Final_J A_redactions.pdf

JUSTIFICATION FOR OTHER THAN

FULL AND OPEN COMPETITION

I. CONTRACTING ACTIVITY

This document provides justification and requests approval for the use of Other Than Full and Open Competition procedures and supports requirements generated for the Air Force Life Cycle Management Center, Agile Combat Support Directorate, Electronic Warfare/Avionics Division

(AFLCMC/WNY).

The contracting activity for this requirement is:

Air Force Life Cycle Management Center Electronic Warfare/Avionics Contracting Branch (AFLCMC/WNKCB) 235 Byron St., Suite 19A Robins AFB, GA 31098-1670

The primary purchase request number supporting this contracting action is FD2060-14-30576.

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

a. Source(s): ITT Exelis (CAGE: 1D522 (Classified), 28527 (Unclassified)) 77 River Road Clifton, NJ 07014-2099 Large Business

b. Requirement: Engineering Services; Cost Plus Fixed Fee and Firm Fixed Price

c. In support of the AN/ALQ-172(V) Countermeasures System

d. Type Requirements: Air Force

e. Period of Performance: 1 basic year, and four (1) one year ordering periods. IDIQ 60 months

ARO, with at least 6 separate delivery orders upon award of basic contract.

III. DESCRIPTION OF THE SUPPLIES/SERVICES REQUIRED TO MEET THE AGENCY’S

NEEDS:

Engineering and technical services describes the products and activities required from the Contractor for AN/ALQ-172(V) Countermeasures System (CMS) Engineering Services. This support modifies the AN/ALQ-172(V) Operational Flight Program (OFP), other system software tools, and support equipment software; provides solutions to sustaining engineering inquiries; and performs system and software deficiency analyses; provides engineering/technical services required to develop Form, Fit and Function (FFF) Shop or Line Replaceable Units (SRU or LRU). These efforts support adequate and complete testing of the AN/ALQ-172(V) OFPs and the situational awareness and self protection capability

This acquisition provides for a five year ID/IQ contract for the AN/ALQ- 172(V) CMS and associated support equipment. The total estimated cost of the contract, including all individual delivery orders, is $71,498,000

Task Descriptions Cost Estimated Period of

Performance (POP) per Task

FY14

AFGSC BC and Non-BC $5,567,000 18 months

AFSOC Deficiency Analysis (DA) for BC $1,590,000 18 months

Enhanced Maintenance Test Set (EMTS) Software Support

EMTS(V)2: $1,500,000 14 months

Sustaining Engineering Services (SES) $685,000 12 months

MARS LRU-10 Final Redesign $26,180,000 24 months

FY15

AFSOC BC and Non-BC $5,567,000 18 months

AFGSC DA for BC $ 1,590,000

18 months

EMTS Software Support

EMTS(V)1/3: $576,000

EMTS(V)2: $576,000

14 months

SES $685,000 12 months

FY16

AFGSC BC and Non-BC $5,567,000 18 months

AFSOC DA for BC $1,590,000 18 months

EMTS Software Support

EMTS(V)1/3: $576,000

EMTS(V)2: $576,000

14 months

SES $685,000 12 months

FY17

AFSOC BC and Non-BC $5,567,000 18 months

AFGSC DA for BC $ 1,590,000 18 months

EMTS Software Support

EMTS(V)1/3: $576,000

EMTS(V)2: $576,000

14 months

SES $685,000 12 months

FY18

AFGSC BC and Non-BC $5,567,000 18 months

AFSOC DA for BC $ 1,590,000

18 months

EMTS Software Support

EMTS(V)1/3: $576,000

EMTS(V)2: $576,000

14 months

SES $685,000 12 months

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TOTAL $71,498,000 60 months

NOTE: All delivery orders are non-severable tasks due to deliverable end items except SES delivery order, which is a severable task and a 12 month period of performance

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 Source, and No Other Supplies or Services Will Satisfy Agency Requirements.

V. DEMONSTRATION THAT THE CONTRACTOR’S UNIQUE QUALIFICATIONS OR

NATURE OF THE ACQUISTION REQUIRES THE USE OF THE AUTHORITY CITED

ABOVE (APPLICABILITY OF AUTHORITY):

This follow–on effort to the original source has been subdivided into the five tasks noted in the paragraph III table. The Air Force's minimum requirements can only be satisfied by the unique services described above, and these services can only be supplied by one supplier with unique capability. The highly specialized services are described for each of the tasks as follows:

to provide development of Block Cycle Software Updates to the AN/ALQ-172(V) OFPs in support of AFGSC and AFSOC requests , the Government has identified that the following documentation set is required for a technical data package to support full and open competition of the basic and delivery orders: System Subsystem Specifications for each AN/ALQ- 172(V) CMS version, Functional Performance Specs for each LRU, Source Control Drawings for SRUs, high-level timing diagrams for signal paths, detailed timing diagrams for radio frequency (RF), video and digital circuits within time-critical signal paths, software requirements specifications for each AN/ALQ-172(V) CMS version, and architectural and detailed design documents for each AN/ALQ-172(V) CMS version.

Knowledge, experience, and supporting data of the programming language is required to perform the OFP updates for the ALQ-172(V) system. The programming language is proprietary to ITT (Exelis). The Government did not purchase a complete technical data package for the AN/ALQ-172(V) CMS upon its inception to support full and open competition of system OFP sustainment.

to provide Sustainment Engineering Support (SES) for other software system products that are directly impacted by or related to the installed AN/ALQ-172 system software.

Analysis of existing requirements and design can be done only by examining the existing source code and system operational behavior. ITT Exelis has been the only commercial source providing these services since the inception of the AN/ALQ-172(V) system into the Air Force inventory in 1976.

Also, the Government currently lacks a complete set of system technical documentation for the AN/ALQ-172(V) system. The system documentation set delivered to the Government is incomplete and inadequate for any other source to satisfy the requirement without a significant familiarization and re-engineering effort.

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1369415880C Highlight continue the process of finalizing the hardware and producing the software necessary to qualify the

ALQ-172 MARS LRU-10

It is also the most expensive LRU to maintain on the aircraft, due to low Mean Time Between Failure (MTBF), ineffective Built-in-tests

), and high repair costs. The MARS LRU-10 hardware was developed by Exelis on contract F09603-01-D-0207. Data was not purchased by the government during the design and prototype contract effort. This Project will complete the software and testing necessary for an operational FFF replacement.

ITT Exelis, AN/ALQ-172(V) Original Equipment Manufacturer (OEM), is the original designer and developer of the AN/ALQ-172(V) Countermeasures System (CMS), and is the only source with the data, skills, and experience necessary to provide the engineering support required. ITT Exelis designed and manufactured the majority of the system Line Replaceable Units (LRUs) and most of the Shop Replaceable Units (SRUs) within the LRUs. ITT Exelis did subcontract the design and production of a limited number of other SRUs and LRU antennas to suppliers that possessed product expertise in specific areas. The Government has relied solely on ITT Exelis for AN/ALQ-172(V) system support since its inception in 1976. ITT Exelis has the requisite skills and knowledge to bridge technical deficiencies in the system documentation needed to complete this effort.

These services are not available in the commercial marketplace because the system has a military application only. No new sources of supply are anticipated as all technical data related to the AN/ALQ-172(V) is, at minimum, restricted Distribution D data and not available to the public (for official use only). Government has unlimited data rights for hardware specific drawings only; not in the software which is required for performance on this effort. No other commercial providers have the necessary system knowledge, computer software language experience, and familiarity with the organizational processes to meet the services requirements. Available data on the AN/ALQ-172(V) is not adequate to provide for Full and Open Competition.

The ALQ-172 components, from SW design to HW components, are tightly intermingled with most system documentation, creating barriers to sanitizing information for release. The ITT (Exelis) proprietary components are so widespread that many small redesign efforts would be required to eliminate proprietary items.

The Government requested that ITT (Exelis) provide a purchase price (if the data does exist) or an estimated cost to develop and deliver a complete technical data package (if the data does not currently exist) in May 2012. Exelis provided an estimated cost of $64.7M and an estimated delivery of greater than 60 months to develop the drawings and specifications through reverse engineering efforts of the hardware and software for system sustainment purposes. ITT (Exelis) provided an updated price estimate on 26 February 2014, with an estimated cost of $72.4M to provide a complete technical package.

The Government 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. The government’s own estimate to develop the complete data package organically by reverse engineering is $40,543,410 and 251,432 labor hours. This estimate is based on an engineering review and analysis of the tasks required to develop the data; the FY14 DMAG rate was used to calculate labor costs.

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The annual AN/ALQ-172 Block Cycle (BC) cost is estimated to be $7M. Assuming the government has the complete data package now and contracting strategy is a full and open competition, then the cost savings over the sole source would be estimated to be less than $1M annually based on 10% reduction in the incumbent’s actual engineering rates or hours. The 10% reduction is based on the engineer’s best estimate and working knowledge of this program and similar efforts. Currently, the projected life cycle of the B-52 is 2048 which provides an overall estimated savings of $34M. Over the next 34 years, the return on investment is not achievable because it would take appropriately $40M to reverse engineer the complete data package and the Government would only save $34M through competition.

Therefore, the government determined it is not in its best interest to procure the complete technical data package for the ALQ-172 System for the purpose of eliminating proprietary rights, and the costs could not be recouped through competition during the lifecycle of the system. Accordingly, ITT (Exelis) is the only firm 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

VI. DESCRIPTIONS OF EFFORTS MADE TO ENSURE THAT OFFERS ARE SOLICITED

FROM AS MANY POTENTIAL SOURCES AS SEEMED PRACTICABLE:

This effort will be synopsized on the Federal Business Opportunities 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 the data to support acquisition of this effort 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, ITT Exelis will be required to provide certified cost and 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, 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 IAW FAR 15.403-4 to ensure that the ultimate cost to the Government is both 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 26 February 2014 pursuant to FAR Part 10.001 and 10.002. A review of previous market research reports for the AN/ALQ-172(V) system was accomplished identifying the original OEM and their areas of specific product expertise. As stated previously, ITT Exelis and their subcontractors maintain configuration control of LRUs, SRUs and support equipment they designed and built. A technical review of each of the original OEM's current capabilities found there was no

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1369415880C Highlight significant change in their capabilities or their ability to be a potential source for AN/ALQ-172(V) sustaining engineering support.

Recognized knowledgeable individuals within Industry and Government were queried to determine if additional sources were available. Electronics and electronic warfare trade journals were reviewed to identify potential sources. An internet search was conducted to identify potential sources that had the technical ability to provide the required services using realistic and generic phrases. A source was considered non-capable and excluded if technical capability or experience was not identified for a similar requirement. A study was also conducted to estimate anticipated costs and schedule requirements to qualify a new source.

Furthermore, an independent assessment was performed by Mercer Engineering Research Center (MERC) in 2013 to determine the feasibility of competing the follow-on software effort the assessment determined it was not viable at this time. As stated previously, the use of a contractor other than Exelis would have sufficient risk as to outweigh any cost reduction anticipated by using another source. This was due to lack of data and the complexity of ALQ-172.

Market Research techniques utilized were: A search using the web pages was conducted to identify contractors that had the technical ability to provide the services: http://www.testmart.com, http://www.ism.ws/, http://www.gsaadvantage.gov,http://www.galaxy.com, http://www.thomasnet.com, www.fbo.gov, http://www.google.com,http://dsbs.sba.gov.

The first 100 hits of each search site were reviewed for potential vendors. Each vendor webpage was examined for their service capabilities and for services they are currently providing or have provided in the past. Vendors that do not provide software engineering services were eliminated from the vendors list. Next, vendors who have no AN/ALQ-172 system operation knowledge were eliminated. Finally, vendors who have no experience with the language were also eliminated.

No new capable sources have been identified. No advertisers in the Association of Old Crow’s monthly magazine, The Journal of Electronic Defense, indicated required capabilities. No Small Businesses were identified using the Small Business Database search engine.

The results of the market research indicated the Air Force's requirements for AN/ALQ-172(V) sustainment engineering support can only be satisfied by the unique capabilities of one supplier, ITT Exelis, the original prime OEM and system integrator for the AN/ALQ-172(V). ITT Exelis suppliers that were identified do not have the system integrator experience and system architecture familiarity to accomplish the requirement.

IX. ANY OTHER FACTS SUPPORTING THE USE OF OTHER THAN FULL AND OPEN

COMPETITION:

No other contractor has the integration and support expertise and (contractor owned) equipment necessary to provide the services required. The Government does not possess the technical expertise or technical data package and associated documentation to train other sources to develop and qualify system OFP software. ITT Exelis is the system designer and developer of the

AN/ ALQ-172(V) system and the only source with the knowledge, expertise and equipment necessary to successfully fulfill the requirements in the engineering task.

An independent study performed by MERC in July 2013 determined the feasibility of competing the follow-on effort to embed the software into the MARS LRU-10 is not viable at this time. They concluded it would not be prudent to open the MARS software development for competition based on the lack of data and the complexity of the ALQ-172 system. They stated the use of a contractor other than Exelis would have sufficient risk as to outweigh any cost reduction anticipated by using another source.

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:

Under this effort, the government plans to purchase the technical data needed for the production of the MARS LRU-10 as outlined in the Performance Work Statement (PWS). This will allow for possible future competition of the production of MARS LRU-10. In addition, the government is currently performing Diminishing Manufacturing Sources and Materials Shortages (DMSMS) studies on LRU-9 and LRU-1. As obsolete parts and subsequent reverse engineering projects are identified, the government will purchase the technical data needed to allow possible future competition of the production and sustainment of these items.

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(a)(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(b)).