JUST_APPR.pdf

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

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.

Choose the funding level for this J&A Document:

< $700K > $700K and < $13.5M > $13.5M and < $93M > $93M

Contracting Activity: AFSC/PZAAB

Purchase Request / Local ID Number: FD2060-19-00005

Program / Project (and PE, if applicable): Repair of C-5 PCIU

Program Type (PEO or Other Contracting): Other Contracting

Authority (include full title): 10 USC 2304(c) as implemented by FAR 6304-1

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

COORDINATION (AFFARS 5306.304(a) )

Date

05 Jul 2017

Program Mgr / 409 SCMS

Signature

Date

Contracting Officer

Date [ Title ] [ Name ] [ Office Symbol, Phone Number ]

Signature

APPROVAL (AFFARS 5306.304(a) )

Date

Contracting Officer

Date [ Title ] [ Name ] [ Office Symbol, Phone Number ]

Digitally signed by

I. Contracting Activity.

This Justification and Approval to request authority for Other Than Full and Open Competition (OTF&OC) supports requirements generated for the Air Force Sustainment Center (AFSC), 638 Supply Chain Management Group (SCMG), 409 Supply Chain Management Squadron (SCMS) / GUMAA. The contracting activity for this requirement is AFSC/PZAAB. The purchase request number supporting this contracting action is FD2060-19-00005.

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 6.302-1, 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 requirements contract with 5 one-year ordering periods at an estimate of . This document describes a J&A for the award of a contract with Firm Fixed Price contract line items (CLINS) for the repair of the Personal Computer Interface Unit (PCIU), NSN 7021-01-561-5734UC, with Best Estimated Quantities (BEQs) of 34 for each ordering period. This sole source requirement will be procured from the following company:

Miltope Corporation 3800 Richardson RD Hope Hull, AL 34017 Cage Code: 54418 Point of Contact: Tom Bradley Phone: 334-613-6390

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

The Air Force has a depot level repair requirement for the PCIU, NSN 7021-01-561-5734UC. The PCIU provides operator interface with the aircraft onboard embedded diagnostics system. The PCIU is used for in-flight situational awareness of subsystem health and reports BIT codes while attached to a swivel base mounted on the C-5 navigator's table.The total estimated contract value is . All requirements are for Depot Level Repair. The contractor shall repair all reparable carcasses and return to the Air Force within the contract delivery schedules. The period of performance for this repair requirement will be 5 years (5 one year ordering periods) to start on or before 1 November 2018 and end 1 November 2023.

Defense Working Capital Fund (DWCF) 97X4930 will be used for this effort. The following is the NSN and estimated requirements and values for that NSN, including all ordering periods, and the estimated value of the entire acquisition.

Print Out Unit Ord Period 1 Ord Period 2 Ord Period 3 Ord Period 4 Ord Period 5 Total Est BEQ Repair QT 34 34 34 34 34 Est Repair Unit Price ( Est Total Repair Est No Fault Found Qty 1 1 1 1 1

Est NFF Unit Price (4%) Est NFF Total Est BER Qty 1 1 1 1 1 Est BER Unit Price (4%) Est BER Unit Total

Total

Total Contract Cost

The items associated with this effort are currently covered through contractor logistics support (CLS) contract, FA8525-16-D-0003, managed by Lockheed Martin, set to expire on 31 Jan 2021. Lockheed Martin is performing the repair of the NSN until the government establishes a repair contract. The first ordering period repair costs, No Fault Found (NFF) costs, and Beyond Economical Repair (BER) costs were based on costs in the previous CLS contract (FA8525-13-D-0001) since the pricing is not complete on the current CLS contract. The previous CLS contract was executed on 1 Feb 2013 and expired on 31 Jan 2016. Out year unit costs were inflated at a rate of 4%, based on the price associated with the final option of the previous CLS contract. A NFF contract line item number (CLIN) will be included in the contract for any units sent to the contractor and results in no failure mode/fault being detected during the initial testing of a unit. The line item would cover charges for testing and any reinstallation/loading of software/firmware to allow the unit to be determined serviceable condition and returned to the Air Force without any repair.

A Beyond Economical Repair (BER) CLIN will be included to cover any potential condemnations that might incur costs for testing or other work done prior to determining the item is beyond economical repair.

The NSNs have been screened as Repair Method Suffix Code/Repair Method Code (RMSC/RMC) of R3/R which is defined below:

RMSC R: 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.

RMC R: 3- Repair, for the second or subsequent time, directly from the actual manufacturer.

IV. Statutory authority permitting Other than Full and Open Competition.

10 USC 2304(c)(1), as implemented by FAR 6.302-1, Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements. This acquisition will follow procedures of FAR 13.5 Simplified Procedures for Certain Commercial Items.

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 and services available from

Miltope Corporation. The technical data for these items is proprietary to Miltope Corporation. The government contacted Miltope Corporation on 20 March 2017 via email asking whether or not it was willing to sell the data rights associated with the PCIU; the response on 20 March 2017 was that Miltope Corporation would not be willing to the sell the data rights to maintain the PCIU. Due to DMS (Diminishing Manufacturing Sources) issues associated with some of the PCIU components, LCMC (Life Cycle Management Center) plans to replace the current configuration in approximately 2022-2023.

Lockheed Martin no longer functions in the CLS item management role for these items. Management has transitioned to the U. S. Air Force (USAF). As part of the management transition, Lockheed Martin will continue to provide repair services for these items through its CLS contract for 30 months after AFSC assumes item management or when AFSc establishes a repair contract, which ever comes first. Lockheed Martin will no longer be involved in the repair of these items because the U S Air Force will have assumed item management of the items and established its own repair contract with Esterline Federal.

Miltope Corporation possesses unique capabilities demonstrated as follows:

Only Capable Source: Miltope Corporation is the only qualified source for these highly specialized repairs which require extensive knowledge of the technical design techniques. The test equipment required are possessed only by Miltope Corporation and the engineering data package that includes assembly, schematic, and test procedures for these items. The Government does not possess the internal technical drawings for the PCIU.

Depot Source of Repair (DSOR): A workload shift, DSOR 12-144F, was accomplished in May 2013 identifying the PCIU SOR as contractor repair as opposed to organic repair. The shift of this workload from organic to contract repair was based on the decision that it was uneconomical to stand up organic repair capability.

Reverse Engineering: AFSC engineering performed an analysis to determine the estimated costs to reverse engineer the PCIU. Based on expected service life of the current PCIU configuration, the analysis determined the Government would not recoup the reverse engineering investment for these items. The analysis of the PCIU is as follows:

PCIU: Because there is no comparable effort in which to base the reverse engineering costs, the cost estimate is based on engineering experience. It is anticipated that a reverse engineering effort would cost the Government an estimated The current repair cost of the PCIU is approximately Assuming that a reverse engineering effort was successful and competition resulted in a 20% reduction in cost, the new repair price would be per unit. The repair requirement of the PCIU is estimated to be 170 units through the year 2023, the approximate date that the current configuration is to be replaced.

Based on the below breakeven analysis, reverse engineering would result in through 2023. The Government would need to contractually repair 4,125 units in order to cover the costs associated with reverse engineering the PCIU. At the current estimated rate of repair, the Government would not break even until the year 2139; the current PCIU configuration is scheduled for replacement in 2023. If the Government repaired the anticipated 300 units then its profit/loss would be . The government would not be able to recoup the cost associated with a redesign effort based on the estimated demand and the projected life expectancy of the existing PCIU configuration.

Additionally, qualifying a new source would include new supplier startup, performing vendor qualification, first article testing, acceptance testing, and flight tests for each of the items. The time involved with this process could be from 3-5 years which would severely cripple the ability to support the warfighter's C-5 repair requirements and would also encroach upon the planned serviceable life expectancy of the current configuration of the PCIU, 2023. Due to the critical demand, limited schedule, and cost, it is not in the Government's best interests to develop another qualified source. Due to these restrictions, this repair effort should be sole source to Miltope Corporation.

Accordingly, Miltope Corporation is the only firm capable of providing the services described in Section III above without the U.S Air Force experiencing substantial duplication of cost not expected to be recovered through competition.

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

A Request for Information (RFI) to industry was posted to Federal Business Opportunities (FedBizOpps) for 13 April 2017, reference number C-5-PCIU-19-00005. Closing date was 28 April 2017. The RFI was specific to the NSN referenced in Section III and repair NAICS code 811212 Computer repair and maintenance services, without retailing new computers . Descriptions for each NSN were provided in the C5_RFI.pdf outlined as repairs for each. The Government received no responses to the RFI posting.

This requirement will be synopsized on the FedBizOpps website as required by FAR 5.201, citing conditions which preclude full and open competition. Sources expressing an interest as a result of the synopsis will be investigated for their capabilities to perform on this and/or future requirements and identified to Honeywell for possible subcontracting opportunities.

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

The overall price of this acquisition will be determined fair and reasonable to the Government. The PCIU is deemed a commercial item Per Far Part 2.101 because it is of a type customarily used by, sold to, or offered for sale to the general public for other than governmental purposes. Given this is a commercial acquisition utilizing FAR 13 Simplified Acquisition Procedures, Certified Cost or Pricing Data is not required. To determine prices fair and reasonable, price analysis techniques in accordance with FAR 13.106 will be utilized: market research; comparison of the proposed price with prices found reasonable on previous purchases; current price lists, catalogs, or advertisements; comparison with similar items in a related industry; and comparison to an independent Government estimate.

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

Market research was concluded for the PCIU on 20 June 2017. The market research was conducted as outlined by FAR 10.002 using the following methods: Government engineering data searches, internet searches, and issuance of a RFI to industry. There was no available procurement history available for the item associated with this repair requirement; the items have never been procured by AFSC. Due to the C-5 specific characteristics associated with this item and the lack of Government owned technical data, the only source able to perform the repairs is Esterline Federal. The Government conducted the following marketplace and database queries during its market research:

http://www.thomasnet.com/products/ http://dsbs.sba.gov/dsbs/search/dsp_quicksearch.cfm https://carltontechnologies.com/ https://carltontechnologies.com/ https://www.acromag.com/ http://meicomputer.com/ http://mymiltope.com/ http://www.psi-online.com/

A Request for Information (RFI) to industry was posted to Federal Business Opportunities (FedBizOpps) for 13 April 2017, reference number C-5-PCIU-19-00005. Closing date was 28 April 2017. The RFI was specific to the NSN referenced in Section III and repair NAICS code 811212 Computer repair and maintenance services, without retailing new computers . Descriptions for each NSN were provided in the C5_RFI.pdf outlined as repairs for each. The Government received no responses to the RFI posting.

Vendor Survey queries for the PCIU resulted in approximately 47 potential sources. The companies responded to the survey, but did not possess the data or facilities required for repair of the PCIU, therefore were determined “not capable.”

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 Government does not own the data rights; Miltope Corporation is not willing to sell the data required to repair these items. The feasibility of purchasing the data could not be ascertained due to the vendor's failure to provide a quote for the sell of the data. The expected life of the C-5 aircraft is 2040; however the serviceable life of the current configuration PCIU is estimated to be 2022-2023. Due to DMS (Diminishing Manufacturing Sources) issues associated with some of the PCIU components, LCMC plans to replace the current configuration beginning in 2022-2023. Considering this pending configuration change and DMS issues, the Government would not be able to recoup the costs associated with reverse engineering and qualifying a new repair source. This effort would require 3-5 years to accomplish and negatively impact repair support for the Warfighter. The DSOR for the PCIU determined a shift in workload from the projected organic to contractor repair because it would be uneconomical to stand up an organic repair capability.

Based on the AFSC Engineering breakeven analysis for the PCIU, it was determined to not be cost effective to invest in a reverse engineering effort. Based on the quantities projected for repair, the breakeven year for the current configuration PCIU, scheduled for replacement in 2022-2023, is 2139. Due to the costs and time associated with attempting to qualify new repair sources for this item, the negative break even costs associated with reverse engineering, and the obsolescence issue, there is no feasible action that the Government can pursue to overcome barriers to competition since there will be no future acquisitions of this PCIU configuration.

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.