FA852420D0025_JA_Redacted.pdf

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

FOR OFFICIAL USE ONLY

March 2018 FOR OFFICIAL USE ONLY Page 1 of 8

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.

Is this a new or amended J&A Document? New Amended ( Prior to Award Only! )

Is this a Bridge Action as defined in the AF Bridge Action Reduction Plan? Yes No

Funding level for this acquisition: < $700K > $700K and < $13.5M > $13.5M and < $93M > $93M

Contracting Activity: AFSC/PZAAA

Purchase Request / Local ID Number: FD2060-20-00078

Program / Project (and PE, if applicable): Repair of TH-1H EDCU and MFD

Program Type (PEO or Other Contracting): Other Contracting

Authority: 6.302-1 – 10 USC 2304(c)(1), Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements

Estimated Contract Cost (including options): $1,357,520.00 J&A Type: Class Individual

COORDINATION (AFFARS 5306.304(a) ) Sign and Save Procedure

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Date

05 Feb 2020

Project Lead / Program Mgr / Requiring Activity Micah F. Tapp

411 SCMS/GULAB / DSN 472-0826

Signature

X

Date

06 Feb 2020

Contracting Officer CoStella Edwards

AFSC/PZAAA / DSN 468-0167

Signature

X

Date Local Legal Reviewer

78 ABW/JAQ / DSN 472-05

Signature

X

APPROVAL (AFFARS 5306.304(a) )

Date Competition Advocate Elizabeth. F. Kennedy

AFSC/PZCA / DSN: 472-1102

Signature

TAPP.MICAH.FREDERIC

K.1241859289

Digitally signed by

TAPP.MICAH.FREDERICK.1241859289

Date: 2020.02.05 10:08:10 -05'00'

CARROLL.HOWARD.C.1

391029608

Digitally signed by

CARROLL.HOWARD.C.1391029608

Date: 2020.02.06 14:53:29 -05'00'

EPPERSON.CHARLES.

R.1103770811

Digitally signed by

EPPERSON.CHARLES.R.1103770811

Date: 2020.02.07 08:45:28 -05'00'

KENNEDY.ELIZABETH.

F.1383983009

Digitally signed by

KENNEDY.ELIZABETH.F.1383983009

Date: 2020.02.10 13:44:55 -05'00'

March 2018 FOR OFFICIAL USE ONLY Page 2 of 8

I. Contracting Activity.

This Justification and Approval (J&A) is to request authority for Other Than Full and Open Competition (OTF&OC) supporting 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 FD2060-20-00078.

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

Due to the circumstances described herein, the activity requests authority to acquire repair services listed in this document using Other Than Full and Open Competition as prescribed by FA 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 follow-on contract, which will be a Firm-Fixed-Price (FFP) Requirement Indefinite Delivery (IDC) contract with a basic year period and four (4) additional one-year ordering periods. The ordering validity period for the IDC is from 24 September 2020 to 23 September 2025.

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

Astronautics Corporation of America (Astronautics) 4115 N. Teutonia Ave Milwaukee, WI 53209-6731 CAGE Code 10138 Large Business

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

This requirement is for the tear-down, test, evaluation, and repair of the Engine Data Concentrator Unit (EDCU), NSN: 5826-01-622-0442HL, Part Number (P/N): 261400-5 and the Multi-Function Display (MFD), NSN: 5821-01-622-0446HL, P/N: 261450-5 on the TH-1H Helicopter. The EDCUs are dual channel, fully redundant computers supporting real-time conversion of aircraft and engine sensor data into a digital format and interface with engine temperature, pressure and RPM sensors, providing digitization values of all engine, hydraulic & power plant sensors. The MFD is a tactical mission and display system designed for use in advanced military helicopter and transport programs, enhancing situational awareness, information sharing between forces, and mission management through an onboard network architecture. This repair effort includes all tasks required for planning, testing, and support to return unserviceable, exchangeable units to a serviceable condition. This effort requires F-Condition unserviceable assets to be returned in A-Condition serviceable assets. This requirement includes all labor, services, facilities, and replacement parts necessary to return unserviceable assets to “serviceable,” ready-for-issue condition for the sustainment of the TH-1H helicopter fleet (28 total aircraft) stationed at Fort Rucker, AL. This repair contractor will provide sustainment repair services for the TH-1H helicopter program to support training mission requirements for the AFSC and Air Force Education Training Command (AETC).

The following information reflects the Best estimated Quantity (BEQs) and estimated prices for each

March 2018 FOR OFFICIAL USE ONLY Page 3 of 8 ordering period of this acquisition.

Item BEQ Unit Price Total Price Basic EDCU 8-ea $9,915.00 $79,320.00

MFD 8-ea $24,023.00 $192,184.00 OP 1 EDCU 8-ea $9,915.00 $79,320.00

MFD 8-ea $24,023.00 $192,184.00 OP 2 EDCU 8-ea $9,915.00 $79,320.00

MFD 8-ea $24,023.00 $192,184.00 OP 3 EDCU 8-ea $9,915.00 $79,320.00

MFD 8-ea $24,023.00 $192,184.00 OP 4 EDCU 8-ea $9,915.00 $79,320.00

MFD 8-ea $24,023.00 $192,184.00 Total $1,357,520.00

The estimated cost of this repair contract acquisition is $1,357,520.00. The Basic year estimated unit cost was based on the last year repair prices established in the previous contract FA8524-15-D-0802 utilizing a 3% per year rate increase for inflation. This requirement will be funded with Consolidated Sustainment Activity Group (CSAG) Defense Working Capital Fund (DWCF) (Appropriation 97X4930).

The ordering validity for this Requirements IDC will be from 24 September 2020 to 23 September 2025. The delivery schedule will be addressed at the task /delivery order level with anticipated delivery schedule being 270 days after receipt of order (ARO). This J&A covers the ordering validity period of the IDC through completion of all task orders and any increases beyond the stated BEQs.

The nominal CLINs are as follows:

CLIN Description Type X001 Repair (MFD) FFP X002 Repair (EDCU) FFP X003 Data NSP

These NSNs were screened and assigned the Repair Method Code (RMC)/Repair Method Suffix Code (RMSC) of R3/R which means repair, for the second or subsequent time, directly from the actual manufacturer. RMSC R means that the Government does not own the data needed to contract repair of this part 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 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.

March 2018 FOR OFFICIAL USE ONLY Page 4 of 8

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 Astronautics, which possess the unique and highly specialized capabilities demonstrated below.

The EDCU and MFD are highly specialized components used on the TH-1H helicopter which has an expected lifecycle through 2040. These items contain technology that is unique to aircraft flight operations and functionality, which requires specialized capabilities from the OEM, Astronautics. The components are also considered highly specialized due to their proprietary software configuration which consist of specific warranties associated with the OEM. As such, substitute items must be approved by the Astronautics and the Operational Safety, Suitability, and Effectiveness activity.

Astronautics as the OEM, own the technical data package (TDP) and all the data rights to the EDCU and MFD. A complete TDP is required to repair the EDCU and MFD. The Government has limited repair data and does not possess any commercial product sheets, drawings, test data, qualification data, support manuals or related data that defines the performance and manufacturing characteristics of the EDCU and MFD, precluding organic and competitive repair. The Government contacted Astronautics via email to inquire on their interest in selling the TDP and intellectual rights to the Government. On 18 September 2019, Astronautics responded they were not interested in selling the TDP and intellectual rights at any cost.

Astronautics is the only qualified source capable of repairing the EDCU and MFD due to their proprietary rights. Additionally they have previously provided EDCU and MFD repair services in the form of testing, repair, functional check and certification under multiple sole-source contracts. The last sole source repair contract was Requirements contract FA8524-15-D-0802. This contract was awarded on 24 September 2015 and expires on 23 September 2020 and required the repair of 74 assets for the EDCU and 34 assets for the MFD. The repair sustainment of the EDCU and MFD is required to ensure availability of the assets necessary to support mission requirements of the TH-1H helicopter fleet. This follow-on effort will support backorders, Mission Impaired Capability Awaiting Parts (MICAPs), and surge requirements thereby enabling the TH-1H helicopters to perform their missions.

Therefore, this instant acquisition is necessary for the continued repair performance of a highly specialized item/system.

Award to any other source would result in substantial duplication of cost to the Government that is not expected to be recovered through competition and unacceptable delays in fulfilling the Air Force's requirements. In order to establish a competitive market for soliciting this requirement, the Government would need the technical specifications that provide complete technical guidance for servicing these items. As such, awarding to an alternate repair source via competition would require the Government to independently reverse-engineer the part to establish technical data ownership, and compete/award the requirement with the aim of achieving per-unit cost-savings. As a result, a reverse engineering assessment performed by the Government Integrated Product Team (IPT) in June 2019 determined re-engineering these components to develop a complete and adequate TDP would not be economically feasible. This decision was based on the development and delivery of a TDP. A “like” system was evaluated to estimate the procurement cost for a TDP. The HH-60G Fuel Quantity Indicator (FQI) and the TH-1H EDCU and MFD are deemed to be similar in complexity; therefore, the time and financial burden to complete a reverse-engineering contract are believed to also be

March 2018 FOR OFFICIAL USE ONLY Page 5 of 8 similar. The FQI effort required 5 years and $1.48M to develop technical data.

The ultimate objective of these types of projects is to acquire services utilizing competition so that the per-unit cost is less than if awarded to a sole source vendor. Based on that premise, the IPT used those same factors (FQI reverse-engineering cost and schedule) to analyze how much time and money would be required to reverse-engineer the EDCU and MFD.

The following table illustrates the following methodology:

Item Per-Yr. (AS-IS) Per-Yr. Savings (30%) EST to Rev-Eng. Break-Even Year EDCU $79,320.00 $23,796.00 $1,480,000.00 62 Yrs. (2088) MFD $192,184.00 $57,655.00 $1,480,000.00 26 Yrs. (2052)

If the TDP, by a reverse-engineering initiative, was successfully obtained for the EDCU and MFD, then competed, and achieved a 30% cost-savings (resulting from competition), the savings would be estimated to take 7 years. The rationale for this timeline is based on one (1) year to establish a reverse-engineering contract, five (5) years to complete the contract, and one (1) year to compete/ award the new “cost-savings” contract to the alternate source. As illustrated in the above table, the yearly cost-savings of approximately 30% would not break-even with the reverse-engineering investment for 62 years for the EDCU and 26 years for the MFD.

The forecasted lifecycle for these components has been extended through 2040 for the TH-1H platforms. The total repair cost is estimated to be $396,600.00 for the EDCU and $960,920.00 for the MFD based on a sole source acquisition strategy to Astronautics. Therefore, undertaking reverse engineering efforts on the EDCU and MFD with a total estimated cost of $2,960,000.00 ($1,480,000 per component) would result in a substantial duplication of cost to the Government with no anticipation of return on investment by 2040. Therefore, a large amount of the invested costs would result in a net financial loss to the Government due to never recouping the invested costs within the operational service-life of the helicopter. In addition, the capabilities to fill this particular requirement are only available from Astronautics primarily because no other vendor has the data to properly repair these items currently installed in the TH-1H. Astronautics has sole proprietary rights to the technical design and manufacture data for these units and has declined to sell them to the Government. As such, Astronautics is the only identified manufacture source by which Operations, Safety, Suitability and Effectiveness (OSS&E) and Configuration Control can be successfully maintained. As a result of this finding, the IPT concludes that it would not be cost-beneficial to pursue competition via a reverse-engineering investment for these items.

Accordingly, Astronautics Corporation of America is the only firm capable of providing the requirements described in Section III above without the U.S. Air Force experiencing substantial duplication of cost that could not expected to be recovered through competition and unacceptable delays in fulfilling its requirements.

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

A Request For Information (RFI) synopsis was posted to Federal Business Opportunities

March 2018 FOR OFFICIAL USE ONLY Page 6 of 8

(FedBizOpps) on 12 Jul 19 with a response date of 15 Aug 19 under Solicitation Number FA852420R0003. This RFI requested responses from interested vendors that possess the expertise, capabilities, and experience to meet qualification requirements for this effort. No responses were received by the Government.

The requirement will be synopsized in FedBizOpps in accordance with FAR 5.201. It is anticipated that sources having an interest in subcontracting may be identified through synopsis. Any source who responds to the Government as a result of this synopsis will be identified to the prime contractor as a potential subcontracting possibility.

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 15.403-3, the Contracting Officer will require the submission of other than certified cost or pricing data. Price analysis or cost analysis based on “information other than certified cost or pricing data” will be used to examine and evaluate the proposed prices to determine fair and reasonable pricing. Price analysis techniques include comparison of proposed prices to historical prices paid for a same or similar item; comparison with published price lists, offered catalog prices, and prices obtained through market research for a same or similar item; comparison of proposed prices with an independent Government estimate; or analysis of data other than certified cost or pricing information.

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 during 17 May 19 and completed on 18 Sep 19 in accordance with FAR 10.001 and 10.002. The following market research techniques were used:

As described in Section VI above, a RFI was posted to FedBizOpps advising industry of the pending acquisition and soliciting inquiries from interested vendors. The RFI was posted on 12 July 2019 under Solicitation Number FA852420R0003. The Government received no responses to the RFI.

Queries were conducted within Government data bases and various internet searches (IHS Haystack, System for Award Management (SAM), JEDMICS, and Business Identification Number Cross- Reference System (BINCS) were performed. The key terms used in the searches were: “261400-5” and “261450-5”; “MFD"; and “EDCU”. IHS revealed Astronautics as the manufacturer of this item and has provided both parts since 2012. JEDMICS revealed that there were no drawings available for these parts. Internet searches of SAM and BINCS provided the North American Industry Classification System (NAICS) code 811213. As a result of these searches, no additional repair sources were found.

A Small Business Administration (SBA) Dynamic Small Business Search (DSBS) query was conducted utilizing the following:

-- Part Numbers: “261400-5” and “261450-5” No additional repair sources were found.

March 2018 FOR OFFICIAL USE ONLY Page 7 of 8

-- Keyword: “MFD" (12 results returned) None of the sources possess the skills required to perform the necessary repair services. The capability to meet this requirement is currently only available from Astronautics. They are the only source that has the capability and legal authority to repair the MFD used by the TH-1H helicopter.

-- Keyword “EDCU” (no results found) No additional repair sources were found.

These parts are considered commercial items as defined in FAR 2.101. They are utilized by both military and the commercial aviation industry. These components are listed as a commercial item “of a type”. These assets are offered to the general public for non-military application for purchase in their basic configuration without the software code specific to the TH-1H aircraft.

The market research report conducted that Astronautics is the only approved source capable of meeting contractual performance metrics with the lowest risk to the Government given their access to proprietary technical data as the OEM.

IX. Any other facts supporting the use of Other Than Full and Open Competition.

None.

X. List of any sources that expressed, in writing, an 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 possess the TDPs for the EDCU and MFD to support full and open competition. An inquiry for sell of the TDP was sent to the OEM and the OEM responded on 18 September 2019 and declined interest in selling the TDP.

A reverse-engineering effort was determined non feasible as it is estimated to take 60 months to complete and would cause an unacceptable delay in meeting Air Force requirements. 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 21 years.

While the current market research indicates a sole source environment for the EDCU and MFD, the Government will continue to engage with the OEM on an annual basis to determine the feasibility of procuring the TDP. In addition, every 12 months, the Government will (1) review current technical literature, (2) explore alternative product support strategies with the pertinent engineering organizations, (3) inquire with industry for potential sources of supply and/or opportunities to purchase the needed intellectual property to qualify additional sources, and (4) conduct future requests for purchasing data rights, possibly elevating these within the OEM's leadership. Should the OEM

March 2018 FOR OFFICIAL USE ONLY Page 8 of 8 respond favorably to selling the technical data to the Government, the AFSC Logistics Manager and his/her IPT will work with the System Program Office (SPO) in AFLCMC to budget for the funds to procure data where it makes sound economic sense to do so.

The plan to break barriers to competition in the prior J&A was to continue engaging the OEM on selling the TDP to the Government. That plan was executed but the OEM continues to decline to sell the TDP to the Government. Based on fulfillment of the prior plan, the current J&A does not require higher level approval in accordance with DFAR PGI 206.304(a) (S-70) (ii).

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) signature(s) above, I (we) certify that any supporting data contained herein, which is my (our) responsibility, is both accurate and complete.

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