15_90039_FaCT_J_and_A_Final_Redacted.pdf

JUSTIFICATION FOR OTHER THAN

FULL AND OPEN COMPETITION

I. CONTRACTING ACTIVITY

This Justification and Approval is a request for Other Than Full and Open Competition in support of requirements generated for the Air Force Life Cycle Management Center (AFLCMC/WNZCA), and the 404th Supply Chain Management Squadron (SCMS)/GUOBC.

The contracting authority for this requirement is the Agile Combat Support Directorate (AFLCMC/WN), Support Equipment & Vehicles Division (AFLCMC/WNZ), and Contracting Branch (AFLCMC/WNKB), Robins AFB, GA. The purchase request number supporting this contracting action is FD2060-15-90039.

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

Due to the circumstances described below, this activity requests authority to acquire the spares listed in this document using Other Than Full and Open Competition (OTF&OC) as prescribed by FAR 6.302-1, Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements. This action will result in the award of a new contract, which will be a firm-fixed-price contract with a basic requirement plus four options, from which additional quantities may be ordered, if necessary. This requirement will be purchased from the following source:

a. Source: Elbit Systems Ltd (ESL) (OEM) Advanced Technology Center Matam Par

P.O. Box 539 Haifa, Israel 31053 Phone: +97248316448 Cage: S0123 Large business

Vision Systems International, LLC (VSI) (approved U.S. distributor) 641 River Oaks Parkway San Jose, CA 95134 408-252-5327

CAGE: 06VL3

Large business

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

AGENCY’S NEEDS

a. TOOL, FAST CHARACTER, National Stock Number (NSN) 4920-01-565-4320RN, Part Number (PN): MB559A-10 is used to sample cockpit electromagnetic fields for alignment, map generation, and accuracy testing in support of the Joint Helmet Mounting Cueing System (JHMCS). It is a Fast Characterization Tool (FaCT) used on the F-15, F-16, and F-18 aircraft;

on government flight simulators and in the medical field. The software installed on the tester is unique to each aircraft platform. It consists of a FaCT sampler module, interface module, tablet personal computer, and a carrying case.

Basic Requirements:

b. NSN: 4920-01-565-4320RN

Basic: Qty: Est. U/P: Est. Total:

Option Requirements:

Option 1: Qty: 1-3 ea. Est. U/P: Est. Total:

Option 2: Qty: 1-3 ea. Est. U/P: Est. Total:

Option 3: Qty: 1-3 ea. Est. U/P: Est. Total:

Option 4: Qty: 1-3 ea. Est. U/P: Est. Total:

c. Total estimated cost of this acquisition is which is based on the previous contract price and Equipment Requirements System future unit prices. This acquisition will use BP12 and FMS funds.

d. Estimated delivery dates: 12 months ARO

e. The AMC code for this NSN is 3Z, which means it is to acquire, for the second or subsequent time, an item directly from the actual manufacturer that is a commercial/non-developmental/off-the-shelf item. The software for this item is military only.

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 or Limited Number of Responsible Sources, 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 agency’s current minimum needs can only be satisfied by the unique supplies or services available from the above-cited source that possesses the unique capabilities required to manufacture the FaCT. The specific F-16 software that is used for the test set that interfaces with the JHMCS makes this FaCT unique to the F-16 aircraft. ESL, the Original Equipment Manufacturer (OEM), is the only company that can provide the software because they developed the software and it is proprietary to them. ESL manufactures the test set, and VSI is Elbit’s authorized distributor in the US. The test set is also used for the F-15 and F-18 aircraft and there is specific software related to those two aircraft. The highly specialized FaCT now has a much smaller footprint and newer technology, and has replaced the legacy JHMCS Mapper on all F-16 aircraft models.

This NSN was previously purchased on a sole source purchase order FA8532-12-M-0004, which was issued without any options on 23 Feb 2012. Therefore, this acquisition will be a follow-on contract for the continued production of highly specialized equipment.

In an e-mail dated 13 Apr 2011, ESL stated that their designs were proprietary and they are not interested in releasing or selling the rights to the drawings to the government. Rockwell Collins- ESA Vision Systems (ESL subsidiary) confirmed on 24 July 2013 with the Support Equipment Engineer that they are not willing to sell or otherwise release the rights to the data. The product is not under the configuration control of the government. Without the requisite designs and data, the government is not able to develop a Commercial Item Description or a Product Description.

Completion of a reverse engineering (RE) effort for this item is estimated at roughly five years based on ESL technology involved in the test equipment and a similar Business Case Analysis (BCA) by Boeing and MERC (Mercer Engineering Research Center). A breakdown of estimate is given below:

Software development, debugging and testing (based on FaCT’s software platform, only available through VSI):

Electromagnetic mapping technology R&D initiated along with software development (sampler module developed by VSI):

Lab equipment simulation:

Engineers (1 Software & 1 Hardware Technical Data Package with production drawings + training:

One preproduction test equipment:

The availability of aircraft for compatibility testing would increase development time for this equipment. The tester would require extensive engineering to recreate the software that runs the tests and performs the tasks specific to military applications. An operational FaCT must be cannibalized before any RE is initiated, and R&D money must be identified to develop this project. The estimated time needed for RE, coupled with the cost, does not represent a viable option in terms of Return on Investment.

This item supports the JHMCS system on the F-16 aircraft and could remain in service for at least another 15-20 years. The costs above are in addition to the cost of procuring requirements needed during RE effort. The government would have to ensure a preproduction unit is available for testing during the fifth year of contract. This would duplicate costs, time and efforts during the five years of the current JHMCS program, in order to provide this test equipment to the F-16 community. Constraints in availability of the equipment for the following years and additional money may be of concern if the RE effort requires additional time for completion or the preproduction unit fails testing requirements. However, RE costs for this item would continue to increase, making it almost impossible to see a return on investment during the life of this program due to rapid changes in JHMCS technology.

An Economic Analysis was performed as part of market research. The analysis resulted in a return on investment of 0.19 to 1 over a 10 year period. This means that for every dollar of investment made we would return 0.19 cents in savings. To break-even, you would have to save over the 10 year period. You only save over the 10 year period. Given that we only have one data point for competition savings, we performed a sensitivity analysis adjusting the savings to 10 percent. This generated an even lower savings/investment ratio of 0.09 to 1.

Further analysis extending the time period to 40 years, yielded a savings/investment ratio of 0.96, which means it would take more than 40 years to pay back this investment and break even.

Given the advanced technologies and high voltage aspects of the helmet system, it is considered high risk to RE. The lack of a technical data package for the FaCT would make the RE process for this equipment very costly and the equipment quite possibly obsolete at completion because of rapid changes in technology.

Due to the lack of technical data required to produce this item and the high risk associated with RE, continued acquisition of the item from ESL through VSI is considered necessary.

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

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 web page citing conditions which preclude Full and Open Competition.

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 considered fair and reasonable based upon FAR 12 negotiation procedures using price and cost analysis. Methodologies to assure this outcome will be commercial pricing techniques utilizing publicly offered catalogs, comparison to historical contractor sales and/or analysis of limited cost and pricing information which could be made available by the contractor. In the event that limited cost and pricing information is made available, the Government’s negotiation objective will be developed using local technical analysis applied to direct and indirect rate factors recommended by the DCAA and/or DCMA.

VIII. DESCRIPTION OF THE MARKET RESEARCH CONDUCTED AND THE

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

CONDUCTED

Market Research was completed on 21 Aug 14 IAW FAR Part 10.001 and 10.002. A vendor survey was conducted through various internet search engines, to include the small business dynamic search engine from the SBA, with no additional vendors found. Haystack was used to find previous procurement history. The current OEM, Elbit Systems Ltd, through its vendor, Vision Systems International, LLC, is a viable source for the product. There are no commercial products in the current market that will fulfill the Government’s requirements. An internet search was done at www.bing.com and www.google.com, to find other manufacturers, but none were discovered. The criteria used for the Small Business Dynamic Search was “fast characterization,” “FaCT,” “electromagnetic fields,” “JHMCS,” “joint helmet,” “MB559A-10”, “4920-01-565-4320RN”, and “test set, electro-magnetic”; also, NAICS code 334511 was searched and no potential vendors were found using said search. Therefore, Elbit Systems Ltd, through their distributer, Vision Systems International, LLC, is the only source that can provide support for this acquisition.

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

Elbit Systems Ltd is the OEM for the FaCT and retains proprietary rights to the data for this item. They confirmed on 24 July 2013 with the Support Equipment Engineer that they are not willing to sell or otherwise release the rights to the data.

However, prior to next contract option, the Government will again ask for a price to purchase the technical data, elevating the request higher within the company. Additionally, should an adequate proposal be received, the Government will request program funding to acquire the technical data.

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)).