Redacted J&A_Redacted 20-D-0003.pdf

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

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I. Contracting Activity.

This Justification and Approval is to request authority for Other Than Full and Open Competition (OTF&OC) supporting requirements generated for the Air Force Sustainment Center (AFSC), 638 Supply Chain Management Group (SCMG), 409th Supply Chain Management Squadron (SCMS/ GUMBB). The contracting agency and organizational activity, which is responsible for the proposed contracting action, is the Air Force Sustainment Center (AFSC/PZAAB). The purchase request number supporting this contracting action is FD2060-19-00025.

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

Due to the circumstances described herein, the activity requests authority to acquire the repairs 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 follow-on Requirements Indefinite Delivery contract (IDC) which will utilize a Firm-Fixed Price (FFP) pricing arrangement. This contract will be for five years, consisting of a one (1) year basic and four (4) annual ordering periods. The ordering validity of this IDC is projected to be five years from date of contract award which is anticipated to be 30 September 2019.

This sole source requirement will be purchased from the following company:

L-3 Aviation Products Inc.

1355 Bluegrass Lakes Pkwy

Alpharetta, GA 30004-8458

CAGE: 63516

Large Business

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

This requirement is for the repair of the C-130H Aircraft Electronic Flight Instrument (EFI) and the Radar Display Unit (RDU), National Stock Numbers (NSNs) 6610-01-487-3794LG, Part Numbers (P/ Ns) 429300-000/001/300, NSN 6610-01-498-0524LG, P/N 429300-100 and NSN 5841-01-517-7518LG, P/N 427300-200. These services include teardown, analysis, repair, testing, and procurement of spare components, packaging, handling, storage, transportation, as well as data collection, engineering support and services. The repair and testing of these items are to be to Original Equipment Manufacturer (OEM) specifications with return of the assets in Ready-for-Issue

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(RFI) condition while meeting required performance thresholds. These services will specifically benefit customers such as the United States Air Force (USAF), Navy, and Coast Guard to meet mission needs and increase readiness of the C-130H fleet.

The validity period of this IDC is anticipated to be from 30 September 2019 through 29 September 2024. Table 1 below provides the anticipated Best Estimated Quantities (BEQs) per ordering period and the overall estimated value of this acquisition. The BEQs associated with this acquisition may increase based on necessity within the duration of this contract and therefore will be determined as in-scope actions supported by this J&A. The delivery schedule for the assets are to begin 30 days After Receipt of Order (ARO) for quantities as indicated.

TABLE 1

*NFF No Fault Found *BER Beyond Economic Repair

NSN 5841-01-517-7518LG - Radar Display Unit

NSN 6610-01-498-0524LG-Radar Display Unit

PERIOD BEQ Estimated Estimated Estimated Unit Price Total Price BER/NFF/RETOK*

NSN 6610-01-487-3794LG - Electronic Flight Indicator

PERIOD BEQ Estimated Estimated Estimated

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Unit Price Total Price BER/NFF/RETOK*

The estimated value of this IDC is The estimated value and the unit repair cost identified is based on historical repair cost data from previous contracts (FA8538-14-D-0006 and FA8538-14-D-0011). Additionally a 5% per year escalation rate as computed by the Automated Budget Compilation System (ABCS) has been applied. Based on the Department of Labor (DOL) website, a 3-5% escalation rate is also considered the norm. This requirement will be funded by the Material Support Division (MSD) CSAG 4930 appropriation.

The RMC/RMSC code for all listed items is R3D, which means repair for the second or subsequent time, directly from the actual manufacturer. The data to compete contract repair is not physically available, it cannot be obtained economically, nor is it possible to draft adequate specifications or any other adequate, economical description of the repair for competitive solicitations. Expiration date for the RMC/RMSC code is 07 Feb 2022.

The nominal Contract Line Item Numbers (CLINs) are as follows:

CLIN DESCRIPTION COST TYPE

CLIN 0001 Repair FFP

CLIN 0002 NFF NSP

CLIN 0003 BER NSP

CLIN 0004 Repair FFP

CLIN 0005 NFF NSP

CLIN 0006 BER NSP

CLIN 0007 Repair FFP

CLIN 0008 NFF NSP

CLIN 0009 BER NSP

CLIN 0010 Over & Above NSP CLIN 0011 Data NSP CLIN 0012 Material CPFF

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*NFF No Fault Found *BER Beyond Economic Repair

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 responsible sources 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 C-130H EFI and RDU are considered highly specialized items or systems as they display critical navigation information to the pilot and co-pilot to assist in aircraft navigation. The EFI processes flight data, such as attitude, altitude, air speed, barometric pressure, and displays the results. The RDU specifically is responsible for providing radar displays or electro-optic imagery on CRT monitors. It is designed to operate with the AN/APN-241 radar and is used for the coordination of aircraft operations. L-3 Aviation Products Inc., as the Original Equipment Manufacturer (OEM) of the EFI and RDU, is the only capable source of satisfying agency needs through their unique proprietary capabilities and qualifications associated with these items as demonstrated in the following paragraphs.

L-3 Aviation Products Inc., as the OEM, is the only Government approved repair source as no other company has access to the proprietary data in order to be approved as an alternate source of repair for these items. The Government possesses no repair data on these items in its Joint Engineering Data Management Information and Control System (JEDMICS) repository or Technical Order Library to facilitate competition. L-3 Aviation Products Inc. possesses the proprietary test equipment and data to test and repair these items to meet the required military specifications. The latest attempt by the Government to procure the proprietary technical data rights from L-3 was on 10 September 2018. L-3 Aviation Products Inc. responded to the Government advising they were unwilling to sell the technical data package or rights to it.

Historical data reflects that the USAF has a long history of repair of the EFI and RDU with the OEM.

L-3 most recently was awarded two (2) sole source repair contracts on 25 July 2014. These contracts, FA8538-14-D-0006 and FA8538-14-D-0011, are set to expire on 24 January 2020 with the inclusion of clause 52.217-8 Option to Extend Services. Therefore, this acquisition will be a follow-on for the continued repair service of these highly specialized items/ subsystems in support of the C-130H aircraft until the C-130 Avionics Modernization Program (AMP) replaces their use in 2023.

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's requirements. The items complexity and lack of adequate data for the repair, certification and validation testing has resulted in the determination that undertaking a reverse engineering (RE) effort is not economical or beneficial to the Government. Components for repair of the EFI and RDU hardware are still in production, and upgrades to output configuration, obsolescence issues, and test equipment supportability are performed by L-3 Aviation Products Inc. Repair capability and capacity

March 2018 Security Marking (select from the drop-down list) Page 6 of 9 by the OEM, L-3, adequately address sustainment requirements. As mentioned previously the remaining lifecycle of these subsystems is 2023 as the C-130 Avionics Modernization Program (AMP) program is expected to replace their use; however use and the repairs of these systems are required until that time. The estimated reverse engineering costs are based on similar Engineering Projects such as Re-engineering (RE) the 712420-3/7 Caution Advisory Panel (CAP), Project Number 3939. The estimated costs for both the EFI and RDU and their anticipated ROI are displayed below:

To conduct an RE effort for EFI NSN 6610-01-487-3794LG it will take approximately 18 to 24 months to compete at an estimated cost of $2M. The breakout for Return on Investment (ROI) is as follows:

o $12,045/unit at 220 units repaired per year = $2,649,900:

saving 30% due to new design RE, $2,649,900 * .3 = $794,970: So $2M/$794,970 ~ 2.5years

To conduct an RE effort for RDU NSN 6610-01-498-0524LG it will take approximately 18 to 24 months to complete an estimated cost of $1.5M. The breakout for Return on Investment (ROI) is a follows:

o $12,045/unit at 66 units repaired per year = $794,970:

saving 30% due to new design RE, $794,970 * .3 = $238,491: So $1.5M/$238,491 ~ 6.2 years to see a return on investment.

To conduct an RE effort for RDU NSN 5841-01-517-7518LG it will take approximately 18 to 24 months to complete an estimate cost of $1.3M. The breakout for Return on Investment (ROI) is as follows:

o $9,654/unit at 25 units repaired per year= $241,350: saving 30% due to new design RE, $241,350 *.3 = $72,405: So $1.3M/$72,405

17.9 years to see a return on investment.

The total reverse engineering estimate is $4.8M. It will take approximately 18 to 24 months each to reverse engineer the individual NSNs. Additionally, it will also take 18 to 24 months to solicit for new repair source(s), finalize a contract award, and to receive and approve first articles before repair service can begin. No other contractual vehicles are in place to repair these items to support this requirement. The Government is less likely to receive any project funding considering the lack of return on investment prior to end of life of the subsystems (2023). Therefore the time and cost to reverse engineer as well as to qualify another source is not a feasible option for this instant acquisition without negatively impacting the C-130H customer mission(s).

Accordingly, L-3 Aviation Products Inc. is the only source capable of providing the supplies and services described in Section III above without the U.S. Air Force experiencing substantial duplication of cost that could not be expected to be recovered through competition and unacceptable delays in fulfilling its' requirements.

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

A Sources Sought (SS)/Request for Information (RFI) synopsis was posted to Federal Business Opportunities (FedBizOpps) on 29 August 2018 with a response date of 29 September 2018 under Solicitation Number RFI-C-EFI-RDU. The SS/RFI requested responses from interested vendors that possess the expertise, capabilities, and experience to meet qualification requirements for this effort.

No vendors responded to the SS/RFI.

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. Although the Government does not own data to support repair of the C-130H Aircraft EFI and RDU from any other source, any source who responds to the Government as a result of this synopsis will be identified to the prime contractor as a potential for subcontracting possibilities.

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 to support the Government's evaluation of the proposed cost. The proposed skill mix of labor, labor hours, types and quantities of material and other direct costs, and direct and indirect rates will be negotiated by the Government based on recommendations from the 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 price 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.

A detailed market research was conducted in accordance with FAR 10.001 and FAR 10.002 and was completed 25 October 2018. Market research techniques used are as follows:

As described in Section VI above, a SS/RFI was posted to FedBizOpps advising industry of the pending acquisition and soliciting inquiries from interested vendors. The SS/RFI was posted on 29 August 2018 under Solicitation Number RFI-C-EFI-RDU. The Government received no responses to the SS/RFI.

Market research consisted of researching Government data bases (LIMS-EV and PRPS) as well as various Internet sites (IHS Haystack, GSA Advantage, and Google) using key words “flight unit display, radar display unit, radar target indicator, flight information display unit” combined with searches for the appropriate P/N and NSN. A search for HUB zone and Service Disabled Veteran Small Business (SDVOSB) was conducted using the Dynamic Small Business search engine. Vendor

March 2018 Security Marking (select from the drop-down list) Page 8 of 9 information was obtained from the System for Award Management (SAM) database. Additionally the Government North American Industry Classification Systems (NAICS) code of 334511 was referenced to focus the research.

The Government IPT also corresponded with the OEM to determine their present status with respect to these items. Currently there are no other companies besides the OEM that are listed as an approved source for the RDU and EFI as all other sources lack the proprietary data for repair.

The subject NSNs for repair are used exclusively on the C-130H aircraft by the USAF, AFR, ANG and USN. These NSNs are not commercial items due to special military specifications and do not fit the definition of a commercial item as defined in FAR Part 2.101.

The market research conducted revealed that L-3 Aviations Product Inc., the OEM, is the only capable source of fulfilling this instant acquisition due to the proprietary rights associated with the EFI and RDU subsystems.

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 EFI and RDU subsystems are scheduled to remain operational to 2023 until their replacement by the AMP program. It is anticipated that there will be need for repair through 2023. Full and open competition is not a viable solution as an engineering evaluation has determined the cost to reverse engineer the EFI and RDU as uneconomical. The ROI for this system would not occur until after the end of the life cycle, 2023.

The prior J&A's plans to remove barriers to competition referenced that the Government would continue attempts to acquire rights to technical data and drawings with additional requests for proposal to upper management within L-3 Aviation Products Inc. The latest attempt made by the Government to acquire technical data rights from L-3 occurred on 10 September 2018 in which L-3 declined. While the current market research indicates a sole source environment for the repair of the EFI/RDU, the Government will continue to engage with L-3 Aviation Products Inc., at the beginning of each ordering period to determine the feasibility of procuring the data rights in order to promote full and open competition or to establish an organic repair capability before 2023, the end of the life cycle of the systems. Based on the above actions, the prior J&A's plan to remove barriers to

March 2018 Security Marking (select from the drop-down list) Page 9 of 9 competition was accomplished therefore higher level approval of this instant J&A is not required in accordance with DFARS PGI 206.304(a)(S-70)(ii).

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.