Redacted_J&A.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:

Contracting Activity: AFSC/PZAAB

Purchase Request / Local ID Number: FD2060-16-00283

Program / Project (and PE, if applicable): C-5 Honeywell Avionics

Program Type (PEO or Other Contracting): Other Contracting

Authority (include full title):

10 U.S.C. 2304(c)(1) as implemented by FAR 6.302-1, 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

07 Nov 2016

Program Mgr / Requiring Activity

Signature

Date

07 Nov 2016

Contracting Officer

Date

09 Nov 2016

APPROVAL (AFFARS 5306.304(a) )

Date

09 Nov 2016

Competition Advocate

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 FD2060-16-00283.

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 a basic year plus four one-year ordering periods. These sole source repair requirements will be accomplished by the following company:

Honeywell International Inc. (Cage Code: 94580)

2600 Ridgway Pkwy

Minneapolis, MN, 55413-1719

Large Business

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

The Air Force has repair requirements for the Low Noise Amplifier/Diplexer (Diplexer), NSN 5985-01-492-6331UC, Data Link Printer (DLP), NSN 7025-01-490-0096UC, High Power Amplifier (HPA), 5996-01-492-6330UC, Micro Inertial Reference System (MIRS), 6605-01-500-6802UC, and Satellite Data Unit (SDU), 5895-01-501-5901UC. The Diplexer amplifies and filters incoming and outgoing signals for proper system operation. The Diplexer establishes the noise floor for the communication system by boosting the signals and noise received from the antenna to a level much greater than the noise level of components in the receive path. The DLP is a general purpose, high performance, airborne message, and thermal line printer. The HPA is a class AB linear amplifier that provides Radio Frequency (RF) power amplification of L-band signals generated by the SDU to a power level required for transmission to the satellite. The MIRS is an inertial reference unit which serves as a third source of attitudes, rates, accelerations, and heading, providing a fail-operative capability for systems using these outputs. The SDU provides an interface to all aircraft avionics and implements all functionality associated with modulation, demodulation, error correction, channel rate selection, RF translation, and channel frequency selection for four communication channels.

J&A Attachment 1 lists the NSNs and estimated requirements and values, including all options. 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 projected period of performance (PoP) for this effort is Sep 2017 - Sep 2022. Defense Working Capital

Fund (DWCF) will be used for this effort.

The items associated with this effort are currently covered through contractor logistics support (CLS) contract, FA8525-16-D-0003, managed by Lockheed Martin. The basic year 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. Out year unit costs were inflated at a rate of . 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 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 (REPAIR METHOD SUFFIX CODE):

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 (Repair Method Code) 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.

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 Honeywell. The technical data for these items is proprietary to Honeywell. Per an email received from Honeywell on 4 April 2016, Honeywell declined to sell the proprietary repair data associated with each of these items. 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 subcontract to Honeywell.

This continued repair coverage will end once AFSC establishes repair coverage directly with Honeywell.

Lockheed Martin will no longer be involved in the repair of these items because the U S Air Force has assumed management of the items and established its own repair contract with Honeywell.

Honeywell possesses unique capabilities demonstrated as follows:

Only Capable Source: Honeywell 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 Honeywell and the engineering data package that includes assembly, schematic, and test procedures for these items. Honeywell has been our source of repair (SOR) for the Diplexer, MIRS, SDU, HPA, and DLP for over ten years. The Diplexer, MIRS, SDU, and DLP are currently used exclusively on the C-5 aircraft. The Government does not possess the internal technical drawings for any of these components.

Depot Source of Repair (DSOR): A workload shift, DSOR 11-308, was accomplished in August 2012 identifying the Diplexer SOR as contract support. A workload shift, DSOR 11-309, was accomplished in May 2014 identifying the MIRS SOR as contract support. A workload shift, DSOR-14-076-F, was accomplished in September 2015 identifying the SDU SOR as contract support. A workload shift, DSOR 14-076F, was accomplished in September 2015 identifying the HPA SOR as contract support. A workload shift, DSOR 11-300, was accomplished in August 2012 identifying the DLP SOR as contract support. The shift of these workloads from organic to contract repair was based on the decision 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 Diplexer, MIRS, SDU, HPA, and DLP. Based on expected service life of the C-5 aircraft through year , the analysis determined the Government would not recoup the reverse engineering investment for these items. The analysis of each item is as follows:

Diplexer: Based on engineering experience and past reverse engineering efforts, it is anticipated that a reverse engineering effort would cost the Government an estimated . The current repair cost of the Diplexer is approximately . Assuming that a reverse engineering effort was successful and competition resulted in a reduction in cost, the new repair price would be per unit. The repair requirement of the Diplexer is estimated to be units through the year 2040. Based on the below breakeven analysis, reverse engineering would result in revenue loss of through 2040. The Government would need to contractually repair 5,188 units in order to cover the costs associated with reverse engineering the Diplexer.

At the current estimated rate of repair, the Government would not break even until the year .

MIRS: Based on engineering experience and past reverse engineering efforts, it is anticipated that a reverse engineering effort would cost the Government an estimated . The current repair cost of the MIRS is approximately . Assuming that a reverse engineering effort was successful and competition resulted in a reduction in cost, the new repair price would be per unit. The repair requirement of the MIRS is estimated to be units through the year . Based on the below breakeven analysis, reverse engineering would result in revenue loss of through . The Government would need to contractually repair units in order to cover the costs associated with reverse engineering the MIRS.

At the current estimated rate of repair, the Government would not break even until the year .

SDU: Based on engineering experience and past reverse engineering efforts, it is anticipated that a reverse engineering effort would cost the Government an estimated . The expected serviceable life of the C-5 airframe is the year . The current repair cost of the SDU is approximately . Assuming that a reverse engineering effort was successful and competition resulted in a reduction in cost, the new repair price would be per unit. The repair requirement of the SDU is estimated to be units through the year . Based on the below breakeven analysis, reverse engineering would result in revenue loss of through . The Government would need to contractually repair units in order to cover the costs associated with reverse engineering the SDU. At the current estimated rate of repair, the Government would not break even until the year .

HPA: Based on engineering experience and past reverse engineering efforts, it is anticipated that a reverse engineering effort would cost the Government an estimated . The expected serviceable life of the C-5 airframe is the year . The current repair cost of the HPA is approximately . Assuming that a reverse engineering effort was successful and competition resulted in a reduction in cost, the new repair price would be per unit. The repair requirement of the HPA is estimated to be units through the year . Based on the below breakeven analysis, reverse engineering would result in revenue loss of through 2040. The Government would need to contractually repair units in order to cover the costs associated with reverse engineering the HPA. At the current estimated rate of repair, the Government would not break even until the year .

DLP: Based on engineering experience and past reverse engineering efforts, it is anticipated that a reverse engineering effort would cost the Government an estimated . The expected serviceable life of the C-5 airframe is the year . The current repair cost of the DLP is approximately . Assuming that a reverse engineering effort was successful and competition resulted in a reduction in cost, the new repair price would be per unit. The repair requirement of the DLP is estimated to be units through the year . Based on the below breakeven analysis, reverse engineering would result in revenue loss of through . The Government would need to contractually repair units in order to cover the costs associated with reverse engineering the DLP. At the current estimated rate of repair, the Government would not break even until the year .

Accordingly, Honeywell 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 22 March 2016, reference number FA8538-16-00283-C5. Closing date was 22 April 2016. The RFI was specific to NSNs referenced in Section III and repair NAICS code 811219 Repair and Maintenance - Other Electronic and Precision Equipment Repair and Maintenance. Descriptions for each NSN were provided in the C5_RFI.pdf outlined as repairs for each. The Government received one generalized response to the RFI “Interested Vendor”; however, the respondent capability could not be determined from this response. Attempting to perform due diligence, an email was sent to the vendor on 29 July 2016 asking which of the items associated with this repair effort the company was interested in and if the company was able to repair the item(s). The Government never received a response from the vendor, therefore they were deemed “not capable.”

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 anticipated cost will be determined fair and reasonable based upon FAR 15 negotiation procedures using price and/or cost analysis. The contractor will be required to submit certified cost or pricing data in accordance with FAR 15.403-4. A comprehensive analysis will include a technical evaluation of the proposal, use of recommendations from Defense Contract Management Agency (DCMA), and advice from expert technical personnel supporting the program.

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 separately for each NSN. Market research was concluded for the Diplexer, DLP, HPA, MIRS, and SDU on 26 October 2016. 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 items associated with this repair requirement; the items have never been procured by AFSC. Due to the C-5 specific characteristics associated with these items and the lack of Government owned technical data, the only source able to perform the repairs is Honeywell. 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

• http://www.klmicrowave.com/products2.php?c1_id=3

• http://www.amplitechinc.com/search.php?NOISE=2.00

• http://www.anatechelectronics.com/catalogsearch/result/?q=diplexer

• http://www.irwin-ind.com/manufacturer/seiko_instruments.htm

• http://www.summitavionics.com/mips313g.html

• http://www.l-3com.com/

• http://www.raytheon.com/

• http://www.pasternack.com/default.aspx?

• http://inertiallabs.com/

• http://www.novatel.com/products/span-gnss-inertial-systems/

• http://www.spartonnavex.com/products/

• http://www.satcoms.com/

A Request for Information (RFI) to industry was posted to Federal Business Opportunities (FedBizOpps) for 22 March 2016, reference number FA8538-16-00283-C5. Closing date was 22 April 2016. The RFI was specific to NSNs referenced in Section III and repair NAICS code 811219 Repair and Maintenance - Other Electronic and Precision Equipment Repair and Maintenance. Descriptions for each NSN were provided in the C5_RFI.pdf outlined as repairs for each. The Government received one generalized response “Interested Vendor” to the RFI; however, the respondent's capability could not be determined from the response. The vendor did not complete the questionnaire associated with the RFI, which is used to determine the company's capabilities. An email was sent to the vendor on 29 July 2016 asking which of the items associated with this repair effort the company was interested in and if the company was able to repair the item(s). The vendor never responded therefore they were deemed “not capable.”

Vendor Survey queries for the Diplexer resulted with 3 potential sources. One of the companies responded to the survey, but did not possess the data or facilities required for repair of the Diplexer, therefore were determined “not capable.”

Vendor survey queries for the HPA resulted in 3 potential sources. Two companies responded to our survey, but did not possess the data or facilities required for repair of the HPA, therefore were determined “not capable.”

Vendor survey queries for the MIRS resulted in 3 potential sources. Two companies responded to our survey, but did not possess the data or facilities required for repair of the MIRS, therefore were determined “not capable.”

Vendor survey queries for the DLP resulted in 2 potential sources. One company responded to our survey, but did not possess the data or facilities required for repair of the DLP, therefore were determined “not capable.”

Vendor survey queries for the SDU resulted in 3 potential sources. One company responded to our survey, but did not possess the data or facilities required for repair of the SDU, therefore were determined “not capable.”

The market research concluded Honeywell is the only capable source for buy and repair services for these items. The data packages associated with the repair of these items is proprietary to Honeywell. Qualifying a new source would include new supplier startup, performing qualification, first article testing, acceptance testing, and flight tests for each of the items. The time involved with this process could be from years which would severely cripple the ability to support the warfighter's C-5 repair requirements. 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 Honeywell.

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 and the contractor is not willing to sell the data required to repair these items. The Government will send inquiry to Honeywell prior to each ordering period requesting their interest in selling the technical data to the Government for any future requirement. The expected life of the C-5 aircraft is . DSORs for the Diplexer, DLP, HPA, MIRS, and SDU determined a shift in workload from the projected organic to contract repair because it would be uneconomical to stand up an organic repair capability.

Based on the AFSC Engineering breakeven analysis for each NSN, it was determined to not be cost effective to invest in a reverse engineering effort. Based on the quantities projected for repair, the breakeven years ranged from year . Due to the costs and time associated with attempting to qualify new repair sources for each of these items and the negative break even costs associated with reverse engineering these items, the only feasible action that the Government can pursue to overcome competition barriers for future repair requirements is to continue trying to acquire the proprietary data needed to compete the repair efforts for the Diplexer, DLP, HPA, MIRS, and SDU.

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.