J_and_A_Redacted_J_and_A_for_Repair_Contract_FA8524_18_D_0006_Awarded_16_JULY_2018.pdf

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

Page 1 of 820 Apr 201720 Apr 2017

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: AFSC/PZAAA

Purchase Request / Local ID Number: FD2060-17-01281

Program / Project (and PE, if applicable): TH-1H Avionics Components

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 Project Lead / Program Mgr / Requiring Activity

Signature

Date

18 Aug 2017

Contracting Officer

Date

Local Legal Reviewer

APPROVAL (AFFARS 5306.304(a) )

Date

Competition Advocate

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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 activity for this requirement is AFSC/PZAAA at Robins AFB, GA. The purchase request (PR) number supporting this contracting action is FD2060-17-01281.

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

Due to the circumstances described herein, the activity requests authority to acquire these repair services 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 (FFP) Requirement Indefinite Delivery Contract (IDC) with a basic and four (4) ordering periods.

This sole source requirement will be purchased from the following company:

Chelton Avionics, Inc.

DBA: Cobham Aerospace Communications (CAC)

6400 Wilkinson Dr.

Prescott, AZ 86301-6164

CAGE 1WZE2

Large Business

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

This requirement is for repair services in support of TH-1H helicopter avionic components. These items are critical to the mission of training helicopter pilots at Cairns Field, Fort Rucker, AL. Some are safety related, such as the alarm-monitor. Others are mission critical as they allow the student pilots to train using these devices.

These avionics components are commercial items as defined under FAR Part 12 and are used on commercial helicopters, as well as the military TH-1H helicopter variant.

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The estimated repair/exchange costs, quantities thereof (per Ordering Period), and aggregated totals for the entire requirement are illustrated in J&A Attachment 01 entitled “Best Estimated Quantities and Costs.”

The National Stock Numbers (NSNs), Part Numbers, and Nouns are listed below. The total amount of this requirement is

NSNs Part Number Noun 5821-01-474-2547HL 153-040047-01 Cobham Tuner, Radio Frequency 5821-01-474-2548HL 31300-0201-1200 Cobham Control, Radio Set 5821-01-474-2550HL 400-015525-0501 Cobham Transceiver 5821-01-552-8993HL 400-015525-0101 Cobham Receiver, Radio 5826-01-552-8996HL 400-047552-0100 Chelton Control, Direction 5826-01-553-2003HL 066-1105-00 Cobham Receiver, Radio Navigation

5831-20-004-4014HL

(Sub-NSN to -8789) N301A-067 Northern Airborne Technologies (NAT) Audio Controller

5831-20-008-8789HL

(New Master NSN) N301A-201 Intercommunication Control

6340-01-553-3324HL 611 NAT Alarm-Monitor

NSN-8789 will eventually replace NSN-4014 as it is phased-out. The nomenclature differs with the introduction of the newer NSN; however, they perform the same function.

All NSNs have been screened and have an associated AFMC Form 762, Contract Repair Screening Acquisition Worksheet (CRSAW) which indicates an assigned Repair Method Code (RMC) and Repair Method Suffix Code (RMSC) of R3/Z. RMC “R3” is associated with parts that are being repaired for the second or subsequent time directly from the actual manufacturer. RMSC “Z” indicates that these parts are commercial/non-development/off-the-shelf items.

The type funding utilized for this requirement is Consolidated Sustainment Activity Group (CSAG) funding (Appropriation 4930). The period of performance (PoP) is FY18 - FY23. The projected PoP is 1 Jan 2018 through 31 Dec 2022.

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 TH-1H helicopter is a refurbished Bell UH-1H helicopter with an installed Huey II kit, which includes a more powerful engine, new dynamic components, a new nose and tail boom. The cockpit and mission

Page 4 of 820 Apr 2017 equipment upgrades include a digital cockpit, and crashworthy seats. These modifications transform a legacy aircraft into a state-of-the-art training platform compatible with future operational aircraft.

This undergraduate training platform develops multiple pilot skills and transitions those skills faster across multiple aircraft. The TH-1H's advanced electronics provide expanded training opportunities and improved operational capabilities by upgrading the engine, transmission and rotor system. It has multi-function displays allowing for future upgrades and provides new aircrews with a seamless transition from the TH-1H to a follow-on rotary wing aircraft such as the CV-22 and the Combat Search and Rescue-X helicopters.

The avionics package consists of commercial off-the-shelf (COTS) items. The original equipment manufacturer (OEM) of the NSNs for this effort is Cobham Management Services, Inc. (CAGE 1B7G3).

Northern Airborne Technology Ltd. (NAT) and Chelton Avionics, Inc. are divisions of Cobham. These NSNs are currently on contract for repair services under contract FA8524-15-D-0004. This is a sole source contract with Cobham Aerospace Communications (CAGE 1WZE2). The PoP for this contract is 23 Sep 2015 - 31 Dec 2017.

The contemplated requirements will be solicited under OTF&OC to Cobham Aerospace Communications (CAC) based on the following.

The technical data required to perform the repair of these parts is proprietary to the OEM, Cobham Aerospace Communications (CAGE 1WZE2), a Chelton Avionics Inc. Division. The Government's request to buy this technical data was declined by the OEM on 15 May 2017.

Because the Government does not have access and/or rights to the technical repair data, qualifying a new source would require a clean-sheet redesign or an extensive reverse-engineering project. In order to determine whether or not there would be any cost-benefit to pursuing this strategy, the integrated product team (IPT) assessed an analogous reverse-engineering project that was accomplished for the HH-60G fuel quantity indicator (FQI). This effort required 5-years and to obtain a technical data package for this one item. This analogous project consisted of major tasks involving contract preparation/award, technical data/drawing development, prototype development, and data package deliverables. Discussions with AFLCMC/WIUE engineers revealed that the FQI example is likely to be very similar in technical complexity to the avionics components for this effort. For quantitative purposes, the IPT correlated the costs and a derivative of the schedule of the analogous project to estimate the cost and time required for a reverse-engineering project for the CAC items. Since these eight parts are completely different from one another in specific function, each part requires an independent reverse-engineering project. In other words, there would likely be minimal opportunity for common/coinciding/shared tasks between each project for cost-saving measures. Based on similarities to the HH-60G FQI reverse engineering effort, the estimated cost to reverse engineer each CAC item is . Some or most of the reverse engineering projects could be accomplished in parallel and overlap each other. Based on this assumption and assessments by engineering and the program management team, the eight reverse-engineering projects are estimated to be completed within 11 years at a cost of (i.e. x 8 NSNs). Also, once that effort is completed, the time required to earmark funding, compete a new repair contract, and begin processing assets through repair could potentially add 5 to 6 more years, totaling 17 years (2034) in all. (Reverse-engineer = ~11 years; Compete/Award/Deliver = ~6 years)

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The operational demand for these parts has been estimated based on several years of usage and observable failure rates; therefore, it is not likely that these parts will see spikes or surges. Because of this, the Air Force's ability to achieve cost-savings of any significance will be greatly constrained due to (1) the number of units being repaired is quite minimal and (2) the fleet size is only 28 helicopters, which will never present a demand of any real magnitude. Hypothetically, if we were to pursue reverse-engineering these items and begin observing a yearly cost-savings in 2034, that would equal an approximate yearly cost-savings of

*Methodology for : Starting with a baseline yearly cost of in 2022, based on Government cost estimate and applying a 3% inflation through year 2034, then the estimated costs for repair of these NSNs in 2034 would total . If the Government were able to achieve a 25% cost savings through competition, the delta cost savings only equals

If the Government could save roughly beginning in 2034, then it would take approximately 120 years to recoup the reverse-engineering investment of The TH-1H is projected to fly until 2040;

therefore, any efforts made to establish data ownership with the goal of qualifying new sources to leverage cost-savings from competition would need to be able to recoup that investment within the next 23 years.

Accordingly, CAC is the only firm capable of providing the repair services 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 unacceptable delays in fulfilling its requirement.

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

A Sources Sought Synopsis (SSS), fa852417r0005, was posted on Federal Business Opportunities (FedBizOpps) on 14 Nov 2016 and closed on 29 Nov 2016. The SSS requested responses from interested vendors who possess the expertise, capabilities, and experience to meet the qualification requirements to repair these items. No additional sources were identified due to the Government receiving no responses to this market survey.

This requirement for these repairs will be synopsized on the FedBizOpps web page as required by FAR

5.201. Any sources that respond 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 based upon FAR Part 12 negotiation procedures using price 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 or pricing information is required in accordance with FAR 15.403-3(c), the Government's negotiation objective will be developed based on recommendations from the Defense Contract Audit Agency (DCAA)/Defense Contract Management Agency (DCMA), and local pricing and technical personnel supporting the program.

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VIII. Description of the market research conducted and the results, or a statement of the reasons market research was not conducted.

Market research was completed 08 August 2017 as outlined by FAR Part 10.001 and 10.002 using the following methods:

Sources Sought synopsis fa852417r0005 was posted on FedBizOpp on 14 Nov 2016. There were not responses to the synopsis.

The market research also consisted of reviews of industry reports, trends, and product developments;

discussions with industry representatives; internet searches; and utilization of knowledge possessed by the Engineering Staff.

The Dynamic Small Business Search (DSBS) engine was queried using the part numbers. The query returned no results.

A vendor survey was conducted using Information Handling Services (IHS) (Haystack). This survey showed Cobham Management Services or Chelton Avionics, Inc. provided the NSNs in the past. The survey also showed parts were purchased from a distributor but no other vendors for repair services.

Research found that in the past, the Government attempted to establish an organic repair facility based on Data Management and Intelligence (DMI) Study 11-026(L). Legacy Source Of Repair (SORA) with Tracker Number 11-026, signed December 2009 designates all workloads on the TH-1H as non-core. Final Depot Source of Repair (DSOR) decision dated 6 Jun 2011 from HQ AFMC/A4 approves all TH-1H workload for Contractor Repair.

Because of the complexity of these items, required equipment, and lack of proprietary data, including test procedures, it would not be possible to establish an organic repair capability.

Commercial Opportunities: These items are available commercially (i.e. offered to the general public for purchase); however, the technical data for repairing these parts is proprietary.

The market research concluded the capabilities to fill this requirement are only available from the OEM because no one else has access to the proprietary data required to repair these items. The OEM has sole proprietary rights to the data for these units and will not sell it to the Government. Reverse-engineering these parts in order to establish technical data ownership for qualifying new repair sources would not be cost-beneficial to the Government. In order to maintain Operational Safety, Suitability and Effectiveness (OSS&E) and Configuration Control, the Government's need cannot be met by any source other than the

OEM.

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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 U.S. Government does not have the technical data required for repairing these items. The Government's request to buy this technical data was declined by the OEM on 15 May 2017.

Reverse-engineering options have been assessed and the IPT concluded that such efforts would not be cost-beneficial to the Government. This helicopter platform is anticipated to fly until 2040; therefore, any efforts made to establish data ownership with the goal of qualifying new sources to leverage cost-savings from competition would need to recoup the financial investment within the next 23 years. The analysis showed it would take over 120 years to recoup a reverse engineering investment therefore determined not feasible based on the projected life of the program

The team completed actions to break barriers to competition as identified in the previous J&A (14-00243).

The plan included request to OEM for sell of technical data and exploring feasibility of a reverse engineering effort. Based on completion of these actions, this J&A does not require higher-level approval under condition stated in DFARS PGI 206.304(a) (S-70) (ii).

Nonetheless, every 18 months, the Government will (1) review current technical literature, (2) explore alternative product support strategies with the pertinent engineering organizations, (3) inquiry with industry for potential sources of supply and/or opportunities to purchase the needed intellectual property to qualify additional sources, and (4) Future requests for purchasing data rights will be elevated within the OEM's leadership. Should the OEM respond favorably to selling the technical data to the Government, 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

Page 8 of 820 Apr 2017 is my (our) responsibility, is both accurate and complete.