F-15-IRST-JA_Redacted.pdf

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

NOTE: If a Justification and Approval was approved for the preceding acquisition, a copy of the approved J&A for the predecessor action 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 and approval at a level above the contracting officer. The predecessor J&A will be used as a reference document by the approving official.

Choose the funding level for this J&A Document:

< $700K > $700K and < $13.5M > $13.5M and < $93M > $93M

Contracting Activity:

Air Force Life Cycle Management Center Fighters & Bombers Directorate (AFLCMC/WW), F-15 Contracting Division (AFLCMC/WWQ)

Purchase Request / Local ID Number:

FA8634-17-R-2697

Program / Project (and PE, if applicable): F-15 Infrared Search and Track (IRST) and Operation Flight Program (OFP) Integration, Low Rate Initial Production (LRIP), and Full Rate Production (FRP)

Program Type (PEO or Other Contracting): Program Executive Officer (PEO); Acquisition Category (ACAT) II

Authority (include full title): 10 U.S.C. 2304(c)(1), as implemented by FAR 6.302-1 (a)(2)(ii)

Estimated Contract Cost (including options): $1,035,100,000.00 J&A Type: Class Individual

COORDINATION (AFFARS 5306.304(a) )

Date

21 Jul 2016

Contracting Officer

Signature

Date

21 Jul 2016

Project Lead / Program Mgr / Requiring Activity

25 Jul 2016

Chief of the Contracting Office (COCO), F-15 Division

26 Jul 2016

Development System Program Manager (DSM), F-15 Divison

27 Jul 2016

Local Legal Reviewer

28 Jul 2016

Chief of the Contracting Office (COCO)

Fighters and Bombers Directorate

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 an Individual J&A for Other than Full and Open Competition.

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

This Individual J&A authorizes the use of other than Full and Open Competition procedures for the acquisition of an Infrared Search and Track (IRST) system and integration with the F-15 aircraft. The F-15 IRST is an Acquisition Category (ACAT) II program. The resultant new contract will include IRST and Operation Flight Program (OFP) integration and test, Low Rate Initial Production (LRIP), and Full Rate Production (FRP). It will be predominately Cost-Plus-Incentive-Fee (CPIF) for integration and test and Fixed-Price-Incentive-Firm (FPIF) for LRIP and FRP, but other contract types may be used as appropriate.

The objective of this program is to integrate, produce, install, and maintain the IRST subsystem for the F-15. The contract will be awarded to The Boeing Company, St. Louis, Missouri (Boeing-STL), the Original Equipment Manufacturer (OEM) of the F-15. The contract Period of Performance (PoP) will be FY17-FY23 with a $ ceiling price.

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

This Individual J&A covers IRST and OFP integration and test, LRIP, and FRP efforts for the F-15 IRST program. The IRST J&A scope also includes effort to test, 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 stand-up, and develop and deliver technical data.

This IRST effort includes integration of F-15 aircraft-level OFP with one hundred twenty-five (125) IRST production aircraft pods (one hundred (100) to ACC and up to twenty-five (25) additional for ANG) and eight (8) Test Assets. The OFP integration is to ensure the IRST software in the mounted pods operate as designed without compromising any of the existing capabilities of the aircraft.

After release of the request for proposal (RFP), Boeing-STL will be required to competitively select an IRST pod supplier which will meet the Air Force's IRST requirement. The competitive source selection will secure fixed pricing from the IRST pod supplier throughout integration and test, LRIP and FRP. The IRST pod hardware represents over half of the total requested J&A ceiling, thus providing competitive pricing for a majority of this effort. After an IRST pod supplier has been selected, Boeing-STL will proceed with integration of the selected pod. During this effort, Boeing-STL will begin the preliminary OFP software work, substantiate technical and integration risks, validate Critical Technology Elements (CTEs) and Technology Readiness Levels (TRLs), and plan the program baseline through the preliminary design review and critical design review.

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 delivering the remaining IRST pods as well as initial contractor logistic support required until the transition to organic sustainment. Both the LRIP and FRP phases of the program will be funded with 3010 appropriations with a total PoP from FY17-FY23.

Under the contract, Boeing-STL will manage the integration of the IRST system to include building and integrating test assets and integrated development testing of test assets using 3600 appropriations. The requested $1.035B J&A ceiling is based on an October 2015 F-15 Program Office (PO) Rough Order of Magnitude (ROM) estimate. This ROM was prepared by AFLCMC Cost Staff for the total effort. The ROM projects costs to be for LRIP, for FRP, and for OFP integration. The integration, production, and deployment phase of the F-15 IRST program will take several years to complete, thus requiring the obligation and expenditure of funds over multiple fiscal years. The total PoP for this program is expected to be from FY17-FY23.

IV. Statutory authority permitting Other than Full and Open Competition.

All contracting actions covered by this individual 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 F-15 PO believes that award to any other source would result in substantial duplication of cost to the Government that is not expected to be recovered through competition and unacceptable delays in fulfilling the Air Force's requirements. The integration of the mission critical F-15 IRST pods 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 F-15 Aircraft OFP. Boeing-STL is currently the sole integrator managing each of these on-going F-15 modification programs. The F-15 IRST effort must specifically address complex Electromagnetic Interface (EMI), and Electromagnetic Compatibility (EMC) interoperability. Due to Boeing-STL's position as the sole integrator of all other major F-15 subsystems, they are in the best position to ensure that IRST is interoperable with other F-15 subsystems. Duplication, or transference, of the capabilities possessed by Boeing would be cost and schedule prohibitive.

The F-15 PO estimates a delay in excess of five (5) years for an acceptable alternate contractor to successfully integrate the IRST pods on the F-15 aircraft. The anticipated delay of qualifying an F-15 IRST integrator will prohibit the program from achieving critical Warfighter milestones for Required Asset Availability (RAA) of one (1) squadron of F-15Cs (ten (10) aircraft) equipped with ten (10) IRST systems by FY2019. The F-15 PO estimates a five (5) year delay (6 months for acquisition planning; 18 months for Interface Control Document (ICD) Development; 6 months to compile ICD data and develop the RFP; 18 months to conduct a source selection; and 12 months for an alternate integrator to develop the OFP software coding tools necessary to perform OFP integration), resulting in schedule delays of at least five (5) years in meeting the FY2019 RAA commitment. The anticipated delay of selecting a new IRST integrator for the F-15 will prevent the program from achieving the Joint Requirements Oversight Council (JROC) approved Capability Development Document (CDD) Initial Operational Capability (IOC) date of FY2019, and would cause an unacceptable delay in fielding an IRST capability to the warfighter.

Furthermore, selecting an alternate contractor for OFP integration would require the acquisition of both a data rights package with unlimited rights and OFP software coding tools in order to meet the USG integration requirements. The USG does not currently possess either the necessary data package or the software coding tools. In April 2016, the PO requested a cost estimate to procure the necessary data rights package to compete the requirement. Boeing-STL declined to provide a price for an unlimited F-15 data rights package. Boeing-STL has maintained that given the breadth of known and unknown activity, including OFP software development anticipated development, sustainment and special program efforts involving Boeing-STL and their suppliers, such an exercise (of providing data rights) is not feasible due to the fact that their suppliers have consistently no-bid, citing DFARS 227.7103-1(c).

In addition to the necessary data rights and OFP software coding tools, a new software developer would need to stand up two (2) software labs consisting of F-15 software with additional diagnostic equipment. A software lab consists of all components of a F-15 except for the airframe and associated materials. The F-15 PO estimates the cost of a software lab to be which does not include an airframe or associated materials not required for testing. Therefore, award to any other source would result in an estimated $142M in known increased costs. This does not include the unknown cost of the necessary data rights to integrate the system, and the loss of technical expertise, documentation, and capabilities (i.e., operations, design, facilities and tooling, configuration, manufacturing processes, integration of the aircraft avionics and maintenance support procedures). These costs cannot be quantified due to the consistent no-bid by Boeing-STL for the unlimited data rights package.

During market research activities conducted for this program, all other vendors responded that they would not be capable of full integration of the IRST pod. All vendors indicated they would require assistance from the Original Equipment Manufacturer (OEM), Boeing-STL. There would not be a recovery of the duplication of cost or relief of the unacceptable delays through competition of this program because Boeing-STL is the only vendor that possesses the data rights, technical expertise, documentation, and capabilities for full IRST integration. All other sources would have to buy the data rights from Boeing- STL, which they are unwilling to sell, or completely redevelop, if possible, a new F-15 data package, gain technical expertise, create documentation and produce capabilities to allow for full integration of the IRST pod into the F-15. The cost and schedule delays of this task would be prohibitive and would have a severe impact to operability of the F-15. Accordingly, Boeing-STL is the only firm capable of providing the supplies described in Section III above without the Air Force experiencing substantial duplication of cost that could not be expected to be recovered through competition and unacceptable delays in fulfilling its requirements.

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

In accordance with FAR part 10, market research was conducted by posting a Sources Sought Synopsis (SSS) on the Federal Business Opportunities (FBO) website on 7 November 2014 to identify potential sources capable of producing production-ready IRST pods by 2018 and sources capable of developing and integrating IRST pods for fielding by 2020. The SSS, was available on FBO for 30 days, advised industry members of the proposed acquisition, and solicited inquiries from interested parties by 11 December 2014.

Six responses were received: BAE, Boeing Phantom Works (Phantom Works), L-3, Lockheed Martin (Lockheed), Northrop Grumman, and Raytheon SAS.

Based on the six responses received, the Air Force determined a need to host an IRST Industry Day in Sep 2015. The six sources that responded to the SSS were invited to the Industry Day, plus an additional seventh source, Boeing-STL. Although Boeing-STL did not respond to the SSS (as the synopsis was seeking sources capable of producing an IRST pod), Boeing-STL did express an interest in the requirement once they understood the IRST pod would need to integrate with the F-15 Aircraft OFP. Also, during this time, Phantom Works withdrew their interest and declined to attend the Industry Day, thus leaving a total of six potential sources.

During Industry Day, all interested sources confirmed their capability to produce an IRST pod; however, all but Boeing-STL disclosed their limited technical knowledge of integrating their IRST pod with the F-15.

Boeing-STL was the only potential source who demonstrated the capability to integrate the IRST pod into the F-15 Aircraft. Furthermore, Boeing-STL is the only contractor who possesses the necessary data and source code to develop the required OFP coding necessary to ensure successful integration of the IRST pod with the F-15 Aircraft OFP.

The above market research, along with constant market surveillance and discussion with Air Force subject matter experts, confirmed that only Boeing-STL has the capability and willingness to accept responsibility for the IRST integration effort. This market research also confirmed that while there is only one potential integrator in the marketplace, there are multiple IRST suppliers with systems capable of meeting the USAF requirement. Because there are multiple suppliers capable of meeting the USAF requirement, Boeing-STL will be required to competitively select an IRST supplier for the new IRST subsystem.

For the purpose of increasing subcontracting (IRST supplier) activities, a Notice of Proposed Contract Action (NOCA) will be published in accordance with FAR 5.201 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 contract and market surveillance from January 2014 through April 2016, no source other than Boeing-STL has demonstrated the capability, experience, or ability to integrate an IRST pod on the F-15; furthermore, no other source has offered or shown any interest in taking responsibility for IRST integration.

VII. Determination by the Contracting Officer that the anticipated cost to the Government will be fair and reasonable.

The Contracting Officer has determined that the Government can obtain and negotiate fair and reasonable prices for the IRST, initial spares, and associated activities acquired from Boeing on a sole source basis. As previously stated, Boeing will competitively select an IRST pod supplier which will allow the market to drive down costs for the Air Force. The competitive selection made prior to the integration & test phase will secure fixed pricing from the IRST pod supplier through FRP. This supplier cost accounts for a majority of the total requested J&A ceiling, ensuring competitive pricing for a majority of this effort. In addition, thorough technical, price and/or cost analyses will be performed as necessary by the F-15 PO (with the assistance of the AFLCMC Pricing Division), the Defense Contract Audit Agency (DCAA) and the Defense Contract Management Agency (DCMA). The IRST program may utilize the DCMA Integrated Cost Analysis Team (ICAT) team for technical evaluation, pricing, evaluation and negotiation support if warranted. 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), including subcontractors in which no exception to certified cost or pricing data applies. 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 efforts 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.

As described in Section VI, market research, in accordance with FAR part 10, was conducted by posting a SSS notice on FBO, advising industry of the pending acquisition and soliciting inquiries from interested parties. The synopsis requested all interested sources to respond by providing: a description of existing relative experience; their capabilities to design, develop, integrate, fabricate, test, install, and support improvements to weapon systems to include handling of classified and unclassified material; qualifications of key personnel; their organizational structure; any information on existing facilities, major subcontractors to be utilized. The synopsis also requested recommendations for use of an alternate North American Industry Classification System code and to identify any major performance, schedule or cost risks anticipated.

Six vendors responded to the synopsis: Lockheed Martin, BAE, L-3, Northrup Grumman, Raytheon SAS, and Phantom Works. However, after reviewing the responses, the F-15 PO determined that all of the vendors had only provided information regarding capability to produce IRST pods, without referencing the OFP integration capabilities.

In order to gain more specific information on industry capabilities, the F-15 PO set up a series of Industry Days sessions, including individual and group meetings with vendors. The purpose of these Industry Days was to explore the technical details of the various approaches presented through vendor briefings, and determine which, if any, solutions would be viable for use on the F-15. All vendors that responded to the original SSS, plus Boeing-STL were invited to the Industry Days. However, Phantom Works did not participate as noted above, resulting in six (6) total vendors.

Aside from Boeing-STL, all vendors disclosed that they would be unable to perform the OFP integration portion of the effort. While each expressed confidence in the capability of their pod, they all remained dependent on the OEM to accomplish the integration of their IRST pod with the F-15. Therefore, the F-15 PO has determined that only Boeing-STL is capable of performing the IRST integration and OFP work required for successful IOC in FY19.

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

As the sole integrator of the F-15 system, Boeing-STL is the only contractor in possession of the technical expertise, proprietary software coding tools, and detailed system and subsystem knowledge (i.e., operations, design, facilities and tooling, configuration, manufacturing processes, integration of the aircraft avionics and maintenance support procedures) required to successfully integrate, install, and maintain the IRST subsystem for the F-15.

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.

This contract is intended to produce and integrate IRST pods onto the F-15 fleet. Part of the IRST acquisition strategy is to acquire Unlimited, Government Purpose, or Specially Negotiated Data Right sufficient to support future competition and organic repair for IRST.

IRST will utilize Non-Developmental Items and modified Commercial items to the maximum extent practicable. In addition, the IRST team has instituted a practice to validate, evaluate, and if necessary, challenge any data rights assertions made by Boeing-STL or the potential IRST pod supplier. The Depot Source of Repair (DSOR) process is being conducted and the program team has determined the IRST 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 IRST pod integration effort.

In addition, the Competition in Subcontracting Clause (FAR 52.244-5) will be included in the resultant IRST contract.

XII. Certification by the Contracting Officer.

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. Certification by the technical/requirements personnel.

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)).