Redacted_JA_RSAF__F-15SA_Sustainment.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 Air Force Life Cycle Management Center, Electronic Warfare and Avionics Division, Precision Attack System Program Office for International Sales.

The contracting activity for this requirement is Air Force Life Cycle Management Center, Electronic Warfare and Avionics Contracting Branch. The purchase request number supporting this contracting action is FD2060-12-33747.

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

Due to the circumstances described herein, the activity requests authority to acquire the services listed in this document using Other Than Full and Open Competition prescribed by FAR 6.302- 1(a)(2)(iii)(B), Only One Responsible Source and No Other Supplies and Services Will Satisfy Agency Requirements. This individual Justification and Approval (J&A) authorizes the use of other than full and open competition procedures to award a sole source primarily Firm Fixed Price (FFP), Indefinite Delivery Indefinite Quantity (ID/IQ) contract to Lockheed Martin (LM), 5600 Sand Lake Road, Orlando, Florida, through Lockheed Martin Missile and Fire Control (LMMFC) (CAGE 04939) or one of Lockheed Martin Corporation’s wholly owned subsidiaries, Lockheed Martin Global Inc. (LMGI) (CAGE 1Q1J8) or Lockheed Martin Overseas Corporation (LMOC) (CAGE 0ET18), a Large Business. Prior to proposal submission, LM corporate will determine through which entity to submit its proposal, considering factors such as potential tax liabilities and OCONUS performance requirements. This acquisition is for follow-on sustainment services in support of Sniper Advanced Targeting Pod (ATP), Low-Altitude Navigation & Targeting Infrared for Night (LANTIRN) Navigation Pod (NP), and a new procurement for sustainment services in support of Infrared Search and Track (IRST) for the Royal Saudi Air Force (RSAF).Sustainment includes repair and return activities for Line Replaceable Units (LRUs) for the Sniper ATP, IRST, and LANTIRN NP systems. This requirement also includes procurement of Organizational Level support equipment, Intermediate Level support equipment and a software upgrade to RSAF owned Advanced Deployment Kit Intermediate Level testers to support the forward looking infrared capability, as well as peculiar tool kits, bench stock, depot lay-in parts and data deliverables as stated in Attachment A. Finally, Contractor Engineering Technical Services (CETS) in the Kingdom of Saudi Arabia to support the Sniper ATP, IRST and LANTIRN NPs, to include in- Kingdom on the job training, supply chain management, program management, and product support, are services that will be procured under this requirement. The primary contract type for task orders issued under the contract will be FFP. Task orders may also be issued for Over and Above (O&A) activities, to include crashed pod recovery/permanent repair, bird strikes and unserviceable LANTIRN NPs which must be repaired prior to the upgrade effort. These task orders may be issued on a Cost Reimbursement or Fixed Price basis and represent less than 1% of the total estimated requirement.

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

AGENCY’S NEEDS

This J&A covers a basic contract award for contractor logistics support (CLS) services and supplies in support of the Sniper ATP, LANTIRN NPs and IRST system, purchased under contracts FA8540-12-C-0012 and FA8522-09-C-0006. The services described in Section II will be for a five year period beginning at contract award, approximately December 2014. The period of performance for services on the basic contract will be five years, beginning January 2 2015 and going through December 31, 2019. The overall period of performance will not exceed seven years in order to allow all task orders issued within the five-year ordering period to complete individual task order periods of performance. The value for the instant requirement is estimated to be $182,800,000.00. This estimate is based upon price and availability (P&A) data provided by LM. The Letter of Offer and Acceptance (LOA) SR-D-SAP ( between the United States Government (USG) and the Government of Saudi Arabia is the source of funding for this proposed contract action.

IV. STATUTORY AUTHORITY PERMITTING OTHER THAN FULL AND OPEN

COMPETITION

10 U.S.C. 2304(c)(1) as implemented by FAR 6.302-1(a)(2)(iii)(B), Only One or a Limited Number of 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)

A. Foreign Military Sales The services and supplies covered by this J&A are a part of the largest Foreign Military Sale in U.S. history, under the RSAF F-15S Fleet Modernization Program (FMP) effort as described in the Defense Security Cooperation Agency notification to Congress, transmittal No. 10-43, dated October 20, 2010. While LOA SR-D-SAP source directed the procurement of Sniper ATPs, IRST systems and LANTIRN NP upgrades to Lockheed Martin, the Original Equipment Manufacturer (OEM), the sustainment services and associated equipment are not source directed in the LOA. The Sniper ATP was competitively acquired as a Non-Developmental Item (NDI) in 2000 and the USG did not purchase the Sniper ATP re-procurement nor repair data.

Additionally, the new IRST sensor system was procured for the first time by the USG under the Wright-Patterson Air Force Base F-15SA aircraft production contract. No re-procurement or repair data for the IRST sensor system was purchased under this acquisition either. While the USG previously procured re-procurement data for the older LANTIRN system, the USG does not own the data for the upgraded LANTIRN NPs being procured for the RSAF. LM remains the only source that possesses the proprietary drawings, design and manufacturing technical data and specific software test programs required to manufacture and support Sniper ATPs, IRST and LANTIRN NPs.

B. Follow-On Contract LM is the original designer, developer and manufacturer of the Sniper ATP, LANTIRN, and IRST systems and is currently the sole provider of sustainment support for the entire Sniper ATP, IRST and LANTIRN NP Depot level support. The Sniper ATP and IRST systems as well as associated test equipment are specialized military unique hardware that have been customized to the point that they could not be reengineered by an unqualified source or bought commercially off-the-shelf. The original contract (FA8522-09-C-0006) for RSAF Sniper ATP procurement and services completed its period of performance in July 2013. There are no other contract vehicles in place to deliver the requirements stated in Section II. As such, this individual J&A requests approval to enter into a follow-on, sole source acquisition with LM for the performance of specialized services where an award to any other source would result in duplication of costs that would not be recovered through competition. The RSAF would experience duplication of cost if these sustainment services were competed through one of two ways: 1) If a winning contractor, other than LM, were awarded the contract, that contractor would have to subcontract to LM for repairs, engineering support for upgrades, support for design anomalies and engineering solutions for re-design due to obsolescence as the USG could not provide technical data for the three systems to the awarded contractor; and 2) If a winning contractor, other than LM, were to attempt to reengineer the technical data for the three systems in order to fulfill the instant services, the customer would realize a duplication of cost in excess of $1B in life cycle costs. This estimate is based on the Independent cost analysis performed on 18 Jun 2010 prior to award of the USAF Sniper Sustainment Contract (FA8523-12-D-0004)

C. Highly Specialized Services LM possesses the specialized capabilities including the proprietary software, engineering personnel, data, and equipment necessary to sustain the Sniper ATP, IRST and LANTIRN fleets.

As the original system designer and builder, LM has retained the engineering expertise to address all the customer’s technical requirements. This is accomplished through a core team of software engineers familiar with the proprietary Operational Flight Program (OFP) software for all three systems. This team will be called upon to remedy any technical problem that may arise.

Additionally the contractor engineering team has modified common support and test equipment tailored to manufacture and sustain these systems. Since the original procurement of LANTIRN in 1996, the USAF and RSAF have maintained a sole source relationship with LM for precision attack pods, for a wide range of mission support, production and contractor field support capabilities. The FMS program office intends to capitalize upon its investment in LM’s: 1) familiarity with the Sniper ATP, IRST, and LANTIRN NP systems specifications and related systems engineering processes, to translate operational needs into system requirements documents and sub-specifications, 2) unique engineering expertise to research any of the three systems’ problems, develop and test engineering changes associated with modifications, enhancements, and upgrades, and 3) support infrastructure to continue the existing two-level maintenance concept and relationships, and to furnish field support for its operational customers.

Additionally, the Sniper ATP Depot Source of Repair (DSOR), accomplished November 2011, approved a workload split of 18% organic repair at Warner Robins Air Logistics Complex (WR- ALC) and 82% contract repair for the sustainment of the USAF Sniper ATP fleet and all Foreign Military Sales Sniper repairs.

D. Unacceptable Delays While the DSOR requires the 82/18 percent split, the contractor is actually utilizing organic maintainers for 88% of all current Sniper ATP depot-level repairs at WR-ALC under a partnership agreement, with LM as the prime, using limited-rights technical repair data. This repair work is dependent upon a constant flow of parts that can only be provided by this contractor. The USG does not own or possess rights to procurement data to facilitate competitive procurement of parts needed to sustain the Sniper repair/supply chain. To address this lack of a full Technical Data Package (TDP), ASC/Combat Electronics Division requested a cost estimate ROM from LM for Sniper ATP data rights. The ROM was provided to the Government on 29 April 2010. Although the total ROM cost was approximately $702 million, the government re-engaged the contractor in an email dated 24 July 2013, and revalidated that:

1) this value excluded supplier owned data (some of the most critical elements of the Sniper ATP design), 2) rights in data would be Government Purpose only, and 3) the contractor provided the ROM “for planning purposes only and should not be construed as a firm offer to sell.” As a complement of this query, the Government Cost Comparison Analysis (CCA) established a TDP cost of $703.2 million to support the full range of anticipated Sniper post production support requirements. A breakout of the TDP costs between re-procurement data, technical repair data and recoupment of developmental costs was not provided; however, given that the USG already possesses limited rights to technical repair data, the vast majority of cost would be for re-procurement and developmental costs. Lacking this data, the USG will still be dependent upon the contractor for future parts supply and technical support, which constitutes a substantial portion of contract costs. The Precision Attack System Program Office, Robins AFB, GA, finds LM’s ROM to be a credible representation of the value of the total TDP costs considering the above CCA results. Based on this information, the USG does not find the purchase of the TDP to be economically feasible or a sound business case and therefore does not intend to purchase the TDP. Additionally, LOA SR-D-SAP does not include funding nor a requirement to purchase re-procurement data for the three systems. The LOA has met the ceiling value established by Congress; hence the customer cannot buy the data until the RSAF deems re-procurement data a higher priority than the weapons systems and vehicles currently required by the LOA. The required time to conduct the BCA, establish a valid requirement, source funding, compete for source selection, award the contract, have another source develop the Technical Data Package and deliver, procure Depot level Support Equipment and more, would be an unacceptable delay the customer cannot accept. Systems supported by this contract began delivery March 2013.

VI. DESCRIPTION OF EFFORTS MADE TO ENSURE THAT OFFERS ARE

SOLICITED FROM AS MANY POTENTIAL SOURCES AS DEEMED PRACTICABLE

This requirement has been synopsized in the Federal Business Opportunities web page as required by FAR 5.201. Air Force Life Cycle Management Center, Electronic Warfare and Avionics Division, Contracting Branch, posted a Request for Information (RFI) seeking any sources that may possess the expertise, capabilities, and experience to meet the requirements for depot level repairs and total logistics support, to include in-country field service technical support, for the Sniper ATP, LANTIRN NP, and IRST systems sold to the Royal Saudi Air

Force (RSAF) through Foreign Military Sales. The RFI was posted to the Federal Business Opportunity website September 17-30, 2013. No responses were received for this posting.

VII. DETERMINATION BY THE CONTRACTING OFFICER THAT THE

ANTICIPATED COST TO THE GOVERNMENT WILL BE FAIR AND REASONABLE

The price of this acquisition will be fair and reasonable to the government. The contractor will be required to provide certified cost or pricing data to be used to support the USG’s evaluation of the proposed cost. Unit prices will be negotiated by the USG based on recommendations from the Defense Contract Audit Agency (DCAA) and Defense Contract Management Agency (DCMA). The contract price will be negotiated in accordance with the procedures in FAR Part 15 to ensure that the ultimate cost to the government 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. Market research was conducted pursuant to FAR Part 10.001 and 10.002 and consisted of:

(1) A review of the USAF Operational Requirements Documents, the Advanced Targeting Pod System Specification and participation in the operational requirements assessment of the USAF source selection for ATP, and (2) Using generic criteria to identify additional sources on the World Wide Web (WWW). No sources with Sniper ATP, IRST or LANTIRN experience were identified other than the prime, LM. This is logical for several reasons. No other source has manufactured or repaired the three systems listed. As the Sniper ATP is a non-developmental item, there is insufficient data available that would allow another source to qualify. The items covered under this requirement are LM manufactured/specification controlled items for which there is no alternate manufacturing source or total organic repair capability. LM is the only qualified source capable of meeting the requirement as described by the RSAF LOA.

Techniques included internet searches on the Thomas Register and Google search using keywords “Sniper”, “LANTIRN”, “IRST” and “targeting pod”, which did result in identification of additional targeting pods manufactured and supported by various sources such as Northrop Grumman and Raytheon, who manufacture Litening III & IV, Litening AT, and Terminator.

However, only the Sniper ATP meets the RSAF requirement as called out by the FMS customer in the RSAF LOA.

B. Research for this effort was based on internet searches, past experience with similar contracts, and discussions with USG personnel leading similar efforts. Additional information was gathered during the negotiations of data rights between the USG and LM on the first USAF Sniper ATP contract, reviewing data rights assertions on FMS contracts involving Lockheed Martin and Northrop Grumman, reviewing and editing LANTIRN drawings for LM and for the USG, and participating in three Department of Defense (DoD) source selections for precision attack systems. Internet searches show only one source. Internet searches were "Sniper ATP", “IRST” and “LANTIRN Navigation Pod” since this is a request for support for those three systems.

C. There are three DoD contractors that specialize in precision attack sensor systems. They are Northrop Grumman Corporation, Raytheon Company, and Lockheed Martin Corporation. The three companies offer competing targeting systems for which they each maintain exclusive data rights. Lockheed Martin Corp LM and Raytheon have a vendor sub-vendor relationship on the NP. The proprietary nature of their products means there is only one supplier of the Sniper ATP Systems, IRST, and LANTIRN NP.

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 Contractor has advised that they do not intend to offer a technical data package for sale to the USG at this time via an email response dated 24 July 2013. Additionally, RSAF LOA SR-D- SAP does not provide a requirement nor funding to procure a re-procurement data package for the three systems. The Precision Attack System Program Office supports FMS customers based on the USAF existing support infrastructure. Should the USAF reconsider purchasing the TDP to make competition practical, the Precision Attack System Program Office would follow suit.

The Precision Attack System Program Office will engage with the Saudi customer to discuss the need for an established requirement to procure the TDP, at the next scheduled program review.

At this point the customer will conduct a business case analysis to determine the need to fund the requirement. If the customer establishes a valid requirement, the government will solicit the contractor again. The program office will continue to assess the business case analysis of the USAF and how it supports the subject systems for life of the FMS case.

XII. CONTRACTING OFFICER’S CERTIFICATION

The contracting officer’s signature on the Coordination and Approval Document evidences that he has determined this document to be both accurate and complete to the best of his 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)).