JA_-_redacted.pdf

411 SCMS/GULB FD2060-14-00028

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), 411th Supply Chain Management Squadron (SCMS) / GULB. The contracting authority for this requirement is 638th Supply Chain Management Group (SCMG)/PKAA. The purchase request number supporting this contracting action is

FD2060-14-00028.

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, Requirements contract with a basic year plus four (4) year option period. This sole source requirement will be purchased from the following company:

Ontic Engineering and Manufacturing 20400 Plummer Street Chatsworth, CA 91311

CAGE 45934

Small Business, Women Owned NAICS Code: 332912

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

AGENCY’S NEEDS

This acquisition is to obtain a five year (basic year and four annual options) firm fixed price requirements type contract for the repair of the Fuel Quantity Indicator (FQI) System applicable to the UH-1N helicopter. National Stock Numbers (NSN’s), Nouns and Part Numbers are listed below in this paragraph. The repair will require the contractor to restore the unserviceable assets to serviceable condition using the contractor developed repair and acceptance test procedures.

NSN Noun Part Number 2915-01-361-0133GA Control Unit, Pump 0201KCR01 6680-01-360-9451GA Indicator, Liquid Qty 20-246-01 6680-01-361-0739GA Liquid Transmitter 0250KTU01 6680-01-361-0740GA Liquid Transmitter 0116KTU02 6680-01-361-0741GA Liquid Transmitter 0166KTU01

BASIC

Noun TYPE BEQs EST URC Total Control Unit, Pump Repair 8 Control Unit, Pump TT&E 8 Indicator, Liquid Qty Repair 18 Indicator, Liquid Qty TT&E 18 Liquid Transmitter Repair 15 Liquid Transmitter TT&E 15 Liquid Transmitter Repair 6 Liquid Transmitter TT&E 6 Liquid Transmitter Repair 6 Liquid Transmitter TT&E 6 Total $200,221.00 Options 1 Noun TYPE BEQs EST URC Total Control Unit, Pump Repair 6 Control Unit, Pump TT&E 6 Indicator, Liquid Qty Repair 10 Indicator, Liquid Qty TT&E 10 Liquid Transmitter Repair 7 Liquid Transmitter TT&E 7 Liquid Transmitter Repair 4 Liquid Transmitter TT&E 4 Liquid Transmitter Repair 4 Liquid Transmitter TT&E 4 Total $115,035.00 Option 2 Noun TYPE BEQs EST URC Total Control Unit, Pump Repair 6 Control Unit, Pump TT&E 6 Indicator, Liquid Qty Repair 10 Indicator, Liquid Qty TT&E 10 Liquid Transmitter Repair 7 Liquid Transmitter TT&E 7 Liquid Transmitter Repair 4 Liquid Transmitter TT&E 4 Liquid Transmitter Repair 4 Liquid Transmitter TT&E 4 Total $120,786.75 Option 3 Noun TYPE BEQs EST URC Total Control Unit, Pump Repair 6 Control Unit, Pump TT&E 6 Indicator, Liquid Qty Repair 10 Indicator, Liquid Qty TT&E 10 Liquid Transmitter Repair 7

Liquid Transmitter TT&E 7 Liquid Transmitter Repair 4 Liquid Transmitter TT&E 4 Liquid Transmitter Repair 4 Liquid Transmitter TT&E 4 Total $126,826.09 Option 4 Noun TYPE BEQs EST URC Total Control Unit, Pump Repair 6 Control Unit, Pump TT&E 6 Indicator, Liquid Qty Repair 10 Indicator, Liquid Qty TT&E 10 Liquid Transmitter Repair 7 Liquid Transmitter TT&E 7 Liquid Transmitter Repair 4 Liquid Transmitter TT&E 4 Liquid Transmitter Repair 4 Liquid Transmitter TT&E 4 Total $133,167.39

Grand Total $696,036.23

TOTAL POTENTIAL CONTRACT VALUE

Total estimated cost of this repair effort for the basic and four option periods is $696,036.23.

This price is based on the last repair cost with current escalation factors of to make it current with a five percent escalation factor for each of the option years.

The Fuel Quantity Indicator System on the UH-1N helicopter consists of two electrically separate systems: (1) Liquid-Crystal Display (LCD) and the Liquid Quantity Indicator (LQI), with five probes and (2) low level/fuel transfer sensing system. The LQI multiplexes and measures the capacitance of the usable fuel of the lower fuel cells (lower left aft, lower right aft, lower left forward, and lower right forward) and provides a bar graph displaying lower tank fuel volumes. Each bar graph segment represents 10 percent fuel contents. A four digit numeric field displays the total usable fuel weight of the four lower fuel cells and the upper aft tank. This system is mission critical and therefore required for the UH-1N helicopter to be mission capable.

The USAF’s minimum needs can only be satisfied by the unique supplies or services available from Ontic Engineering and Manufacturing, CAGE 45934. The Original Equipment Manufacturer (OEM), GE Aviation Systems LLC sold the data rights to Ontic in May 2011.

The Acquisition Method Code (AMC)/Acquisition Method Suffix Code (AMSC) for this item is R3/R: RMC: R3: Repair, for the second or subsequent time, directly from the actuals manufacturer. RMSC: R: The Government does not own the data or the rights to the data needed to contract repair of th epart from additional sources. It has been determined to be uneconomical to buy the data or rights to the data. It is uneconomical to reverse engineer the part. This code is used when the Government did not initially purchase the data and/or rights.

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

The agency's minimum needs can only be satisfied by the unique supplies or services available from only the cited source(s), which possesses the unique capabilities demonstrated as follows:

The Repair Method Code (RMC) is R3; Repair, for the second or subsequent time, directly from the actual manufacturer. The Repair Method Suffix Code (RMSC) is R; the Government does not own the data or the rights to the data needed to contract repair of this part from additional sources. There are no foreseeable obstacles to prevent Ontic from repairing these parts in a timely manner. The drawings, maintenance manuals and acceptance test procedures are proprietary. Data or the rights to use the data needed to repair these parts from additional sources are not owned by the Government. In October 2011 GE informed the Government that they completed the process to sell their data rights to Ontic Engineering and Manufacturing, Cage Code 45934 in May 2011 and were transferring management of the Fuel Quantity business to Ontic. 411 SCMS/GULA contacted Ontic Engineering and Manufacturing via telephone and e-mail on 13 Aug 2013 and 14 Jan 2014 to inquire about the potential purchase of data rights.

Ontic stated that they were not willing to sell data rights to the Government. Without a repair contract there is no vehicle to restore the FQI system to serviceable condition resulting in UH-1N helicopters becoming Non Mission Capable (NMC). On January 31, 2013 HQ AFMC/A4DC approved SORA 11-280 (DMI #13602F)(DSOR #11-280) for workload shift from Organic repair to Contract repair. The current repair source for the Fuel Quantity Indicator (FQI) system is through a contract with Ontic Engineering and Manufacturing in Chatsworth, California. The repair level drawings, technical data and acceptance test procedures are proprietary to Ontic, and Ontic is not willing to sell rights to the government. Ontic has repair stations, fully developed test software and a trained workforce for repairing these assets.

Ontic is currently repairing these assets successfully for the Government under contract FA5824-12-D-0001, due to expire in June 20 14. The 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 as well as in 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 the Federal Business Opportunities (FedBizOpps) web page as required by FAR5.201. 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 this repair from any other source, any source who responds to the Government as a result of this synopsis will be identified as a potential repair source.

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 15.404, it is anticipated that negotiations will be conducted using information other than cost and pricing data from the contractor. Thorough price analysis will be conducted using available information and approved pricing techniques that will support the contracting office in making a determination that the price paid to the contractor is fair and reasonable to the Government.

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 on February 4, 2014, as outlined by FAR Part 10.001 and

10.002 using the following methods: search engines such as ILSmart, Central Contractor Registration (CCR), Information Handling Services (IHS) (Haystack), Small Business Advocate (SBA) Website, along with Google.

Some of the sites used were:

http://dsbs.sba.gov/dsbs/

Queries were conducted with the part numbers, NSN’s, past and present manufacturers (Ontic and GE), and part names. Also, searched for HUB zone and service disable veteran owned businesses was also conducted using the Dynamic Small Business Search Engine. A search of the Small Business Database on NAICS Code 332912 and key words “0250KTU01”, “0116KTU01”, “0116KTU02 and “0201KCR01” returned no small businesses. No small business and no small disadvantage business opportunity can be met concerning this axquisition. This repair requirement is not considered commercial. The Fuel Quantity Indicator System is military unique to the UH-1N helicopter mission. On 24 Oct 2011, DE Consulting and L3-Com gave a capabilities briefing at Robins AFB. Most of the discussion was about replacing the fuel quantity indicator on the control panel for the UH-1N. In the course of discussions, DE Consulting provided a booklet for Aircraft Engineering, another company DE represents (Cage 1UHX1). DE Consulting might be able to repair the components of the UH-1N fuel system. DE Consulting is a small business as well as owned by a disabled veteran. Investigation would require “F” condition assets for inspection by DE Consulting engineering staff, none is available given high demand and limited supply of “A” condition assets to fill open orders. Any alternate source would be required to partner with Ontic for access to technical data and additional cost incurred would be passed on to Government as operating cost. Engineering has estimated a Technical Data Package (TDP) adequate to allow depot level repair capability through reverse engineering of the system would cost approximately $2M to $3M and take approximately one to two years.

Below are estimated costs to perform a reverse-engineering effort for Tech Data. Total cost for all assets is $1,676,060.

NSN NOUN

Phase 1 TPS/Rev

Eng Eval/Reqs

Phases 2-4

TPS

Dsgn/Dev/Delv

Phase 5 Reverse

Engineering Total

2915-01-361-0133

Fuel Level Monitor $72,000 $243,000 $289,000 $604,000

TPS/Rev

Eng Eval/Reqs

Phases 2-4

TPS

Dsgn/Dev/Delv

Phase 5 Reverse

Engineering Total

6680-01-361-0740

Liquid

QTY

Transmitter

6680-01-361-0741

Liquid

QTY

Transmitter

6680-01-361-0739

Liquid

QTY

Transmitter $500,000

TPS/Rev

Eng Eval/Reqs

Phases 2-4

TPS

Dsgn/Dev/Delv

Phase 5 Reverse

Engineering Total

6680-01-360-9451 Liquid

QTY

Indicator $77,540 $257,975 $236,545 $572,060

Grand Total: $1,676,060

Reverse engineering efforts typically are discouraged for electronics, as new technological advances typically yield more cost and quality effective solutions.

Currently, efforts are being made to investigate possible sustainable long-term alternatives based on technological advancement. The requirement has been annotated for a possible engineering services contract, which has yet to be awarded. The long-term goal would be to acquire a future fuel quantity indication solution utilizing the latest technology, with the government obtaining prototypes and data rights, which would greatly leverage its market leverage. Due to uncertainty of contract award and performance metrics, delivery dates and quantities of the prototypes is unknown.

Product Data

The following vendors were identified in IHS Information Service and the Technical Data.

Ontic is the most current vendor, however, Smiths Aerospace (since acquired by GE Aviation) has a history with the part:

Company Cage

Ontic Engineering (Active Vendor) 45934

GE Aviation Systems (Historical) 35012 & 058R3

The Government does not own the rights to the data to repair these assets. In an effort to circumvent this limitation, the 411 SCMS/GULA contacted Ontic Engineering and Manufacturing via telephone and e-mail on 13 Aug 2013 and 14 Jan 2014 to inquire about the potential purchase of data rights. Ontic stated that they were not willing to sell data rights to the Government. The Repair Method Code (RMC) is R3; Repair, for the second or subsequent time, directly from the actual manufacturer. The Repair Method Suffix Code (RMSC) is R; the Government does not own the data or the rights to the data needed to compete the contract for repair of this part from additional sources.

In addition, due to lack of the government owning the complete drawings and technical data package to compete this requirement, plus the low usage and low demand of this item, the Government’s best chance of developing a repair source lies with Ontic Engineering and Manufacturing, Cage Code 45934. The OEM is the only contractor to complete this effort.

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

OPEN COMPETITION

Ontic, is unwilling to sell data rights to the Government, which means the technical data package, specification, and engineering description suitable for Full and Open Competition cannot be developed without reverse engineering. Due to lack of available data/test data and test equipment available to compete the requirement, plus the low usage/low demand of these items, qualifying any other source would be uneconomical for the Government.

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

The Government does not currently own a complete drawing or technical data package needed to compete this requirement or to develop an organic repair capability. These items need to be repaired by an approved source. The market research for the FQI system was conducted and determined that the capabilities to fill these particular repair requirements are currently only available from Ontic Engineering and Manufacturing, Cage Code 45934, because no one else has the proprietary and intellectual data rights. Lack of data and data rights, Ontic’s refusal to sell the government the data rights, along with prohibitive reverse engineering costs will not allow the Government to compete this effort at this time. However, for any future acquisitions, the Government will reevaluate marketplace conditions to see if full and open competition can then be utilized, since the program life of the UH-1N is slated to at least remain active through 2040.

Due to lack of available data/test data and test equipment required to repair organically or to compete the requirement, qualifying any other source other than Ontic Engineering and Manufacturing, Cage Code 45934, would be uneconomical for the Government. It is anticipated that there will be follow-on repair requirements, and as such, the Program Office will continue their attempts to procure data by requesting at a higher level within the company;

should a proposal be provided, the Program Office will budget for the funds to procure data if it makes economic sense to do so.

Currently, efforts are being made to investigate possible sustainable long-term alternatives based on technological advancement. The requirement has been annotated for a possible engineering services contract, which has yet to be awarded. The long-term goal would be to acquire a future fuel quantity indication solution utilizing the latest technology, with the government obtaining prototypes and data rights, which would greatly leverage its market leverage. Due to uncertainty of contract award and performance metrics, delivery dates and quantities of the prototypes is unknown.

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))