06 C-5M CLS J_A_Redacted final.pdf

FOR OFFICIAL USE ONLY

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

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APPROVAL (AFFARS 5306 . 304 ( a) )

Date Signature

Digitally signed by

ROPER.W LLIAM.B.JR.12880147

Date: 2020.05.07 14:18 37 -04'00'

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I. Contracting Activity.

This Justification and Approval (J&A) is to request authority for Other Than Full and Open Competition (OTF&OC) to support requirements generated for the Air Force Life Cycle Management Center (AFLCMC/WLS), C-5 Super Galaxy Division. The contracting activity responsible for this acquisition is AFLCMC/WLSK. The purchase request number supporting this contracting action is FD2060-19-33936.

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

Due to circumstances described herein, the activity requests authority to acquire the services listed in this document using 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 follow-on, Indefinite Delivery/Indefinite Quantity (IDIQ) contract which will consist of a one (1) year basic and three (3) one-year option periods, and the inclusion of FAR 52.217-8 (Option to Extend Services) allowing for up to a maximum extension of six months to the validity period.

The IDIQ contract will include Firm Fixed Price (FFP), Cost-Plus Fixed Fee (CPFF), and Cost- Reimbursable-No Fee (CR-NF) contract line items (CLINs). The validity period of the IDIQ is projected to be 01 Feb 2021 - 31 Jul 2025 if the six month extension is exercised. The Government intends to combine the next C-5 Contractor Logistics Support (CLS) and Sustaining Engineering Technical Support Services (SETSS) contracts as a part of the follow-on acquisition; therefore, CLS is exercising a shorter period of performance (4 years) to align with the SETSS contract expiration.

The CLS/SETSS combined efforts will decrease the number of acquisitions required to sustain the C- 5M fleet. This IDIQ will be awarded as a Single Award Task Order/Delivery Order Contract exceeding $112M based on FAR 16.504(c)(1)(ii)(D)(1)(iii) in which this J&A provides supporting rationale.

The sole-source requirement will be purchased from the following company:

Lockheed Martin Corporation Doing Business As: Lockheed Martin Aeronautics (LMA) 86 South Cobb Drive Marietta, GA 30063-0001 Commercial and Government Entity (CAGE) Code: 98897 Large Business

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

The primary purpose of this CLS contract is to continue sustainment and logistical support services required for the C-5M fleet modified by the Avionics Modernization Program (AMP)(F33657-98-C- 0006)/Reliability Enhancement and Re-engining Program (RERP)(F33657-02-0200 & F8625-07-C- 6471) in order to provide strategic aircraft capability to the Air Mobility Command (AMC) and Air Force Reserve Command (AFRC). The C-5M sustainment and logistical support requirements will be fulfilled through a variety of CLINs, Pricing and Unit of Issue arrangements.

The CLS services include:

Supply Chain Management: Spare and repair parts management, supply distribution and control, inventory management and control, warranty administration, supply data interchange, forecasting, FOR OFFICIAL USE ONLYMarch 2018 Page 4 of 9 provisioning, and transitioning initial spares. Additional responsibilities include maintaining readiness base-level spares, procurement of repair components for Diminishing Manufacturing Sources (DMS), parts obsolescence, repair of C-5M Line Replaceable Units (LRUs), repair of peculiar support equipment, tracking unique identification marking requirements, packaging, handling, storing, and transporting items. This also includes Depot Level (D-Level) maintenance and inspections performed at designated operating bases, depot locations, and contractor facilities for items not specifically covered by C-5M technical publications. D-level maintenance may include contracted field teams and/or technical Modification/Maintenance, Repair & Overhaul personnel and trained Field Service Representative personnel to assist and deploy with USG mobile maintenance teams.

Administration/Management: The Contractor shall identify a program manager to act as the single point of contact (POC) for this contract.

The total estimated dollar value of this effort is $187.63M and is derived from cost comparison and historical data received from the current CLS contract FA8525-16-D-0003.

The estimated value of $187.63M is allocated for Supply Chain Management, Spares and Repairs, Product Administration and Management Support per Fiscal Year as follows:

Basic Option I Option II Option III 6-Month Option Total

FY 21 FY 22 FY 23 FY 24 FY 25

$39.88M $40.92M $42.04M $43.18M $21.61M $187.63M

All efforts will be funded with MAJCOM Operations & Maintenance (O&M) 34XX funding appropriations.

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 Services Category (SCAT) Level-III effort is a follow-on contract for highly specialized services currently provided by LMA on contract FA8525-16-D-0003 for the sustainment of the C-5M aircraft. As the OEM, LMA is the only source capable of providing support services, to include the maintenance and repair of AMP/RERP peculiar systems, subsystems, and components used to modernize the aircraft, due to their proprietary data rights on the technical data, tooling, and systems on the C-5M platform.

The C-5 AMP/RERP was a part of a multi-phase effort by the United States Air Force to modernize its fleet of C-5 aircraft to achieve increased mission effectiveness and readiness. During the acquisition phase of the C-5 modernization process, the C-5 Development System Office (DSO) determined that full and open competition was not a viable alternative since LMA is the OEM and owns and controls the C-5 data. Therefore, the DSO determined it would not be cost effective to develop a second source for the effort.

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The Government's procurement philosophy for the C-5 AMP and RERP contracts was to utilize commercial and commercial-based software technology and existing commercial avionics software systems to upgrade the C-5 aircraft with safe, modern, and reliable avionics and aircraft systems. Thus, the Government's acquisition strategy, request for proposal, and ensuing contracts were all based upon utilization of commercial and commercially based software technology and avionics. Under the DFARS, commercial computer software or commercial computer software documentation is acquired under the licenses customarily provided to the public except for information documenting the specific modifications made at Government expense to such software or documentation to meet the requirements of a Government solicitation. Therefore, the Contractor and its subcontractors are not obligated to provide additional rights in or access to commercial software to the US Government under the AMP and RERP contracts.

The two-phase C-5 modernization program began with the $454M AMP program, awarded to LMA in 1999, which significantly enhanced the aircraft's electronics for the modern era. RERP, the second phase of the C-5 modernization program, awarded to LMA in 2001, accounted for $11B in overall upgrade cost. LMA competitively selected General Electric Aircraft Engines (GEAE), headquartered in Cincinnati, Ohio, to offer a new propulsion system anchored by the popular GE CF6-80C2 engine.

The Government did not procure the Level-III product drawings, formal acceptance test plans and procedures, or full system/subsystems specifications necessary to compete subsequent contract efforts. Lack of technical data and computer source code for multiple LRUs within the systems, coupled with the prime contractor's configuration control, preclude issuance of the required support for C-5M CLS to any other contractor. Additionally, pursuant to the “Software Users Agreement” under contract F33657-98-C-0006 dated 14 Jun 2006, the Government has the right to use and load the required software on all C-5M AMP/RERP aircraft and equipment, but does not have any software rights for modifying, reverse engineering, or decoding software developed for or under the modernization program. However, to provide the Government insight and oversight of the Contractor's C-5 RERP ICS contract work the Contractor agrees to exert best efforts to enable Government personnel viewing access to C-5 RERP ICS contract commercial software specifications, and source code, at both LM Aero facilities and at subcontractor facilities. Such viewing access shall be coordinated in advance and be on a noninterference basis. Government personnel granted such viewing access will execute a non-disclosure agreement with the Contractor, and subcontractors as applicable, when such non-disclosure agreement is appropriate based on the commercial or proprietary nature of the software.

In 2003, the Government asked LMA to identify the cost to procure C-5 proprietary data. In LMA's response, (contracts letter DO-LTM-2003000532-0 dated 4 Dec 2003) they stated their proprietary C-5 data was not for sale. However, per the contracts letter cited above, if they were to sell the data, LMA estimated the cost would be $1B. Three additional requests were submitted on 22 Nov 2011, 12 Dec 2011 and May 2014. The first request was to update the price associated with the previous requests.

LMA responded on 28 Nov 2011 that the proprietary data relative to the C-5 aircraft was not for sale.

The second request was to revise the Nov 2011 request to provide a price for procuring depot level maintenance data for LRUs and equipment. This request included technical data and computer software including procedures required for the repair, test and processing of LRUs and shop replacements units along with unlimited data rights. LMA responded on 21 Dec 2011 that the technical data, source code, and software necessary for operation, maintenance, installation, and training purposes relative to C-5 LRUs was not for sale.

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On 15 April 2019, C-5 Contracting AFLCMC/WLSK requested a Rough Order of Magnitude (ROM) from LMA for all remaining technical data used in support of the C-5M aircraft with no data right restrictions.

This included, but was not limited to, drawings, data tables, models, specifications, software, processes, and procedures, excluding those with licensing rights. LMA stated the requested data rights are not for sale and that they would no bid data rights requests. Therefore, this sole-source acquisition is necessary for the continued sustainment of a highly specialized 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 would result in unacceptable delays in fulfilling the Air Force's requirements. In order to develop a new source, a complete redesign of the core computer and integration with multiple subsystem elements would be required, as well as a redesign of the software integration for the C-5 avionics suite resulting in costly engineering efforts and extensive lead times. Such a redesign effort is estimated at approximately $1.4 billion in FY16 dollars. This cost is estimated using the initial C-5 AMP Engineering and Manufacturing Development (EMD) cost as a basis for comparison.

Additionally, new Software Integration Laboratory (SIL) development would absolutely be necessary to support this redesign effort. The SIL is a flight deck located at Robins AFB, capable of performing software loading and operational checkout of LRUs. A turn-key SIL redesign is estimated to cost approximately $30 million, based on the review of data from ongoing SIL efforts.

redesign effort estimated to take 10 to 12 years to complete not production delays .

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

A Sources Sought (SS)/Request for Information (RFI) synopsis was posted to Federal Business Opportunities (FedBizOpps) on 25 June 2019 under Solicitation number FA8525-19-R-XXXX, C-5M Contractor Logistics Support (CLS). The SS/RFI was amended 10 July 2019 to add an attachment with responses to RFI questions, to include a list of the parts, assemblies, and components that would be included on the contract. Responses were due by 26 July 2019. The SS/RFI requested responses from interested vendors that possess the expertise, capabilities, and experience to meet qualification requirements to sustain and support the C-5M fleet, to include services for supply chain management and repair and administration/management. Specifically, the description stated, “The Contractor shall procure, repair, overhaul, manage, and distribute spare parts and material for contractor-managed and USG-managed items for the C-5M peculiar items identified in the contract.”

A total of four (4) vendors responded to the SS/RFI (Advanced Project Consulting, Allied Express Solutions, North Bay Aviation, and AAR), providing copies of their capability statements and responses to the survey questions. Each vendor was evaluated and determined capable based on general experience with related services; however, they stated they did not have the restrictive proprietary rights on the intellectual property, technical data, tools, and models required to perform these

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This 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 potential subcontracting opportunities.

In accordance with AFFARS 5306.304 (a), the Senior Contracting Official (SCO) signature authorizes release of the solicitation concurrent with forwarding the justification package to SAF/AQC for review and SAF/AQ for approval.

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 to support the Government's evaluation of the proposed cost. The proposed skill mix of labor, labor hours, types and quantities of materiel and 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 beginning April 2019 and completed in July 2019 in accordance with FAR

10.001 and 10.002.

The market research techniques used are as follows:

As described in Section VI above, a SS/RFI was posted to FedBizOpps on 25 June 2019 advising industry of the pending acquisition and soliciting inquiries from interested vendors. However, as stated above the identified companies are not capable of meeting the CLS requirement without a partnering or teaming arrangement with the OEM due to the proprietary data rights on the intellectual property, technical data, tools, and models required to perform these services. Considering this information and the LMA declination in response to the 15 April 2019 request, the CLS program team concluded re-accomplishing any of the market research searches would reveal no capable sources.

Other market research techniques employed in this report include engineering experience, review of the sustaining engineering and performance requirements of present C-5 contracts, review of available technical data, survey experience of the OEM facilities, and contacts within both industry and Government. As a result of the additional market research techniques performed, five (5) large companies (LMA, Boeing Aerospace Operations, Zodiac Northwest Aerospace Technologies, Airbus, and L-3 Communications Integrated Systems) were identified; however, LMA was the only company capable of providing services required as a result of the proprietary data rights.

In addition, a search was conducted through the Central Contractor Registration (CCR) website of the Dynamic Small Business Search (DSBS) database. The CCR/DSBS search had the following search parameters: General Nature of Business - Services; NAICS Code - 336411, Aircraft Manufacturing, and Keywords - “Cargo Aircraft” “Repair” and “Supply” and “Integration”. The search yielded a total of 50 businesses with 11 small disadvantaged businesses, 6 8(a) businesses, 6 woman-owned small businesses, 5 other minority-owned businesses, 9 service-disabled veteran- owned businesses and 13 with no

FOR OFFICIAL USE ONLYMarch 2018 Page 8 of 9 ownership certifications available (see attachments to view DSBS search). Some of the small businesses searched held multiple certifications within these categories. However, no small business entity was found to be capable of meeting this requirement.

The C-5M CLS requirement does not fit the definition of a commercial item as described in FAR Part

2.101. This service is defined as military unique and is not customarily used by the general public or by non-Governmental entities. The Government requires parts that meet an exact form, fit, and function as determined by the specific mission. There are no aircraft in the commercial market with the same or similar components.

As demonstrated by the market research, LMA is the only vendor capable of fulfilling the Government's requirement.

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 C-5 Sustainment and Modernization is required and directed by the Government in order to meet mission requirements. Due to the complexity and nature of the sustainment and modernization effort, it must be supported by a contractor with vast knowledge of the requirements, specifications, hardware configurations, software baselines, internal and external dependencies, and have a test suite of equipment to sustain and modernize the C-5 fleet. The Government does not possess the TDP for the C- 5M to support full and open competition. An inquiry for sale of the TDP was sent to the OEM on 15 April 2019. The OEM responded on 15 April 2019 and declined interest in selling the TDP. LMA continues to decline offers by the Government to procure proprietary C-5 data for use by other competitors. The Government has only limited data available, such as cataloging and usage data; despite this, we are continuously working toward transitioning the LMA managed items to organic managed capability. All items on the CLS contracts were previously approved for CLS for life. That strategy changed from CLS for life to organic management within the AF which also brings in assigning the appropriate source of repair and logistically reassigning items to the AF to be managed.

The Source of Repair Assignment (SORA) status allowing transfers of specific items from CLS for life to Organic capabilities are an impact to the current contract as well as the follow-on contract for this requirement. LMA owns the data, personnel and facilities capable of providing sustainment support for the Government. LMA will be responsible for sustainment of the AMP and RERP aircraft modifications with supply chain management, repair and administration/management. This will benefit the Air Force for continued support of the C-5 Aircraft while some items begin transition from CLS for life to organic sustainment as well as those items maintained under the current SORA. There is no other company that can compete for this work without substantial cost to the Government with excessive and unacceptable wait time.

A reverse engineering effort is estimated to take 120 to 144 months to complete. This would cause an unacceptable delay in meeting our Air Force requirements, and therefore was determined not feasible.

While the current market research indicates a sole source environment for the C-5M effort, the government will continue to engage with the OEM on an annual basis, prior to the exercise of each option period to determine the feasibility of procuring the TDP. Follow-on contracts will include a requirement to