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

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Contracting Activity: Air Force Life Cycle Management Center, Electronic Warfare and Avionics Contracting Branch (AFLCMC/

WNYKB)

Purchase Request / Local ID Number: FD2060-15-90959

Program / Project (and PE, if applicable): Sniper ATP System

Program Type (PEO or Other Contracting): PEO ACS

Authority (include full title): 10 U.S.C. 2304(c)(1)

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

COORDINATION (A F F A R S 5 3 0 6 . 3 0 4 ( a) ) ** The text in the signature blocks below is editable, including the title.

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APPROVAL (A F F A R S 5 3 0 6 . 3 0 4 ( a) ) ** The text in the signature blocks below is editable, including the title.

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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.

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I. Contracting Activity.

This Justification and Approval to request authority for Other Than Full and Open Competition supports requirements generated for the Air Force Life Cycle Management Center (AFLCMC), Electronic Warfare/Common Avionics (WNY) Division, Precision Attack System Program Office for International Sales (WNYBAI). The contracting activity for this requirement is the Air Force Life Cycle Management Center (AFLCMC), Electronic Warfare and Avionics Contracting Branch (WNYKB). The Purchase Request number supporting this contract action is FD2060-15-90959.

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

Due to the circumstances described herein, this activity requests authority to acquire services in support of the European Participating Air Forces (EPAF) portion of an aircraft software upgrade for the Sniper Advanced Targeting Pod (ATP) 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 individual Justification and Approval (J&A) authorizes the use of other than full and open competition procedures to award a delivery order under the Indefinite Delivery Indefinite Quantity (ID/IQ) Contract FA8540-15-D-0001 (CLIN 0006), with a Cost Plus Fixed Fee (CPFF) pricing arrangement for country unique software to:

Lockheed Martin Missile and Fire Control (LMMFC) (CAGE: 04939) 5600 W. Sand Lake Road #MP-265 Orlando, Florida 32819-8907 Large Business

This delivery order at a value of is to acquire services to upgrade the Sniper ATP software for Belgium, Norway, and the Netherlands to S1 Operational Flight Program (OFP). The period of performance for these services is with a projected award .

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

This requirement is to upgrade the Sniper ATP software for the EPAF aircraft as configured for Belgium, Norway, and the Netherlands. The new software will support the current baseline as well as the new S1 baseline. This software upgrade will ensure FMS customer owned aircraft will provide the appropriate advanced capabilities necessary to support future national and coalition operations. The objective of this delivery order is to satisfy Belgium, Norway, and the Netherlands' requirement for EPAF S1 development support including management, integration, software testing, and ground and flight tests. This S1 OFP flight software will incorporate user requested flight and functional enhancements which take advantage of changes in technology and weapon systems. The S1 program will satisfy the customer' most critical common software and hardware needs by providing enhanced capabilities for avionics, munitions, navigation, electronic warfare and communication systems. These services are valued at based on the program estimates for the CPFF country unique software portion of the IDIQ Contract FA8540-15-D-0001. The period of performance for these services is with a projected award . The type of funds to be used for these services is

FMS.

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 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).

The Sniper ATP was competitively acquired as a Non-Developmental Item (NDI) in 2000 and the United States Government (USG) did not purchase the Sniper ATP procurement or repair data. LMMFC 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. The Sniper ATP systems as well as associated test equipment are specialized military unique hardware that have been customized to the point that they could not be re-engineered by an unqualified source or bought commercially off-the-shelf. There are no other contract vehicles in place to deliver the requirements stated in Section III. As such, this individual J&A requests approval to enter into a sole source acquisition with LMMFC for the procurement of services to upgrade the Sniper ATP system where an award to any other source would result in duplication of costs that would not be recovered through competition. FMS customers would experience duplication of cost if these acquisition services were competed through one of two ways: 1) If a winning contractor, other than LMMFC, were awarded the contract, that contractor would have to subcontract to LMMFC for 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 Sniper system to the awarded contractor; and 2) If a winning contractor, other than LMMFC, were to attempt to re-engineer the technical data for the Sniper system in order to fulfill the services, the customer would realize a duplication of life cycle costs.

LMMFC possesses the specialized capabilities including the proprietary software, engineering personnel, data, and equipment necessary to manufacture the Sniper ATP. As the original system designer and builder, LMMFC 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 the Sniper system. This team will be called upon to remedy any technical problems that may arise. Additionally, the contractor engineering team has modified common support and test equipment tailored to manufacture and sustain the Sniper systems. Since the original procurement of Sniper in 2000, the USAF and other FMS customers have maintained a sole source relationship with LMMFC for Sniper ATPs, for a wide range of mission support, production and contractor field support capabilities. The FMS program office intends to capitalize upon its investment in LMMFC's: 1) familiarity with the Sniper ATP 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 system's 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.

Failure to meet the aircraft testing schedule would necessitate an additional testing period be scheduled for required Sniper software integration into the aircraft Operational Flight Program at an additional cost of $1M. The USG does not own or possess rights to procurement data to facilitate competitive procurement of parts needed to procure Sniper ATPs. To address this lack of a full Technical Data Package (TDP), ASC/Combat Electronics Division requested a cost estimate ROM from LMMFC for Sniper ATP data rights. An initial ROM was provided to the Government on 29 April 2010. Although the total ROM cost was approximately , the government re- engaged the contractor in an email dated 24 July 2013 and again in an email dated 22 July 2014, which 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 to 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 Sniper ATP Program Office, Robins AFB, GA, finds LMMFC'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, Belgium's LOA BE-D-QAT, Norway's LOA NO-D-QAX, and the Netherlands' LOA NE-D-QAS do not support the cost to purchase the data.

Therefore, the customer cannot buy the data until these countries' governments deem the TDP a higher priority than the weapons systems currently required by the LOAs. Furthermore, any effort to reverse engineer Sniper ATP would add unacceptable delays to LMMFC's delivery schedule. Sniper ATP development began prior to the 2000 original procurement with the first qualified system delivered 2004. The estimated time to reverse engineer, test and produce a qualified system would be approximately the same duration. This delay would jeopardize the Software Integration Laboratory (SIL) scheduled for . Accordingly, LMMFC is the only firm capable of providing the services described in Section III above without Belgium, Norway, and the Netherlands experiencing unacceptable delays in fulfilling its requirements.

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

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. 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 terms and conditions used to establish the IDIQ Contract FA8540-15-D-0001 was determined fair and reasonable to the government. The contractor will be required to provide certified cost or pricing data 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.

Market research was conducted in August 2014 and refreshed in October 2015 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). The generic searches were conducted on Google, www.google.com, and Thomas Register, www.thomasnet.com with the terms “Sniper pods”, “Sniper ATP”, “Sniper Advanced Targeting Pod”, “LANTIRN”, and “Infrared Search and Track,” 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. No sources with Sniper ATP experience were identified other than the prime, LMMFC. This is logical for several reasons. No other source has manufactured or repaired the Sniper ATP system 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 LMMFC manufactured/specification controlled items for which there is no alternate manufacturing source or total organic repair capability. LMMFC is the only qualified source capable of meeting the requirement as described by the FMS LOAs.

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 LMMFC on the first USAF Sniper ATP contract, reviewing data rights assertions on FMS contracts involving Lockheed Martin and participating in three Department of Defense (DoD) source selections for precision attack systems. Internet searches show only one source.

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. The proprietary nature of their products means there is only one supplier of the Sniper ATP Systems.

The original requirement establishing the IDIQ Contract FA8540-15-D-0001 was synopsized in the Federal Business Opportunities web page as required by FAR 5.201. The Air Force Life Cycle Management Center, Electronic Warfare and Avionics Division, Contracting Branch, has recently posted two separate Requests for Information (RFI) seeking any sources that may possess the expertise, capabilities, and experience to meet the requirements for manufacturing, testing and delivering AN/AAQ-33 Sniper Advanced Targeting Pod (ATP) Systems, Replenishment Line Replaceable Unit (LRU) Spares, Bench Stock, Support Equipment, Technical Orders, Contractor Technical Support (CTS) and User Familiarization for the Sniper ATP systems sold to the Foreign Military Sales customers. The older RFI for FA8540-15-D-0001 was posted to the Federal Business Opportunity website May 12, 2014 through 16 June 2014. No responses were received for this posting. Additional RFIs were posted on 16 September 2015 and 18 September 2015 respectively (FA8540-15-R-RFI01 & FA8540-15-R-RFI02). No responses were received for those postings.

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.

LMMFC is currently only one qualified source with all the equipment and data necessary to manufacture the Sniper ATP system.

During the acquisition to establish the IDIQ Contract FA8540-15-D-0001, the Contractor advised that they do not intend to offer a technical data package for sale to the USG via an email response dated 24 July 2014. The Sniper ATP 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 Sniper ATP System Program Office would follow suit. The program office will continue to assess the business case analysis of the USAF and how it supports the subject system until the last buy projected to .

Additionally, none of the current LOAs include funding or a requirement to purchase re-procurement data for the Sniper system. With the current unavailability of procurement data, reverse engineering efforts would be required for future acquisitions if the FMS customer authorizes funding under an LOA amendment or new case. The Precision Attack System Office will engage with the FMS customers to discuss the need for an established requirement to procure the TDP, at the next scheduled program review. At such time, the customer will be provided with the appropriate cost and schedule data to determine if developing a new source through reverse engineering efforts is a viable option. If the customer establishes a viable requirement, the government will solicit LMMFC again for the availability of the procurable data necessary for reverse engineering efforts.

XII. Certification by the Contracting Officer.

The contracting officer’s signature on the Coordination and Approval Document, as evidenced by his signature above, 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. Certification by the technical/requirements personnel.

As evidenced by their signatures above, 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)).

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