FD2060-16-92802_JA_SETSS_Redacted.pdf

JUSTIFICATION FOR OTHER THAN

FULL AND OPEN COMPETITION

I. CONTRACTING ACTIVITY

The contracting activity for this effort is the Galaxy Division, Contracting Branch (AFLCMC/WLSK). The organization responsible for the proposed contracting action is the Galaxy Division, Engineering Branch (AFLCMC/WLSEAC). This document is a “Justification for Other Than Full and Open Competition.” The Purchase Request (PR) number is FD2060-16- 92802.

II. NATURE AND/OR DESCRIPTION OF THE ACTION BEING PROCESSED

This effort is a follow-on to contract FA8525-13-D-0003, Sustaining Engineering and Technical Support Services (SETSS). The contract type for this acquisition will be Indefinite Delivery- Indefinite Quantity (IDIQ) and will utilize Firm-Fixed Price (FFP), Cost Plus Fixed Fee (CPFF), and Cost Reimbursable No Fee (CRNF) pricing arrangements. This effort is for the acquisition of services to meet sustaining engineering requirements which are uniquely provided by Lockheed Martin Aeronautics Company (LM Aero) in support of the C-5 fleet. Due to the proprietary data and processes required from the Original Equipment Manufacturer (OEM) to perform these services, this requirement will be sole sourced to:

Lockheed Martin Aeronautics Company (LM AERO) (CAGE Code 98897)

86 South Cobb Drive Marietta, GA 30063-0001 Large Business

The orders issued using the resulting contract will be limited to tasks which require the unique expertise of LM Aero in support of the C-5 fleet. Actions may include, but are not limited to, efforts to support Aircraft Structural Integrity Program (ASIP), ASIP Modernization, Functional Systems Integrity Program (FSIP), Deficiency Investigation Program (DIP), the Corrosion Prevention and Control Program (CPCP), the Rapid Response Program (RRP), Technical Data Sustainment (TDS) Support, and Reliability Enhancement and Re-Engining Program (RERP)/Avionics Modernization Program (AMP) sustaining engineering support. Historically, these programs have been supported by the OEM, LM Aero, since much of the data and processes required for these programs are proprietary to them.

The estimated program cost is and includes a 12-month basic ordering period with two (2) 12-month optional ordering periods for a projected total of three (3) years from 1 December 2015 through 30 November 2018.

Legacy sustaining engineering services include the support for ASIP, ASIP Modernization, FSIP, CPCP, DIP and TDS. Legacy services are funded with sustaining engineering dollars, Element of Expense/Investment Code (EEIC) 58300. RERP/AMP engineering and technical services are funded with Contractor Logistics Support – Technical Support dollars, EEIC 57834. The estimate for legacy sustaining engineering is based on historical data from current and past performance. ASIP Modernization, however, as a new task, does not have historical data and utilizes the C-5 ASIP Manager’s best estimate. The RERP/AMP engineering and technical services are based on current performance and extrapolations from similar services performed under the RERP Production contract and the AMP CLS contract.

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

AGENCY’S NEEDS

This effort is for sustaining engineering requirements that are unique to LM Aero for the C-5 airframe. The tasks covered are for the engineering efforts on systems, products or materials required to resolve technical or supportability deficiencies revealed in the operational services of the C-5 fleet. This includes, but is not limited to: assessing deficiency indicators; defining the characteristics and causes of such deficiencies; determining the impact on the affected product;

identifying and evaluating alternative solutions; determining the preferred solution; and designing, integrating and validating the solution.

ASIP Modernization is a new tasking to be undertaken in support of an improved and updated ASIP. DIP taskings vary by item and scope since they are dependent on findings from service-revealed deficiencies and in-depth data analysis. Additionally, TDS is a low-dollar effort that supports C-5 engineering by delivering Lockheed proprietary data including applicable sections of the OEM Specification Manuals, copies of existing or updated non-dimensioned and dimensioned drawings, and copies of existing or updated engineering reports to the engineer or other user in support of operations and maintenance. Appropriate deliverables are loaded to Joint Engineering Data Management Information and Control System (JEDMICS) for future Government use, where applicable. The services associated with RERP/AMP engineering support include evaluation and investigation of deficiencies peculiar to these platforms which can only be addressed by LM Aero. The tasking for Propulsion Technical Support is a follow-on to support provided under the current SETSS RERP task order. This CLIN is a subtask of the greater RERP tasking and a separate CLIN is assigned in order to allow for FFP pricing.

The cost to support these services will not be affected by any future reductions in the size of the C-5 fleet. Sustaining engineering and technical support services address reliability, maintainability and operational readiness of the C-5 from a fleet perspective rather than on a per aircraft basis. The cost of engineering analysis of deficiencies is independent of the fleet size.

Funding is acquired for these sustaining engineering and technical services using Maintenance Engineering Appropriation 3400.

The overarching purpose of ASIP, FSIP, CPCP, TDS, DIP and RERP and AMP engineering and technical support services is to maintain the operational readiness of the C-5 fleet from the standpoint of the aircraft structure and functional systems. This is accomplished through early identification of potential or existing structural and functional problems and the development of replacement/improvements of critical elements. CPCP tasks may be associated with items that may be included within ASIP and/or FSIP. Numerous interrelated functional tasks must be performed in order to accomplish an effective ASIP, FSIP and CPCP for the C-5 fleet. These efforts involve ongoing updates and analyses to continually enhance analytical and prediction capabilities so that evolving ASIP and FSIP requirements may be effectively met. As the USAF fleet ages, ASIP, FSIP, CPCP and its attendant functions become increasingly vital in safe and effective force management. LM Aero, as prime manufacturer of the C-5 aircraft, is uniquely qualified to perform ASIP and FSIP tasks and functions for continuous and effective execution of force structural and functional systems maintenance, tracking, and proactive forecasting. LM Aero has provided this service since delivery of the aircraft and has established and maintained an engineering database (both under contract and independently) that includes analyses, maintenance actions, modifications, repairs, etc., all of which form a continual basis for determining needed future ASIP, FSIP and CPCP actions.

The orders issued using this contract will be limited to tasks which require the unique expertise of LM Aero in support of the C-5 aircraft. Actions may include, but are not limited to: efforts to support ASIP, ASIP Modernization, FSIP, CPCP, DIP, RRP, engineering and technical data, and modeling, simulation and testing which are integral to the completion of the overall engineering task, as well as, special studies and analysis which require specialized knowledge and processes in relation to the RERP and AMP platforms. Yearly increases reflect historical increases based on the current negotiated legacy contract. Labor rates on the current contract were negotiated by DCAA. The basic ordering period will be 1 December 2015 through 30 November 2016. The first and second optional ordering periods will be 1 December 2016 through 30 November 2017 and 1 December 2017 through 30 November 2018, respectively. The estimated annual cost of these services is as follows:

ORDERING PERIOD ESTIMATED VALUE

Basic Option 1

Option 2

TOTAL

IV. STATUTORY AUTHORITY PERMITTING OTHER THAN FULL AND OPEN

COMPETITION

10 USC 2304(c), 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 affected agency's minimum needs can only be satisfied by the unique supplies or services available from LM Aero, who possesses unique capabilities demonstrated as follows: The tasks contracted using this authority will be based on LM Aero proprietary engineering data for analytical and actual aircraft loads, stress, materials, and special configurations. As the original manufacturer of the C-5 aircraft, LM Aero is the only source with the required engineering data and service-related history to accomplish these engineering tasks. The current SETSS contract, FA8525-13-D-0003, was awarded sole source to LM Aero on 30 Nov 2012, with a basic year and two (2) option years and a ceiling of $63,028,000. A ceiling increase to $75,028,000 was required and approved by the contracting officer after team consultation with the Warner Robins Air Logistics Complex (WR-ALC) Policy Office. The taskings performed under this contract include ASIP, FSIP, CPCP, TDS, DIP and RERP and AMP engineering and technical support services. The second optional ordering period will end on 30 November 2015. These sustaining engineering and technical services are non-ACAT. Therefore, this acquisition is for continued performance of a highly specialized service.

AFLCMC/WLSE 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. The USAF would be required to maintain the current level of engineering and technical services with LM Aero in concurrence with any efforts to duplicate the existing data, models and processes in order to maintain mandatory integrity programs. In order to compete the effort, a new contractor would require at least one tail number to test to destruction and free access for contractor personnel and test equipment to at least three tail numbers in operation for ground and flight testing for each of these programs. A full flight test program would be required to record varying loads on the aircraft. The contractor would have to build a comprehensive virtual structural model of the C-5 from the ground-up as a part of this effort and determine the appropriate analysis processes for the activities required by the ASIP and associated risk assessment methods, as well as reverse or re-engineer and prototype any structures, systems, components and software which are intellectual property of Lockheed. Additionally, the contractor would need to develop relationships with the many related subcontractors. An effort on this scale is estimated to cost a lump sum of about $1.3B in Then Year 2016 Research, Development, Test and Evaluation, 3600, dollars with a period of performance of 7 to 10 years minimum due to the complexity of the project. This dollar amount is based on the amount Lockheed invested to complete the original C-5 contract after it was terminated in the late 1960’s. If a competitive contract on this scale were to be approved and competitive procurement begun in FY15, the contract would be expected to be awarded no earlier than FY18 for an IPT to have sufficient time to fully develop the program requirements. With an assumed performance period of 10 years, a fully developed technical data package would be received by the Government in approximately FY28. With a fleet retirement date of 2040, this leaves 12 years in which the USAF may recoup the costs of producing the technical data package. With a cost of $1.3B, the Government would need to save over $108M per year in order to break even at the retirement of the fleet. This number is greater than the current annual costs of the entire SETSS program. This would constitute a substantial duplication of cost and effort for the Government that is not expected to be recovered through competition.

Over the years, due to the cost involved, the Government has procured only results of the data analyses, and not the raw data itself. This data is not available from any other contractor or Government facility. Interruption of LM Aero engineering support to the C-5 would seriously jeopardize the timely execution of the Force Structural/Functional Maintenance Plan as well as impact USAF ability to fully sustain mandatory and best practice programs (ASIP, FSIP, CPCP).

This will result in decreased capability to predict potential problems and proactively accomplish preventative maintenance to avoid extended periods of unscheduled aircraft downtime.

The services to design and provide the modifications required for RERP and AMP were originally procured competitively and awarded to LM Aero. However, the technical data that was developed for these platforms was not fully acquired for many of the modifications made by the RERP program. Much of the AMP technical data for the AMP Line Replaceable Units (LRU) are proprietary to LM Aero or its vendors. The RERP and AMP platforms are avionics-intensive and software-dependent. However, the Government negotiated a perpetual licensing agreement with LM Aero, under contract FA8525-13-D-0004 (License Number SLA-13-C5- 001), to establish access to various levels of standing special license rights in regard to specifically listed computer software, licensed computer software documentation, RERP Interface Control Documents (ICDs) and AMP ICDs. Many physical changes to the aircraft were also required specifically to support the modifications to the C-5 aircraft. These services for RERP and AMP Studies and Analysis are only in support of RERP and AMP peculiar hardware and systems issues. RERP and AMP functional software support is not provided by this effort.

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 website citing conditions which preclude Full and Open Competition in accordance with FAR 5.201.

VII. DETERMINATION BY THE CONTRACTING OFFICER THAT THE

ANTICIPATED COST TO THE GOVERNMENT WILL BE FAIR AND REASONABLE

Cost and price analysis will be accomplished to ensure the contract is awarded at a fair and reasonable price. The contractor will be required to submit certified cost or pricing data in accordance with FAR 15.403-4. A comprehensive analysis will include a technical evaluation of the proposed effort, audits by Defense Contract Audit Agency (DCAA), and reviews by Defense Contract Management Agency (DCMA). All actions will ensure that the ultimate prices to the Government are fair and reasonable.

VIII. DESCRIPTION OF THE MARKET RESEARCH CONDUCTED AND THE

RESULTS, OR A STATEMENT OF THE REASONS MARKET RESEARCH WAS NOT

CONDUCTED

In accordance with FAR 10.001, market research was conducted and a Market Research Report (MRR) dated 15 September 2014 was produced to determine the sources that are able to support the requirements for the C-5 fleet under ASIP, FSIP, CPCP and other related integrity programs covered under this effort, as well as TDS, DIP and RERP/AMP sustaining engineering and technical services. The MRR identified five possible vendors; however, only one source was found to be capable of meeting the requirements of this effort due to LM Aero intellectual property and proprietary rights to technical data, raw data, modeling and processes that are required to perform taskings under this effort and to which the Government would not otherwise have access.The techniques employed in the MRR include specialized engineering experience and knowledge of the C-5 aircraft and its RERP/AMP platforms, review of the sustaining engineering requirements of the present C-5 contracts, a review of available technical data, survey experience of the OEM facilities, personal contacts within both industry and Government and internet searches. A search was conducted through the Central Contractor Registration (CCR) website of the Dynamic Small Business Search (DSBS) database. A total of 33 businesses, with 13 small disadvantaged businesses, three (3) 8(a) businesses, one (1) HUBZone business, ten (10) woman owned small businesses and five (5) service disabled veteran owned businesses, were identified and researched. However, no small business entity was found to be capable of meeting this requirement, unless a teaming arrangement is reached with the OEM to overcome shortfalls in the manpower and restrictive proprietary rights on the technical data, tools and models required to perform these services, as well as access to other LMA intellectual property.

LM Aero stated in writing on 24 March 2008 that they will not sell the C-5 technical data to the Government for any price but are willing to cooperate in partnering with the Government on sustainment initiatives. In order to aid further Government sole source breakout attempts, the Government requested individual pricing for 11 specific C-5 models, software programs and data files/tables through RFP FA8525-12-R-34665, C-5 Sustaining Engineering and Technical Support Services (SETSS). These programs and data tables were identified as key to significant portions of the C-5 ASIP program which would allow them to be performed either organically or to be awarded competitively. LM Aero replied in a 30 August 2012 letter stating that they would not propose to those specific CLINs for reasons of both a loss of business and competitive advantage for the Lockheed Martin Corporation and that many of the items requested are considered LM Aero intellectual property. This response was in keeping with LM Aero’s stated policies in the 24 March 2008 letter.

The Government sent a letter to LM Aero on 16 May 2014, requesting a Rough Order of Magnitude (ROM) estimate of the cost to provide all technical data used in support of the C-5 aircraft to the Government with no rights restrictions. This includes, but is not limited to, drawings, data tables, models, specifications, software, processes and procedures, excluding those with licensing rights negotiated under contract FA8525-13-D-0004, license number SLA- 13-C5-001. LM Aero responded in a 30 May 2014 letter that LM proprietary data is not for sale at this time. The letter also indicated that LM Aero may be willing to negotiate on a case-by-case basis for partnering agreements and for licensing of LM proprietary data.

The contract envisioned under this J&A encompasses only services for which LM Aero is the only source. However, subcontracting possibilities do exist for small businesses since LM Aero maintains an annual DoD Comprehensive Small Business Subcontracting Plan.

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

In the event proprietary data becomes available, the Government will make diligent efforts to compete these areas. Additional breakout attempts are being pursued by the Government to divide out workload/services away from a sole source provider, where possible. Portions of the ASIP and CPCP related tasks have already been contracted out to Research Centers and other Contractors which offer a broad range of analytical capabilities. For example, most of the C-5’s CPCP Support has been contracted to an 8(a) company as a direct award. The Department of Defense’s Defense Technical Information Center (DTIC), was utilized to investigate and reverse engineer deficient components of the C-5 automated flight control system panel. As another example, DTIC is being utilized to investigate and reverse engineer deficient elements of the C-5 pilot assist cable servo.

The AFLCMC/WLSE ASIP Manager with the concurrence of the WLSE EN decided in Fiscal Year (FY) ‘08 to initiate an effort to evaluate the C-5 ASIP program and to recreate some of this proprietary data in order to lessen the Government's dependence on LM Aero, thus setting up a second source for support. The strategy is to contract out the second source requirement focusing on the less critical proprietary components and working towards the more critical ones.

This strategy is seen as a long term effort due to sustaining engineering funding limitations.

Sufficient FY10 engineering funding to begin the effort was obtained and a study was awarded to Mercer Engineering Research Center (MERC) on 10 August 2010 with a three-year Period of Performance (PoP). The PoP for this effort was extended to 9 August 2014 and the C-5 ASIP Assessment Report was delivered 14 February 2014. The assessment report included recommendations to improve ASIP effectiveness, flexibility and responsiveness. The C-5 ASIP Manager and engineering leadership determined that the technical risk in the wholesale second sourcing of ASIP outside the OEM is very high. The technical and financial benefits were determined to be insufficient to pursue second sourcing and agree with the conclusions reached in the MRR on timeline and insufficient return on investment.

Any second source will be required to generate non-proprietary data which will be Government owned. Non-proprietary data will allow the Government to compete the specialized engineering services among various qualified sources. Some or all of the non-proprietary data could be performed through organic means, but would require AFLCMC/WLSE to request additional manpower through the POM cycle. Additional manpower has been requested annually through this process but been denied. Cuts to manpower are also in process. Any additional required manpower as non-proprietary data becomes available is unlikely to be approved.

Another step that has been taken by the C-5 ASIP and FSIP Managers to reduce Government dependence on the OEM is a plan to transfer the AFIRM site programming, management and hosting to the 578 SMXS at Robins Air Force Base (RAFB) which would bring this portion of the effort into organic support. The Software Maintenance Group has already begun transitioning the AFIRM site from contractor to organic support and funding has been planned for this effort. It is anticipated that AFIRM will be fully organically supported by the 578 SMXS by the time performance of the FY16 SETSS begins. The Government is also exploring the feasibility of awarding part or all of the data processing requirements in support of Individual Aircraft Tracking (IAT) to the 578 SMXS.

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)).