Redacted_B-2_FAST_II_JA_FINAL.pdf

COORDINATION AND APPROVAL DOCUMENT

CONTRACTING ACTIVITY: ASC/WWZ B-2 Division PROGRAM NAME: B-2 Flexible Acquisition Sustainment Team (FAST) II AUTHORITY: 10 U.S.C. 2304(c)(1), as implemented by FAR 6.302-1(a)(1) ESTIMATED CONTRACT COST: $9.9B (Ceiling) TYPE J&A: Class

COORDINATION DATE

Program Manager

ASC/WWZP

LESLIE A. SCOTT, Civ, USAF

DSN: 986-5175, COM: (937) 656-5175

Contracting Officer

ASC/WWZK

JULIE K. HALL, Civ, USAF

DSN: 986-5113, COM: (937) 656-5113

Legal Reviewer

AFMCLO/JAN

WALTER PUPKO, Civ, USAF

DSN: 674-7121, COM: (937) 904-7121

Competition Advocate

ASC/PK

MARK JORDAN, Civ, USAF

DSN: 785-3741, COM: (937) 255-3741

Chief, Contracting Division

ASC/WWZK

MARK J. PALMER, Civ, USAF

DSN: 785-8393, COM: (937) 255-8393

COORDINATION AND APPROVAL DOCUMENT

PROGRAM NAME: B-2 Flexible Acquisition Sustainment Team (FAST) II

Senior Center Contracting Official

ASC/PK

TODD J. POSPISIL, Col, USAF

DSN: 785-3741, COM: (937) 255-3741

COORDINATION DATE

PEO

AFPEO/FB

DUKE Z. RICHARDSON, Col, USAF

DSN: 674-5555, COM: (937) 904-5555

Deputy Assistant Secretary (Contracting) (DAS(C)) WENDY M. MASIELLO, Maj Gen, USAF

COM: (571) 256-2397

APPROVED:

JANET C. WOLFENBARGER, Lt Gen, USAF Military Deputy, Office of the Assistant Secretary of the Air Force (Acquisition)

DSN: 227-6363, COM: (703) 697-6363

Class Justification for

Other Than Full and Open Competition

I. CONTRACTING ORGANIZATION:

B-2 Division (ASC/WWZK) Bldg 556 2690 Loop Road West Wright-Patterson AFB OH 45433-7148

II. NATURE/DESCRIPTION OF THE ACTION:

A. This action is in support of the B-2 Weapon System, a major program assigned to the Air Force Program Executive Officer for Fighters/Bombers (AFPEO/FB). The Air Force proposes to award a new five-year base ordering period for modernization and sustainment, and one five-year modernization Option single award Indefinite Delivery/Indefinite Quantity (ID/IQ), sole source B-2 Flexible Acquisition Sustainment Team (FAST) II contract for the B-2 weapon system. The B-2 FAST II ID/IQ contract is not a standalone ACAT program; each of the efforts utilizing this contract vehicle will have its own ACAT level or will be a non-ACAT effort and will follow the requisite acquisition approval processes. While the primary purpose of this contract involves modernization efforts, the majority of B-2 sustainment requirements will also be contracted for under this arrangement. Therefore, this ID/IQ contract will provide continuing support necessary to modernize and sustain the B-2 fleet while ensuring availability of combat capabilities to the war fighter. This contract will continue efforts presently performed by Northrop Grumman Aerospace Systems Sector, Military Aircraft Systems, as the prime contractor, and its subcontractors.

After conclusion of the B-2 Engineering and Manufacturing Development and production phases, Northrop Grumman has continued to modernize and sustain the fleet while serving as the B-2 platform integrator. While the Government (B-2 Division) maintains configuration control at the system level, Northrop Grumman maintains control of the B-2 configuration baseline, notifying the B-2 Division of changes to the system baseline, as well as updating and distributing system documentation, including technical manuals, to all users. Northrop Grumman is also responsible for system performance in accordance with prescribed performance requirements while integrating associated weapon system components furnished by the Government, such as but not limited to, aircraft and mission planning, support equipment, engines, training equipment, test instrumentation kits, and other prime mission equipment, as defined in the System Requirements Document.

Maintaining Northrop Grumman in its current role as modernizer, sustainer, and program integrator further capitalizes on the successful partnership formed over the years with the subcontractor vendor base as well as two major US Air Force commands, Air Force Materiel Command (AFMC) and Air Force Global Strike Command (AFGSC) (Air Combat Command prior to 1 Feb 10). Two indicators of this successful partnership are the completed Multi-Stage

Improvement Program (MSIP), an ID/IQ contract vehicle for B-2 modernization efforts from 1997-1999, and the current FAST ID/IQ contract which has been utilized since 1999 to meet both modernization and sustainment war fighter requirements. Both contracts have provided exceptional support to the war fighter.

B. The FAST II ID/IQ contract will include a five-year base ordering period for modernization and sustainment, and one five-year Option for modernization from the date of contract award, which is currently projected to be December 2012. Deliveries may occur through a period of three years after expiration of the ordering period.

The projected B-2 program requirements and business environment is expected to be similar to B-2 contract activity experienced over the last thirteen- year period under the current FAST ID/IQ contract.

There are many areas where the Efficiencies Initiative is supported by utilizing this contract arrangement, such as: development of experienced teams familiar with the contract framework structure; intelligent use of a limited number of resources administering/utilizing the contract;

utilization of standard terms and conditions, reducing negotiation time; promoting program continuity by executing modernization efforts which commonly extend over three to five years each; obligating program funding in a timely manner; providing flexibility to adapt appropriate acquisition strategies to individual delivery orders and allow streamlined processes and procedures; highly skilled and security-cleared personnel familiar with the B-2 program continue support of the B-2 as an affordable requirement, all which will continue to support the war fighter in a highly efficient manner. Each new modernization and/or sustainment program is reviewed and approved by B-2 Division senior functional leaders, and others, such as the Tinker AFB Program Support Integrator (PSI), the Program Element Manager (PEM), and AFGSC. In addition, all ACAT programs follow DODI 5000.01 requirements for acquisition review and approval, which provides management oversight at all levels required for the particular acquisition. This contract is merely a framework with which to efficiency award delivery orders which have been through the complete acquisition process, and approved on an individual basis, utilizing a stable and comprehensive ordering vehicle. This contract framework in no way prevents the government from pursuing component break-out or competition for any effort required for either modernization or sustainment of the B-2 aircraft.

The B-2 Division recognizes the need for competition within a single award contract arrangement and will continue to implement the Weapon System Acquisition Reform Act of 2009 through competition-based subcontractor arrangements in applicable FAST II delivery orders. The B-2 Division and Northrop Grumman will continue to implement efficient processes leading to reduced life cycle and modernization costs. The B-2 Division will review its efforts to introduce competition at the annual Air Force Review Board (AFRB). The B-2 Division will also continue to seek opportunities to introduce other contractor and/or Government providers into the B-2 Enterprise to enhance competition, lower costs, and provide continued supportability of the weapon platform. Approval of this J&A does not relieve the program office of its on-going responsibility to actively assess and pursue competition for sustainment, modernization, and upgrades. Accordingly, the program office will report annually at an SAE-level meeting on its continuing efforts to maximize competition.

C. Due to the small B-2 fleet size of 20 aircraft, a five-year base ordering period for modernization and sustainment, and one five-year Option for modernization, provides the continuity required by multiple ACAT-designated programs which are commonly procured in a phased approach. In particular, the ACAT ID B-2 Defensive Management Modernization (DMS-M) program is Air Force Global Strike Command’s #1 priority and the largest and most important modification to the B-2 in the history of the weapon system. This capability is required to maintain the direct attack capability of the weapon system against 21st Century threats in the Anti-Access/Area Denial (A2/AD) environment. It is a planned 10-year development, production and modification effort utilizing three separate delivery orders which require use of the FAST I ID/IQ contract for the technology development phase, the FAST II ID/IQ five-year base ordering period for the Engineering Manufacturing and Development (EMD) phase, and the FAST II ID/IQ five-year modernization Option period for the production and modification phase. This DMS-M modernization program has already been approved by OSD(AT&L) and is currently executing in the technology development phase. OSD(AT&L) approved the DMS-M Rapid Acquisition Initiative (RAI) as a should-cost pilot program which maximizes use of mature technologies and speed to try and accelerate the program by up to three years and save up to $500M. Seamless transition between each phase of this program is critical to realizing the RAI objectives. DMS-M is a highly integrated electronic warfare suite which interoperates with several existing and future subsystems on the B-2. Northrop Grumman is the only supplier which can execute this large and highly integrated modernization program and maintain the nuclear hardness and low observable standards for the overall B-2 weapon system.

The five-year modernization Option period is required to execute this ACAT ID DMS-M RAI pilot program. Any perturbation in contracting for the DMS-M RAI would undermine the OSD(AT&L) pilot program and would jeopardize the attempted three-year acceleration and $500M cost savings initiatives.

Another example of a phased approach program is the Low Observable Signature and Supportability Modifications (LOSSM). LOSSM provides design, development, engineering, test, and production for a series of LO modifications to improve aircraft Radar Cross Section (RCS) performance and maintainability. The current top issues that cause maintenance hours and aircraft non-availability are in the areas of LO maintenance and repair over the life cycle of each aircraft. The LOSSM program is updating many areas of the aircraft with new LO materials that require less field maintenance and will increase aircraft availability. The current LOSSM program has installations planned through 2021, covering both the initial FAST II base period and five year modernization option period.

Another phased approach program is the Flexible Strike Program. The ACAT II B-2 Flexible Strike Stores Management Operational Flight Program (SMOFP) Re-host and B61 Mod 12 Integration to support Air Force Global Strike Command (AFGSC), in coordination with Air Force/A10, Air Force Program Executive Officer (AFPEO)/Strategic Systems (SS), Air Force Nuclear Weapons Center (AFNWC), and Air Armament Center (AAC)/Eglin AFB plan to acquire a replacement weapon Tail Kit Assembly (TKA) in support of the National Nuclear Security Agency (NNSA) B61 Life Extension Program (LEP). This program addresses the requirement of the B-2 system designation as a threshold platform to support aircraft integration and testing of the B61 LEP weapon, with replacement TKA (All-Up-Round (AUR)), to be compatible and capable of delivery in support of stated United States Strategic Command (USSTARTCOM)/J8, United States European Command (USEUCOM) ECJ5-W, and United States Air Forces Europe (USAFE)/A3N aircraft compatibility requirements. This is a planned 9-year development, production and modification effort using three separate delivery orders.

Flexible Strike SMOFP Re-host will require use of the FAST I ID/IQ contract for the initiate phase; and the FAST II ID/IQ five-year base ordering period for the requirements maturation, EMD, and production and modification phases. Flexible Strike B61 Mod 12 Integration will use the FAST II ID/IQ five-year base ordering period for the EMD phase and the FAST II ID/IQ five-year modernization Option period for the production and modification phase. The Flexible Strike SMOFP Re-host effort not only allows for future integration of digital nuclear weapons such as B61 Mod 12, but will provide the foundation for future required weapons upgrades on the B-2 system. Northrop Grumman is the only supplier which can execute this multifaceted and highly integrated modernization program. The five-year base and option period is required to execute this ACAT II program. Any perturbation in contracting for the Flexible Strike Phase 1 and B61 Mod 12 Integration programs would undermine the B61 LEP and would jeopardize the B-2/B61 LEP nuclear certification schedule.

In advance of exercising the Option, the B-2 Division will reevaluate the acquisition strategy for the B-2 FAST II contract to ensure the current strategy and contract approaches are viable for the Option period. As part of the Option exercise process, the B-2 Division will present an acquisition strategy briefing to SAF/AQ. The acquisition strategy briefing will consider the contractor’s performance during the base ordering period, the contract types and incentives used during the base ordering period, the mix of program requirements performed by the contractor and the government during the base ordering period, and the results of the Business Case Analysis (BAC) described in paragraph VI.(C), below. As described throughout this J&A, the B-2 Division will, where feasible, continue to seek competition at the delivery order, subcontractor, and component breakout level.

III. DESCRIPTION OF SUPPLIES/SERVICES:

A. The B-2 FAST II contract provides modernization and sustainment activities needed to support the B-2 weapon system at all CONUS and Forward Operation Locations (FOL). The B-2 FAST II contract scope includes weapon system modifications to include development, design, test, production, and installation, as well as sustainment support such as sustaining engineering, software maintenance, initial and replenishment spares provisioning, consumables management, support equipment replacement and repair, technical support, technical order maintenance, Programmed Depot Maintenance (PDM), Interim Contractor Support (ICS), Contract Depot Maintenance (CDM), Diminishing Manufacturing Sources and Material Shortages (DMSMS) management and parts acquisition, software integration laboratory operations, maintenance and upgrades, as well as Contractor Field Team (CFT) support to include emergency fleet repair support. Enterprise support includes, but is not limited to, discrete activities such as flight test core cadre support, training support, and quick reaction studies. In addition, enterprise support includes program planning and integration, enterprise process training, Operational Safety, Suitability, and Effectiveness (OSS&E) support, DataLink support, transportation of materials, cost reduction programs, and plant infrastructure.

B. The ceiling of this J&A is $9.9B. The ceiling value was derived from current programming activities based on in-house cost estimates for future projected modernization and sustainment requirements. The yearly amounts reflected below are not considered yearly ceilings but represent funding requests based upon the FY13 Program Objective Memorandum (POM) inputs, to include approved programs and high interest new initiatives and are subject to change based on AFGSC priorities and available Air Force resources. The amounts below include adequate flexibility should requirements emerge that are unexpected in the current spectrum of future efforts. The following appropriations will be used to fund projected requirements: 3600, 3010, 3080, 3400, and Consolidated Sustainment Activity Group (CSAG) working capital fund.

B-2 FAST II Estimated Requirements

B-2 Requirements ($M) FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 Total

3600 4.6 643.9 688.3 685.6 548.9 264.5 220.5 140.9 95.4 95.3 3387.9 3010 8.8 21.9 24.1 332.8 600.0 743.9 271.4 194.3 163.4 146.8 2507.2 3400 0.000 0.000 0.000 513.2 562.2 550.9 602.4 592.4 646.4 582.4 4050.0

B-2 Requirements 13.5 665.8 712.4 1531.5 1711.1 1559.3 1094.3 927.6 905.2 824.5 9945.2

NOTE: Slight difference in totals is due to rounding.

Candidate B-2 Weapon System Enhancements/Improvements: The following is a list of candidate B-2 weapon system modifications derived from AFGSC priorities and current and future POM activities, as well as recurring sustainment activities that must be funded to maintain current/improved operational capability. Given AFGSC priorities and funds availability, any/all of these candidate B-2 efforts can/will be acquired within the constraints of the B-2 FAST II contract. Existing B-2 projects, already on contract, will be completed and delivered under the original B-2 FAST contract.

Candidate B-2 Modernization and Sustainment Efforts

a. Extremely High Frequency Increments 2 and 3

b. Defensive Management System-Modernization Upgrade

c. Massive Ordnance Penetrator with Enhanced Capabilities

d. Core Flight Test

e. Low Observable Signature & Supportability Modifications

f. Mode 5/S Identification Friend or Foe with Automatic Dependence Surveillance-

Broadcast Upgrade

g. Advanced Weapons Integration

h. Adaptable Communications Suite Upgrade

i. Interim Contractor Support

j. Performance Based Logistics Support

k. Weapon System Support Center-Software Integration Laboratory Upgrade &

Operations

l. Programmed Depot Maintenance

m. Peculiar Support Equipment

n. Initial Spares

o. Depot Activation

p. Stores Management Processor//Mixed Carriage/B61 System II Interface

q. Global Positioning System Military-Code

r. B-2 Very Low Frequency Upgrade

s. Joint Precision Approach and Landing System

t. Universal Armament Interface

u. Radar Enhanced Modes

v. ACES 5 Modular Seat

w. Global Positioning System Signal to Weapons Bays

Future modernization efforts will materialize over the life of the B-2 and will enhance the fleet by maximizing, to the greatest extent possible, the following objectives:

a. Reduced life cycle costs

b. Improved reliability, maintainability, and availability

c. Accelerated precision conventional and nuclear bombing capability

d. Enhanced communications capability

e. Improved crew workload and decreased maintenance workload

f. Improved lethality

g. Improved survivability and/or decreased vulnerability

h. Maximized growth flexibility

i. Development and support of required future infrastructure

j. Enhancements for operation in the national and international airspace system

k. Prioritized resolution of AFGSC’s B-2 aircraft discrepancy list

l. Enhanced software and database updates

IV. STATUTORY AUTHORITY:

The statutory authority, which permits other than full and open competition for this acquisition, is 10 U.S.C. 2304(c)(1) and FAR 6.302-1(a)(1), “Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements”. Northrop Grumman is the only provider capable of modifying, sustaining, and integrating the B-2 weapon system.

V. APPLICABILITY OF AUTHORITY:

A. The B-2 weapons system is a highly specialized system, and no other prime contractor is known to possess the necessary unique capabilities to meet the requirements of the B-2.

Selection of a new source would require, at a minimum, the duplication of costs associated with tooling, machinery and capital investments, and specialized technical capabilities. New labor will be needed, requiring unique skill sets, and security clearances for all personnel, all of which would require extensive efforts over a significant number of years, and would result in program delays. Furthermore, the additional efforts would result in substantial duplication of costs to the Air Force that would likely never be recovered through competition and would result in significant delays in fulfilling the Air Force’s requirements.

B. There is a reasonable basis to conclude that the agency’s minimum needs can only be satisfied by Northrop Grumman due to the unique craftsmanship, and supplies available from only one source, or only one supplier with unique capabilities. The distinctive skills, such as years of B-2 knowledge and experience, and an engineering team with unique competency in the B-2 system, with particular emphasis on the low observable component, required to perform modernization upgrades, cannot be duplicated by another contractor without substantial duplication of costs and/or unacceptable schedule delays. In particular, the ACAT ID B-2 Defensive Management Modernization (DMS-M) program is Air Force Global Strike Command’s #1 priority and the largest and most important modification to the B-2 in the history of the weapon system. This capability is required to maintain the direct attack capability of the weapon system against 21st Century threats in the Anti-Access/Area Denial (A2/AD) environment. It is a planned 10-year development, production and modification effort utilizing three separate delivery orders which require use of the FAST I ID/IQ contract for the technology development phase, the FAST II ID/IQ five-year base ordering period for the Engineering Manufacturing and Development (EMD) phase, and the FAST II ID/IQ five-year modernization Option period for the production and modification phase. This DMS-M modernization program has already been approved by OSD(AT&L) and is currently executing in the technology development phase. OSD(AT&L) approved the DMS-M Rapid Acquisition Initiative (RAI) as a should-cost pilot program which maximizes use of mature technologies and speed to try and accelerate the program by up to three years and save up to $500M. Seamless transition between each phase of this program is critical to realizing the RAI objectives. DMS-M is a highly integrated electronic warfare suite which interoperates with several existing and future subsystems on the B-2. Northrop Grumman is the only supplier which can execute this large and highly integrated modernization program and maintain the nuclear hardness and low observable standards for the overall B-2 weapon system.

The five-year modernization Option period is required to execute this ACAT ID DMS-M RAI pilot program. Any perturbation in contracting for the DMS-M RAI would undermine the OSD(AT&L) pilot program and would jeopardize the attempted three-year acceleration and $500M cost savings initiatives.

Northrop Grumman has been the system integrator since inception of the B-2 development program and, as the platform designer/developer, owns intellectual property as well as proprietary technical data rights to the aircraft design and manufacturing processes. The Air Force, as a means of reducing development and production costs, chose not to acquire unlimited data rights. In so doing, Northrop Grumman became the sole provider for most future modernization and sustainment activities through the life cycle of the B-2 weapon system.

However, as requirements are identified, the B-2 program office will review the available technical data, determine what additional data would be required, and determine whether it would be economical to obtain the additional data in order to compete the requirement.

C. Northrop Grumman has been the sole designer, developer, and manufacturer of the B-2 air vehicle. As single producer of the weapon system, Northrop Grumman is currently the only prime contractor in possession of the intellectual property, proprietary technical data, documentation, and detailed knowledge of the B-2 aircraft (operations, design, facilities and tooling, configuration, manufacturing processes) to successfully provide the weapon system support structure for the unique B-2 aircraft system/subsystems. No other source has access to, or is in possession of, the necessary intellectual property, proprietary technical data and documentation to develop, design and integrate modifications as well as sustain the B-2 fleet.

The B-2 Division has access to, but not delivery of, Level III production drawings. The Business Case Analysis (BCA), described in para VI.(C) below, will address the cost of procuring these drawings, and other conditions, such as proprietary issues and data rights, for purposes of competition of modernization. Additionally, the government does not have rights to software source code which also limits the ability to compete the modernization efforts. For example, the B-2 software support concept consists of Northrop Grumman management and operation of software integration at the Oklahoma City-Air Logistics Center (OK-ALC) Weapons System Support Center Software Integration Laboratory (WSSC SIL). To develop a commensurate capability in the area of software, another provider will require detailed knowledge of several Northrop Grumman primary software programs and major supplier software programs covering embedded air vehicle systems, ground systems, and support equipment. A complex laboratory infrastructure would be required to support the development, testing, and integration of the software programs, requiring in-depth knowledge of the methodologies and rationale for all software as it exists today. The supportability of software involves correcting defects, modifying the system to incorporate new requirements, and changing the system to add capability and enhancing performance. Cost effective/efficient software support requires a comprehensive understanding of how independent changes affect the entire weapon system. The risks associated with a new software integration and testing provider are unacceptably high due to potential gaps in ongoing software maintenance activities as well as timely testing of new modification software. To develop this capability with another contractor it is estimated to cost $1B and add five-plus years in development time. Delays in any software testing can and will affect aircraft availability for combat missions as well as flight test, production, and installation of modifications providing enhanced combat capability to the war fighter. It is estimated that the delays in software testing would cost between $450M-$500M and add two and a half to three years in development time. The rationale contained in Para II.B, a five-year base ordering period for modernization and sustainment, and one five-year Option for modernization, reduces the negative cost and schedule ramifications of attempting to develop this capability with another contractor.

VI. EFFORTS TO OBTAIN COMPETITION:

A. A sources sought pre-solicitation synopsis describing the B-2 FAST II requirements was published on the Federal Business Opportunities (FBO) website on 27 April 2010. The synopsis requested all interested sources to respond in writing and provide a statement of capabilities as outlined in the FBO announcement. Northrop Grumman provided the only response. This sources sought pre-solicitation synopsis supported the market research and supports a sole source award to Northrop Grumman. For the purpose of increasing subcontracting activities, a Notice of Proposed Contract Action (NOCA) will be published in the FBO at least 15 days prior to issuance of the solicitation.

B. In accordance with FAR 6.302-1, in the case of the B-2 Program, there is a reasonable basis to conclude that the agency’s minimum needs can only be satisfied by unique supplies or services available from only one source or only one supplier with unique capabilities. The complexity and uniqueness of the B-2 puts the need for integration at a premium. Nearly every requirement involves both low observable technologies and nuclear hardening, making the integration task especially difficult. In addition to the high degree of specialization, the B-2 is an extremely small fleet of 20 aircraft. However, the FAST II contract framework does not preclude future competition or breakout of requirements where integration is not required.

C. As part of the B-2 Division’s efforts to increase competition, an Business Case Analysis (BCA), complete with a Cost Benefit Analysis (CBA), will be conducted to assist in determining the technical level of data necessary to support competition, and also to lay out the costs associated with various alternatives of data procurement for the individual candidate modernization and sustainment efforts described in Section III, above. It is anticipated that the BCA will thoroughly document any data which would be considered necessary for those instances where competition may be feasible. It is estimated that it will take no longer than two years to complete the BCA and that the five-year base ordering period will allow time to accomplish a thorough BCA, as well as the follow-on acquisition planning, and implementation.

The B-2 Division will present the results of the BCA to SAF/AQ during the modernization Option exercise acquisition strategy briefing, described in paragraph II.c, as a condition to exercise the five-year modernization Option period, or at an AFRB or special brief at an earlier point, if feasible.

D. As part of the individual program approval process, each effort is reviewed to ensure sufficient data is procured to support sustainment, as directed by the Depot Source of Repair (DSOR). The B-2 Division is Title 10 compliant with 10 USC 2464, procuring sufficient technical data, with appropriate rights, to support operations, maintenance, installation, and training. If there is an indication of competition for these individual efforts, funding will be examined for the feasibility of purchasing the appropriate data rights if necessary. Additionally, each ACAT program is reviewed on an individual basis for the possibility of pursuing alternate sources. The B-2 Division will continue its efforts to obtain competition for viable programs.

VII. FAIR AND REASONABLE COSTS:

The Contracting Officer has determined the Government can obtain and negotiate fair and reasonable prices for delivery orders associated with the FAST II contract. Thorough technical, price and/or cost analyses will be performed as necessary by the B-2 Division, and Defense Contract Audit Agency (DCAA), and/or the Defense Contract Management Agency (DCMA) support will be requested. Northrop Grumman will be required to furnish certified cost and pricing data for delivery orders meeting the threshold for submission of such data. Assist audits, rate reviews, and other evaluations of major subcontracted effort will be accomplished, as necessary, by the cognizant DCAA and DCMA organizations. DCAA and DCMA analyses will be combined with B-2 Division analyses and used in the substantiation of fair and reasonable costs.

VIII. MARKET RESEARCH:

As described in Section VI above, market research in accordance with FAR Part 10, was conducted by synopsis of the proposed acquisition, advising industry of the pending acquisition and soliciting inquiries from interested parties. A sources sought synopsis was posted on the FBO webpage on 27 April 2010. Northrop Grumman was the only contractor providing a response. As the designer, developer, integrator and sole manufacturer of the B-2 since program inception, Northrop Grumman is the only entity with detailed knowledge of the proprietary design and manufacturing processes, and possesses unique manufacturing and integration facilities with critically skilled labor to integrate improvements and changes into the B-2 weapon system. Therefore, in the interests of the USAF financial resources, AFGSC operational priorities, and the 509th Bomb Wing combat operations, it is not prudent to award this contract to any provider (to include small or disadvantaged businesses) other than Northrop Grumman.

IX. OTHER FACTS: NONE

X. LIST OF INTERESTED SOURCES:

Northrop Grumman is currently the only provider that can cost effectively accomplish all the requirements associated with the B-2 FAST II activities. No other sources responded to the sources sought synopsis or are known to have the knowledge and capability to perform all the tasks in a timely and cost effective manner. See Section VI above.

XI. STEPS TO FOSTER COMPETITION:

The B-2 Division continually searches for opportunities to compete or break out components from the B-2 prime contractor. In keeping with the Weapon System Acquisition Reform Act of 2009, the B-2 Division will take all necessary steps, as addressed in this J&A, to optimize competition at the system component/subcomponent level where appropriate. The complexity and uniqueness of the B-2 put the need for integration at a premium. Nearly every requirement involves both low observable technologies and nuclear hardening, making the integration task especially difficult. In addition to the high degree of specialization, the B-2 is an extremely small fleet. Individual ACAT programs will be reviewed for feasibility of pursuing alternate sources. Additionally, the contractor is highly encouraged to compete at the subcontracting level. For example, the Defensive Modernization Program (DMS) is executing the program to the Rapid Acquisition Initiative by maximizing use of leveraged systems/competition, and focusing on affordability by incentivizing maturity, speed, and cost/performance trades. In addition, the B-2 Division encouraged the contractor to optimize competition through the use of competitive prototyping in a source selection for subsystems on the DMSM. This process promoted potential sources to provide low cost alternatives to full competition throughout the technology development phase, thereby affording a lower cost to offerors to compete.

The Competition in Subcontracting (FAR 52.244-5) clause as well as the Limitation on Pass- Through Charges (FAR 52.215-23) clause will be included in the B-2 FAST II contract. For the purpose of increasing subcontractor activity, a Notice of Contract action will be publicized in the FBO to alert large and small businesses to potential subcontracting opportunities with Northrop Grumman.

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.

XIII. TECHNICAL/REQUIRMENTS PERSONNEL 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.