14-31942_JA_FMS_SNIPER_IDIQ_Redacted.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 FD2060-14-31942.

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

Due to the circumstances described herein, the activity requests authority to procure the supply items and embedded 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 Missile and Fire Control (LMMFC) (CAGE 04939), 5600

Sand Lake Road, Orlando, Florida, a Large Business. This acquisition is for procurement of

Sniper Advanced Targeting (ATP) Pods, initial spares, pylons, bench stock, support equipment, technical orders, Contractor Technical Support (CTS), Interim Contractor Support (ICS), retrofitsand user familiarization. The Indefinite Delivery Indefinite Quantity (ID/IQ) contract will consist of one year basic contract period and two (2) one year options. The primary contract type for orders issued under the contract will be FFP. Pricing for “country unique requirements” to include country unique software and retrofits, will be established at the delivery order level, either FFP or Cost Plus Fixed Fee (CPFF).

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

AGENCY’S NEEDS

The Precision Attack System Program Office for International Sales is currently pursuing an acquisition strategy to award an IDIQ contract consisting of a one year basic ordering period and two (2) one year options to LM for acquisition of Sniper ATPs, initial spares, pylons, bench stock, support equipment, technical orders, Contractor Technical Support (CTS), Interim

Contractor Support (ICS), retrofits and user familiarization. The estimated value of this J&A is

$58.8M. The ID/IQ contract ceiling is $485M. Historically, 97% of FMS customers requesting to purchase Sniper ATPs, associated support equipment and embedded services source direct the items and services in their Letter of Offer and Acceptance (LOA) in accordance with FAR 6.302-

4, International Agreement. Of the seven FMS customers projected to procure Sniper ATPs during the three year period covered by the ID/IQ contract, it is anticipated that all but two FMS customers, Taiwan and Pakistan, will source direct the requirement in their LOAs. This J&A covers the procurement of Sniper ATP systems and associated support equipment and embedded services for any Sniper ATP delivery order for any FMS customer who does not source direct to

Lockheed Martin in its LOA accordance with FAR 6.302-4, International Agreement. The procurement described in Section II will be for a basic one year ordering period with two (2) one year option periods, beginning at contract award, approximately September 2015. The estimated value for this J&A is based upon recent Sniper ATP purchase contracts for Pakistan (FA8539-

07-C-0009), Saudi (FA8522-10-C-0003), and Iraq (FA8540-13-C-0008). Comparison costs incurred under the Pakistan contract and Saudi contract FA8522-10-C-0003 for the procurement of Sniper ATPs, spares, support equipment has also been reviewed. The Letters of Offer and

Acceptance (LOA) TW-D-QBZ (Lines 046- Sniper ATPs, 056 – CSTOs, 057- Support

Equipment, 714 – Engineering Services) and J2-D-QQR (Lines 001- SNIPER ATP, 002-

SNIPER Spares, 003- Support Equipment, 004- CPINs, 005- Tech Data, and 700 – Engineering

Services) and Pseudo LOA J2-D-QQR (Lines 001- SNIPER ATP, 002- SNIPER Spares, 003-

Support Equipment, 004- CPINs, 005- Tech Data, and 700 – Engineering Services) between the

United States Government (USG) and the Governments of Taiwan and Pakistan are the source of funding for Taiwan and Pakistan requirements to be awarded on the first delivery order under 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, 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 FMS Sniper Program Office is consolidating future FMS Sniper ATP system procurements covered by this J&A in an effort to avoid future undefinitized contract actions (UCAs), reduce acquisition timelines, and reduce touch labor hours in the program office, contracting office, and various support organizations. The first three projected FMS customers

) have an estimated total requirement for Sniper ATPs. Projected future requirements indicate potential sales of an additional Sniper ATPs, making this the largest Sniper Foreign

Military Sale ID/IQ contract in U.S. history. While the LOA for Iraq, IQ-D-SAH, is source directed to Lockheed Martin in accordance with FAR 6.302-4 and does not require a J&A, Taiwan’s LOA TW-D-QBZ and Pakistan’s LOA J2-D-QQR are not source directed and require a J&A.

B. Highly Specialized Equipment

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 problem 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.

C. Unacceptable Delays

The Sniper ATP was competitively acquired as a Non-Developmental Item (NDI) in 2000 and the USG did not purchase the Sniper ATP procurement or repair data. 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. 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 reengineered 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. 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. The ROM was provided to the

Government on 29 April 2010 and 23 July 2014. Although the total ROM cost was approximately and respectively, 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 of this query, the Government Cost Comparison Analysis (CCA) established a TDP cost of $ 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. Depending on what level of TDP the USG was able to procure, the USG would 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 LMMFC’s ROM to be a credible representation of the value of the total TDP costs considering the above CCA results. In any case Taiwan’s

LOA TW-D-QBZ and Pakistan’s LOA J2-D-QQR do not support the cost to purchase the data;

hence the customer cannot buy the data until the Taiwan and Pakistan government deem the TDP a higher priority than the weapons systems currently required by the LOA. Furthermore, even if this effort was competed through one of two ways: 1) a contractor, other than LM, being awarded the contract, that contractor would have to subcontract to LMMFC 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 Sniper system to the awarded contractor; or 2) a contractor, other than LMMFC, attempting to reengineer the technical data for the Sniper system in order to fulfill the instant services, the Government would realize an unacceptable delay in fulfilling its requirements of at least 6 years based on the

Government’s estimate developed from reviewing history on the Sniper ATP development which began prior to the 2000 original procurement with the first qualified system delivered

2004.. In addition, the schedule associated with this contract period of performance is designed to parallel the new buy aircraft manufacturing, testing, and delivery schedule. 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 . Any effort to reverse engineer Sniper ATP would add unacceptable delays to

LMMFC’s guaranteed 14 month delivery schedule. LMMFC’s guaranteed 14 month delivery schedule for Sniper ATP meets the customer’s delivery requirements. The estimated time to reverse engineer, test and produce a qualified system would be approximately the same duration.

This delay would jeopardize each country specific Software Integration Laboratory and Flight

Tests beginning inscheduled to begin 2016 for each of the country specific F-16 Programs, as well as, the individual schedules of the additional five projected FMS ally countries to use this contract. A potential impact on international relations between those countries and the U.S. could occur if the FMS customers schedules are not met. Accordingly, LMMFC is the only firm capable of providing the supplies and embedded services described in Section III above without

Taiwan and Pakistan experiencing unacceptable delays in fulfilling its requirements.

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. 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 RFIs were posted to the Federal Business Opportunity website May 12, 2014 through 16 June 2014. 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 in August 2014 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. 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 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. However, only the

Sniper ATP meets the FMS customer’s requirement as called out by the FMS customer’s 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 LMMFC on the first

USAF Sniper ATP contract, reviewing data rights assertions on FMS contracts involving

Lockheed Martin and and participating in three Department of Defense (DoD) source selections for precision attack systems. Internet searches show only one source. Internet searches were

"Sniper” since this is a request for acquisition of that system.

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

ATP Systems.

http://www.google.com/

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

There is currently only one qualified source with all the equipment and data necessary to manufacture this system, that source is LMMFC. 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 2014. 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 program office will continue to assess the business case analysis of the USAF and how it supports the subject system for the life of the FMS Sniper ATP program or until the last buy projected to end 2021. Additionally, none of the current LOAs include funding nor 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 Program 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 valid requirement, the government will solicit LMMFC again for availability of the reprocurable data necessary for reverse engineering efforts.

XII. CONTRACTING OFFICER’S CERTIFICATION

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