J&A_-_Redacted_1_Redacted.pdf

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

FOR OFFICIAL USE ONLY

FOR OFFICIAL USE ONLY13 Sep 2017

I. Contracting Activity.

This Justification and Approval to request authority for Other Than Full and Open Competition supports requirements generated for the Air Force Sustainment Center (AFSC), the 638th Supply Chain Management Group (SCMG), and the 409th Supply Chain Management Squadron (SCMS)/ GUME. The contracting activity for this requirement is the Air Force Life Cycle Management Center (AFLCMC/EBK) Armament and Missiles Contracting Division. The Purchase Request number supporting this contracting action is FD2060-17-00126.

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

Due to the circumstances described herein, the activity requests authority to acquire the spares listed in this document 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 requirement is for the award of a new Firm Fixed Price Indefinite Delivery Indefinite Quantity (IDIQ) contract with a basic ordering period of 12 months, plus four out-year ordering periods. The projected period of performance is August 2018 through August 2023.

This sole source requirement will be purchased from the following company:

Hi Rel Connectors Inc.

Doing Business As: Hirel Connectors 760 Wharton Dr Claremont, CA 91711-4800

CAGE: 34222

Small Business

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

This requirement is for the procurement of the AIM-120 Missile Buffer Connector, NSN:

5935-01-336-9017AL, P/N: 654478-3, used with the AIM-120 missile on the LAU-12X launcher.

This item is strictly for military application. The AIM-120 Missile Buffer Connector provides electrical connectivity between the LAU-12X launcher and the AIM-120 missile. This item goes on an end item which is loaded on the F-15A/B/C/D & E, F-16A/B/C & D and F-18C/D, E/F and G aircraft as well as Mounted Advanced Medium Range Air to Air Missile system (HUMRAAM) and Surface Launched Advanced Medium Range Air to Air Missile (SLAMRAAM) ground launchers.

This acquisition is in support of United States Air Force (USAF), United States Navy (USN) and Foreign Military Sales (FMS) requirements. The projected requirements are as shown below:

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FOR OFFICIAL USE ONLY13 Sep 2017

NSN:5935-01-336-9017AL

Ordering Period=OP Basic OP OP 1 OP 2 OP 3 OP 4 Min/Max 1,000-3,000 ea 1,000-3,000 ea 1,000-3,000 ea 1,000-3,000 ea 1,000-3,000 ea

Est Unit Price:

Total Est Cost:

Total for NSN:

The total estimated contract value for this acquisition is . A 5% escalation factor was applied to the estimated unit price for each Out-Year Ordering Period. The basis for the estimated cost was derived from the Forecast Unit Price on the March 2017, D200 Summary computation. This requirement will be funded with 3010 Central Procurement (CP) funds.

The minimum/maximum requirement for this IDIQ is 1,000/3,000 each per ordering period and 1000/15,000 overall. The delivery requirements for this acquisition is 300 ea. 22 weeks after receipt of order (ARO). The period of performance for this effort is five years after contract award, anticipated to begin in August 2018 through August 2023.

This NSN was screened and assigned Acquisition Method Code (AMC)/ Acquisition Method Suffix Code (AMSC) of 3/B. AMC 3: Acquire, for the second or subsequent time, directly from the actual manufacturer.AMSC B: This part must be acquired from a manufacturing source(s) specified on a source control or selected item drawing as defined by the current version of DoD-STD-100. Suitable technical data, Government data rights, or manufacturing knowledge are not available to permit acquisition from other sources, nor qualification testing of another part, nor use of a second source part in the intended application. Although, by DoD-STD-100 definition, altered and selected items shall have an adequate technical data package, data review discloses that required data or data rights are not in Government possession and cannot be economically obtained.

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 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 or services available from Hirel Connectors. Hirel Connectors has previously been awarded sole source contracts specifically for the procurement of the AIM-120 missile buffer connectors. The last contract executed was contract FA8520-15-D-0001, awarded on 30 April 2015. Hirel possesses the unique capabilities demonstrated as follows:

FOR OFFICIAL USE ONLY

FOR OFFICIAL USE ONLY13 Sep 2017

The AIM-120 missile buffer connector is a highly specialized item. It has been determined to be of such complexity and criticality between the LAU-12X launcher and the missile due to the use of stainless steel for the housing and a unique pin configuration. Raytheon is the Original Equipment Manufacturer (OEM). The design requirements for NSN 5935-01-336-9017AL are defined by a top level Technical Data Package (TDP) comprised of a Source Controlled Drawing (SCD) 654478 (Rev H 2003) and associated Development Specification (DS) DS32050-456. Raytheon owns the proprietary rights for both documents and both drawings have Distribution Statement E (“Distribution authorized to DoD Components only”). As the design agent of the buffer and the missile, Raytheon manages configuration of the system under Total System Performance Responsibility agreements.

Raytheon uses Hirel Connectors as the only qualified source to make the items for use on the missile and Hirel is identified as the only source on the design requirements and SCD. Raytheon has stated that any source or design other than Hirel Connectors will void any and all warranties on the entire AIM-120 Missile system, to include a reverse-engineered redesign. A new source would also undergo a full qualification process by Raytheon and approval by the Operational Safety, Suitability, and Effectiveness (OSS&E) activity, AFLCMC/EBHA.

In October 2016, the Government contacted Raytheon upper management and asked if another source of supply could be qualified. As stated above, Raytheon advised the Government that if any source other than Hirel Connectors was used Raytheon would have to qualify the source first. Raytheon estimated the qualification cost to be approximately . This cost would involve flight testing of all 30 Advanced Medium Range Air to Air Missile (AMRAMM) configurations at a cost of

, equating to an overall cost of . The investment required to qualify a new source would not be cost effective as platforms currently using the item are set to begin retirement in 2020 with the longest service life platform retiring in 2040. In addition to the cost to qualify, Raytheon advised the Government that they are not interested in pursuing the qualification of a new source as it is not in the best interest of their company due to potential lawsuits with Hirel.

A redesign of the buffer connector was attempted in 2008 by Raytheon. This redesign intended to resolve ratcheting mechanism problems and allow for competitive sourcing. It was delivered by Raytheon to the USAF (P/N: 654478-4) and was subsequently deemed unacceptable for fielding due to the high cost for qualification testing. Raytheon, as the OEM, does not possess a qualified design for the buffer connector precluding them from being a capable source. Hirel Connectors has the only design that is qualified for manufacture and use.

Based on the last redesign attempt in 2008, the estimated timeline to qualify a new source or design was derived. It would take approximately one (1) year to engineer the design and produce a prototype ready for the required testing needed to qualify a new design. Additionally another two (2) to three (3) years would be required in order to compete an effort and start receiving production quantities. The overall process to qualify a new source would cost an additional and delay efforts by up to four

(4) years, substantially impacting the operational capability and jeopardizing the availability of fully mission capable aircraft. Based on the time and cost, qualifications of a new design was determined unacceptable for fielding due to the high cost for qualification testing.

As mentioned previously the AIM-120 missile is both source controlled and defined by top level TDP that is proprietary to Raytheon. Raytheon owns the Source Control drawing for the Buffer Connector NSN which is coded as 2B, non-competitive because it does not include drawings for the ratcheting attachment mechanism or for the pin locations. Hirel Connectors owns the only qualified complete design TDP. The Government has access to the TDP but is unable to distribute the TDP to achieve

FOR OFFICIAL USE ONLY

FOR OFFICIAL USE ONLY13 Sep 2017 competition as Raytheon has indicated use of any other source or supplier will nullify the warranty for the entire missile system. In addition to the TDP limitations, warranty concerns, cost and time to qualify through Raytheon, reverse engineering was deemed non economical for the government to pursue. A Return on Investment (ROI) analysis compared the cost savings due to competition for the remaining life of the system in present value dollars and proposed investment. A reverse engineering effort would cost the Government in which this investment would not be fully recouped until 2155, well beyond the life cycle of platforms. Based on information received from Raytheon on the number of AIM-120s requiring testing, which is 30, a reverse engineering project is estimated to only reduce the purchase price of

The reverse engineering dollar is based on the following:

• for engineering services to develop the new design and develop the new TDP.

• Flight testing/separation testing would be required on all 30 AMRAAM configurations requiring at a minimum 30 flight tests. Flight tests would require the following: (1) the test aircraft itself,

(2) a photog aircraft to witness and film the launch, and (3) tanker support given the test would occur in Eglin's water ranges within the Gulf of Mexico. The total cost of the 3 equate to per hour to operate and would take about 1 hour each, or just for the flying hours per test, resulting in an overall cost of for all 30 flight tests.

• The AIM-120 missile costs each or total of

TOTAL

Without procurement of the buffer connector from the approved source, backorders and Mission Impaired Awaiting Parts (MICAP) requirements would dramatically accumulate since no other source is identified on the SCD as an authorized source of supply. The overall mission capable rate of the AIM-120 Missile and LAU-12X Launcher would be detrimentally impacted, as would the aircraft they support. Without the connector the warfighter is unable to utilize the capability of the AIM-120, seriously impacting operational capability and jeopardizing the availability of fully mission capable aircraft.

Accordingly, Hirel Connectors is the only firm capable of providing the requirements described in Section III above without the U.S. Air Force experiencing unacceptable delays and duplication of cost in fulfilling its requirements.

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

A Request for Information (RFI) was posted for NSN 5935-01-336-9017 under solicitation number FA8554-17-R-0002 on the Federal Business Opportunities (FedBizOpps) web page. The RFI requested responses from vendors that possess the expertise, capabilities, and experience to meet qualification requirements to manufacture the AIM-120 Missile Buffer Connector. The RFI was posted on 21 October 2016 with a response date of 22 November 2016. No responses were received as a result from this posting.

This requirement will be synopsized on 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

FOR OFFICIAL USE ONLY

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 negotiated in accordance with procedures in FAR Part 12 and FAR 13.106-3(a) (2), and a statement of price reasonableness ensuring the ultimate price to the Government is fair and reasonable. Additional pricing methodologies to negotiate fair and reasonable pricing may include reviewing publicly offered catalogs, comparison to historical contractor sales, and/or analysis of limited cost and pricing information provided by the contractor.

In the event that limited cost and pricing information is made available, the Government's negotiation objective will be developed using local technical analysis and direct and indirect rate factors recommended by the Defense Contract Management Agency (DCMA).

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 and completed on 17 June 2017 in accordance with FAR Part 10.001 and 10.002. Market research techniques used included issuance of Sources Sought RFI, internet search of the SBA Dynamic Small Business Search (DSBS) tool and research based on expert residence knowledge by the government program management/engineering team.

A RFI to industry was posted on 21 October 2016 under Solicitation Number FA8554-17-R-0002. No vendors responded to the RFI.

A DSBS query was conducted 8 August 2017 utilizing the North America Industry Classification System (NAICS) code 334417 (Electronic Connector Manufacturing) with keyword “Connector.”

This produced 173 suppliers, including Hirel. All vendors, with exception to Hirel Connectors were determined not capable based on Raytheon's SCD restrictions.

There was a Commercial Item Determination (CID) made by a Contracting Officer back in 2015. The CID deemed the connectors commercial. Due to different opinions, the DCMA Commercial Item Group (CIG) was called upon to assist in the determination. DCMA found an equivalent part number for sale commercially by numerous companies. The DCMA CIG considers the buffer connector to be of similar form, fit and function to those customarily available to the general public. Based on their analysis there was insufficient evidence to recommend reversal of the prior CID. The use of stainless steel for the housing and a unique pin configuration are the most significant differences between the proposed part and the commercial equivalent part. The buffer connector is produced on the same production line as those sold to the general public.

The market research concluded Hirel Connectors is the only vendor capable of meeting the Government's requirements.

IX. Any other facts supporting the use of Other Than Full and Open Competition.

None.

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X. List of any sources that expressed, in writing, an 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.

Raytheon stated in October 2016 that qualification of another source would require Raytheon qualification and approval. Raytheon estimated a qualification effort would be very costly and they were not interested in pursuing such an effort. If a reverse engineering effort were pursued, it is estimated to cost . It is estimated to take a minimum of 137 years (FY2155) to recover the reverse engineering investment. The expected life of this program will extend through the year 2040.

It is anticipated that there will be follow-on purchases; however, the time-frame and quantities are unknown at this time. In efforts to remove barriers to competition, the Government will request on an annual basis, Raytheon's interest in qualifying another source. If they agree, the Government will take action to allocate funding for the effort.

XII. Certification by the Contracting Officer.

As evidenced by my signature above, I have determined this document to be both accurate and complete to the best of my knowledge and belief.

XIII. Certification by the technical/requirements personnel.

As evidenced by my (our) signatures above, I (we) certify that any supporting data contained herein, which is my (our) responsibility, is both accurate and complete.