Final_J A_-_FBO_Redacted.pdf

COORDINATION & APPROVAL DOCUMENT

Contracting Activity: Air Force Life Cycle Management Center

Fighters & Bombers Directorate (AFLCMC/WW)

F-15 Contracting Division (AFLCMC/WWQ)

Local Identification Number: PK-COL-15-00084

Program Name/Program Element: F-15 Eagle Passive/Active Warning Survivability

System (EPAWSS) Engineering and Manufacturing

Development (EMD), Low Rate Initial Production

(LRIP), and Full Rate Production (FRP) Phases

Estimated Contract Cost

(including options): $4.6B

Type Program: Program Executive Officer (PEO); Acquisition

Category (ACAT) I-D

Authority: 10 U.S.C. 2304(c)(1), as implemented by FAR

6.302-1 (a)(2)(ii)

Type J&A: Class

COORDINATION:

Contracting Officer

AFLCMC/WWQK

1/22/2015

EPAWSS Program Manager

AFLCMC/WWQP

1/23/2015

Chief of Contracts

AFLCMC/WWQK

1/29/2015

COORDINATION & APPROVAL DOCUMENT

Contracting Activity: Air Force Life Cycle Management Center

Fighters & Bombers Directorate (AFLCMC/WW)

F-15 Contracting Division (AFLCMC/WWQ)

Local Identification Number: PK-COL-15-00084

Program Name/Program Element: F-15 Eagle Passive/Active Warning Survivability

System (EPAWSS) Engineering and Manufacturing

Development (EMD), Low Rate Initial Production

(LRIP), and Full Rate Production (FRP) Phases

Estimated Contract Cost

(including options): $4.6B

Type Program: Program Executive Officer (PEO); Acquisition

Category (ACAT) I-D

Authority: 10 U.S.C. 2304(c)(1), as implemented by FAR

6.302-1 (a)(2)(ii)

Type J&A: Class

Deputy Development System Manager F-15 Division

AFLCMC/WWQ

2/4/2015

Legal Reviewer

AFMCLO/JAN

2/9/2015

Chief of the Contracting Office

AFLCMC/WWK

2/11/2015

Competition Advocate

AFLCMC/PK/PZ

2/11/2015

JUSTIFICATION AND APPROVAL (J&A)

FOR

OTHER THAN FULL AND OPEN COMPETITION

I. CONTRACTING ACTIVITY

Department of the Air Force

Air Force Materiel Command

Air Force Life Cycle Management Center

F-15 Division (AFLCMC/WWQ)

Bldg 556, Area B

2690 Loop Road West

Wright-Patterson AFB OH 45433-7424

This is a Class J&A for Other than Full and Open Competition.

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

This Class J&A authorizes the use of other than Full and Open Competition procedures for the acquisition of a new electronic warfare (EW) system for the F-15 aircraft. The Eagle

Passive/Active Warning and Survivability System is an Acquisition Category (ACAT) I-D program, hereafter referred to as EPAWSS. The resultant new contracts for Engineering and

Manufacturing Development (EMD), Low Rate Initial Production (LRIP), and Full Rate

Production (FRP), will be predominately Cost-Plus-Incentive-Fee (CPIF) for EMD, Fixed-Price-

Incentive-Firm (FPIF) for LRIP, and Firm-Fixed-Price (FFP) for FRP (as further detailed in the table below ). The objective of this program is to fully design, integrate, test, produce, install and sustain the new EW system for the F-15. The contract(s) will be awarded to The Boeing

Company (Boeing), St. Louis, Missouri, the Original Equipment Manufacturer (OEM) of the F-

15 (Boeing acquired McDonnell Douglas). The aforementioned contract actions are consistent with the business strategy outlined in the Tailored Acquisition Strategy for the EPAWSS.

1 Contract type, value, and period of performance in the above table are estimates only and dependent upon funding availability.

2 This J&A is based on the Service Approved Acquisition Strategy (April 2014) and contingent on MDA approval of the

EPAWSS Competitive Prototyping Waiver (CPW). J&A assumes MDA approval of Acquisition Strategy and CPW.

3 Increment 1 replaces existing Radar Warning Receiver (RWR), Internal Countermeasures System (ICS) and Countermeasures

Dispenser System (CMDS), and adds a geolocation capability.

4 Increment 2 adds a Fiber Optic Towed Decoy (FOTD) / Monopulse Angle Countermeasure (MACM) capability.

TY$M EMD LRIP FRP

Inc. 1 Est. Timeframe

FY16- FY19 FY19-FY20 FY21-FY29

Inc. 1 Est. Dollar Amount $371.9 $332.7 $3,028.6

Inc. 2 Est. Timeframe

FY16-FY20 FY20 FY21-FY29

Inc. 2 Est. Dollar Amount $134.7 $63.5 $618.4

Total Est. Dollar Amount $506.6 $396.2 $3,647.0

Predominate Contract Type CPIF FPIF FFP

Contract Vehicle C Contract C Contract C Contract

Estimated Award Date 4 th

QTR 2016 2

nd

QTR 2019 3

rd

QTR 2021

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

AGENCY’S NEEDS

This class J&A will lead to EMD, LRIP, and FRP contracts for the EPAWSS program. The

EPAWSS class J&A scope includes effort to design, fabricate, assemble, test, install, manage, deliver spare parts and support equipment, train, perform systems engineering, provide technical support, update technical orders, provide Interim Contractor Support (ICS), support organic depot standup, and develop and deliver technical data.

As noted in Section II, the F-15 EPAWSS program will pursue a two increment approach to reach the full required capability during EMD, LRIP and FRP. Design for both increments will begin at the same time and proceed concurrently, subject to funding availability. Under the

EMD contract, Boeing will manage the integration and final design of the EW system to include building and integrating test assets and integrated development testing of EMD test assets using

3600 appropriations. The LRIP phase is intended to ensure that the manufacturing development is completed to allow for efficient and adequate manufacturing capability to support the follow-on full rate production phase. In addition, LRIP will consist of establishing an initial production baseline, production of the minimum quantity of systems necessary for Initial Operational

Capability (IOC) and activities required to prepare for the orderly increase in production rate.

The FRP phase of the program will consist of the delivery and installation of the remaining

EPAWSS units onto the F-15 aircraft as well as initial contractor logistic support required until the transition to organic sustainment. Both the LRIP and FRP phase of the program will be funded with 3010 appropriations.

The requested $4.6B J&A ceiling is based on a December 2014 F-15 Program Office

Estimate (POE) (approved by AFLCMC Cost Staff) for the EMD, LRIP, and FRP efforts. The design, production, and deployment phase of the F-15 EPAWSS will take several years to complete thus requiring the obligation and expenditure of funds over multiple fiscal years. The individual annual quantities depicted below are estimates only, exclude spares and test aircraft, and subject to change based on funding and aircraft availability.

F-15 EPAWSS Tentative System Procurement (excluding spares & test aircraft)

FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 TOTAL

Quantity 24 18 37 54 59 54 47 50 43 386

IV. STATUTORY AUTHORITY PERMITTING OTHER THAN FULL AND OPEN

COMPETITION

All contracting actions covered by this class J&A fall within the authority found at 10 U.S.C.

2304(c)(1), as implemented by FAR 6.302-1(a)(2)(ii) -- 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 development of the mission critical F-15 EPAWSS is both complex and highly specialized as it must seamlessly integrate with multiple other mission systems on the aircraft, including but not limited to: APG-63(V)3 Active Electronically Scanned Array (AESA) radar, APG-82(V)1 AESA radar, Advanced Display Core Processor (ADCP) II mission computer upgrade, and the aircraft-level Operational Flight Program (OFP). Boeing is currently the sole source integrator managing each of these on-going F-15 modification programs. The F-15

EPAWSS integration effort must specifically address complex Electromagnetic Interface (EMI), Electromagnetic Compatibility (EMC) and Radio Frequency (RF) interoperability. Due to

Boeing’s position as sole source integrator of all other major F-15 programs, they are the only company that can ensure that EPAWSS is interoperable with the other F-15 subsystems.

The current EPAWSS Characterization contract and planned EPAWSS Technology

Maturation and Risk Reduction (TMRR) contract are being (or will be) executed as sole source efforts with Boeing utilizing the Eagle TALON ID/IQ contract (F33657-01-D-0026) under the authority of the Eagle TALON J&A No. 02-JA-020 dated 6 Feb 02. As the integrator under the

Characterization contract, Boeing is currently developing functional requirements, characterizing the current F-15 RF environment, developing interface control documents, evaluating technical risk, and conducting early program planning.

During the TMRR phase, Boeing will competitively select an EW supplier with USAF oversight that will result in a best value for the USAF. The competitive selection made during the TMRR phase will secure fixed pricing from the EW supplier throughout EMD, LRIP and

FRP. This cost represents an estimated 52% of the total requested ceiling, resulting in competitive pricing for a majority of this effort. In addition, Boeing will begin the preliminary design of the EW system, substantiate technical and integration risks, validate CTEs and technology readiness levels, and plan the program baseline through the preliminary design review and critical design review. After an EW supplier has been competitively selected during

TMRR, Boeing will proceed with integration of the selected suppliers’ solution; however, with the potential selection of an alternate integrator, the integration effort performed by Boeing during TMRR will be invalidated because an alternate integrator could select a different EW supplier, requiring significant rework. The award to any other source for EW integration would result in substantial duplication of cost to the Government that is not expected to be recovered through competition, and would also result in unacceptable delays in fulfilling the Air Force’s requirements. Duplication or transference of the capabilities possessed by Boeing would be cost and schedule prohibitive.

Although all market research has confirmed that there are no other integrators willing to accept full system responsibility, if an alternate integrator were available to participate in a competition, it is estimated that the cost to select an alternate EW integrator for EMD and maturing that integrator’s knowledge of the EPAWSS design, including the scope required to successfully integrate EPAWSS with the F-15 aircraft, would exceed $200M. This estimate is based on the cost the Air Force will have incurred under the Characterization contract (F33657-

01-D-0026 0121, $15M) and the cost estimated to complete the TMRR phase of the EPAWSS program (F33657-01-D-0026 0138, $185M). If an alternate integrator were selected, there would be a significant learning curve requiring re-work and duplication of costs already incurred by Boeing. In addition, if a competition was held and Boeing was selected, the competitive pricing obtained during TMRR will require revision because of the anticipated delay (as described below). The estimated cost of a potential competition does not account for the substantial cost of an alternate integrator procuring the required data rights from the F-15 OEM needed to successfully integrate EPAWSS, nor does it account for the other government costs of running a source selection and staffing the PO for an additional three years. The EPAWSS will integrate with nearly every major subsystem and require hardware modifications throughout the aircraft. The cost to award to an alternate integrator to develop the knowledge and skills for successful integration of the required EW capability would be cost prohibitive and add significant risk to the program.

The F-15 EPAWSS team anticipates that it would be at least a three (3) year delay to select an acceptable alternate source for EW integration with the required knowledge to successfully integrate the EPAWSS on the F-15 aircraft. This estimate is based on the current schedule of the

EPAWSS characterization effort and the anticipated schedule for the EPAWSS TMRR effort.

This assessment assumes the alternate EW integrator can gain access to the required Boeing proprietary design data and manufacturing processes. The anticipated delay of selecting a new

EW integrator for the F-15 will prevent the program from achieving the Joint Requirements

Oversight Council (JROC) approved Capability Development Document (CDD) IOC date and would cause an unacceptable delay in fielding EPAWSS to the warfighter. The EPAWSS IOC dates are critical as the F-15 fleet will continue to fulfill a significant role in the USAF force structure over the next decade and beyond and the F-15 EPAWSS is critical to F-15 survivability, lethality, and affordability. The operational risk to the F-15 fleet increases every year that the IOC for F-15 EPAWSS capability is delayed, and operational risk taken by commanders will continue to grow as threats advance and proliferate, further driving warfighter urgency for a replacement EW system. The JROC approved IOC for EPAWSS Increment 1 is

FY 2021 for the F-15E, FY 2022 for the F-15C, and FY 2023 for Increment 2 for both F-15E/C aircraft.

Table 1 below shows the estimated schedule assuming Boeing serves as the integrator for

EPAWSS. Table 2 shows the estimated schedule assuming an alternate integrator is selected.

The data included in the table is hypothetical because our market research has indicated there is no other company capable or willing to perform the integration role.

Table 1: Current Contract Strategy FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32

Proposal to Award

EMD

LRIP

FRP

RAA

F-15E F-15C

Table 2: Revised Contract Strategy FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32

Acq Planning

Obtain Dta/Rls RFP

Source Selection

TMRR/EMD

LRIP

FRP

RAA

F-15E F-15C

As shown in the tables above, if there were an alternate integrator available to perform

EPAWSS integration, the delay would extend initial fielding at least three years.

There are several F-15 systems, both on and off-board, with which the new EW system must be interoperable and compatible. In addition to the highly integrated nature of all subsystems, there are multiple aircraft configurations which make configuration management, supplier management and parts obsolescence management critical to the successful implementation of all

F-15 system upgrades, including EPAWSS. Lack of integrated management of these interdependent subsystem modifications introduces both a high level of operational risk due to degraded system performance, and potential safety risk due to an increased likelihood of critical systems conflict.

Boeing is the sole firm possessing the unique breadth and depth of technical skills, experience, and overall systems integration knowledge across all F-15 systems for which the

EPAWSS EW system must integrate with, and is thus solely capable of integrating the EPAWSS

EW system, described in Section III above, without the USAF experiencing substantial duplication of cost and unacceptable delays in fulfilling its requirements. Furthermore, extensive market research as described in Section VI and VIII below confirmed that Boeing uniquely possesses the demonstrated critical capabilities as the integrator for this new EW system.

VI. DESCRIPTION OF EFFORTS MADE TO ENSURE THAT OFFERS ARE

SOLICITED FROM AS MANY POTENTIAL SOURCES AS DEEMED PRACTICABLE

Market research in accordance with FAR Part 10 was conducted by the posting of a Sources

Sought Synopsis (SSS) on the Federal Business Opportunities (FBO) website in November 2011 advising industry of the proposed acquisition and soliciting inquiries from interested parties. In addition, a Request for Information (RFI) was posted on FBO in June 2012 seeking input from potential EW suppliers as well as those willing to serve as the EW integrator for a potential F-15

EW upgrade and invited EW suppliers and potential integrators to participate in an Industry Day session with members of the EPAWSS program team. The discussions during the Industry Day event helped further refine the market research. Finally, all EW suppliers and potential integrators were invited to participate in a demonstration at the Air Force Research Laboratory

(AFRL). The above market research, along with constant market surveillance, discussion with

USAF subject matter experts, and other active USAF EW programs confirmed that only Boeing has the capability and was the only company that expressed a willingness to accept responsibility for the EW system and integrated F-15 weapon system performance. This market research also confirmed that while there is only one potential integrator in the marketplace, there are multiple

EW suppliers with systems capable of meeting the USAF requirement. Because there are multiple suppliers capable of meeting the USAF requirement, Boeing is currently holding a competition to select the best value EW supplier for EPAWSS, and the USAF will benefit from the competitive pricing obtained during this competition.

As the designer, developer, integrator and sole manufacturer of the F-15 since the program’s inception, Boeing 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 onto the F-15 aircraft.

VII. DETERMINATION BY THE CONTRACTING OFFICER THAT THE

ANTICIPATED COST TO THE GOVERNMENT WILL BE FAIR AND REASONABLE

The F-15 Division Contracting Officer has determined that the Government can obtain and negotiate fair and reasonable prices for the EPAWSS, initial spares, and associated activities acquired sole source from Boeing. In addition, the Government will benefit from the competition that Boeing will conduct for the EW supplier. This firm, competitive supplier pricing will be placed on the TMRR contract, and carried forward on the EMD, LRIP and FRP contracts. Thorough technical, price and/or cost analyses will be performed as necessary by the

F-15 Division, the Defense Contract Audit Agency (DCAA) and the Defense Contract

Management Agency (DCMA). The EPAWSS program will be utilizing the DCMA Integrated

Cost Analysis Team (ICAT) team for technical evaluation, pricing, evaluation and negotiation support. Boeing will be required to furnish certified cost and pricing data for proposals meeting the threshold for submission of such data (FAR 15.403-4). Assist audits, rate reviews, and other evaluations of major subcontracted efforts will be accomplished, as necessary, by the cognizant

DCAA and DCMA organizations. DCAA and DCMA analyses will be combined with F-15

Division analyses and used in the substantiation of fair and reasonable prices. For those orders not meeting the thresholds for submission of certified cost or pricing data, data other than cost or pricing data will be obtained from the contractor in sufficient detail to support evaluation by means of cost analysis. The Contracting Officer will verify that the anticipated cost to the

Government is fair and reasonable based on the enterprise assessment of this data.

VIII. DESCRIPTION OF THE MARKET RESEARCH CONDUCTED AND THE

RESULTS, OR A STATEMENT OF THE REASONS MARKET RESEARCH WAS NOT

CONDUCTED

The F-15 EPAWSS team has had continuous contact with the EW market and performed continuous market research from early 2011 through the release of the TMRR RFP on

19 June 2014 when the Contracting Officer directed the EPAWSS team to cease all communication with industry due to the start of the Boeing-led competition to select an EW supplier.

As discussed in Section VI above, formal market research began in November 2011 when a SSS was posted to the FBO website. The SSS presented the EPAWSS program objectives, summarized program requirements, and sought input specifically from EW suppliers able to meet those requirements. There were four (4) companies that responded with some general information regarding their EW capabilities. In late 2 nd

Quarter CY2012, the EPAWSS team researched existing internal Air Force data associated with replacing the current F-15 EW system (TEWS), along with the SSS information secured in the previous quarter and held discussions with other similar program office teams (e.g., F/A-18 IDECM, F-16 CAPES, AC/MC-130J Commando II, B-2 DMS and Navy Next Generation Jammer).

This information enabled the team to develop a more thorough and detailed RFI for an EW system that could satisfy a 2007 EPAWSS CDD. This was posted to the FBO website in June

2012. The amended RFI invited both EW suppliers and potential integrators to participate in four-hour one-on-one sessions with the EPAWSS Team. Four suppliers responded with viable approaches for developing a new F-15 EW capability (Northrop Grumman, BAE, Raytheon, and

ITT), one supplier (Lockheed Martin) responded with a limited-scope alternative to the EW subsystem, and three suppliers (Curtiss-Wright, Elisra, and L3 COMM) responded concerning their role in the EW subsystem supply chain and not interested in competing for the full

EPAWSS requirement. Boeing was the only respondent with the interest and the capability of performing the role of integrating the EW capability onto the F-15 aircraft. This result is driven by Boeing’s position as the aircraft OEM along with their subsequent efforts in developing, coding, and owning the data required for integration into the aircraft level F-15 OFP. The

Industry Days were held throughout the end of July and the beginning of August 2012. The

EPAWSS team then conducted follow-on meetings and site visits with the EW suppliers in order to assess the maturity of the technology presented during Industry Day sessions, to gauge manufacturing readiness, and to resolve open issues.

Based on the RFI and Industry Day input, there are four EW system developers and manufacturers in the marketplace interested in the full EPAWSS requirement, and there is only one prime integrator (Boeing) in the marketplace interested in the EPAWSS requirement to integrate an EW system onto the F-15. One of the primary questions asked during Industry

Days to each EW system supplier, was their willingness and capability to assume and accept full accountability for integrating their EW system onto the F-15. All EW system suppliers declined to participate as the prime contractor for integration. Boeing, the F-15 OEM, is the only company that has indicated its willingness to accept total aircraft and subsystem performance responsibility and demonstrated its capability to integrate a new EW system onto the aircraft.

Building upon the thorough market research already performed, the EPAWSS team posted a

Notice to Industry in October 2013 to FBO inviting potential EW suppliers to the AFRL’s

Integrated Demonstrations and Applications Laboratory (IDAL) for hardware demonstrations in order to gather performance data relevant to the characterization of system maturity and readiness. Utilizing the IDAL was voluntary and was not a prerequisite for participation in upcoming EPAWSS opportunities. IDAL was available to any potential supplier during March and April 2014. Three suppliers (Northrop Grumman, Raytheon, ITT) responded to the FBO notice and participated in the AFRL IDAL demonstration. Through this demonstration the

EPAWSS team gathered additional market research which helped confirm EW supplier capabilities and market conditions.

Through the evaluation of the RFI responses as well as continuous market surveillance, three companies or teams (BAE, Northrup Grumman, and Raytheon/ ITT) were determined to have

EW subsystems capable of meeting the USAF’s EPAWSS requirements within the program schedule and budget. The F-15 EPAWSS team has continuously monitored the market for potential F-15 EW integrators and will continue this market surveillance throughout the

EPAWSS program. For the purpose of increasing subcontracting activities, a Notice of

Proposed Contract Action (NOCA) will be published on FBO at least 15 days prior to issuance of the solicitation. In addition, all resultant contracts will include FAR 52.244-5 – Competition in Subcontracting, which requires prime contractors to select subcontractors and suppliers on a competitive basis to the maximum extent practical. A synopsis of contract award will be issued in accordance with FAR 5.301.

With nearly continuous contact and market surveillance from early 2011 through June 2014, no other source (other than Boeing) has the capability, experience, or ability to integrate an EW system on the F-15; furthermore, no other source has offered or shown any interest in taking responsibility for EW integration.

IX. ANY OTHER FACTS SUPPORTING THE USE OF OTHER THAN FULL AND

OPEN COMPETITION

N/A

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

These contracts are intended to develop, produce, and install the new EW subsystem onto the

F-15 fleet. Part of the EPAWSS acquisition strategy is to acquire Unlimited, Government

Purpose, or Specially Negotiated Data Rights sufficient to support future competition and organic repair for EPAWSS. Data rights will be used as an evaluation factor during the competitive EW supplier selection, and EPAWSS will utilize Non-Developmental Items and modified Commercial items to the maximum extent practicable. In addition, the EPAWSS team has instituted a practice to validate, evaluate, and if necessary, challenge any data rights assertions made by Boeing or the potential EW supplier. The Depot Source of Repair (DSOR) process is being conducted and the program team has determined the EPAWSS sustainment strategy will be at least partially organic. The Government will continue to monitor the market environment for potential future competition to the maximum extent practicable for the EW integration effort.

XII. CONTRACTING OFFICER’S CERTIFICATION

The Contracting Officer’s signature on the Coordination and Approval Document evidences that he 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. TECHNICAL/REQUIREMENTS PERSONNEL’S CERTIFICATION

As evidenced by their signatures on the Coordination and Approval Document, the technical and/or requirements personnel responsible for supplying the data have certified that any supporting data contained herein are both accurate and complete (FAR 6.303-2(c)).