redacted_J A.pdf

JUSTIFICATION FOR OTHER THAN

FULL AND OPEN COMPETITION

I. CONTRACTING ACTIVITY

This Justification and Approval (J&A) to request authority for Other Than Full and Open Competition supports requirements for the Air Force Sustainment Center (AFSC), 638th

Supply Chain Management Group (SCMG) and the 409th Supply Chain Management Squadron (SCMS/GUMB). The contracting authority for this requirement is the Air Force Sustainment Center Contracting Branch (AFSC/PZAAB). The Purchase Request supporting this contracting action is FD2060-16-00004.

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

Due to the circumstances described herein, the activity requests authority to acquire the repair of NSNs listed in this document using Other Than Full and Open Competition 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, indefinite delivery indefinite quantity (IDIQ) contract with three-year Basic plus Option I (2-Year); Option II (3-Year) and Option III (2-Year) periods. This sole source requirement will be purchased from the following company:

Northrop Grumman Technical Services (NGTS) 101 Industrial Park Blvd.

Warner Robins, GA 31088-7049 CAGE Code: 1LTU5 Large Business

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

AGENCY’S NEEDS

The Air Force has a repair requirement for the AN/APN-241 Low Power Color Radar (LPCR). The AN/APN-241 LPCR sustainment covers 28 National Stock Number (NSN)s as a part of the LPCR system. The LPCR system includes an antenna, indicator and control panels, a Radio-Transmitter-Processors (RTP), a RTP mount, an antenna power supply, a wired chassis and several Line Replaceable Modules (LRMs).

The AN/APN-241 is a low power, lightweight pulsed Doppler radar in the transport class with a high resolution synthetic aperture radar mapping mode. In addition to meeting needs for precision navigation, this mapping capability enables operators to execute landing missions with confidence on unimproved runways without aid from ground-based landing systems. This contract will return 28 NSNs to serviceable condition in accordance with the Original Equipment Manufacturer (OEM) specifications. The NSNs covered by this J&A are contained in Attachment 1 of this document. The AN/APN-241 LPCR is a major system with highly specialized firmware, hardware and software integration across all C-130H2s, C-130H3s, HC-130P/Ns, LC-130Hs and C-130J aircraft. This effort will support eight different commands: Air Mobility Command (AMC), Air Force Reserve Command (AFRC), National Guard Bureau (NGB), Pacific Air Forces (PACAF), Air Force Special Operations Command (AFSOC), United States Air Forces in Europe (USAFE), Air Combat Command (ACC) and Air Education and Training Command (AETC). The Navy and Coast Guard are looking to be added in the out years as their individual contracts expire.

Based on a 2007 HQ AFMC/A4 DSOR decision, the Government established a Public Private Partnership (PPP) Agreement with Northrop Grumman Corporation on 18 Dec

10. Based on this agreement, Northrop Grumman Corporation and the 402 Maintenance Wing (MXW) signed an Implementation Agreement that will supply repair parts to 402 MXW, manage data updates to repair technical orders, and provide obsolescence management and solutions, equipment maintenance, and engineering services and support. The 402 MXW will provide skilled avionics technicians to screen/repair Line Replicable Units (LRU) s and Line replaceable Modules (LRM) s for the AN/APN-241. Northrop Grumman is the only company with the data to provide the services that enable the 402 MXW to repair these assets. They possess all data pertaining to the unit (including manuals, procedures, and test equipment), and in a letter from NGTS (VP) dated 26 February 2015, they are unwilling to sell their data to the Government. The AN/APN-241 is a product they are still in the process of building and selling. Research has shown there is not a commercial AN/APN-241 radar repair capability which meets the requirements. In addition, it is not feasible to organically develop a commercial radar capability to meet the requirements. Furthermore, the requirements cannot be modified to allow for the use of other existing commercial or non-developmental radars. Since the AN/APN-241 is a non-developmental system, the Government did not procure detailed drawing packages, documentation of manufacturing procedures, test specifications, or inspection data rights. This data is proprietary to Northrop Grumman. The total estimated cost of this requirement is which is based on the maximum quantity for all 28 NSNs based on the Secondary Item Requirements System (D200A) and cost per ordering period. A 3% escalation factor was applied to estimated NSN cost for each Option year. The type of appropriation for the repair of NSNs is 4930. The period of performance is 120 months.

29 September 2013 under other than full and open competition, and provides coverage through 28 September 2016. The contract is a basic year with options, with a total value of . The contracting action covered under this new J&A is a follow-on for continued support of the AN/APN-241.

As mentioned in section III above, the Government established a Public Private Partnership Agreement with Northrop Grumman Corporation on 18 Dec 10. Based on this agreement, Northrop Grumman Corporation will supply repair parts to 402 MXW, provide and manage data updates to repair technical orders, and provide obsolescence management and solutions, equipment maintenance, and engineering services and support and test station software. The 402 MXW will provide skilled avionics technicians to screen/repair LRUs and LRMs for the AN/APN-241. Northrop Grumman is the only company with the data to provide the services that will enable the 402 MXW to repair these assets. The Government does not have the technical data required for repair and/or production of spares/repairs. NGTS was asked to provide a price for the data; they responded via letter dated 26 February 2015, clearly stating that the data was not for sale.

NGTS is the only known source with the technical data expertise, facilities and equipment required to support repair of these NSNs. All NSNs for this effort are proprietary items for which the Air Force does not own the internal engineering data.

NGTS has proprietary ownership to performance specifications for these NSNs. NGTS approved procedures are used for all Shop Replaceable Units (SRU) s, LRUs and LRMs repairs and no other company has such procedures available. There are no Government approved depot-level Technical Orders releasable to Department of Defense (DoD) contractors. Items to be repaired and purchased include various categories of electronic items to include Radio Frequency (RF) components/RF switches, signal processors and amplifiers. This type of repair is a specialized field of electronic repair, unique to each NSN, and not readily available in the commercial marketplace due to stringent DoD requirements. Components made for military aircraft are not generally sold on the commercial market due to the difference in requirements (Night Vision Imaging System, etc.). Highly technical skills, using the relevant technical data, are required in order to satisfactorily service and maintain the AN/APN-241 component part NSNs. Furthermore, NGTS owns special test equipment that is essential for the troubleshooting and testing of applicable assets which has not been procured by the Government. The drawing package for test station/equipment is owned by NGTS. The Government currently does not own a data package suitable for publication and therefore cannot provide a data package to any potential suppliers.

NGTS possesses the specialized capabilities, including the engineering personnel, data, and equipment necessary to repair the NSNs covered via this effort. As the OEM, NGTS has retained the engineering expertise to address all the customer's technical requirements. These NSNs are proprietary items that were specifically designed and developed to meet the Lockheed Martin Aeronautics (LMA) defined performance parameters for AN/APN-241. Since NGTS is unwilling to sell the required data necessary to perform the required services, it is not practicable that other companies could adequately provide a proposal or fulfill the workload requirements.

The 409 SCMS/GUMB believes that award to any other source would result in substantial duplication of cost to the Government that is not expected to be recovered through competition and unacceptable delays in fulfilling the Air Force requirements.

Duplication of Costs/Unacceptable Delays: There are no other qualified companies currently available to provide the necessary supplies/services for the NSNs. NGTS is the only company that has full capability to build and/or repair each item. The Government reverse engineering cost estimate for the 28 NSNs is $461M (Engineering $162.2M, Material & Labor $ 77.3M, Software Development $59.5.M, Technical Data Package $67.8M and Qualification and Flight Testing $42.8M, Maintenance Test Equipment $51.4M) and will require six – eight years to qualify new Sources of Supply (SOS) and Sources of Repair (SOR). Furthermore, since these items are mission critical, any items other than the currently approved source require extensive lab, ground and flight tests. The reverse engineering estimates and timeframes are based on similar Maintenance Engineering Project Sustainment Tool (MPST) Consolidated Sustainment Activity Group (CSAG) engineering projects. A similar project (small complexity circuit card assembly (CCA)) of the AN/APN-241 Materiel Support Division (MSD) Consolidated Sustainment Activity Group (CSAG) Project 3404 was submitted in FY13 to re-design a Graphic Signal Processor (GSP) CCA to resolve obsolescence issues. The initial phase of this project will take two years to complete with a cost estimate of $2M. This effort is for only one of the 28 CCAs contained in this (LRU). The administrative lead time for acquiring the funds and contract award will be an additional two to three years. The total completion time is estimated at eight – eleven years. We expect to continue supportability of the AN/APN-241 through 2045. Our analysis resulted in a savings/investment ratio of 0.16 over the expected life of the system which means that for every dollar of investment made we would return $0.16 cents in savings.

The payback period is over 147 years. To recoup the investment of $461M, the Government would have to achieve a savings percentage of over 100 percent which is unrealistic. This assessment/calculation (known as a “break-even analysis”) was accomplished by the multi-functional team in collaboration with the Robins financial management (FM) office.

Pivotal to competition is the acquisition of data, preferably in the early stages of the system life cycle. As outlined above, and assuming the Government had a data package suitable for competitive solicitation/award, it would require eight to eleven years to secure funding and qualify a new source. Accordingly, NGTS is the only firm capable of providing the supplies and services described in Section III above without the U.S. Air Force experiencing duplication of cost that could not be expected to be recovered through completion 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 (FedBizOpps) web page as required by FAR 5.201 citing conditions which preclude full and open competition. Although the Government does not own data to support the sustainment of repairs for the 28 NSNs applicable to the AN/APN-241 LPCR from any other source, any source who responds to the Government as a result of this synopsis will be referred to the prime contractor for subcontracting possibilities.

Sources Sought Synopsis and Request for Information (RFI) were considered as a supplement to routine synopsis and market research. However, based on the following factors, the team is certain that these efforts would not have changed the acquisition strategy or non-competitive posture of this requirement: historical knowledge of the system; review of previous contracts/contract history; proprietary data; partnership with the depot; routine system software upgrades; and market research reports/results for current and similar systems. In particular, the partnership arrangement is determined to be a “positive” for Government/organic technicians, giving them exposure to new technology that they otherwise may not have the opportunity to experience.

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 in supporting the Government’s evaluation of the proposed cost. 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 (DCAA) and/or 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 price 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 in accordance with FAR Part 10.001 and 10.002 and was completed February 2015. The multi-functional team was involved in conducting and documenting the market research effort. In-depth guidance was provided by the Robins Acquisition Center of Excellence (ACE) subject matter expert (SME), as well as the Robins Small Business Office SME. The following market research techniques were used:

A. Current: The Government engineering team conducted research through the completion/review of current AFMC Form 762, Contract Repair Screening Analysis Worksheet (CRSAW) documents completed in accordance with AFMCI 23-113. The items to be acquired under this contract are those for which the screening processes determined that technical data is inadequate for competition.

B. Current: The Government conducted three different vendor surveys with 42 sources.

NSN procurement histories were reviewed to identify if the Government had previously contracted for these requirements from a company other than NGTS. The results of the survey yielded that either the vendor was a subcontractor to the OEM, manufactured a component, or sold the product line to NGTS. There were no sources that could complete this requirement without dependency on NGTS.

C. Current: Additional information was reviewed concerning Source of Repair Analysis SORA for these NSNs. This information documented the lack of proprietary technical data available, lack of depot repair, as well as the decisions that contributed towards the decision to assign the source of repair to the Contractor (Northrop Grumman).

D. Historical: Market research for the previous contracts involved interrogation of DoD data systems performed at the time a firm requirement for purchase or repair was identified. For this follow-on contract, the same type reviews have been accomplished. The result of the previous Market Research for Repair (MRR) yielded that NGTS was the only source capable of performing the requirement.

E. Forward-Looking: Prior to each option exercise, internet searches will be conducted on the U.S. Dept. of Commerce, United States Census Bureau website using North American Industry Classification System (NAICS) Code 334511 to research companies that might possess spare/repair and engineering capability for these NSNs. The Business Identification Number Cross-Reference System (BINCS) Search (http://www.logisticsinformationservice.dla.mil/BINCS/default.aspx) will be used to look up CAGE code/business contact information. Webster’s Online Business Directory (www.webstersonline.com) will also be used to gather contact information for businesses; we will again conduct these searches prior to each option exercise.

Market research has clearly concluded the only company capable of repairing the specified 28 NSNs is Northrop Grumman Technical Services (CAGE Code: 1LTU5).

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

The systems/sub-systems for the subject NSNs are stable and mature in the sustainment life cycle. The life of the AN/APN-241 program is 30 years. While the current Market Research indicates a sole source environment for these NSNs, the following are steps the Government will take to overcome barriers to competition for future acquisitions:

A. Review these NSNs prior to exercising each option to identify opportunities where procurement of technical data/drawings would return a positive Return on Investment (ROI) to support competitive acquisition or performance by Government personnel.

B. Prior to each option exercise, engage with NGTS for sale of technical data/drawings for those NSNs with a positive ROI or pursue third party engineering services, where feasible, for enhancement to data currently owned by the Government to render it suitable for a competitive repair effort or repairs performed by Government personnel.

C. Request funding to acquire technical data/drawings for competition in the appropriate fiscal cycle to yield the purchase of sufficient data packages where procurement of technical data/drawings would return a positive ROI or other benefit to justify competition or performance by Government personnel.

D. Execute funded projects to obtain technical data/drawings.

E. Ongoing market surveillance continues through the monitoring of technical literature, discussion with other engineers, and attendance at expos for potential repair sources/suppliers of the subject NSNs.

F. Every three years (beginning from contract award date) the multi-functional team will again initiate a break-even analysis, such as was discussed in Section V above to determine if procuring repair data maximizes the lifecycle sustainment related support. All life cycle sustainment decisions must conform to the most recent Depot Source of Repair (DSOR) determination.

G. The Air Force accomplishes continuous market surveillance and periodic reviews of the adequacy of its technical data for competition. The technical data for every item to be acquired or repaired is reviewed under a formal acquisition engineering process (known as the AFMC 762 screening process) that determines the appropriate acquisition approach in view of the specific item-unique, detailed data the Air Force’s possesses and its adequacy for competition.

The current contract includes a Public Private Partnership where the depot is utilized for 69% of the total contract cost. All of the 69% is credited towards Depot Maintenance Statute 10 USC 2464 (also known as “50/50”). We will continue to pursue acquisition of data or Government usage rights to the data to allow for future competitive acquisition;

for each request, we will elevate at a higher level within the NGTS company hierarchy.

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)).