16-00259_JA_Redacted.pdf

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

Page 1 of 7Updated: 15 Mar 16

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: AFMC AFSC/PZAAA

Purchase Request / Local ID Number: FD2060-16-00259

Program / Project (and PE, if applicable): APQ-170 Multi-Mode Radar Line Replaceable Units and Shop Replaceable Units

Program Type (PEO or Other Contracting): Other Contracting

Authority (include full title): 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

Estimated Contract Cost (including options): J&A Type: Class Individual

COORDINATION (AFFARS 5306.304(a) )

Date Program Manager

Joseph P. Palms

411 SCMS/GULAAA, 478-926-2232

Date Contracting Officer

Howard C. Carroll

AFSC/PZAAA, 478-926-0152

Signature

Date

24 Jan 2017

Legal Reviewer

Bradley S. Adams

78 ABW/JAQ, 478-222-0569

Signature

Date

30 Jan 2017

Competition Advocate

Kimberly McDonald

AFSC/PZC, Robins, 478-222-1088

Signature

APPROVAL (AFFARS 5306.304(a) )

Date

10 Feb 2017

Director of Contracting

Anthony J. Baumann, SES, DAF

AFSC/PK-R, 478-926-3916

Signature

KI,

Page 2 of 7Updated: 15 Mar 16

I. Contracting Activity.

This Justification and Approval (J&A) 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) / GULA. The contracting activity for this requirement is AFSC/PZAA. The purchase request number supporting this contracting action is FD2060-16-00259.

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

Due to the circumstances described herein, the activity requests authority to acquire the repair 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 the award of a new follow-on Firm-Fixed Price (FFP) five-year Requirements Contract (One-year basic plus four twelve-month ordering periods). This sole source requirement will be purchased from the following company:

DRS Sustainment Systems, Inc.

201 Evans Lane Saint Louis, MO 63121-1126 CAGE Code: 98255 Large Business

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

This requirement is for the repair of the APQ-170 Multi-Mode Radar (MMR) Radio Frequency (RF) Line Replaceable Units (LRUs) and many of their underlying Shop Replaceable Units (SRUs) which are subsystems of the APQ-170 MMR and next higher assembly, the MC-130H Combat Talon II aircraft. This is a follow-on contract to FA8524-12-D-0016. The current contract will expire 02 August 2017. See J & A Table 1 for list of National Stock Numbers (NSNs) and BEQ Quantities.

The extent of repair work required will be determined by the initial inspection/functional checkout and the disassembly/assembly required to return the item to a serviceable end item. Original design of the end item and parts thereof, or the design functional capabilities of the end item, will not be changed, modified or altered unless such changes are authorized in writing by the Procuring Contracting Officer (PCO). The contractor will be required to return the end item to a serviceable condition within the time line identified in J & A Table 2 after receipt of task order and asset.

The LRUs and SRUs are integral subsystems of the APQ-170 Multi-Mode Radar. This Radar was designed to support Terrain Following (TF) and Terrain Avoidance (TA) capabilities specifically for use on the Special Operations Forces (SOF) MC-130H Combat Talon II Aircraft. It provides controlled flight at very low levels with ground mapping, weather detection, terrain avoidance and beacon navigation.

Total estimated maximum cost of this acquisition is (see J A Max Cost Table 1). Basis for the estimated cost for this acquisition is from the Forecast Unit Price on the Sep 2016 D200 Comp with a 3% escalation factor added to each ordering periods. Repairs will utilize Defense Working Capital Funds (DWCFs) 97X4930. The Period of Performance (PoP) for this effort is estimated to be 03 August 2017

Page 3 of 7Updated: 15 Mar 16 through 02 August 2022 (FY17 - FY22). Delivery requirements are 45-60 days after receipt of asset (See J A Turn Around Time Table 2).

All NSNs have been screened and assigned Repair Method Code (RMC)/Repair Method Suffix Code (RMSC) of R3/C, R3/N and R4N.

The RMC “R3” designation means: repair, for the second or subsequent time, directly from the actual manufacturer.

The RMC “R4” designator identifies repair, for the first time, directly from the actual manufacturer.

The RMSC “C” designation indicates the part requires engineering source approval by the design control activity in order to maintain the quality of the part. Existing unique engineering skills, and repair knowledge by the qualified source(s) require repair of the part by the approved source(s). The approved source(s) retain repair knowledge, or technical data that are not economically available to the Government, and the data or knowledge is essential to maintaining the quality of the part. An alternate source must qualify in accordance with (IAW) the design control activity's procedures, as approved by the cognizant Government engineering activity. The qualification procedures must be approved by the Government engineering activity having jurisdiction over the part in the intended application.

The RMSC “N” designation means: repair of this part requires special test and/or inspection facilities to determine and maintain ultra-precision quality for its function or system integrity. Substantiation and inspection of the precision or quality cannot be accomplished without such specialized test or inspection facilities. If the test cannot be made available for the competitive manufacture of the part, the required test or inspection knowledge cannot be documented for reliable replication, or the required physical test or inspection facilities and processes cannot be economically documented in a Technical Data Package (TDP).

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).

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

DRS is the Original Equipment Manufacturer (OEM) and the only known source that has the technical repair data, unique system test equipment, Test Program Set (TPS), and expertise to perform maintenance on this system. The Source of Repair (SOR) must be capable of repairing the system as well as maintaining configuration control. Since DRS is the only known source of the repair data, this will ensure that the configuration control on this system will not be compromised.

The technical repair data and associated support test equipment required for this effort were not purchased by the Government at the time of the acquisition of the MC-130H. The Government does not possess, or have access to any technical expertise, test equipment or TPS's for the repair of the LRUs and SRUs.

Page 4 of 7Updated: 15 Mar 16

The APQ-170 is currently installed on eighteen (18) operational MC-130H Combat Talon II aircraft;

accordingly, the required support is for 18 shipsets of the radar system. The APQ-170 Radar is not scheduled to be replaced with a modified or upgraded system; it is projected to be the operational radar system until the MC-130H aircraft itself is retired from active service in 2025.

All of the NSNs listed in this document are used exclusively by the Government as these items were specifically designed for the radar system. Because of the environment the radar is used in and what it is designed to do, no commercial item is available to meet the users' requirements. They are considered system critical for APQ-170 Radar System.

In 2002, Air Force Materiel Command (AFMC) approved the award of a bridge contract to DRS, for the repair of the radar's four Radio Frequency (RF) LRUs and associated SRUs while organic repair was to be set up. Because the organic depot was unable to achieve repair capability for the RF LRUs, DRS has been our only source of repair.

Issues contributing to the organic depot's inability to repair RF assets were availability and reliability of support equipment, maturity of test program sets, parts availability, technical expertise and the required repair turn-around time (TAT) needed to support the MC-130H Talon II operational tempo. A 45/60 day repair TAT is required for the SRUs/LRUs respectively, per Table 2, to support the mission availability of the aircraft. The APQ-170 is mission critical for penetration/insertion, high speed low level air drops and extraction operations.

When it was determined that the organic depot could not repair these assets, the repair of all RF LRUs was returned to DRS.

This requirement includes qualifying replacements radar parts that have gone obsolete. Based on DRS's knowledge of these Radar subsystems, they are the only capable source to resolve obsolescence issues.

This continuation of support is critical to the success of this program.

DRS currently has Aircraft Radar Automatic Test Station (ARATS) test benches in their facilities and trained personnel. The test benches at DRS are Government Furnished Equipment (GFE) and all the test benches are about 26 years old. Because of their age, the test benches are fragile and susceptible to damage if moved. The risk of damage and delay of moving the test benches would severely impact support for the user.

The test benches are used to troubleshoot and sell-off Radar assets that have been inducted for contractor repair. It is also used to support reliability improvements and the parts obsolescence program that supports the Radar. When a replacement part is being qualified for use in the Radar, it is installed in every place in the Radar where it could be used. An Automatic Test Procedure (ATP) is performed on the LRU to verify that the new part works. The LRU is then installed in a temperature chamber and its built in test is used to verify that the LRU is still functioning across the military temperature range. If a part does not pass the test, DRS's engineering expertise allows them to investigate and resolve the deficiency, including, if necessary, submission of Engineering Change Proposal (ECP) for implementation of a permanent solution.

The Government has requested data rights/access from the OEM. The most recent request was e-mail sent on 13 May 2016 requesting the availability for Government purchase of the data or data rights. DRS

Page 5 of 7Updated: 15 Mar 16 responded via email on 26 May 2016, saying they refuse to sell their proprietary data at this time.

Without access to the repair data for the special test equipment, the Government would have to pursue a reverse engineering effort for the development of the tester(s) hardware, TPS's, Integrated Test Adapters, Tech Data, and repair procedures. The Government performed a cost estimate analysis on 15 Nov 2016 to reverse engineer the special test equipment only. It was estimated to take a minimum of (in engineering efforts only) and 48 months to complete. The Government anticipates a cost savings due to competition; however due to the low quantity demand for these parts as projected by the D200A planning system, Return on Investment (ROI) is on the dollar with a payback of 8.6 years. This savings, , is expected to decline significantly once all other factions of the Work Breakdown Structure (WBS) is analyzed. The expected service life of the NSNs is 9 years due to the weapon system retirement planned for FY2025. Funding for a reverse engineering effort has not been projected in the Future Year Defense Program event, therefore to Program Objective Memorandum (POM) for the funding would take a minimum of two years. The current contract expires 02 Aug 2017 and this would be an unacceptable delay.

In accordance with the Air Force Special Operations Command (AFSOC), the MC-130H is scheduled to be phased out of service and replaced by the MC-130J by 2025. The 411th has confirmed that the identified LRUs and SRUs are not utilized in the MC-130J model.

Therefore based on the estimated ROI, a phased retirement plan by AFSOC beginning within the next nine

(9) years and their confirmation these assets will not be utilized on the new MC-130J, it is not cost effective to reverse engineer. A reverse engineering effort would be a substantial duplication of costs that is not expected to be recovered by competition and unacceptable delays that the Government cannot accept without Mission Impaired Capability Awaiting Parts (MICAPs) and Surges occurring. These are critical safety items and failure would render the MC-130H Combat Talon II aircraft Non-Mission Capable; the MC-130H would lose terrain following and/or terrain avoidance capabilities needed for its special operation covert missions.

Accordingly, the capabilities to repair these assets is only available from the OEM. In order to maintain Operations, Safety, Suitability and Effectiveness (OSS&E) and Configuration Control, the Government's needs cannot be met by any source other than DRS.

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

This requirement will be synopsized on the Federal Business Opportunities (FedBizOpps) web page as required by FAR 5.201 citing conditions that preclude Full and Open Competition (F&OC). It is anticipated that sources expressing an interest in subcontracting may be identified through synopsis.

A Request for Information (RFI) Solicitation FD2060-16-00259, was posted on FedBizOpps on the 17 May 2016 with response date of 28 Jun 2016. The notice stated the Government was conducting market research to identify potential sources that could repair APQ-170 Radar LRUs. No sources expressed interest in this effort. A revised RFI was posted on the 24 Oct 2016, with response by 25 Nov 2016.

Again, no sources responded.

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

Page 6 of 7Updated: 15 Mar 16 the Government's evaluation of the proposed cost. The proposed skill mix of labor, labor hours, types and quantities of material, other direct costs, and direct and indirect rates will be negotiated by the Government based on recommendations from 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.

Market research was conducted in accordance with FAR Part 10 on 28 Nov 2016. Market research techniques used included conversations with team members/experts from outside of APQ-170 team, review of the Joint Engineering Data Management Information and Control System (JEDMICS), issuance of RFI, review of available technical data, Thomas Register, Haystack, D043, System for Award Management (SAM), and Google Internet searches.

Internet Searches: http://dsbs.sba.gov/dsbs/search/dsp_dsbs.cfm was performed using the North American Industry Classification System (NAICS) codes: 811219 - Other Electronic and Precision Equipment Repair and Maintenance. The Small Business Administration web site was searched using “APQ-170, C-130, radar and repair” search criteria at http://dsbs.sba.gov/dsbs/search/dsp_quicksearch.cfm and produced zero results.

Other internet searches using keywords “APQ-170 Repair” found references to contracts that have been placed in the past. The searches found repair information regarding other parts of the radar but not specifically these NSNs. No additional sources of repair on these specific NSNs were found.

The special test equipment data is not available to establish another source of repair, therefore opportunities for small business involvement in this effort are very low. The prime contractor may be able to use small business vendors for needed piece part materials.

These items do not meet FAR Part 12, Commercial Item Requirements; they are not used by or sold to the general public. Market research did not reveal any other sources for repair on the APQ-170 Multi-Mode Radar.

Based on all these factors, the market research concluded DRS, the Radar OEM, is the only source capable of performing these repairs due to use of their technical repair data, unique system test equipment, TPS, and in-depth knowledge of these radar components.

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.

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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 own or have access rights to the technical data. On 26 May 2016, DRS declined to sell or provide Government rights to their proprietary data.

As discussed in Section V, a reverse engineer effort was determined uneconomical. Based on the expected service life of 9 years (2025) with a minimum of 4 years to reverse engineer the assets, it is estimated to produce a Saving/Investment Ratio of return on every dollar invested. To recoup the invested dollars, the estimated payback period is years just for engineering efforts.

The 411th SCMS will continue attempts to procure technical data prior to each annual ordering period. If DRS agrees to sell the data to the Government, the Logistics Program Manager in AFSC will work with the System Program Office to budget for the funds to procure the data where it makes economic sense to do so.

XII. Certification by the Contracting Officer.

As evidenced by his/her signature, the contracting officer 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, 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))