J_and_A_MAGR_Redacted_J&A_Redacted.pdf

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

Choose the funding level for this J&A Document:

< $700K >$700Kand < $13.5M >$13.5Mand < $93M > $93M

Contracting Activity: AFLCMC/WNYKB

Purchase Request / Local ID Number: FD2060-16-91049

Program / Project (and PE, if applicable):

Program Type (PEOorOtherContracting): PEO

Authority (include full title):

Estimated Contract Cost (including options): $81,800,000.00 J&AType: Class Individual

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NOTE: IfaJustificationandApprovalwasapprovedfor theprecedingacquisition,acopyof theapprovedJ&Aforthepredecessoraction 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 andapprovalatalevelabovethe contractingofficer. ThepredecessorJ&Awillbeusedasareferencedocumentbytheapprovingofficial.

Date ProjectLead/ProgramMgr/RequiringActivity Adam B. Blankenship, Maj., USAF

AFLCMC/WNYB,

Signature

Date Contracting Officer Erica W. Harris

AFLCMC/WNKE,

Signature

Date Local Legal Reviewer Phillip T. Korman, Maj., USAF

AFMC/JA

Signature

Date Competition Advocate Kimberly McDonald

AFMC AFSC/PZC,

Signature

Date LyndaT.Rutledge

AFPEO/ACS (AFLCMC/WN)

Signature

Miniaturized Airborne GPS Receiver 2000 Variants Production & Sustainment Follow

10 U.S.C 2304 (c) (1), as implemented by FAR 6.302-1, Only One Responsible Source and No Supp

BLANKENSHIP.ADAM.B.

HARRIS.ERICA.WENDY.

.1244562368 Date: 2017.02.14 11:14:02 -05'00'

KORMAN.PHILLIP.T.

MCDONALD.KIMBERLY.

RUTLEDGE.LYNDA.T.

JUSTIFICATION FOR OTHER THAN

FULL AND OPEN COMPETITION

I. CONTRACTING ACTIVITY

This Justification and Approval (J&A) requests authority for Other Than Full and Open Competition to support requirements generated for the Air Force Life Cycle Management Center, Agile Combat Support Program Executive Office (PEO), Electronic Warfare and Avionics Program Office, Global Positioning System (GPS) Joint Service Support Management Office (JSSMO), AFLCMC/WNYB. The Contracting Activity for this requirement is AFLCMC/WNKE. The Purchase Request number supporting this action is FD2060-16-91049.

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

Due to the circumstances described herein, the activity requests authority to procure the items and services listed in Section III of this document using Other Than Full and Open Competition prescribed by FAR 6.302-1, “Only One Responsible Source and No Other Supplies and Services Will Satisfy” Agency Requirements. This individual J&A authorizes the use of other than full and open competition procedures to award a new sole source requirements contract with a five year ordering period at an estimated cost of $81.8M. The estimated contract award is 17 September 2017, with Period of Performance (PoP) ending 16 September 2022.

This document describes a J&A for the award of a contract with Firm-Fixed Price (FFP), Cost Plus Fixed Fee (CPFF), and Cost Plus Incentive Fee (CPIF) contract line items (CLINs) for quantities and hours of production and sustainment services associated with the Miniaturized Airborne GPS Receiver 2000 (MAGR-2K) variants. Additionally, the contract includes demilitarization (demil), as well as, technical hours for technical services, studies and analysis efforts. Pricing for technical services efforts may be established at the delivery order/task order level and will primarily be CPFF or CPIF. This sole source requirement will be procured from the following company:

Raytheon Company 2000 East El Segundo Blvd El Segundo, CA 90245-3507

(CAGE: 4U884)

Large business

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

AGENCY’S NEEDS

This requirement will provide for the purchase of production quantities, repairs, asset demil and technical services hours associated with all variants of the MAGR-2K receiver.

The MAGR-2K is highly specialized GPS User Equipment (UE). It was designed specifically for military aircraft to deliver precise navigation and timing to the warfighter’s platform to assist in successfully carrying out the mission. The MAGR-2K provides anti-jamming, weapon hand-over interface, targeting, interface with encrypted radios, aircraft carrier alignment, gunfire vibration, electromagnetic interface, and stricter military temperature and humidity range requirements than commercially available GPS units.

The M-code compliant variant is now in development and production and sustainment is covered under this J&A.

The period of performance of this effort will be five years. Funding types used in this contract may include Procurement, Operation & Maintenance (O&M), Research Development Test and Engineering (RDT&E), and others as determined appropriate. With the approval of this J&A, the following estimated quantities will be available for procurement, repair, and technical services:

FY18 FY19 FY20 FY21 FY22

Total Procurement BEQs BEQs BEQs BEQs BEQs Total Unit Price Total 5826-01-567-6367

MAGR-2KS-

524D

105 45 15 0 0 165

TBD

MAGR-2K-M

(PRU)

0 50 0 0 0 50

TBD

MAGR-2K-M

0 13 27 56 96 192

Totals 105 108 42 56 96 Note: Best Estimated Quantities (BEQs)

FY18 FY19 FY20 FY21 FY22

Repair BEQs BEQs BEQs BEQs BEQs Total Unit Price Total 5826-01-567-6367

MAGR-2SK-

524D

148 148 148 148 148 740

5826-01-521-3421

MAGR-2KS-RF

20 20 20 20 20 100

5826-01-463-2309

MAGR-2K-RF

4 4 4 4 4 20

5826-01-463-0993

MAGR-2K-IF

4 4 4 4 4 20

5826-01-490-3309

MAGR-2K-IF

4 4 4 4 4 20

TBD

MAGR-2K-M

(PRU)

5 0 0 0 0 5

TBD

MAGR-2K-M

0 5 5 25 25 60

Totals 185 185 185 205 205 965

FY18 FY19 FY20 FY21 FY22

Total Hours Estimated

Hours Estimated Hours

Estimated Hours

Estimated Hours

Estimated Hours

Technical Services Cost

Then Year $ Millions

FY18 FY19 FY20 FY21 FY22 Total Total Contract Value

Total Procurement $

Total

All NSNs identified in this J&A have an AFMC Form 761, Screening Analysis Worksheet (SAW) and/or AFMC Form 762, Contract Repair Screening Acquisition Worksheet (CRSAW) which assign an Acquisition Method Code (AMC) and Acquisition Method Code Suffix Code (AMSC) or Repair Method Code (RMC) and Repair Method Suffix Code (RMSC). All screening actions resulted in an AMC or 3R (SAW) for procurements or R3D (CRSAW) for repair/demil. The screening codes indicate the repair or procurement of these NSNs is sole source to the prime or actual manufacturer based on requirements to use source controlled drawings and/or the Government does not own the data rights to compete.

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 type of 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 agency's minimum needs can only be satisfied by the unique supplies and services available from Raytheon, which possesses the distinct capabilities demonstrated as follows. As the developer and original equipment manufacturer of the family of MAGR-2K variants since 1998, Raytheon is uniquely qualified to continue production, repair and technical services satisfying the Government's requirements described in Section III above. Specifically, Raytheon possesses the facilities, personnel, special tooling, management and expertise needed to satisfy the production, repair, technical service requirements and demil for these receivers. Raytheon is also the only source with the data and technical specifications required to produce and sustain a qualified MAGR-2K. Since Raytheon owns the data and technical specifications, they are the only source who could satisfy technical services requirements such as repairs, Engineering Change Proposals (ECPs), software anomalies, testing, and integration of these receivers, as well.

The existing Contract FA8807-13-D-0001 was awarded sole source to Raytheon Company, on 20 September 2013. The last ordering period for that contract expires 17 September 2017.

All MAGR- 2K variants included in this effort are sole source to the original equipment manufacturer (OEM) based on the requirement to use source-controlled drawings. The Government does not own the data rights to compete production and Raytheon confirmed on 18 September 2015 that they would not sell the data rights. A follow-up request to purchase data rights was sent to Raytheon on 6 October 2016 via letter. Raytheon has not provided a response as of 9 February 2017 and we don’t anticipate receiving a response prior to approval of this J&A.

Raytheon is uniquely qualified to continue production of the approved family of MAGR-2K receivers because they own the MAGR-2K “Production Build” drawings/specification required to support the Government’s requirements.

The DoD’s requirement for specialized technical services in support of production and sustainment associated with the MAGR-2K drives the estimated need for approximately 30,000 technical service hours, which includes aircraft integration efforts, anticipated software anomalies, and other possible technical issues.

f this receiver were to be redesigned to fit into the MAGR-2K mount, it would be a new design effort to include integration and flight testing for each specific aircraft. A new design effort of this type would not meet the required timeline and would be at a significant increased cost to each platform for the integration and test efforts. Approval of this J&A allows for continued production, sustainment, technical services, studies and analyses and demil for this highly specialized equipment.

In addition, costs to duplicate logistics efforts would be considerable, since any new source would have to reverse engineer the operational characteristics of the MAGR-2K system.

Reverse engineering for the MAGR-2K would take an estimated five years before being able to produce a qualified receiver. This is largely due to the proprietary nature of the software used within the current OEM produced MAGR-2K system, contracting with a new company outside that of the current manufacturer, would introduce additional and adverse program, logistical, and configuration challenges.

Updated market research, completed on 6 October 2016, concluded that a similar GPS airborne receiver that meets the Government 2K “M-code” requirement does not exist. Therefore, award to any other source would cause a duplication of costs that would not be recovered and an unacceptable delay in meeting the agency needs for MAGR-2K in both fielding and sustainment.

VI. DESCRIPTION OF EFFORTS MADE TO ENSURE THAT OFFERS ARE

SOLICITED FROM AS MANY POTENTIAL SOURCES AS DEEMED PRACTICABLE

A Request for Information (RFI) was posted on the Federal Business Opportunity (FedBizOpps) site on 20 June 2016 under Solicitation number FA8523-16-R-0034. The RFI stated the Government was conducting market research to identify potential sources that may possess the expertise, capabilities, and experience to perform production, sustainment, modification, and engineering support for the MAGR-2K on various Navy and Air Force platforms. The RFI asked any interested parties to submit capability statements if they were interested in this procurement. Responses were due to be received 30 days later on 20 July 2016. Raytheon was the only vendor to respond.

This requirement will be synopsized on the Federal Business Opportunities (FedBizOpps) web page as required by FAR5.201. It is anticipated that sources having an interest in subcontracting may be identified through synopsis. Although the Government does not own data to support acquisition of this repair from any other source, any source who responds to the Government as a result of this synopsis will be identified as a potential repair source.

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 in supporting the Government’s evaluation of the proposed cost. Cost analysis will also include review of actuals for production units. 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 Audit Agency (DCAA) and/or Defense Contract Management Agency (DCMA) and/or expert technical personnel supporting the program. The contract price will be negotiated in accordance with the procedures in FAR Part 15, ensuring the ultimate price 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 accordance with FAR 10.001 and completed on 6 October 2016. On 20 June 2016, the Contracting Officer posted a RFI to the Government-wide Point of Entry (Federal Business Opportunities, www.fedbizopps.gov) in accordance with FAR 5.201.

The RFI asked interested parties to submit a Company Capability Statement (CCS) in response.

Raytheon was the only vendor to respond.

Internet searches were conducted for the availability of SAASM-based airborne GPS receivers that were comparable to the performance requirements of the current MAGR-2KS-524D receiver. Although several manufacturers produced SAASM-based receivers that provided a MIL-STD-1553 data bus, in all cases the physical configuration of those receivers is incompatible with the current host platforms. These receivers do not meet the specification requirements and cannot be easily modified to meet platform requirements (e.g., fit, form and function). Therefore, the receivers cannot be considered suitable substitutes or alternatives.

Google and Yahoo search engines were used with keywords: “Miniaturized Airborne GPS Receivers”, and “Miniaturized Airborne GPS Receivers SAASM.” Raytheon was the only company that had the capability for this requirement. No other sources were found that satisfy the government’s requirements in a single miniaturized LRU that also includes SAASM and has demonstrated the ability to integrate with the affected aircraft platforms.

The Small Business Administration search tool was used for Small Businesses (dsbs.sba.gov/dsbs/search). There were zero small business companies that had the capabilities to meet the government requirements.

While the GPS market consists of several commercial providers, the MAGR-2K receiver is required to have military precise positioning service GPS using the latest security architecture and SAASM in order to provide the DoD with secure, accurate location information. Raytheon is the only known source that has incorporated SAASM into the MAGR-2K or its equivalent.

Raytheon’s proprietary position on the SAASM integration into the MAGR-2K means there is only one supplier of the MAGR-2K. Previous market research concluded that Raytheon was the only firm capable of providing the 2K requirement.

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, expertise and data necessary to manufacture and support the MAGR-2K; that source is Raytheon. The older version of the MAGR-2K system is in operation and anticipated to remain through 2025, and any effort to reverse engineer this receiver would take approximately five years and not be completed in the timeframe necessary to provide an alternative solution in a timely manner to support the customers' requirements. While the current market research indicates a sole source environment for these NSNs, the government is taking steps to overcome barriers to competition for future acquisitions:

A. The Government will continue attempts every two years to acquire rights to technical data by elevating acquisition requests within the company as necessary.

B. Approximately two years prior to the next contract award date, the multi-functional team will initiate a break-even analysis, to determine if procuring repair data maximizes the lifecycle sustainment related support. The multi-functional team will continue to pursue obtaining a level of data rights for possible competitive acquisition and organic repair capability.

C. The team will accomplish annual market surveillance and monitoring of technical literature to determine potential repair sources/suppliers of subject NSNs.

Once the next generation receiver (the MAGR-2K-M) is fielded, we will continue with the same actions as above to acquire the data rights and pursue possible competitive acquisitions.

XII. CONTRACTING OFFICER’S CERTIFICATION

As evidenced by his/her signature, the contracting officer has determined this document to be both accurate and complete to the best of his/her knowledge and belief (FAR 6.303-2(b) (12)).

XIII. TECHNICAL/REQUIREMENTS PERSONNEL’S CERTIFICATION

As evidenced by their signatures, 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)).