Lot_14-16_Production&CLS_JA_Redacted.pdf

Justification and Approval (J&A) for Other Than Full and Open Competition I - ---- --------------------------------------------- -------.------------- ---, I NOTE: If a Justification and Approval was approved for the preceding acquisition, a copy of the approved J&A for the predecessor action I I must be included in the staff package for approval of the Instant J&A. This appfles to J&A staff packages that are submitted for review I I and approval at a level above the contracting officer. The predecessor J&A wlll be used as a reference document by the approving official. I I . I L-------------.---------------------------------------.----------------------------

Choose the funding level for this J&A Document:

0 ~ $700K D > $700Kand 5. $13.SM D > $13.SM and 5. $93M ~ > $93M

Contracting Activity: AFLCMC/EBYK (Aerlal Targets Branch), Eglin AFB FL

Purchase Request/ Local ID Number: TBD

Program I Project (and PE, if applicable): Air Force Subscale Aerial Target (AFSAD Lots 14.;16 Production/CLS Contract

Program Type (PEO or Other Contractlng): PEq ACAT 111 ·

Authority (Include full title): 1 o us~ 2304(c)(1 ), as implemented by FAR 6.302-1, required by FAR 6.303-2(b)(4) .

·-· ____ ... __ E,stimated Con~r.act Cost (Including options): J&A Type: [gJ Class D Individual

COORDINATIO!"J ,<AFFARS 5306.304(a))

Date Contracting Officer Slgnature

AFLCMC/EBYK/DSN:

Date Project Lead/ Program Mgr/ Requiring A'ctivity Signature . '

AFLCMC/EBYA/DSN:

Date Local Legal Revlewer Signature

96 TW/JAQ/DSN:

Date tompetitlon Advocate Signature

AFLCMC/PK/DSN:

Date Senior Contracting Official (SCO or SCCO) Signature

AFLCMC/PK-OL Eglln/DSN:

Date PEo't Commander (Requirements Cognizance) Signatwre

AFLCMC/EB/DSN:

Date Deputy Assistant Secreta·ry (Contracting) Slgnat e

2.er~li>

SAFI AQC/

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

APPROVAL (AFFARS 5306.304(al)

Date Signature

2s-t1~~1l,, Performing the Duties of Principal Deputy

Office of the Assistant Secretary of the Air Force (Acquisition & Logistics)

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

I. Contracting Activity.

The contracting activity for this Other Than Full and Open Competition Class Justification and Approval (J&A) Is the Air Force Life Cycle Management Center Armament Directorate (AFLCMC/EB), Test and Trai.ning Division (AFLCMC/EBY), Aerial Targets Branch, AFLCMC/EBYK, Eglin AFB, FL 32542-6844.

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

This class J&A Is for a new follow-on.production and Contractor Logistics Support (CLS) contract FA8678-18-C-0002 for BQM-167A Air Force Subscale Aerial Targets (AFSATs). This new contract will be comprised of one (1) base prodµctlon lot !)lus two (2) production lot options and three (3) CLS options, for support during 2019-2021 and will be awarded to CEI, , a wholly-owhed subsidiary of Kratos Defense & Security Solutions Inc,, , The contract types are Firm-Fixed Price (FFP) for production, warranty, CLS

Inventory Control Point (ICP), Data, APC-4 Pods, and Time and Material (T&M) for CLS Out-of-Warranty Repair (OWR), The contract award Is anticipated to be In 1 QFY1 B. · · ·

Ill. Oescription of supplies/services r!;!quired to meet agency needs, The follow-on production of BQM-167 is required to prqvlde adequate threat represent1;1tlve targets to meet current and .projected HQ AF/rE-sponsored kill authorizations as outlined In AFI 99-108. The USAF missions require ever evolving weapons systems that not only require more precision, 1:>ut lethality as well, In order for the warfighter to deploy these weapons, all USAF and DoD weapon systems must undergo survivability and lethality testing before entering full rate production. The BQM-167 A satisfies Title 1 O lethality testing/threat realism testing as required for all major aircraft and missile system~.

This follow-on production and s.ustainment acquisition of B,QM-167A AFSATs is required to proylde adequate cost-effective targets and timely support to·evaluate fielded, as well as developmental, air-to-air weapon system programs to determine weapon performance and assess mission success. The planned contract appropriations and estimated dollar amounts are provided in th~ following table:

AF Procurement & Sustainment Required BQM-167A FY Appropriations in $M

Estimated Cost Estimated Award Dat~ Lot 14 Production (3010) & 31 Dec2017 Product Improvement (3600)

Lot 15 Production (3010) & 31 Dec2018 Product Improvement (3600) .

Lot 16 Production (3010) & 31 Dec2019 Product Improvement (3600)

Product Improvement (3600) 31 Dec·2020

CLS CY20 (3400) 01 ~an 2020

CLS CY21 (3400) 01 Jan 2021 c~s cv22 (34doJ 01 Jan 2022

BQM-167A Production

Estimated PoP

Under the contemplated'contract, CEi will provide a ,basic effort (Lot 14) and two priced options (Lots 15-16) for BQM-167 A .

production units and associated data. Associated data includes, but is not limited to, an Integrated Master Plan and

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Schedule, Engineering Change Proposals, Failure Summary and Analysis Report, Scientific and Technical Reports, Obsolescence Management Plan and Status Reports, BQM-167 A production units will be funded with AF Aircraft Procurement (3010), with deliveries anticipated between 1QFY19 and 1 QFY22. The production options will be structured with a range of quantities of26to 35 with the most probable quantity for each Lot being 30 units, The preceding Appropriation table illustrates anticipated funding required at the anticipated contractual maximum production quantity .of 35 units per year. Associated data will also be Firm-Fixed Price and procured with 301 O funds. Product improvement efforts

. utilizing Air Force Research and Development (R&D) (3600) funds will'also be executed using a fixed price c:;:ontract type. An example Is Increasing the capability of the APC-4 plume pod which will allow the user to relight the pods during Infrared Missions. Other product Improvements may be Identified throughout the duration of this contract.

Contractor Logistics Support Under the contemplated contract, CEI wlll provide three priced options for BQM-167A CLS to include ICP, Source of Supply (SOS) and OWR for all peculiar support equipment, end items, subassemblles, and component parts. Through the Source of Repair Assignment Process (SORAP), HQ Air Force Materiel Command (AFMC) approved CLS for BQM-167 A depot level repair on 3 March 2004. The.production contracts for Lots 14· 16 will not result In any significant changes to depot level repair procedures or.depot maintenance actions. CLS will be required to support the system from 2019 through 2021,. coincident with each delivery period from production. In addition, CEI will provide comprehensive logistics support consisting of all duties and functions associated with material management, supply support, configuration management, data management, packaging, handling, storage, and transportation (PHS&T), deficiency reporting, depot malntenani:e, and sustaining ·

. engineering. All of the CLS efforts, including the FFP CUN for CLS and the T&M ·cuN for Out of Warranty Repairs, will be funded with AF Operations and Maintenance (O&M) (3400) funds, ·

IV. Statutory authority permi~tlng Other than Full and Open Competition, 1 o USC 2304(c)(1), as implemented by FAR 6.302-1(a)(2)(ii)(B), required by FAB 6.303·2(b)(4).

V. Demonstration that the contractor's unique qualification.s or nature of the acquisition requires the use of the authority cited above (applicability of authority), The Air Force Subscale Aerial Target (AFSAT) ls an Acquisition Category (ACAT) Ill program assigned to the Air Force Program Executive Officer for Weapons (AFPEO/WP). The original BQM-167A acquisition program was procured through a non developmental item acquisition strategy, which competitively awarded production for Lots 1·5 to CEi on 12 July 2002. As such, no RDT&E funds were used to develop.the BQM-167 A system, The original acquisition did not Include the purchase of the Technical Data Package (TDP) or government purpose data rights, thereby limiting the pe5tential sources of supply or sustainment support. Additionally, Department of Defense (DoD) test support and aerial target Inventory requirements demand continuous production and ·do no~ permit a break due to high operations tempo. This includes capability to meet all program requirements, Including the necessity to prevent disruption to the planned live-fire (USC Title 10) requirements for F-22 and F-35 weapon syst.em developments, AIM-120(7/D and AIM-9X development, high priority special weapons/ weapons system testing, front-line fighter operational flight program (OFP) gevelopment1 an.d missile inventory We~pon System Evaluation Programs (WSEPs). Therefore, these acquisitions will be follow-on contracts for the continued production of highly specialized equipment and services. The Life Cycle Management Plan (LCMP), signed in 2008 and revalidated by the Aerial Targets Program Office on 8 September 2015, docu·mented the approval of 800 total targets being purchased through an estimated 20 production lots. Follow-on production contracts for BQM-167 A Lots 5..-13 were awarded on a sole-source basis to CEI under contracts FA8678·1 O·C-0051, FA8678·12,C·0202, and FA8678-15·C·0069, The existing CLS contract, awarded sole source to CEI under contract FA8678·12·C·0202, consisted of CLS through 2015. There is a pending CLS contract, for support from 2016-2018, planned for sole source award to CEi under contract FA8678-16·D·0008; This CLS contract effort addressed In this document 1«111 support the program from 2019-2021 to ensure no gaps in support to the use~ · · ·

CEI Is the only company that has the technical expertise, technical data documentation and detailed knowledge of the AFSAT (BQM-167 A) (drone unique avionics, unique software, facilities, tooling, manufacturing processes, and maintenance support procedures) to successfully perform the requirements of this pending acquisition. The AFSAT Program Office has confirmed that.award to any other source would result In unacceptable delays In fulfilling the Air Force's requirements. To meet the time sensitive production schedule requiremen!, a new sol_.lr~e would have to test, qualify, apply for and receive an

Justification and Approval (J&A) for Other Than Full and Open Competition · air worthiness certlficati:, and apply for and receive Stage Four radio frequency (RF) authorizations for all subsystem components of the system that transmits or receives RF. These are time consuming processes estimated to take at least four

(4) years. These activities would require Government action and approval before the new source could field an operational AFSAT. These limitations would create a three year Interruption In AFSAT deliveries which would cause the Air Combat Command (ACC)to fall below their required AF SAT inventory of 60 assets. With an expected attrition rate of 30 losses per year, a three year interruption would result In far less than the required AFSAT Inventory In years 2019-2025.

The operational forces cannot sustain a'three-year Interruption In AFSAT deliverles. The BQM-167A Is an enabling weapon system, required by USC§ Title 10 for operational testing In a threat reallstlc environment, and is required for all Major Defense Acquisition Programs (aircraft systems as well as air-to-air and surface-to-air miss lie systems) to test against prior to entering Into full-rate production. In addition to causing an unacceptable delay In the BQM-167A program schedule, operational impacts would also be felt.by the F-35, F-22, F-15, F-16, F-18, AIM-120, AIM-9X, WSEP, and Allied test programs.

Thus, it is Imperative the BQM-167A program schedule re.main stable to adequately support the schedules of ACAT I programs directly supporting the warfighter i·n theater. ·

Accordingly, CEI Is the only firm capable of providing the supplies and services described In Section Ill without the U.S. Air Force experiencing unacceptable delays In fulfilling its requirement. ·

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

Source Sought Synopsis (SSS) number FA86.78--18-C-0002 was posted on the FedBlzOpps website on 2 June 2015. · Prospective offerers wen~ requested to submit a Statement of Capabilities (SOC) to be evaluated against the established evaluation criteria. The Incumbent contractor, CEI, was the only respondent. CEl's soc was evaluated against th~ established evaluation criteria and wa~· determined to be technlcally"acceptable.

A Notice of Contract Action (NOCA) will be posted to FedBlzOpps at least 15 days prior to Issuance of the final solicitation. A synopsis of contract award will be posted in accordance with FAR 5.301. Any responses received will be considered in accordance with FAR6.302-1 (d)(2). · · v1·1. Determination by the Contracting Officer that the anticipated cost to the Government will be fair and re.asonable.

The Contracting Officer will ensure that the final price of the contracting actfons awarded under this Class J&A shall be fair and reasonable fo the Governmen.t in strict accordance wl~h guidance contained in the Fed,eral Acquisition Regulation and its respective S!Jpplements. Th.e Program Office has completed an Independent cost estimate ror the follow-on contracting actions, The Government wlll obtain actuals from both the prime and subcontractors in development of the Gove~nment objective. Certified cost.or pricing data will be required in support of cost and price analysis. The Defense Contract Audit Agency resident office In Sacramentb, CA will provide field pricing support and will obtain audits as required for major subcontracts. A technical team familiar with the current effort and qualified to make recommendations relative to the offeror's proposed labor hours and materials will assist the Contracting Officer during negotiations. -At the conclusion of negotiations, a Certificate of Current Cost or Pricing Data wlll be obtalhed JAW FAR 15.406-2(a). ·

VIII. Description of the market research conducted ancf the results, or a statement of the reasons market research was 'not conducted.

In addition to releasing the SSS, the Aerial Targets Program office contacted Army and Navy Targets Management Offices to Identify any p·otentlal subscale aerial targets sources. In 2011, the Navy conducted a full and open competition for their similar, but unique subscale aerlal target requirements. While three responsible offerers responded, no source existed with a mature system design ready for production. Subsequently, the Navy leveraged the BQM-167A program, <!Warded CEI a three year, $ development contract for the .. BQM-177, and Is currently In the development and testing phas.e. The Navy was able to leverage the BQM-167A program with minima I development, facilities, and supplier qualification costs. ·

Key program management and engineering employees remain cognizant of Industry capabilities. Technlcalpersonnel also remain aware of industry Improvements and capabilities by their continual search through technlcal Journals and trade publications. These methods have not Identified new qualified sources, nor have these methods Identified potential alternative approaclies to satisfy the core requirements of this program. This market research verified to high fidelity that CEI is the only source with the requisite unique engineering expertise, necessary data, and l3QM-.167 A production support equipment/special' test equipment required to produce AFSATta.rgets for the proposed upcoming production period.

Market conditions for the SSAT remain the same as when the Lot 11-13 J&A was written. The only new SSAT development after 2013 was the Navy-Jed BQM-1T/., which does not fulfill AFSAT requirements and is still in RDT&E. The program office also consulted with the Army Targets Management Office to obtain results of the their recent market research and there were no other qualified suppliers Identified other than C~I for them as well.

Market research confirmed that CEI has the only solution that can meet the Government's AFSAT requirements. As desqlbed In Section VI above, market research, In accordance with FA.R Part 10, Included synopsis cifthe proposed acquisition, advising Industry of the pending ~cqulsltlon and soliciting lnquMes from Interested parties.

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

This BQM-167 A technical data package (TDP) Is proprietary property of CEi; therefore the Government would have to purchase the TDP and data rights. As part of the market research for this follow-on effort, the Government received a Rough Order Magnitude (ROM) estimate of $ from CE.I to purchase the TDP and data rights. While the Government does not find this ROM to be fair and reasonable, it does not have the right to force CEJ to sell their proprietary data, nor ls there a reasonable likelihood for the Government to recover.this cost through competition. As such, the Government does not intend to procure a technical data package,or qualify a new vendor for AFSAT due to this prohibitive cost and unacceptable schedule delay outlined in Secticm V.

X. List of sources, if any, that expressed interest in the acquislti<>n.

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 subsequeht acquisitions for the s·upplies or services required.

This is the follow-on acquisition of BQM-167 A and no viable steps are available t~ foster competition for the production of AFSATs. The Air Force Is not planning any buys over the 800 targets acquired through FY2028, as outlined In Section V.

AFLCMC/EBYK wlll continue to conduct market research by remaining cognlzar:,t of potential suppliers of subscale aerial targets available in the marketplace through Interaction with the targets Industry where appllcable and appropriate. In addition, the AFLCMC/EBYK will continue to maintain contact with the U.S. Army and Navy'Targets Management Offices to · share Information on subscale Industry partners. During the execution of Lots 14-16 and CLS contract, the Program Office will continue to 1) engage with Air Combat Command to.reevaluate AFSAT requirements and, 2) identify through updated and revalidated niarket research potential opportunities tb foster competition while still meeting mission requirements.

Since the· 11, 13 J&A was approved, 'Ace requirements of the progra'm .remain the same and that no other qualified suppliers were identified to have a product that meets the system requirements. As discussed In Section VJ, the program office posted a Sources Sought on FedBizOps for 45 days to allow potential competitors more time to develop a Statement of Capabilities.

Even with the extended posting period, no other contractor showed interest In this effort. Research and communication performed In 2013-2015 with the Army and Navy Targets Management Offices yielded the same results Jn that CEI is the only qualified supplier f~r the AFSAT. · · . ·

XII, Certification by the Contracting Officer.

As evidenced by his signature above, the,Contractlng Officer has determined this document to be both accurate and complete to the best of. his knowledge· and bell~f. (FAR 6.303-2(b)(12).

XIII, Certification by the technical/requirements personnel.

As evidenced by their signature, the technical and/or requirements. personnel have certified that any supporting data contained herein, which Is their responsibility, is both.accurate and complete. (FAR 6.303·2(c))

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