16-C-0001-Redacted_J_ _A.pdf

JUSTIFICATION FOR OTHER THAN

FULL AND OPEN COMPETITION

I. CONTRACTING ACTIVITY

This Justification and Approval to request authority for Other Than Full and Open Competition supports requirements generated for the Air Force Sustainment Center (AFSC), 638th Supply Chain Management Group (SCMG), 409th Supply Chain Management Squadron (SCMS) I GUMCA. The contracting authority for this requirement is AFSC/PZAAB, 235 Byron St., Ste 19A, Bldg. 300, Robins AFB, GA 31098-1670. The purchase request number supporting this contracting action is FD2060-16-00186.

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

Due to the circumstances described herein, the activity requests authority to acquire the repair services listed in this document using Other Than Full and Open Competition as prescribed by FAR 6.302-2, Unusual and Compelling Urgency. This action will result in the award of an urgent repair that will be a new Firm-Fixed Price requirements contract. This requirement will be procured from the following company:

Under collaboration agreement between Boeing and L-3 Communications Corporation (Cage 76301) L-3 Communications will perform the repairs. There will be a one year basic period.

Performing Teammate under collaboration agreement with L-3:

The Boeing Company 626 Anchors Street NW Fort Walton Beach, FL 32548-3861 Cage Code: 76301 Large Business

The assets repaired under this contract will be utilized by the USAF.

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

AGENCY'S NEEDS

A requirement exists for testing, repair and calibration of the Flat Panel Up Front Controller (FPUFC) National Stock Number (NSN)/Part Number (PN) 5895-01-530-1899FX/A05A0249- 12, TO 12R5-5-222-3&4 that are beyond scope of warranty repair. The FPUFC is form, fit and function compatible with the USAF F-15E prior model, the Up Front Control (UFC).

NSN PIN FY

5895015301899FX A05A0249-12 FY16

Quantity

Period of Coverage

Basic

Total estimated cost of basic is -ppropriations will fund this effort.

If repairs are not maintained the mission will be degraded through an increase in MICAPs and a decrease in mission capable rates.

The current RMC code is for this item is R3R. The Government does not own the data or the rights to the data needed to contract repair of 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.

The FPUFC is repaired through Boeing and subcontracted to L-3. The current contract (FA8530-08-D-0004) was extended to 25 Dec 15, however the monthly demand is 13 each and that will not cover the requirements until the follow on awards. Based on a delay in receiving the proposal for the long term follow on contract and the lead times for audits, the anticipated award date is now estimated in March 2016. An emergency short term firm-fixed-price (FFP) contract will be required for a four month period while negotiations for the long term follow on contract are being conducted. If the FPUFC will not be able to be repaired until March 2016, the F-15 will experience a work-stoppage and multiple aircraft will be grounded. The degree to which these repairs fall behind schedule will remain behind schedule due to the fact that L-3 cannot accelerate inductions or repair activities to make-up lost time. Time is critical and the tactical approach should be one that achieves rapid results. This will cause multiple aircraft to be in MICAP status; F-15's being grounded will result in no availability for ground troops, which will result in the loss of aircraft and the lives of personnel.

IV. STATUTORY AUTHORITY PERMITTING OTHER THAN FULL AND OPEN

COMPETITION

10 USC 2304( c ), as implemented by FAR 6.302-2, Unusual and Compelling Urgency

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 minimum needs can only be satisfied by the unique supplies or services available from only the above cited source, which possess unique capabilities demonstrated as follows:

The FPUFC utilizes a single, new technology Liquid Crystal Display (LCD) flat panel display to replace the current segmented LCDs of the USAF Up Front Control (UFC). Not only are the old LCDs unreliable, but they are obsolete as well. The FPUFC is also night vision imaging compatible, providing a complete solution for all reliability and obsolescence issues currently facing the USAF UFC.

Boeing contracted L-3 to design, develop, and produce the FPUFC. Although the data is proprietary to L-3, Boeing owns the rights to the data until 2016 when their agreement/contract expires.

Once expired, L-3 will have all rights to the data. The USAF has been unable to purchase or acquire any design data for the FPUFC. Boeing provided no response to the USAF's request to acquire design data information 6 Feb 2013. L3 was contacted 20 May 2014 to discuss either purchase of data rights, or failing that, a Public Private Partnership (PPP) with the 402nd EMXS.

At that time, they reiterated they would not discuss anything until the teaming agreement with Boeing expires in May 2016. Boeing and L3 were contacted on February 4, 2015 to discuss the possible purchase of data rights or the possibility of a PPP. With regards to the teaming agreement, both parties stated that they are unable to fully discuss their plans prior to its expiration. However, Boeing did state that there have been preliminary discussions about extending the teaming agreement or signing a new agreement with L3. Boeing and L3 were unable to discuss the sale of data rights and are not interested in pursuing a PPP at this time.

Should the teaming arrangement indeed expire in 2016, the Government will make expeditious efforts to contract directly with L3 in order to avoid paying pass-through costs to Boeing: this would be a short term plan, while a long-term plan to pursue full and open competition continues.

While executing a Foreign Military Sales order for Flat Panel Up Front Control procurement, Boeing evaluated the manufacturing capability and discovered that legacy units could not be manufactured because of obsolescence issues. Under a Memorandum of Agreement (MOA) between Boeing and the FPUFC Original Equipment Manufacturer (OEM) L-3, the OEM cannot sell/repair any of the redesigned hardware without that effort first flowing through Boeing. The current agreement lasts until 2016. Therefore FPUFC users must buy/repair the product from Boeing who will then subcontract to L-3.

The 409 SCMS engineering estimates that reverse engineering (including hardware, software, and test equipment) the FPUFC would cost a minimum of $8M in addition to at least $4M for TDP generation, for a total minimum cost of approximately $12M. Engineering also estimates that a reverse engineering/Test Data Plan generation effort would take a minimum of 24 months.

Reverse engineering data was based on similar engineering project data which was collected in Feb 2014.

With a conservative estimate of 25% savings by bringing this effort into the depot or competiting it would take 34 years to recoup the cost of reverse engineering for this effort. The F- l 5E aircraft is currently schedule for retirement in 2030. The results of the market research performed indicate that reverse engineering would result in unacceptable delays and un recoverable duplication of costs.

If the FPUFC will not be able to be repaired until March 2016, the F-15 will experience a work stoppage and multiple aircraft will be grounded. The degree to which these repairs fall behind schedule will remain behind schedule due to the fact that L-3 cannot accelerate inductions or repair activities to make-up lost time. Time is critical and the tactical approach should be one that achieves rapid results. This will cause multiple aircraft to be in MICAP status; F-15's being grounded will result in no availability for ground troops, which will result in the loss of aircraft and the lives of personnel.

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. It is anticipated that sources having an interest in subcontracting may be identified through synopsis. However, it is anticipated that there will be no effective competition due to the lack of technical data, test equipment, and complexity of supporting the

F-15E FPUFC.

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 15.404, it is anticipated that negotiations will be conducted using information other than cost or pricing data from the contractor. Thorough price analysis will be conducted using available information and approved pricing techniques that will support the contracting office in making a determination that the price paid to the contractor is fair and reasonable to the Government.

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 Sept 2014 for the subject services, in accordance with FAR 10.002(b )(2), to determine commercial application and the possibility of alternate sources. The techniques used were internet searches and discussions with other government technical employees, including FMS and Navy, that are/were directly involved with the F-15 avionics systems. Internet searches were conducted on the following websites:

http://web.sba.gov/pronet/search/dsp _ dsbs.cfm, http://thomasregister.com, http://www.eem.com, http://www.yahoo.com, and www.ccr.gov. Finally, market surveillance through continual monitoring of technical literature, discussions with other engineers and attendance at annual technical expos are/were performed. Market research results indicated that no one other than Boeing can provide the required repair services.

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

L3 was contacted 20 May 2014 to discuss either purchase of data rights, or failing that, a Public Private Partnership (PPP) with the 402"d EMXS. At that time, they reiterated they would not discuss anything until the teaming agreement with Boeing expires in May 2016. Upon expiration of this agreement another attempt will be made to purchase the data. Boeing and L3

••••were contacted on February 4, 2015 to discuss the possible purchase of data rights or the possibility of a PPP. Boeing and L3 :9a.vere unable to discuss the sale of data rights and are not interested in pursuing a PPP at this time. If the Government was able to purchase the data rights to stand up a repair line or if a PPP was established, the total process would take 5-6 years including the time required to obtain depot stand-up funding. This time estimate was based on a similar PPP effort.

Without the necessary technical data the Government is unable to foster competition with respect to the requirements covered in this J&A. The Government will continue attempts to acquire data rights through requests to Boeing and L3, elevating at higher levels within the org structure.

Also, the Government will continue to monitor industry changes and reviews of the screening process for the AFMC Form 762s. Depending on the designated Acquisition method Code/Repair Method Code (AMC/RMC), such screening will be revisited every 1-5 years. The Government will continue to surveil the market for new opportunities to develop LCD sources on future non-urgent contracts.

While the current MR indicates a sole source environment for these NSNs, there are steps the Government will take to overcome barriers to competition for future acquisitions:

1. Review the item on this contract to identify opportunities where procurement of technical data/drawings would return a positive Return on Investment (ROI) and justify competition. (This cannot take place until the teaming agreement is over and L3 is willing to discuss whether they are willing to sell the technical data/drawings).

2. If a decision is made by Boeing & L3 to continue the teaming agreement, an analysis will be completed to determine the feasibility of 3rd party engineering services.

3. If 3rd party engineering services are a viable option, funding will be requested for such services.13,820.

4. If funding is granted, funded projects would be executed to pursue third party engineering services (where feasible) for a proposal to enhance the data as necessary to render it suitable for competition.

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)).

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