JA_Redacted.pdf

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

FOR OFFICIAL USE ONLY

March 2018 FOR OFFICIAL USE ONLY Page 1 of 8

NOTE: If a Justification and Approval was approved for the preceding acquisition, a copy of the approved J&A for the predecessor action must be included in the staff package for approval of the instant J&A. This applies to J&A staff packages that are submitted for review and approval at a level above the contracting officer. The predecessor J&A will be used as a reference document by the approving official.

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

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

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

Contracting Activity: AFLCMC/WNKAB

Purchase Request / Local ID Number: FD2060-18-00812

Program / Project (and PE, if applicable): Emergency Power Unit (EPU) Tester

Program Type (PEO or Other Contracting): PEO

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

Estimated Contract Cost (including options): J&A Type: Class Individual

COORDINATION (AFFARS 5306.304(a) )

Date Project Lead / Program Mgr / Requiring Activity

AFLCMC/WNZ /

Signature

Date

06 Aug 2018

Contracting Officer

AFLCMC/WNKAB /

Date

10 Aug 2018

Local Legal Reviewer

AFMC/JA/

APPROVAL (AFFARS 5306.304(a) )

Date

28 Aug 2018

Competition Advocate

AFSC/PZCA,

March 2018 FOR OFFICIAL USE ONLY Page 2 of 8

I. Contracting Activity.

This Justification and Approval is a request for Other Than Full and Open Competition in support of requirements generated for the AFLCMC/WNZ Support Equipment and Vehicles Program Office. The contracting activity for this requirement is AFLCMC/WNKAB. The purchase request number supporting this contracting action is FD2060-18-00812.

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

Due to the circumstances described below, this activity requests authority to acquire the assets listed in this document using Other Than Full and Open Competition (OTF&OC) as prescribed by FAR 6.302-1, Only One or a Limited Number of Responsible Sources and No Other Supplies or Services Will Satisfy Agency Requirements. This action will result in the award of a new Firm-Fixed-Price (FFP) Requirements Indefinite Delivery contract (IDC) consisting of a one (1) year basic plus four (4) ordering periods. The period of performance is anticipated to begin on 15 Sep 18 through 15 Sep 23.

This limited sources requirement will be performed by one of the following companies:

Honeywell International Inc.

Doing Business As: Honeywell 2525 West 190th St Torrance, CA 90504-6002 CAGE Code: 70210 Large Business

RSL Electronics USA, Inc.

70 Round Hill Rd Poughkeepsie, NY 12603-5125 CAGE Code: 0WKM4 Small Business

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

This requirement is for the procurement of NSN 4920-01-126-1759RN, a Flight Control System Test Set, commonly known as the Emergency Power Unit (EPU) Tester. This aircraft maintenance tester is designed to test the EPU on the F-16A/B Aircraft. More specifically, it is used to functionally test components of the EPU system installed in the airframe. The tester consists of a panel assembly, two cable and hose assemblies, a contents plate, a schematic diagram, and spare lamps contained within a carrying case. The tester also contains circuits for testing the airborne EPU system while it is installed in the aircraft. The test set is attached to the aircraft to complete a circuit or circuits using both the test set and aircraft subsystems. The system circuits under test are the power supply, lamp test, sensor continuity, augment, simulated turbine speed, controller response, and gaseous nitrogen circuits.

The validity period of the Requirements IDC will be five years, anticipated to be 15 Sep 18 through 15 Sep 23. The requirement will consist of USAF and FMS requirements. The Basic Period will cover the current USAF backorders. Future AF, DoD, and FMS requirements will be executed via the Ordering Periods.

March 2018 FOR OFFICIAL USE ONLY Page 3 of 8

Quantities and estimated prices of the basic and each one-year ordering period are displayed below:

NSN 4920-01-126-1759RN

Contract CLIN BEQ Est. Unit Price Est. Total Price Basic Period 0001 Ordering Period 1 1001 Ordering Period 2 2001 Ordering Period 3 3001 Ordering Period 4 4001

Total Contract Estimate:

The total estimated contract value is and is based on historical prices from the previous contract including an escalation factor of 3% using the Equipment Requirements System (ERS). These assets will be procured with 3400 Operations & Maintenance (O&M) funds. The estimated delivery date is 180 days after award of contract and/or execution of a delivery order.

The NSN 4920-01-126-1759RN was screened and assigned an Acquisition Method Code/Acquisition Method Suffix Code (AMC/AMSC) of 1R. An AMC of “1” means suitable for competitive acquisition for the second or subsequent time. The AMSC code of “R” means the Government does not own the data or the rights to the data needed to purchase this part from additional sources. It has been determined to be uneconomical to buy the data or rights to the data. It is uneconomical to reverse engineer the part. This code is used when the Government did not initially purchase the data and/or rights.The asset is screened as AMC of “1” because two companies have access to the data; however, without access or rights to the data, the Government is unable to compete the effort.

The procurement will resolve many of the current CRITICAL requirements. The current supply level for the Government is . This acquisition will help the Government achieve and maintain the required level of supply which is 100% of the EPU Tester.

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 a Limited Number of Responsible Sources and No Other Supplies or Services Will Satisfy Agency Requirements, required by FAR 6.303-2(b) (4)

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 USAF's minimum needs can only be satisfied by the unique supplies available from the above cited sources that possess unique capabilities demonstrated as follows:

Honeywell International is the Original Equipment Manufacturer (OEM), with part number 912476-5-1, who specifically designed the tester as a highly specialized piece of equipment used to perform functional testing at the airplane (F-16) and perform functional checkout of the EPU. The tester is military specific and unique to the F-16 platform, performing functional tests of the components of the EPU system installed on the airframe. RSL Electronics USA reverse engineered a

March 2018 FOR OFFICIAL USE ONLY Page 4 of 8 tester and became an approved source through testing on a contract in 1994 with their part number, AS111694.

The Government contacted both Honeywell and RSL Electronics via email on 3 January 2018 regarding the sale of the data and neither company expressed interest in selling the data to the Government. Both companies have manufactured the tester for the Government and other foreign customers, and the data is proprietary. Numerous attempts by Government personnel to contact Honeywell as recently as 28 Jun 18 regarding this effort and the sale of the TDP have gone unanswered.

The Procurement history demonstrates award to either Honeywell or RSL for the last twenty (20) years except for purchases from four surplus companies. Solicitation FA8532-08-R-21935 was posted 17 Jun 08 and closed 17 Jul 08 with the intent to limit sources/solicit sole source to Honeywell International and RSL Electronics under the authority of 6.302-1. Subsequently, contract FA8533-08- C-0025 was awarded to one of the approved sources with access to the TDP. The four surplus companies, were providing surplus assets to fulfill the Government's needs for each of these awards.

In each instance, the surplus distributor was providing EPU Testers manufactured by Honeywell or RSL. The Prior J&A for the procurement of this asset (FD2060-10-21162) specified a limited competition between the two sources, however during the solicitation phase of this acquisition, a reduction in availability of funds occurred changing scope to that of surplus and resulted in the award of contract FA8532-10-C-0040 to surplus distributor, .

In July 2015, the tester was procured under a Third Party Logistics (3PL) IDIQ contract FA8517-14- D-0012 with .

Users continue to experience immense equipment shortages The Government is authorized 105 testers, but only has each in use with only field-level repair support available. Other than the aforementioned 3PL procurement of 27 testers provided by an unapproved source, the procurement history demonstrates purchases from either surplus companies, Honeywell International Incorporated (large business), or RSL Electronics USA Division (small business).

Due to world events and increased military activity, it is imperative that these test sets are procured in a timely manner. As previously mentioned, the Government's fleet is operating at of minimum required levels, negatively impacting current fleet numbers within the F-16 community and impeding

March 2018 FOR OFFICIAL USE ONLY Page 5 of 8 mission requirements. Due to lack of available data as well as the depleted numbers in the current fleet, the Government is unable to utilize existing assets to conduct a reverse engineering effort.

Additionally, the time necessary to conduct a reverse engineering effort is determined to be at least 12 months based on a similar RE effort conducted on the EPU Tester with RSL Electronics. This length of time for an RE effort is considered as an unacceptable delay that would only enhance the current strain on F-16 missions. This instant acquisition, in support of critical requirements, will fully support the Government's mission needs for EPU testers during the specified Period of Performance and will ultimately resolve the Air Force working far below minimum operational numbers and alleviate any strain and negative impact to the F-16 community.

In summary, Honeywell International and RSL Electronics USA have maintained the technical capabilities, facilities, and expertise needed to manufacture the tester. There have been no additional changes in the market for this item. Any surplus previously available has been exhausted, and the Government's current requirement is for quantities higher than the number available in surplus inventory. For this reason, surplus will not satisfy the Government's need at this time.

Accordingly, Honeywell International and RSL Electronics USA are the only companies capable of providing the supplies and services described in Section III above without the U.S. Air Force experiencing unacceptable delays in fulfilling its requirements.

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

A Sources Sought Synopsis (SSS) / Request for Information (RFI) was posted to Federal Business Opportunities (FedBizOpps) on 25 May 2017 under solicitation number FA8533-17-FCSTS with a response date of 30 Jun 2017. The SSS/RFI requested responses from interested vendors that possess the expertise, capabilities, and experience to meet qualification requirements for this effort. No vendors responded. A second SSS/RFI was posted on 12 Dec 17 under solicitation number FA8533-18-R-EPU with a response date of 11 Jan 18. The SSS was posted to identify potential sources that may possess the expertise, capabilities, and experience to meet the requirements for qualification and production of the Flight Control System Test Set or EPU Tester, NSN 4920-01-126-1759RN. RSL responded to the SSS on 11 Jan 18 via email, expressing RSL's intent to submit a proposal for the EPU Tester upon release of RFP.

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

VII. Determination by the Contracting Officer that the anticipated cost to the Government will be fair and reasonable.

The Government anticipates fair and reasonable prices will be determined based on adequate competition. In the event competition is not achieved, the Contracting Officer will require the submission of other than certified cost or pricing data in accordance with FAR Part 15.403. Price analysis or cost analysis based on “information other than certified cost or pricing data” will be used to examine and evaluate the proposed prices to determine fair and reasonable pricing. Price analysis techniques include comparison of proposed prices to historical prices paid for a same or similar item;

March 2018 FOR OFFICIAL USE ONLY Page 6 of 8 comparison with published price lists, offered catalog prices and prices obtained through market research for a same or similar item; comparison of proposed prices with independent Government estimate; or analysis of data other than certified cost or pricing information.

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

Market research was conducted in accordance with FAR Part 10.001 and 10.002. The market research was completed on 21 Jun 2018. Various market research techniques such as internet searches, historical documentation, JEDMICS, BINCS, HAYSTACK, PRPS, IHS, and an RFI/SSS were used.

Additionally, both email and telephone conversations were utilized.

An NSN search in the Haystack Gold database was conducted using keywords: “912476-5-1”, “AS111694”, “4920-01-126-1759”, and “flight control system test set.” No additional potential vendors were found using the keyword searches.

Additional searches were conducted using B2B commercial database for potential vendors manufacturing similar devices as well as DSBS; however, any potential manufacturer or vendor would need access to the TDP for consideration.

The Government attempted to identify additional sources via a SSS/RFI synopsis that was posted to FedBizOpps under solicitation number FA8533-17-FCSTS on 25 May 2017, with a response date of 30 Jun 2017; however, there were no responses. A SSS was also posted to FedBizOpps on 12 Dec 17 as document FA8533-18-R-EPU with a response date of 11 Jan 2018. On 3 Jan 18, the Government contacted RSL Electronics and Honeywell International to determine their interest in this procurement and the sale of data. RSL Electronics' responded via phone and email expressing RSL's interest in the procurement, and with RSL responded to the Sources Sought on 11 Jan 18 via email, expressing RSL's intent to submit a proposal for the EPU Tester upon release of the RFP. Honeywell International did not respond to the public posting on FedBizOpps or the Government's inquiry regarding their interest, nor did Honeywell respond to direct communications.

On 16 Apr 18, the Small Business Administration (SBA) contacted the team regarding potential eligibility for sole source award under the 8(a) Program for the

“4920-01-126-1759RN/Flight Control System Test Set/EPU Tester” effort under NAICS 336413. The Government contacted who then submitted a response to the sources sought FA8533-R-18-EPU. cites their interest as a distributor for RSL for this equipment, referencing the Non-Manufacturer Rule (NMR) and a waiver listing under NAICS 336413. The director of the Small Business Office at Robins examined the waiver listing as it relates to this procurement and deemed it not applicable, as the NAICS waiver only applies to aircraft auxiliary parts such as crop dusting, external fuel tanks, and inflight refueling equipment. As the NMR Waiver listing does not apply, any business (including, but not limited to, ) would be required to comply with the prime contractor's Limitations on Subcontracting found in 13 Code of Federal Regulations, 125.6(2), stating that the prime contractor must complete at least 50% of the work. In this case, only two companies, RSL and Honeywell, are capable of meeting the requirement of 50% of the work, as the data is proprietary to the two manufacturers.

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This item does not meet the requirements to be called a commercial item.

Market Research concluded that two companies have access to the TDP, introducing some competition into this market, and the quantities for this particular requirement likely exceed the capacity of quality surplus available. It is recommended that the Government award this effort sole-source to either Honeywell or RSL, both of whom own the data and are approved manufacturers of this part. Due to the Government's limited knowledge of performance requirements and non-possession of the required technical data, it is unable to compete the effort at this time.

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 Government does not own or have access to the complete TDP to provide to interested manufacturers to support full and open competition. An inquiry for sell of the TDP was sent to both Honeywell and RSL on 11 Jan 2018. RSL declined interest in selling the TDP, and despite repeated attempts via phone and email as recent as 28 Jun 18, Honeywell has not responded to numerous inquiries by Government personnel.

A reverse engineering effort is estimated to take at least one year to complete. This would cause an unacceptable delay in meeting our Air Force requirements and is therefore determined not feasible.

The life of the program is through 2035.

The Government will continue to contact both Honeywell and RSL annually to inquire as to their interest in selling the TDP. If either responds positively, the Government will perform a cost analysis of a reverse-engineering effort, including an evaluation of the current fleet and the Government's ability to surrender an asset for that effort. Should Honeywell or RSL be willing to sell the TDP to the Government and/or should the operational fleet be capable of withstanding surrender of assets for reverse engineering, it may be possible that reverse engineering efforts could be engaged to foster more competition for future acquisitions.

The plan to break barriers to competition in the prior J&A was to continue to monitor the commercial market for a new Flight Control Test Set that may serve as an alternative. That plan was executed but the OEM continues to decline to sell the TDP to the Government. Based on fulfillment of the prior plan, the current J&A does not require higher-level approval in accordance with DFARS PGI 206.304(a) (S-70) (ii).

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XII. Certification by the Contracting Officer.

As evidenced by my signature above, I have determined this document to be both accurate and complete to the best of my knowledge and belief.

XIII. Certification by the technical/requirements personnel.

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