The Air Force has a requirement for a complete overhaul of the C-5 Dewar assemblies, national stock numbers (NSN) 1680-01-572-4786UC, part number (P/N) 7081054-101 (Left Wing) and NSN 1680-01-572-4787UC, P/N 7081054-102 (Right Wing). The Dewar Assemblies make up the Dewar System which is part of the Fire Suppression System (FSS). The FSS is a safety system designed to prevent fires on board the aircraft. The system is part of the Minimum Equipment List and is required to be operable for flight. Failure of this system poses an unacceptable risk and may result in loss of life and/or aircraft. Overhauling the entire system will reduce downtime in the field providing greater support for the war fighter.

PR FD2060-12-31144

Under the contemplated contract, the Original Equipment Manufacturer (OEM), Parker Hannifin Aerospace will provide overhaul services for the right hand and left hand Dewar assemblies to support sustainment of the C5 aircraft fleet.

Estimated maximum quantities needed and dollar values for each ordering period are as follows:

First Ordering Period: Date of award through twelve calendar months NSN BEQ Est. Unit Cost Total Est. Cost

1680-01-572-4786UC 7 $ $

1680-01-572-4787UC 7 $ $

First Year Total Cost = $

Second Ordering Period: Thirteenth month through twenty-fourth month NSN BEQ Est. Unit Cost Total Est. Cost

1680-01-572-4786UC 6 $ $

1680-01-572-4787UC 6 $ $

Second Year Total Cost = $

Third Ordering Period: Twenty-fifth month through thirty-sixth month NSN BEQ Est. Unit Cost Total Est. Cost

1680-01-572-4786UC 6 $ $

1680-01-572-4787UC 6 $ $

Third Year Total Cost = $

Fourth Ordering Period: Thirty-seventh month through forty-eighth month NSN BEQ Est. Unit Cost Total Est. Cost

1680-01-572-4786UC 7 $ $

1680-01-572-4787UC 7 $ $

Fourth Year Total Cost = $

Fifth Ordering Period: Forty-ninth month through sixtieth month NSN BEQ Est. Unit Cost Total Est. Cost

1680-01-572-4786UC 5 $ $

1680-01-572-4787UC 5 $ $

Fifth Year Total Cost = $

Total maximum estimated cost of this acquisition for a five year period, including all quantities, is $9,753,324.00. This cost is based on an estimated overhaul cost provided by the contractor for first year and calculated with an inflation factor of 2.5% per year for option year costs.

Appropriation is MSD Working Capital Funds.

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)

The agency’s requirements can only be satisfied by the unique services available from Parker Hannifin Aerospace based on the following:

The Government does not have possession of, or rights to, sufficient data to overhaul these parts organically or to provide to another contractor. The Government does not possess data for overhaul procedures, data for any tooling required for overhaul, data for any required test equipment, or data for test parameters for subject items.

There is no previous contracting history for these items. There is no procurement or overhaul history; only the component parts have been acquired or overhauled in the past. There has never been a complete overhaul procedure in the periodic maintenance of the aircraft for the entire Dewar System. The current maintenance concept for the C-5 Dewar Assemblies is “fly to fail” and repair component parts as needed.

To improve Reliability and Maintainability (R&M) of the C-5 Dewar System, Parker Hannifin Aerospace, the OEM, determined that instead of overhauling component parts as they failed, the R&M of the Dewar System could be improved by overhauling the entire Dewar Assemblies as whole units. Parker developed overhaul procedures for the Dewar Assemblies and the data for the overhaul procedures remain the proprietary data of the OEM.

The items were screened in accordance with AFMCI21-149 dtd 4 Mar 2009, Contract Technical/Repair Screening, and were assigned a Repair Method Code (RMC) of 3, which means repair directly from the actual manufacturer, and a Repair Method Suffix Code of P, which means the rights to use the data needed for contract repair of this part from additional source(s) are not owned by the Government and cannot be purchased, developed, or otherwise obtained.

These items are under the configuration control of the vendor, however the Government maintains configuration control of the aircraft and must be notified of all Class I changes to the item. The detailed overhaul data for these items is proprietary to Parker Hannifin.

As the OEM and current repair source for the major components of these assemblies, Parker Hannifin has the capacity to meet Air Force requirements in terms of known schedule needs as well as the potential to accommodate excess capacity that may be required to support surge 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 citing conditions which preclude Full & Open Competition. 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 overhaul 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 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 cost, and direct and indirect rates will be negotiated by the Government based on recommendations from the Defense Contract Audit Agency (DCAA) and expert technical personnel supporting the program. The contract price will be negotiated in accordance with 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 was conducted in accordance with FAR 10.002. Search of WR-ALC/XPQ Market Research Report Archives & active research was conducted. Internet searches were performed on 29 May 2012 for “Dewar”, “Dewar Assembly” and “Dewar Overhaul” using sites such as the ihs.com, naics.com, dogpile.com, Google, etc. No relevant results were found.

Program Manager contacted a Customer Support Manager for Parker Aerospace by e-mail 22 February 2012 to verify proprietary nature of overhaul data for Dewar Assemblies and to determine if Parker Aerospace would be willing to sell the rights and data to the Government.

Parker representative responded that as the sole source OEM for the subject Dewar Assemblies, they cannot sell their proprietary data, drawings, or any other associated rights to the assemblies.

These parts were designed, qualified and manufactured exclusively for a military application, the C-5 heavy cargo transport aircraft. These parts are not interchangeable with any part found on any other military or commercial aircraft. Engineering has determined that these items are C-5 unique and are non-commercial. The commercial acquisition procedures outlined in FAR Part 12 (Acquisition of Commercial Items) are not applicable to this requirement. Therefore, any available commercial overhaul procedures are not suitable for use with these items.

The OEM developed the overhaul procedures and is the sole source vendor with the technical knowledge to successfully overhaul this item.

Consistent with RMC/RMSC 3P, a sole-source acquisition strategy is recommended for any overhaul contracts. Consistent with commerciality findings, non-commercial acquisition procedures are recommended for overhaul. Based on the market survey, overhaul of these items is not eligible for set-aside to any of the small, disadvantaged, or other categories designated by the Small Business Agency. Parker Hannifin Corporation is the only responsible source capable of providing the services to satisfy agency requirements.

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

OPEN COMPETITION

Even though the Government maintains configuration control of the aircraft and must be notified of all Class I changes to these items, the items are under the configuration control of the OEM, Parker Aerospace. These items were designed and manufactured exclusively for use on the C-5 aircraft and the critical performance requirements applicable to these items are outlined in proprietary drawings owned by the OEM.

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

The only available action to remove the competitive barriers to full and open competition would be reverse engineering (RE) efforts to develop test equipment, tooling, and technical data.

Based on engineering experience, RE would cost $8-10M and take 6-7 years to complete. An additional 2-3 years for competitive procurement once the Government owns the data would be required due to First Article and other testing and quality assurance requirements. In addition, the current FSS was qualified for use with these particular assemblies. Any changes or redesign would require the re-qualification of the entire FSS. Engineering has evaluated the complexity of this item and determined that there is a high risk of failure and no guarantee of success.

Engineering does not recommend that this item be reverse engineered due to its criticality to the weapon system and would not support allocation of funding to accomplish RE of the item. RE efforts cannot be economically justified nor could the C-5 program successfully complete mission requirements with the extensive delays required to accomplish a reverse engineer effort.

It is anticipated that there will be follow-on acquisitions for overhaul of subject items. At that time another attempt will be made to procure data, and if unsuccessful, feasibility of RE will also be re-evaluated.

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(a)(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(b)).