J&A_CY19_Redacted.pdf

, ustification and Approval (J&A) for Other Than Full and Open Competition (OTF&OC)

I. Contracting Activity.

This J&A requests authority for OTF&OC to support requirements generated for the Air Force Life Cycle Management Center, Medium Altitude Unmanned Aircraft System (UAS) Division, AFLCMC/Wll and its delegates. The Contracting Activity for this requirement is the Command and Control, Intelligence, Surveillance, and Reconnaissance Contracting Branch, AFLCMC/WIKBA at Robins AFB GA.

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

Due to circumstances described herein, the activity requests authority to acquire sustainment support 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 Class J&A provides authority to the aforementioned organizations to award new Sole Source Contractor Logistics Support (CLS) Sustainment contracts in support of the MQ-1 (Predator) and MQ-9 (Reaper) weapon systems for Calendar Years (CY) 1 Jan 19 through 31 Dec 21. The total estimated value for this J&A is $1.6IB. This J&A follows the authorities initially granted under the Class J&A approved on 4 Oct 14 for MQ-1 (Predator) and MQ-9 (Reaper) CLS contracts.

This J&A applies to the following Original Equipment Manufacturers (OEM) for the MQ-1 /MQ-9 and its associated systems to include Multi-spectral Targeting System (MTS), Airborne Cueing and Exploitation System Hyperspectral (ACES HY) sensor, and Satellite Communication (SA TCOM) terminals:

1. General Atomics Aeronautical Systems, Inc. (GA-ASl)-OEM for the MQ-l /MQ-9 weapon systems 14200 Kirkham Way, Poway CA 92064 CAGE Code: OYJB5

2. Raytheon Company-OEM for MTS-A/8 and ACES HY System Integrator 2501 W. University Dr., McKinney TX 75071 CAGE Code: 96214

3. L-3 Communication Systems-West (L-3 CSW)-OEM for SATCOM tenninals (Reach back), for MQ-1/MQ-9 datalinks and other communication components that are part of the MQ-1/MQ-9 weapon systems 640 N. 2200 W ., Salt Lake City UT 84116 CAGE Code: 06401

4. Honeywell Aerospace-OEM for the MQ-9 engine and for the Embedded Global Positioning System/Internal Navigation System (EGI) for both MQ-1/MQ-9.

111 S. 34th St., Phoenix AZ 85284 CAGE Code: 99193

Currently, CLS sustainment is provided to the MQ-1 /MQ-9 weapon systems and includes air vehicles, Ground Control Stations (GCS), data link/communications, and sensors.

This action will result in award of one contract to Raytheon and three contracts to GA-ASL In 2019, the program team intends to award a 3-year contract (one-year basic and two one-year options) to Raytheon. Since 2013, GA-ASI contracts have been awarded annually. The intent going forward is to award three annual contracts to GA-ASI in CY19, CY20, and CY21. Each contract awarded to Raytheon and GA-ASI will be executed with a mix of Cost Plus Fixed Fee (CPFF) and Firm Fixed Price (FFP) contract line (CLIN) items utilizing 3400 funding.

Completion of tasks initiated on non-severable CLINs may extend beyond the CY Period of Performance;

, ustification and Approval (J&A) for Other Than Full and Open Competition (OTF&OC) however, no additional, or new work may be initiated beyond applicable CY.

Details are as follows:

Term Contractor Contract Type CLIN Structure Estimated Award PoP

CY19-21 Raytheon Support -"c.,., Mix of 01 Jan 19- 3-Year &Services CPFF/FFP 31 Dec21

CY19 GA·ASI CLS Support "C" Mix of 01 Jan 19- 1-Year & Services CPFF/FFP 31 Dec 19

CY20 GA-ASI CLS Support ''C" Mix of 01 Jan 20- 1-Year &Services CPFF/FFP 31Dec20

CY21 GA-ASI CLS Support "C:' Mix of OlJan- 1-Year &Services CPFF/FFP 31 Dec21

This J&A is necessary to support the multiple year strategy outlined; however, additional efforts to stand up organic repair capability will continue.

AFLCMC/Wll may award a stand-alone contract to Honeywell Aerospace and/or L-3 CSW for repair of specific components during the 3-year period of this J&A authority. Logistics Support Analysis (LSA) contracts are currently in place that will identify the data, materials, and equipment necessary to accomplish organic standup and, if possible, a Public Private Partnership (PPP) may be awarded to accomplish this. In this case, Operations and Maintenance 3400 funding currently planned for GA-AS1 and/or Raytheon may be transitioned to support contracts to be awarded to Honeywell Aerospace and L-3 CSW. At the time of this J&A, ihe LSA data has not been completed and those details are not available. However, the option to award these stand-alone contracts to Honeywell Aerospace and L-3 CSW is being captured within the scope of this Class J&A.

While data is not available to provide award years or amounts for L-3 CSW or Honeywell Aerospace repairs with any real fidelity, this J&A includes ceiling/scope ($1.618 and perfonnance ending 31 Dec 21) which will apply to tJ1ese stand-alone contracts if contract award becomes possible and is recommended by the Product Support Manager.

The MQ-1 is currently scheduled for di vesture in FY 18; however, the possibility exists that some low level effort will still be required to support drawdown activities and to support other Government customers still flying the MQ-1. In that event, this document will provi_de authority for necessary MQ-1 support as well. This flexibility is required due to the Quick Reaction Capability (QRC) requirements of the system which is needed to meet evolving operational mission requirements. This Class J&A shall only be applied to those contracting actions where the Market Research Report, with the coordination of an advocate for competition at the cognizant dollar value of the instant acquisition, concludes that the Government cannot competitively award a CLS sustainment contract. Due to the restrictive factors surrounding data rights, to include ongoing validation of asserted restrictions in technical data and computer software, limited competition between the OEMs identified is not envisioned.

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

The Medium Altitude UAS Division, through its program office at Wright-Patterson AFB OH and AFLCMC/WllLR at Robins AFB GA and other AFMC locations approved by the Medium Altitude UAS Division, have a requirement for follow-on .support sustainment of the MQ-1/MQ-9 weapon systems which include Air Vehicles, the GCSs, the MTS-A/B, ACES HY, and SATCOM equipment, engines, and new systems subsequently incorporated

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J 11stification and Approval (J&A) for Other Than Full and Open Competition (OTF&OC) onto the aircraft. There are currently MQ-9s, MQ-1 s and GCSs stationed at sites worldwide which support combined MQ-1 /MQ-9 Combat Lines. Under the contemplated contracts, the OEM's will provide the following supplies and services supporting these systems: program management, repairs and spares, Contractor Field Service Representatives, sustaining engineering, software maintenance, reliability and maintainability improvements, configuration management, data management, contractor inventory control point, depot supply support, technical manuals, and depot maintenance for these systems. Repairs are based on flying hours which fluctuate based on operational demand. In addition, CLS efforts are frequently used to support QRC requirements based on real-world need. Supported organi1.ations include Air Combat Command (ACC), Air National Guard (ANG), Air Force Special Operations Command (AFSOC), and Air Education and Training Command.

The total estimated value for this 3-year Class J&A is $l.6IB. The following table identifies the total estimated funding by fiscal year (FY) for the three-year J&A period for Raytheon and GA-ASI as previously identified in Section II. The funding estimates were derived from the CLS brochure with a small risk factor for MQ-1/MQ-9. The brochure is developed and managed by the program office responsible for weapon system management with input from the Air Force Lead Command, ACC, and associated commands, AFSOC, and ANG. It documents the programmatic sustainment requirements for a weapon system, which includes a narrative that describes and provides cost associated with each support task for the system. The provided data is used to substantiate budget submissions.

Funding estimates are as follows:

fl'.!2... FY20 FY21

GA-ASI $ $ $

Raytheon S S � TOTAL

TOTAL ClS 3400 $

In addition to the above breakout of necessary CLS support associated with OEMs, Raytheon, and GA-ASI, the program office has continued plans instituted in 2013 for the Organic Repair Early Induction Program. Per Section II, this organic program will include contractual work to be perfonned by the additional OEMs, Honeywell Aerospace and L-3 CSW. This program was recommended upon combining the Sustainment Strategy Business Case Analysis (SBCA) and the most recent infonnation gathered. During the 2nd quarter of FYI3, the program office detennined the current repair data did not adequately support the existing comprehensive depot activation strategy, and a modification to that strategy was warranted. The original strategy had a limited number of components planned for organic depot activation. The updated strategy is expanded and includes all Program of Record Line Replaceable Units/Shop Replaceable Units (LRU/SRU) wiU1 an acquisition cost of $1000 or greater and three or more failures per year.

The updated strategy was briefed and approved by program office leadership on 30 May 13. The new approach establishes separate LSA contracts for GA-ASI, L-3 CSW, Honeywell Aerospace, and Raytheon to perform LSA on all depot-level components for MQ-9. The MQ-1 was not included in these efforts as the Air Force plans to divest within the Fiscal Year Defense Plan/Program (FYDP). The LSAs will give the program office the necessary analyses to ensure the most appropriate sustainment strategies are executed for weapon system components. Each LSA effort is planned to be a 24-month Period of Performance. This analysis includes each MQ-9 LRU/SRU Program of Record configuration that has an acquisition cost of$1000 or greater and three or more failures per year.

The deliveries are planned to be incremental and continue through Jul 17. The analysis will include delivery of recommendations for each LRU/SRU on level of repair analysis, maintenance task analysis, provisioning, support equipment recommendation data, commercial in lieu of organic analysis, training, automatic test equipment solution, depot technical. order lists, configuration management plan, test program set/test requirements determination, computer resources, manpower/personnel, and facilities. Once the analysis deliverables are approved by the Government, a determination will be made on viable candidates for establishment of organic depot repair capability.

Once these organic candidate detenninations are made, future contractual actions, provided depot activation funding

� Jstification and Approval (J&A) for Other Than Full and Open Competition (OTF&OC) is available, will be taken 1o procure the needed requirements (tools, test equipment, etc.) to actually establish organic repair capability. Sole Source support will be needed until organic depot activation transition has been completed.

The program office has continued efforts to transition depot-level repair activity from the current OEMs to an organic/contractor mix source of repair in compliance with 10 USC 2464 (Core). The MQ-1 components have been activated as part of the Early Induction effort. Currently, MTS-A/B sensors are repaired organically under a PPP. In addition, eleven MQ-l components and seven MQ-9 components were also under contract as part of the Early Induction Program. All of these components were successfully activated in Apr 15. The MQ-1 is not anticipated or funded for full depot activation.

With regard to MQ-9, depot-level repair capability for the MTS-B sensor was activated at the Fleet Readiness Center�South East during the 4th Quarter FY13. The goal is to continue moving towards organic, to the maximum extent possible for the MQ-9 and additional weapon system components will be evaluated for organic activation based upon LSA results and funding availability. Further determination wiU be made as LSA data becomes available to the Government, again with all best efforts made to maximize organic capability. In the interim and during any organic transition, CLS contracts wiU continue to provide sustainment support for the MQ-1/MQ-9 weapon systems. Future PPPs and/or additional early organic stand-up will be pursued in future sustainment contracts subject to the outcome of the LSA, future organic capacity, and availabiJity of depot activation funding.

11 •• Statutory authority permitting Other than Full and Open Competit.lon (OTF&OC).

The statutory authority which permits OTF&OC for this acquisition is 10 USC§ 2304 (c)( l ), as implemented by FAR 6302-1. Only the responsible sources (GA-ASL, Raytheon, L-3 CSW, and Honeywell Aerospace) will satisfy agency requirements.

I ' Demonstration that the contractor's unique qualifications or nature of the acquisition requires the use of the authority cited above (applicability of authority).

The MQ-9 VAS, the USAF's primary Intelligence, Surveillance, and Reconnaissance (!SR) & Hunter Killer (HK) weapons system, is a major weapons system. In J 998, solely using their .own Jndependent Research and Development (JR&D) funds, GA-ASI developed the highly specialized MQ-9, a larger, faster, significantly more capable version of the MQ-1. The MQ-9 UAS is a complex integration of aircraft, ground and training systems, sensors, communications equipment, and associated highly specialized equipment. Since its inception, the MQ-9 UAS Program has been characterized by Urgent Operational Need (UON) and Joint UON (JUON) requirements calling for rapid fielding of improved MQ-9 combat capabilities to warfighters. These QRC activities are frequen1ly fielded withou1 consideration to all logistics elements which, in tum, drive quick tum requirements for the follow-on sustainment activities.

The history of the uniquely specialized MQ-1 /MQ-9 weapon systems began with the MQ-1 Advanced Concept Technology Demonstration contract competitively awarded to GA-ASI in 1994. Following award, GA-ASI became the sole designer, developer, manufacturer, and depot-level source of repair of the MQ-1 weapon system. GA-ASI was awarded a contract to build 10 systems and then a subsequent effort for 4 additional systems. GA-AS I subcontracted with Raytheon, Honeywell Aerospace, and L-3 CSW for specific program sub-systems. Since inception, the MQ-1 has proven to be an even greater asset than the warfighter originally envisioned. As a result, requirements for MQ-1 increased significantly to meet increased operational demands and Overseas Contingency Operations (OCONUS) to incJude Operations ENDURING FREEDOM and IRAQI FREEDOM. The MQ-9 Program began in Oct 01 as a Big Safari QRC Program, which procured MQ-9 aircraft from GA-ASI and then later developed the GA-ASI MQ-9 into a HK remote piloted aircraft (RPA). The Secretary of the Air Force and Chief of Staff of the Air Force directed concurrent development and production early in the program. An interim combat capable version of MQ-9 was fielded to provide initial war fighting capabilities while a more capable MQ-9 system was developed during the System Development and Demonstration phase. Incremental fielding of MQ-9 was further accelerated in Mar 06 at the request of the Commander of ACC.

The original approved support strategy for the MQ-1/MQ-9 Programs was CLS for Life and technical data was not purchased. In accordance with (IA W) 10 USC § 2464, the MQ-1 /MQ-9 platforms were designated as Core, or essential for the national defense that the DoD maintain a core logistics capability that is Government-owned and Government-operated. For this reason, significant focus was placed upon the stand-up of organic repair capability.

ln 2009, the program office pursued the procurement of a Technical Data Package (TOP) and received a Rough Order of Magnitude (ROM) from GA-AS! to develop the data packages for the MQ-1/MQ-9, GCS, ground data terminal, and automated test equipment.

In Sep 12, the program office received a proposal from GA-ASl which included TOP information for Line Replaceable Units (LRU) under the FY 13 MQ-9 production contract. GA-ASI provided bids on LR Us for a total cost of for the re-procurement packages and for the data rights. The remaining LRUs were designated not for sale by the contractor.

The program office also received a TOP cost for the Block SO GCS. The re-procurement package

The Government completed extensive market research in 2009-2012 in order to detennine what companies were capable of providing the expertise and capability to support the MQ-1/MQ-9 platform or subsystems. Based on industry responses and the Government's analysis, the Government identified that there were instances ih which the Government could contract directly with the sub-system OEMs for development, retrofit, and sustainment for the MQ-1/9 aircraft. As a resuJt, the following companies were determined to be the only viable sources containing the unique and highly specialized capabilities to support the MQ- l /MQ-9 Program: GA-ASI, Raytheon, L-3 CSW, and Honeywell Aerospace.

General Atomics Aeronautical Systems, Incorporated (GA-ASI)

GA-ASI is uniquely qualified to continue CLS sustainment of the MQ-1/MQ-9 weapon systems under this Class J&A. Significant GA-ASI and public investment has been made in personnel, facilities, special equipment, hand tooling, and manufacturing to develop, produce, modernize, retrofit, and sustain the MQ-9 UAS.

GA-ASI, for example, has invested in proprietary manufacturing processes and procedures used to layer, combine, treat, shape, and condition the composite materials and components from which the MQ-9 aircraft are repaired.

Likewise, the test equipment and facilities required for both the repair and test of the MQ-9 UAS are located in GA-ASI facilities and operated by GA-ASI personnel. No other contractor has comparable MQ-9 UAS test and integration facilities, such as a Software Integration Laboratory, a Hardware-in-the-Loop Laboratory, and a flight test facility. Thus, no other contractor currently has the personnel, facilities, technical data, special test equipment, tooling, manufacturing, and testing facilities necessary for full sustainment to include sustaining engineering and repair of the weapon system elements.

Raytheon Company

Raytheon is uniquely qualified to perform the actions related to the MQ-9 targeting system contemplated under this

.. t tstification and Approval (J&A) for Other Than Full and Open Competition (OTF&OC)

Class J&A. Raytheon is the developer and sole provider of the MTS. The MTS-Bis used on the MQ-9 UAS. The

MTS-B shares an extensive commonality of internal components with the earlier MTS-A which was developed for, and is presently operational on, the MQ-1 UAS. This commonality has posed and continues to pose significant benefits to the support/sustainment of these systems. While Raytheon has, delivered limited commercial source control drawings that are helpful for purposes of developing organic depot maintenance, Raytheon did not deliver a technical data package capable of supporting competition. Therefore, MQ-1/MQ-9 engineering has detennined it would be very high risk to conduct a future competition for sustainment of Raytheon components. In addition, Raytheon has stated they consider the MTS-Band the Electronics Unjt for the MQ-9 a critical part of their Technology Portfolio and would not consider selling Raytheon documentation or rights for software.

Furthermore, although an "alternate design" solution is conceivable, this would present a major duplication of acquisition costs to develop, integrate, test, document, train, and establish logistical support for an alternate MTS source. The delays to deveJop a feasible sensor design from an alternate vendor would significantly impact the program's ability to deliver fuJly mission capable RPAs to meet ACC's current combat line requirements. Additional support/sustainment and cost issues would be affected by the length of the transition window for which the program would have to operate and support both the current and alternate source sensor configurations. On one hand, a long and protracted transition window implies a major cost burden for the USAF to operate and maintain multiple sensor configurations wbjch affects both field and depot operations; while on the other hand, an aggressive transition schedule implies an unnecessary replacement of current MTS sensors well prior to the end of their usable life. There would also be additional logistical complications anticipated with setting up and maintaining an a1temate sensor supplier and associated field and depot maintenance provisions which would factor in as additional schedule and cost risks.

In summary, the cost, schedule, and operations/sustainment implications to the program to switch over to an alternative supplier would be substantial. lt would take approximately 3 to 4 years to complete just the collective set of acquisition steps necessary to achieve a fully integrated and validated system and to establish the various logistics infrastructure and associated requirements to ensure readiness for operations/sustainment. This schedule could further be affected by other factors associated with an open competition and getting the developmental and production contracts underway. The costs to establish an alternate supplier could be on the order of as a first order approximation, but highly contingent upon the degree of changes required to modify and adapt a competitor's product to meet program capability and performance requirements, RPA upgrades, GCS interfaces, and software requirements. Once an alternate design/supplier has been established there would then be a transition period of certain duration in which the Government would be supporting a mixed fleet of sensor configurations and carrying dual support, training, and other infrastructure.

L-3 Communication Systems-West (L-3 CSW)

L-3 CSW is uniquely qualified to perform the actions related to the ongoing sustainment of MQ-9 communications system contemplated under this Class J&A. L-3 CSW manufactures Ku-band satellite and Line of Sight data links for the MQ-9 UAS and is a major subcontractor to GA-ASI for the MQ-9 GCS. Most of these components are unique to the MQ-9 UAS and are critical for flight operations and controlling aircraft over extended Jines of communication known as Remote Split Operations (RSO). These assets are designed and produced to meet specific data link performance requirements in addition to meeting stringent size, weight, and power limitations.

The contractor produces and sustai.ns the MQ-1/MQ-9 Beyond Line of Sight data link which is comprised of both airborne and ground based components. The current version is uniquely configured to meet legacy waveform and size, weight, and power limitations. There are no other vendors who can readily produce and deliver similar components without a costly and lengthy development activity to identify, develop, and package protocols, software, and communication hardware into a form usable to the program. The contractor produces the ground communications segment for .RPA1s GCS and Predator MODEM Assembly (PMA) supporting MQ-l/MQ-9 RSO architecture. The GCS segment and its paired PMA are uniquely designed to support the RSO network and are based on the RPA's proprietary Command and Control, and time synchronization schemas. The RSO network is

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J L stification and Approval (J&A) for Other Than Full and Open Competition (OTF&OC) extensive and covers Continental United States and OCON US locations. L-3 CSW is the only supplier of this hardware and it is exclusi:vely used by the MQ-1/MQ-9 Programs. Any substitute hardware will require development, testing, and possible retrofit of existing systems to ensure compatibility.

The contractor also produces SATCOM tenninals for MQ-1 /MQ-9 that hosts RSO hardware and supports the RSO network. The tenninals are also used by other USAF and Army programs. The MQ-1/MQ-9 assesses continued procurement of these tenninals as a program risk reduction effort by maintaining parity with other programs and current inventory. Keeping the same tenninals reduces the logistics footprint and enables further development and retrofit activities.

The Government requested bids for TDPs for specific L-3 CSW items in the FYI3 MQ-9 Production and Block 50

GCS Request for Proposals (RFP). The Government will continue efforts to procure data with the appropriate rights from the OEM in the future; however, the near term focus will be on completing and reviewing LSA data in order to stand-up depot repair at an organic facility.

[n May 15, a contract was awarded to L-3 CSW for the delivery of LSA by the end of Jul 17 for the MQ-9 Communication/Data Link Equipment. The possibility exists that, based upon the delivered data, there may be a decision to award a stand-alone contract to L-3 CSW for organic repair via PPP. In addition. the MQ-9 Program Office has engaged in, and will continue, efforts to obtain a reprocurement TOP from L-3 CSW with rights necessary to conduct a competition for the MQ-9 communications system in the future.

Honeywell Aerospace

Honeywell Aerospace is uniquely qualified to perfonn the actions related to the ongoing sustainment of repair services for the MQ-9 engine and the EGl contemplated under this Class J&A. Honeywell Aerospace is a major subsystems contractor to GA-ASL Honeywell Aerospace's previous efforts and status as the engine OEM allow it to uniquely leverage previous design and analysis in order to repair the MQ-9 engine system. In Jul 15, Honeywell Aerospace was put on contract to deliver LSA data necessary to stand-up an organic depot for repair of the MQ-9 engine. Once the data is delivered by the end of Jul 17 and evaluated, the program office may plan to award a stand alone contract to Honeywell Aerospace. However, until the LSA data is delivered and evaluated, firm information regarding timeframe and cost cannot be detennined. The Government requested bids for TDPs for specific Honeywell Aerospace items in the FYI3 MQ-9 Production RFP.

The Government will continue efforts to procure data with the appropriate rights from the OEM in the future;

however, the near term focus will be on completing and reviewing LSA data in order to stand-up depot repair at an organic facility.

In order to move from Sole Source CLS sustainment to organic depot repair (as recommended in the SBCA) and competitive sustainment (e.g., procurement of replenishment spares), the Government must have the rights to a TOP and delivery of the necessary data. The program office, through th.e Data Rights Team (DRn, continues to methodically verify contractor data rights assertions by analyzing the assertions, requesting additional data, researching the basjs for the assertions and, in certain circumstances, developing a basis for potential challenge of contractor assertions. This process has resulted in the contractor acknowledging the Government possesses greater technical data rights than the contractor initially asserted. The program office received updated computer software assertions on 13 Mar 17 in which the program office signed a negotiated agreement on 19 Computer Software Components (CSC) that provided Government Purpose Rights (GPR). These GPR will be utilized to facilitate future organic capabilities. The OEMs have also acknowledged the Government has unlimited rights to certain CSCs.

While the program office continues to verify data rights, and to analyze opportunity cost of purchasing data rights from the OEMs, to date, there has not been funding approved to procure TDPs from the OEMs.

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J Jstification and Approval (J&A) for Other Than Full and Open Competition (OTF&OC}

Due to the lack of technical data and funding mentioned above, an evaluation of the necessary actions required to obtain TDPs was conducted. It is estimated to take a minimum of approximately 8 years and cost approximately

. These figures are based upon engineering estimates drawn from prior appropriation expenditures, IR&D investment by the contractors, and an approximation of man years for task perfonnance. Any new contractor using the TDP would be required to conduct significant verification and testing activities which would add additional cost and time to the overall effort.

A return on investment analysis was conducted and has determined that cost is not likely to be recovered over the projected useful Jife of the system, which is 2044. The acquisition lead time (to include budget authority, RFP development, source selection, and contract award) is conservativeJy estimated to be 4 years. If the non-recurring engineering then takes 8 years, the first opportunity to begin seeing any return is 2029. The year at which the Government will "break even" is approximately 2052, some 8 years after the weapon system is scheduled to retire.

The most important consideration; however; is the high risk to the weapon system. The MQ-9 is a dynamic, kinetic weapon system that has not "normalized" and is widely regarded as a QRC Program. New operational requirements, quick reaction development activities and subsequent aircraft modifications occur frequently today. The consistent chaoges that would occur during any reverse engineering (due to JUON/UON, Diminisbing Manufacturing Sources [OMS] as a result of rapidly evolving technology, and operational threats) will effectively erode any potential savings gains. The DoD's operational JSR capabilities would be degraded if tbere were any break in sustainment support for the MQ-1/MQ-9 weapon systems.

Based on these results, the program office believes the OEMs covered in this Class J&A are the only sources capable of providing the supplies and services necessary. Any award to sources other than GA-ASI, Raytheon, L-3 CSW, and Honeywell Aerospace would result in substantial duplication of cost to the Government, that is not expected to be recovered through competition and will result in unacceptable delays in fulfilling USAF requirements.

This CY 19-21 J&A follows the authorities previously granted on 4 Oct 14 and applies only to the procurement of sustainment supplies and services from GA-ASI, Raytheon, L-3 CSW, and Honeywell Aerospace in support of the MQ-1/MQ-9 Program. The Government intends to contract directly with OEM vendors to cover sustainment for the specific components each supports, to include planning and support for organic depot activation efforts.

Through this direct approach, unnecessary pass-through fees associated with the prime vendor sustainment relationship will be avoided. Nonetheless, the program office continues significant focus on standing-up organic capability to Cost-Oriented Resource Estimating (CORE), 50/50 requirements, whenever possible. In addition the program office will continue to verify contractor data rights assertions by analyzing the assertions, requesting additional data, researching the basis for the assertions and, in certain circumstances, developing a basis for potential challenge of contractor assertions in order to promote competition in the future.

\ I, Description of efforts mad! to ensure that offers are solicited from as many potential sources as practicable.

A Request for Information (RFl) was posted to Federal Business Opportunities (FedBizOpps) on 10 Feb 16 in order to assess the marketplace for potential competitive sources for sustainment of the MQ-I/MQ-9 weapon system.

Two responses were received. The two contractors who responded, both OEMs (GA-ASI and Raytheon), have the capability to meet program requirements for the MQ-1/MQ-9 weapon system. The RFls were also issued on 19 May 17, amended on 25 May 17, with a closing date of 9 Jun 17 for specific components of the MQ-l/MQ-9 platform. Four responses were received including Honeywell Aerospace and L-3 CSW. Only the OEMs for SATCOM (L-3 CSW) and engines (HoneyweJI Aerospace) were shown to have the capability and data to provide the required support, but an evaluation of both the LSA and the risk must be accomplished before contract decisions are made.

Although the Government has not taken delivery of the data to support acquisition ofsustafoment support from any other source, any source who responds to the Government as a result of this synopsis wilt be identified to the prime contractor as a potential source for subcontracting possibilities.

, "I • Determination by the Contracting Officer that the anticipated cost to the Government will be fair and reasonable.

The Procuring Contracting Officer will ensure the overall cost of these acquisitions will be deemed fair and reasonable to the Government prior to any contract awards. In accordance with FAR 15.403-4, the contractors will be required to provide certified cost or pricing data to be used in supporting the Government's evaluation of the proposed costs. 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 Audit Agency and expert technical personnel supporting the program. The contract prices will be negotiated lA W the procedures in FAR Part 15 ensuring the ultimate costs/prices to the Government are fair and reasonable.

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

Market research was conducted pursuant to FAR Part 10; details are cited below.

The RFJ was posted on FedBizOpps on 10 Feb 16. Only two contractors responded: GA-ASI and Raytheon. The Government reviewed the responses submitted by these two contractors and determined that they do possess the capability to provide sustainment support for the MQ- J/MQ-9 weapon systems. Neither L-3 CSW nor Honeywell Aerospace responded to the initial RFI for weapon system sustainment, though they are known to have the capability and data necessary to perform some specialized repairs separate from the prime (GA-ASI), or the capability to manage organic repairs at the depots.

Follow-on RFis were issued on 19 May 17 for specific engine and SA TCOM components. While four responses were received for engine repair, Honeywell was the only OEM found to have the requisite data, expertise, and capability to accomplish repairs. Only L-3 CSW responded for SA TCOM. While both of these OEMs are potential sources for some level of support, further evaluation of both the LSA and risk are not complete.

Analysis confinned that those contractors who do not possess a TOP are incapable of providing sustainment support for the MQ-1/MQ-9 weapon systems. Any potential contractors wanting to compete for the MQ-J/MQ-9 sustainment workload or any portion thereof would require production level technical data presently owned by individual vendors. As stated previously, the Government does not have this data to provide.

Based on industry responses and the Government's analysis, the following companies were determined to be the only viable sources which could provide sustainment support and services to the MQ-1/MQ-9 Program:

1. General Atomics Aeronautical Systems, Inc. (GA-ASl)-OEM for the MQ-1/MQ-9

2. Raytheon Company-OEM for MTS-A/8 sensors and ACES HY System Integrator

3. L-3 Communication Systems-West (L-3 CSW)-OEM for SATCOM tenninals for MQ-1/MQ-9

4. Honeywell Aerospace-OEM for the MQ-9 engine and for the EGJ for both MQ-1/MQ-9

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

I C. Any other facts supporting the use of Other Than Full and Open Competition (OTF&OC).

The original RQ-1 Program, later to become the MQ-1 Predator, was competitively awarded in Jan 94. The sustainment effort for the MQ-l was determined to be supported via CLS for the duration of the system's life cycle, based on the best cost detennination at that time. The MQ-9 Program began as a QRC Program in October 2001, also with a CLS Sustainment Strategy for the life of the program. While some efforts are currently being made to acquire data, or rights to data, the Government does not currently possess all of the sufficient data to compete any part or portion of the MQ-1/MQ-9 sustainment requirements.

Additionally, this is a dynamic and fast evolving program with updates, upgrades, and mission changes resulting in an environment where, in the time it takes to evaluate and award a competitive contract action, the resultant outcome would likely be obsolete before completion. Also, if there were any break in sustainment support for the MQ-1/

MQ-9, the DoD's operational ISR capabilities would be severely degraded. The QRC implications and operational impacts are inherent to the mission and do impact the ability to openly compete portions of the program.

> • List of sources, if any, that expressed interest in the acquisition.

Two OEM contractors responded to a RF[ for weapon system sustainment that was posted on FedBizOpps on 10 Feb 16: GA-ASI and Raytheon. Both OEM contractors met all requirements to accomplish the sustainment and support of the MQ-1/MQ-9 weapon system. Both contractors have demonstrated the capability to meet the Statement of Work in its entirety. The Government did not show interest in organically producing the necessary contract requirements; because, the organizations within do not possess the TDPs, oor TOP rights, to successfully complete the requirements of the contract.

> I. 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.

A 3-year coverage period and $1.61 B ceiling for this Class J&A will provide the time and dollars needed to continue CLS sustainment support for the MQ�9 weapon system. The program office will continue to evaluate additional weapon system components for organic activation based upon LSA results. Future PPPs and/or additional organic stand-up will be pursued in future sustainment contracts subject to the outcome of the LSA, future organic capacity, and avaiJability of depot activation funding. The MQ-9 Program Office will report annually at Service Acquisition Executive-level meetings (e.g., Configuration Steering Board, Fall Program Review, Spring Program Review, etc.)

on its continuing efforts to maximize future competition for the MQ-9 UAS, with a specific focus on the competition of sustainment activities not planned for organic depot.

Depot Activation

The program office continues its long term sustainment plan to move away from Sole Source CLS activities and is pursuing the establishment of organic depot repair capabilities through the Depot Maintenance Activation Working Group (OMA WG) and competitive sustainment contracts. It is important to note; however, that while this J&A is asking for approval to proceed with CLS support for the MQ-1/MQ-9 concurrently, the Air Force plans to divest the MQ-1 within the FYDP (per the FY 17 President's Budget [PB]).

As stated above, the OMA WG is an ongoing effort designated to define those actions and activities necessary to estabHsh organic depot repair capability at the identified Acquisition Logistics Centers. The OMA WG and LSA efforts wiJJ continue the Jong term sustainment plan to move away from Sole Source CLS activities and the program office is pursuing the establishment of organic depot repair capabilities to the greatest extent possible and as follows:

1. Continue implementation of the Early Induction Program.

2. Provide data to ensure most appropriate sustainment strategies are implemented including: determining/updating depot-level support capabilities, level of repair analysis, depot repair analysis (commercial in lieu oforganic), training, automated test equipment solution recommendation, Test Procedure Setff echnical Repair Document source development data, Level Il Repair Data, depot repair manuals, manpower/personnel, computer resources, facilities, etc.

3. Identify items that are viable candidates for organic depot repair.

4. Identify items determined not to be viable candidates for organic depot repair that will be considered for repair under a PPP or OEM contract repair.

5. Review of the components and accompanying data packages for potential competition and corresponding request for OEM data packages.

Since the original approved support strategy for the MQ-9 UAS was CLS for the lifetime of the system, no technical data deliverables were purchased. Subsequently, JAW 10 USC § 2464, it was designated as essential for the national defense that the DoD maintain a core logistics capability for the MQ-9 VAS that is Government-owned and Government-operated (CORE). For this reason, significant focus was placed on obtaining delivery of the technical data and the data rights to support the stand-up of organic repair capability. To move forward with this, the MQ-9 Program Office contracted with GA-ASI, L-3 CSW, Honeywell Aerospace, and Raytheon to perform a LSA on all depot-level components for the MQ-9 UAS. When complete in FYI 7, the LSAs will include delivery of recommendations for each LRU/SRU on Level of Repair Analysis, maintenance task analysis, provisioning, support equipment recommendation data, commercial in lieu of organic analysis, training, automatic test equipment solution, depot technical order lists, configuration management plan, test program set/test requirements determination, computer resources, manpower/personnel, and facilities. Once the analysis deliverables are approved by the MQ-9 Program Office, a determination will be made on viable candidates for establishment of organic depot repair capability. When these organic candidate determinations are made, future contractual actions, providing depot activation funding is available, will be taken to procure the needed requirements (tools, test equipment, etc.) to establish organic repair capability. Sole Source support will be needed until organic depot activation transition has been completed.

Currently, the program office has made significant efforts to transition depot-level repair activity from the current OEM to an organic/contractor mix source of repair in compliance with 10 USC 2464 (Core). The MQ-1 components have been activated as part of the Early lnduction effort. Currently, MTS-A/B sensors are repaired organically under a PPP. In addition, 11 MQ-1 components and 7 MQ-9 components are also under contract as part of the Early Induction Program. All of these components were activated in Feb 16. The MQ-1 is not anticipated or funded for full depot activation.

With regard to MQ-9, depot-level repair capability for the MTS-B sensor was activated at the Fleet Readiness Center South Bast via PPP to Raytheon during the 4th Quarter FY13. Implementation of fully organic repair is not expected to occur until FYl 8 due to not having the organic supply chain manpower. The program office currently has a MTS B non-core organic software depot activation contract with Raytheon which establishes organic software depot capability lA W with the Depot Source of Repair direction received in Mar 15. Organic depot capability will be completed by Sep 16. Future software depot activation efforts will be submitted in the FYI 9 Program Objective Memorandum (POM).

Also, an organic depot activation contract has been awarded for the MQ-9 Quick Engine Change and another organic depot activation effort for the MQ-9 Fuel System is in work.

The program office will continue moving towards organic, to the mmdmum extent possible for the MQ-9 and additional weapon system components will be evaluated for organic activation based upon LSA results and funding availability. Further determination will be made as LSA data becomes available-to the Govenunent, again with all best efforts made to maximize organic capability. In the interim and during any organic transition, CLS contracts will continue to provide sustainment support for the MQ-1/MQ-9 weapon systems. Future PPPs and/or additional early

J. stification and Approval (J&A) for Other Than Full and Open Competition (OTF&OC) organic stand-up will be pursued in future sustainment contracts subject to the outcome of the LSA, future organic capacity, and availability of depot activation funding. The program office will report annually at Service Acquisition Executive-level meetings (e.g., Configuration Steering Board, Fall Program Review, and Spring Program Review, etc.) on its continuing efforts to maximize future competition for the MQ-9, with specific focus on the competition of sustainment activities not planned for organic depot.

Rights in Technical Data

Jo order to ensure full vetting of the USAF's technical data rights, the MQ-9 Program Office established a standing cross-functional DRT in Apr 11. The MQ-9 ORT continually assesses past and current data assertions made by the OEM's to support the MQ-9 Program Office and to develop procedures to ensure the USAF's rights are preserved and the appropriate data is delivered. Members of the DRT evaluate the data rights assertions for all actions prior to award by reviewing the data assertions, and requesting and analyzing the contractor's supporting documentation.

The DRT also identifies nonconfonning markings on data and software deliverables and requires the contractors to correct those markings.

Further, all MQ-9 contract actions include deferred delivery and deferred ordering clauses (OF ARS 252.227-7026 and 252.227-70276 and 252.227-7027), which allow the MQ-9 Program Office to order data up to 2 years and 3 years (respectively) after the final delivery on those contracts. All appropriate MQ-9 contracts aJso include a requirement for the contractor to deliver a Data Accession List that identifies data generated during the contract.

The MQ-9 Program Office intends to pursue rights in technical data to increase opportunities for competition and to allow the USAF to use modify, reproduce, release, perfonn, display, or disclose data for use within the USAF and to support the product's life cycle-related acquisition activities. The MQ�9 Program Office solicited an·option TOP delivery with its Development/Integration Hybrid Release I contract, but affordability/budgetary constraints precluded the program from awarding the option. The program will continue to request TOP options on integration, development, and productions efforts, when applicable.

The MQ-9 Program Office is pursuing and will pursue the following actions to increase competitive opportunities:

systematically review/negotiate USAF rights, incorporate priced options for technical data in future modification ::ontracts, and leverage deferred ordering/delivery clauses to obtain data

The MQ-9 Program Office formally challenged GA-ASl's computer software data assertions on 19 Computer Software Component (CSC) items in Sep 14. The MQ-9 Program Office officially withdrew the challenge in Mar 17 upon agreeing to a speciaJly negotiated software license. If the Government requires delivery of the software source code and documentation then additional funding will need to be secured and a new solicitation would need to be issued in the future. Currently

1 organic software depot activation is not funded and was not supported by the MAJCOM in the FY19 POM.

rhe program office has developed a technical data strategy to capture technical data requirements and ensure the :orrect data will be identified, acquired, and delivered. The ORT is leading the execution of this strategy. These echnical data efforts will be used in supporting the following:

l. Ongoing organic depot stand-up decisions made through the Depot Source of Repair process.

2. Working with the program teams to identify the parts and systems that could potentially be competed.

3. Continuing to verify contractor data rights assertions by analyzing, requesting additional data, researching the basis, and challenging of contractor assertions.

4. Identifying and acquiring computer software deliverables and associated intellectual property rights.

Future Contracts

As previously stated in Section V, priced options for TDPs and data rights for specific LR Us were part of the FYI3 MQ-9 Production RFP. The FYl5 Production RFP also contained options for TDPs and data rights for ,pecified LRUs. Further, the Block 50 GCS Low Rate Initial Production RFP contained a requirement for the procurement of a TDP and data rights.

Howe\/er, the program office did not have the funds to procure TDPs from the OEM. The program office has obtained a priced option for the Ground Data Tenninal for that, if acquired, will provide the ability to compete further production lots. To date, the limiting factor has and will likely continue to be funding for the procurement actions. In most cases the program has not budgeted to make TDP procurements.

Due to the lack of technical data funding and program schedule constraints, the program office has developed a new technical data strategy for replenishment spares. The strategy will require the inclusion of TDP option CLINs on all appropriate contracts. The first phase of implementation will be a requirement for the inclusion of TDP option CLINs on appropriate DMS contracts. The second phase will require the evaluation of contracts with a hardware procurement requirement to detennine the appropriate need for a TDP. The last phase will provide a requirement for inclusion of TOP option CLINs on all appropriate development/retrofit, production, integration, and sustainment contracts whereby spares are being procured.