FBO_AWARD_J&A.pdf

Justification and Approval (J&A) for Other Than Full and Open Competition

Note 1: See guidance at the end of this document for completing the following sections.

Note 2: Each field will expand automatically if additional space is needed.

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), 638th Supply Chain Management Group (SCMG), 411th Supply Chain Management Squadron (SCMS). The contracting authority for this requirement is AFSC/PZAAA at Robins AFB, GA. The purchase request (PR) number supporting this contracting action is FD2060-17-00101.

II. Nature and/or description of the action being processed.

Due to the circumstances described herein, the activity requests authority to acquire UH-1N helicopter spares using Other Than Full and Open Competition (OTF&OC) 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 firm-fixed-price contract with a period of Performance (PoP) spanning FY17 - FY22. The sole source requirement will be purchased from the following company:

Bell Helicopter Textron (BHT) Inc.

3255 Bell Helicopter Blvd.

Fort Worth, TX 76118-7630 Cage Code: 97499 Large Business

III. Description of supplies/services required to meet agency needs.

The purpose of this requirement is to purchase spares for the following parts in support of the UH-1N Helicopter Programs:

Pinion Assembly NSN 1615-00-898-1689 PN 204-040-102-17

The agency's need is to support and ensure that the operational mission of the UH-1N helicopter programs are successfully accomplished as a result of procuring the parts identified in this document. The Pinion Assembly is a Bell Helicopter-designated primary part and is a component part of the Generator Quill Assembly which is an aviation Critical Safety Item (CSI). The Pinion Assembly contains several key characteristics that if not conformed to could affect the operation of the part. Such key characteristics are forgings and raw materials which, according to the engineering drawing, require Bell source qualification.

Any commercial facility with Federal Aviation Administration, United States Air Force, and Original Equipment Manufacturer (OEM) certification in manufacturing helicopter Generator Quill Assemblies would be capable of accomplishing this task; however, the Government does not possess a technical data package for the assembly.

The Pinion Assembly was designated with an Acquisition Method Code (AMC) of “4”, which indicates that these parts are to be acquired for the first time directly from the actual manufacturer. The Acquisition Method Suffix Code (AMSC) has been designated as “H”, which states that (1) the Government physically does not have in its possession sufficient, accurate, or legible data to purchase this part from other than the current source(s). This code is applicable only to parts under immediate buy requirements and only for as long thereafter as the deficiency is under review for resolution and appropriate recording. This code is only assigned at the conclusion of limited screening, and it remains assigned until the full screening process resolves physical data questions and results in assignment of a different AMSC.

The estimated purchase costs, quantities thereof (per Ordering Period), and aggregated totals for the entire requirement are illustrated in the below table. The basis of this requirement is derived from the March 2016 D200A summary computation, which identifies the specific parts that need to be purchased and also calculates (1) the Forecast Unit Price and (2) the quantities that are needed by the Warfighter.

Noun NSN PN Unit Cost QTY Totals Pinion Assembly

(Order Period 1) 1615008981689 204-040-102-17 Order Period 2 1615008981689 204-040-102-17 Order Period 3 1615008981689 204-040-102-17 Order Period 4 1615008981689 204-040-102-17 Order Period 5 1615008981689 204-040-102-17 Total

The type funding utilized for this requirement is Consolidated Sustainment Activity Group (CSAG) funding (Appropriation 4930). The PoP is projected to be FY17 - FY22.

IV. Statutory authority permitting Other than Full and Open Competition.

10 U.S.C. 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 requirement will be solicited under OTF&OC to BHT as they are the only source who possesses the proprietary technical data to manufacture these parts. The Pinion Assembly is a highly specialized part because it transmits rotational power from the main transmission to the generator used to power the electrical systems on the aircraft.

Since BHT has sole proprietary rights to the technical design and manufacture data for the Pinion Assembly, a request for acquisition of the data was emailed to BHT on 14 Dec 2016. The company's response stated that Bell Helicopter is not interested in selling data rights for part number 204-040-102-17.

At this time, any attempts by the Government to reverse-engineer the Pinion Assembly would result in a significant duplication of costs that would not be recouped by the Air Force within the timeframe that this part is anticipated to be utilized on the UH-1N aircraft. To make this determination, the team assessed an analogous project that reverse-engineered the Fuel Quantity Indicator (FQI) for the HH-60G aircraft. This effort required years and to complete. It consisted of major tasks involving contract preparation/ award, technical data/drawing development, and prototype development/delivery. Discussions with Engineering revealed that the Pinion Assembly would require intensive design and testing in order to reverse-engineer and qualify a substitute. Therefore, for quantitative purposes, we used the FQI reverse-engineering contract as a cost and schedule comparison for correlating a similar effort for the Pinion Assembly. Based on the analysis and the assessment by engineering, the program management team came to the conclusion that a reverse-engineering effort would require approximately years and in funding. Also, once that is completed, the time required to earmark funding, compete a production contract, and begin receiving assets could potentially add more years, totaling years in all.

(Reverse-engineer = ~ years; Compete/Award/Deliver = ~ years). This would cause an unacceptable delay in meeting mission requirements.

Given the above assumptions, which are based on a comparison to the HH-60G FQI reverse-engineering project, cost-savings resulting from competition of a future procurement contract of the Pinion Assembly would likely not be observable until approximately . Based on D200A computations and forecasted demands for this part, the procurement rate for the Pinion Assembly will likely remain at per year for the foreseeable future (i.e. the procurement history of this item indicates the purchase of only -ea over the past years), thus meaning that future quantities will remain very low and sporadic since they are not procured on a consistent basis. The need to replenish inventories is usually cyclical and may go a few years between buys. This affects the Air Force's ability to achieve cost-savings when the number of units being purchased is this minimal. Even if competition enabled the Air Force to save % of the manufacture price of , that only comes to of cost-savings per item purchased. (For the sake of this analysis, this cost-savings will be rounded up to per unit. Since the average requirement is 2-ea per year, then that's a cost-savings of approximately per year. Currently, the indication is the Air Force plans to fly the UH-1N for less than more years ). An investment of (based on the comparison with the FQI) would take over years to break-even based on an estimated costs-savings of per year (see methodology above in this paragraph). When contrasted with the planned service life of the UH-1N helicopter (i.e. more years), then it can be concluded that choosing to reverse-engineer the Pinion Assembly would be a duplication of cost and NOT produce any cost benefit to the Air Forces within the anticipated duration (i.e. operational years) of service life for the UH-1N helicopter. The breakeven analysis revealed that cost-savings would not break even with a reverse-engineering investment for approximately years based on the cost of the part, demand/usage rates, and the expected service life of the UH-1N helicopter.

Accordingly, BHT is the only company capable of providing the supplies 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 and an unacceptable delay.

VI. Description of efforts made to ensure that offers are solicited from as many potential sources as practicable.

The Pinion Sources Sought Synopsis (SSS) was posted on 8 Sep 2016and responses due by 23 Sep 2016.

The Synopsis Number is FA8524-17-00102. The SSS was posted requesting from interested vendors that possess the expertise, capabilities, and experience to meet the qualification requirements to manufacture the Pinion Assembly (NSN 1615-00-898-1689, PN 204-040-102-17), applicable to the UH-1N helicopter. The Government received no responses to the SSS.

The requirement will be synopsized on the Federal Business Opportunities (FedBizOpps) web page as required by FAR 5.201. Any company who responds to the Government as a result of the 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 fair and reasonable to the Government. Price analysis will be utilized. The contractor will be required to provide other than cost or pricing data to support the

Government's evaluation of the proposed cost. This includes data on prices of the same or similar items previously sold to Government and commercial sources, current catalog and/or price lists, and if required other data in sufficient detail to allow for determination of fair and reasonable pricing. The contract price will be negotiated in accordance with the procedures in FAR Part 12.

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 13 Feb 2017 pursuant to FAR 10.001 and 10.002. UH-1N engineer thoroughly assessed the availability (and/or Government ownership) of the required technical data via the Joint Engineering Data Management Information and Control System (JEDMICS) at https://jedmics.af.mil/ webjedmics/index.jsp, but for this item, the needed information was clearly proprietary to BHT. Also, a Federal Logistics Information search was conducted at the IHS Haystack website at http://www.ihs.com/ products/supply-chain/defense/haystack.aspx to determine if the items were available from a different vendor who could serve as an alternate source of supply. Helicopter-related periodicals were searched for potential supply sources. The commercial market was searched using the Small Business Dynamic Search Engine (SBDS) and Google. None of these efforts identified additional sources for the manufacture or Commercial-Off-The-Shelf (COTS) availability for purchase of this part.

A SSS was posted on 8 Sep 2016 under synopsis number FA8524-17-00102. No vendors responded to the

SSS.

Commercial Opportunities: The pinion assemblies are COTS items sold by BHT. The item being procured under this effort is utilized by military and commercial applications; therefore, this item is categorized as a commercial part under FAR Part 12.

The SSS and vendor surveys for the market research concluded BHT is the only viable source with the required proprietary data needed to manufacture the Pinion Assembly.

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.

The Government does not have the technical data required for manufacturing this item. The Government has requested the OEM consider selling the technical data to the Government but they have declined to offer it for sale. The Government has evaluated the feasibility of a reverse-engineering project but will require an estimated investment of and take approximately years to complete. Based on this, a reverse engineering project is not cost effective or timely to support mission requirement. The UH-1N is projected to continue operation for less than 10 years; however, the estimated cost-savings resulting from competition would not break-even with the reverse-engineering investment for approximately years.

To break barriers to competition, the Government will conduct on an annual basis (1) market surveillance through the monitoring of technical literature, (2) explore alternative product support strategies with the pertinent engineering organizations, and (3) inquiry with industry for potential sources of supply and/or opportunities to purchase the needed intellectual property needed to qualify additional sources (4) send inquire to BHT to request their consideration to sell the technical data to the Government. If BHT provides a positive response to sale the data, the Logistics Manager in AFSC will work with the System Program Office (SPO) in AFLCMC to budget for the funds to procure data where it makes economic sense to do so.

XII. Certification by the Contracting Officer.

As evidenced by my signature above, I have determined this document to be both accurate and complete to the best of my knowledge and belief.

XIII. Certification by the technical/requirements personnel.

As evidenced by my (our) signatures above, I (we) certify that any supporting data contained herein, which is my (our) responsibility, is both accurate and complete.

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