J A6.302-1(a)-- J A 10-04 MOO LSS JA 8-mos.pdf

FOR OFFICIAL USE ONLY – PRE-NEGOTIATION SENSITIVE

JUSTIFICATION & AUTHORIZATION FOR OTHER THAN

FULL AND OPEN COMPETITION

I. AGENCY/CONTRACTING ACTIVITY IDENTIFICATION:

Contract: FA8808-10-C-0002

Contractor: Lockheed Martin Space Systems Company (LMSSC)

1111 Lockheed Way

Sunnyvale, CA 94089

Acquisition Office: Space & Missile Center (AFSPC)

MILSATCOM Wing Contracting Office (MCSW/PK)

483 N. Aviation Blvd

El Segundo, CA 90245

Contracting Officer: Tracy Stroud (MCSW/PK)

MILSATCOM Wing Contracting Office

DSN: 633-9489, Commercial: (310) 653-9489

II. NATURE AND/OR DESCRIPTION OF THE ACTION BEING APPROVED:

This individual Justification and Approval is to authorize the award of a non-competitive contract for MILSATCOM Orbital Operations and Logistics Sustainment Support (MOO&LSS) to Lockheed Martin Space Systems Company (LMSSC). The operations and logistics sustainment activities will support Milstar and the Defense Satellite Communications System

(DSCS) III. The proposed contract support will encompass requirements previously provided for

Milstar/DSCS III systems under the Orbital Operations Support (OOS) and MILSATCOM

Logistics Sustainment Support (MLSS) contracts. The period of performance will commence 01

December 2009 and continue through 25 July 2010. MCSW/PK is currently working on a five-year contract to succeed this proposed effort.

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

AGENCY’S NEEDS (INCLUDING THE ESTIMATED VALUE):

Orbital Operations Support. The current Orbital Operation Support (OOS) contract was awarded

1 December 2003 with a one-year base period and four (4) one-year options. The OOS contract provides technical management and administrative support required to maintain currently-supported Milstar and DSCS OOS ground system software, hardware, and databases in a state of operational readiness. The contractor operates and maintains the tools and facilities, spacecraft simulators and test beds required to verify accuracy of all software, database, and command execution checkout for all on-orbit Milstar and DSCS satellites. The contractor develops, updates, and maintains browser-based and hardcopy archive of developmental and operational information. All options have been exercised including a one year extension. The current contract will expire 30 November 2009, culminating in a total contract value of $449M.

Logistics Sustainment Support: The current logistics sustainment support contract, called

MILSATCOM Logistics Sustainment Support (MLSS), was awarded Dec 2005 with a base year and two one-year options, and one six (6) month option. The MLSS contract provides Mission

Control Segment (MCS) Release Engineering, MCS Configuration Management, MILSATCOM

System Technical Interface Coordination Working Group (MSTICWG) Support, Milstar System

Configuration Baseline Control, MCS Database Engineering, MCS Software Engineering, MCS

Test and Integration, Milstar System Integration Testing, Sustainment System Test (SST) support, Advanced EHF Sustainment Planning support, MCS Independent Verification and

Validation (IV&V) support, Milstar System Certification, Test and Evaluation (CT&E) support, Milstar System Operational Suitability, Safety and Effectiveness (OSS&E) support, MCS

Program Quality Engineering, MCS Installations, Milstar Systems Engineering and Integration, Milstar User Integration, and Satellite Mission Control Subsystem (SMCS) Technical Advisors at Schriever AFB. The contractor develops quarterly maintenance updates, provides quick response support for the Milstar Constellation Control Station (CCS) System Operator

Instruction Manual; performs SMCS Hardware Maintenance, and Program Management and

Administrative support. Oversight of the contractor will be performed by the Mission Control

Segment Integrated Process Team (MCS IPT). The current contract will expire 8 December

2009, with a total contract value of $78.1M.

In order to gain efficiency and reduce cost for protected SATCOM sustainment in the future, a new acquisition strategy was approved Nov 2009 to combine both the OOS and MLSS tasks under a single contract. The sole source award will be to LMSSC, the incumbent contractor on the previous separate OOS and MLSS contracts.

The total estimated value of an eight (8) month contract to provide orbital operations and logistics sustainment support for Milstar and DSCS III (the support previously provided under the OOS and MLSS contracts) is approximately $57.3M. The proposed contract will provide services for orbital operations and logistics sustainment support for Milstar and DSCS III including space, control, and terminal segment operations support. LMSSC, the prime development contractor for both satellite programs, has always provided logistics sustainment support for both systems and orbital operations support since their respective first launches. The proposed new contract will provide uninterrupted follow-on support for both programs in the operations and sustainment phase until a five-year support contract can be awarded.

IV. STATUTORY AUTHORITY PERMITTING OTHER THAN FULL AND OPEN

COMPETITION:

The statutory authority for this action is contracting by Other than Full and Open Competition, 10 U.S.C. 2304(c)(1), as implemented by FAR 6.302-1(a)2(iii)(A), “Only One Responsible

Source and No Other Supplies or Services Will Satisfy Agency Requirements”. The FAR states that services may be deemed to be available only from the original source in the case of follow-on contracts for the continued provision of highly specialized services when it is likely 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.

V. APPLICABILITY OF AUTHORITY: DEMONSTRATION THAT THE

CONTRACTOR’S UNIQUE QUALIFICATIONS OR NATURE OF THE ACQUISITION

REQUIRES THE USE OF THE AUTHORITY CITED ABOVE

The proposed effort is a follow-on contract for highly specialized services. The contractor must be able to maintain existing satellite analysis software, on-orbit spacecraft software, spacecraft simulator hardware and software and technical analyst workstation hardware and software. In addition, the contractor must have the ability to conduct anomaly analyses and checkout based upon satellite telemetry data, design and test histories. The contractor must also perform services at on-site locations including, but not limited to, Schriever AFB, CO, Vandenberg AFB, CA, and all mobile deployed locations.

LMSSC, the original source of the satellite and ground system, has the detailed knowledge, skills and abilities required to support the operations and sustainment of the DSCS III, and Milstar systems. This requires detailed design and operations knowledge of DSCS III, and Milstar satellites, payloads, and terminals design, functional interfaces, and interoperability and specialized knowledge of performance and failure modes of Milstar and DSCS III satellites.

Lockheed-Martin, along with their primary subcontractors Northrop Grumman and Boeing Space

Systems constitute the core of the Milstar development team. This team of three specialized communications contractors now has nearly 20 years of intimate knowledge and experience with this one-of-a-kind satellite communications system, and has extensive one-of-a-kind in-plant software, hardware, and database development, maintenance and test facilities to support satellites consisting of unique, radiation-hardened components, extensive on-board redundancy, nearly 1 million lines of on-orbit software code, and over 450 million on-orbit satellite database data elements. The Lockheed-Martin team has been successfully supporting Milstar orbit operations since the first launch in 1994, currently maintaining a 99.9% Milstar satellite availability rate.

Additionally, Lockheed-Martin (previously Martin-Marietta) is the DSCS III developer. They have over 20 years of experience supporting DSCS III orbit operations since the first launch in

1982, currently maintaining a 99% DSCS III satellite availability rate. LMSSC has unequivocally demonstrated their unique qualifications and outstanding capabilities to provide satellite engineering in support of Milstar and DSCS III satellite health, safety, system, and mission operations.

Additionally, as a result of the emphasis on Acquisition Reform in the mid-1990s, many design and specification CDRLs were eliminated from the DSCS III and Milstar development programs.

The Government’s lack of access to many of those documents and inability to pass them on to a successor contactor directly and adversely impacts the ability of a new contractor to ramp up and take over performance from the incumbent. One key example is the elimination of the Milstar II

Satellite Engineering Handbook (SEH). Without the SEH CDRL, much of the design detail and theory of operation of the satellite is essentially no longer available to companies other than

Lockheed Martin, Northrop Grumman and Boeing Space Systems.

There is a significant amount of proprietary data, design information and documentation regarding the satellite and payload design elements available solely to the prime development contractor, LMSSC, that are unavailable to the other contractors. In addition, there is an extensive support infrastructure within various contractor facilities, which include LMSSC, Northrop Grumman, and Boeing facilities; they are connected to Government facilities via T1 link. The support infrastructure would need to be duplicated should the contract be awarded to a company other than LMSSC.

Substantial Duplication of Costs. An analysis was completed to identify duplicate costs given the assumption that the incumbent, LMSSC, was not awarded the contract. Duplicative costs include: costs to pay the incumbent to provide operations and sustainment throughout the transition period; verifying the new contractor’s analyses throughout the transition period;

building new operations and test facilities and training of new subject matter experts.

In order to resolve anomalies of on-orbit satellites, and provide operations, maintenance and logistics support with the same quality expertise, efficiency and speed as the incumbents, a new contractor would require at least a 12 month transition period at a cost of approximately

$124.4M. This estimate is based only on the cost of performance for the incumbent to remain on contract for an additional 12 months. The estimated cost of the new contractor to provide services for a period of a year is approximately $112M. This estimate is only for operations and logistics support services and does not include new equipment or facilities costs. The overlap for

12 months of transition support results in $124.4M of duplicative costs.

Three of the four companies responding to the sources sought synopsis do not currently provide orbital operations or on orbit support of any satellite system. New orbital test and analysis facilities would be required to replace the current facilities located at Lockheed, Boeing and

Northrop-Grumman. This approach also assumes the new contractor enters into subcontracts or agreements with LMSSC, Boeing or Northrop-Grumman to use existing facilities in providing services. The existing facilities would be operated and maintained throughout the transition period until new prime contractor facilities could be completed and certified. The cost of establishing new facilities ranges from approximately $66.8M to $372M. The most likely estimated cost is $222M. The total of all duplicative costs is $346.6M ($222M + $124.4M).

New facilities would not be certified operational for approximately 12 months and additional training is required for new personnel on the operation of the systems in the new facility.

Transitioning work to a new contractor, purchase of new equipment and establishing operations in new facilities result in a duplication of costs to the Government that cannot be recovered through competition.

Cost Recovery through Competition. The duplication of costs described above cannot be recovered through competition. Milstar and DSCS III are mature programs in the operations and sustainment phase. These systems are reaching the end of their design life. The Government has no plans to procure additional Milstar or DSCS III systems. There are no potential long-term savings to the Government for investments in re-procurement of equipment, facilities and training of new subject matter experts. The Government would pay substantial duplicative costs for sustaining operations with the incumbent contractor throughout the 12 month transition. This contract is a follow-on effort for services that have been performed by the incumbent contractor since the DSCS III and Milstar systems became operational. It is unrealistic for another contractor without prior Milstar/DSCS III experience to be able to provide the necessary services and facilities at a cost savings substantially below the current costs. In a competitive environment, the Government could realistically expect approximately 10% lower proposed prices from other responsive, responsible offers. (10% is based on a typical competitive source selection. The competitive range is usually established with all offerors within 10% of the median price offered.) Assuming a 10% per year savings over the incumbent, the most the

Government could expect to realize in cost savings is approximately $12.4M per year or a total of $8.26M over 8 months. The estimated cost savings from a competitive procurement would be inadequate to offset the estimated $346M in duplicative costs.

Given the above information, it is in the best interests of the Government to award this action to the incumbent contractor using other than full and open competitive procedures. The period of this contractual action is 8 months making a source-selection and 12-month transitional period cost and schedule prohibitive. Award to any other source would result in substantial duplication of cost to the Government that is not expected to be recovered through competition.

VI. A DESCRIPTION OF EFFORTS MADE TO ENSURE THAT OFFERS ARE

SOLICITED FROM AS MANY POTENTIAL SOURCES AS IS PRACTICABLE:

Sources Sought Synopsis. On 30 Jun 2008, MCSW/PK published a sources sought synopsis in the Federal Business opportunities (FedBizOpps) in accordance with FAR Part 5.2. The synopsis described the intent of the Government to procure Milstar/DSCS III Orbital Operations

Support and MILSATCOM Logistics Sustainment Support. Interested parties were provided 15 days to submit an unclassified Statement of Capabilities (SOC) demonstrating detailed design knowledge of Milstar and DSCS III satellites and ground systems including hardware design, test procedures, individual spacecraft configurations and orbital procedures. The SOC was necessary to complete the market research and determine if other potential sources were available to provide the required services.

Four (4) companies, which are described below in Section VIII, responded to the Request for

Information, one of which was the incumbent.

In addition, a Notice of Contract Action (NOCA) was published on FedBizOps on 19 Nov 2009.

This announcement served to notify contractors of the proposed MILSATCOM Orbital

Operations and Logistics Sustainment Support effort, as described in the approved Acquisition

Strategy Document, and determine interest from potential sources other than the incumbent.

Interested parties were provided a second opportunity to submit capability statements. The

Contracting Officer suspects no responses will be submitted prior to the 15-day NOCA expiration date of 4 Dec 2009.

VII. DETERMINATION BY THE CONTRACTING OFFICER THAT THE

ANTICIPATED COST TO THE GOVERNMENT WILL BE FAIR AND REASONABLE.

The contracting officer anticipates the cost for this effort will be considered fair and reasonable.

The contractor will be required to provide a Basis of Estimate with supporting hours and dollars.

In accordance with FAR 15.403-4, (“Requiring Cost or Pricing Data”), certified cost and pricing data will be required for this contract effort. The contracting officer will require contractor proposal submission of cost or pricing data in the format prescribed in FAR15.408, Table 15-2, Instructions for Submitting Cost/Price Proposals When Cost or Pricing Data are Required and

DCAAP7641.90, Information for Contractors. The contracting officer will determine the costs based on any form of, but not limited to, the following recommendations: Audit Reports from

DCAA, Defense Contract Management Agency (DCMA) recommendations, technical evaluations, and past history.

VIII. A DESCRIPTION OF THE MARKET RESEARCH CONDUCTED AND THE

RESULTS.

Market research was conducted to determine the existence of other responsive, responsible offerors. The acquisition team analyzed the capabilities of potential offerors who responded to the Sources Sought Synopsis, dated 30 Jun 2008. Each contractor statement of capabilities was assessed on performance, experience, skill, and knowledge in areas of Milstar and DSCS III system task-specific requirements. The areas and criteria addressed were: 1) Satellite, Payload and Terminal Design, Maintenance and Engineering Experience, 2) AEHF/Milstar MCS and

DSCS III Ground Systems Hardware Maintenance Experience, 3) Mission Planning Element

(MPE) Operations, Maintenance, and Support, 4) Command and Control System Consolidated

(CCS-C) System Interfaces, 5) Systems Engineering Integration and Test (SEIT) Experience, 6)

Direct Mission Support, 7) On-site Urgent and Emergency Depot Level Maintenance Support, 8)

Technical Manual Maintenance Experience, 9) Satellite and Payload Analysis and Simulation, Telemetry Analysis, Test and Training Environment Software and Hardware Maintenance and

Operations, 10) Satellite Anomaly Analyses, Checkout and Resolution. The potential offerors were required to demonstrate recent, relevant experience in each area above.

Four companies, which are described below, responded providing statements of capabilities.

Each one had some capability or experience in at least one of the areas listed above. Only

LMSSC adequately demonstrated knowledge and expertise in all areas of the requirement. The information provided below is taken from the acquisition teams market research findings.

xxxxxxxxx xxxxxxxxx is a small business contractor that has provided spacecraft engineering services to

NASA and DoD. xxxxxxxxs did not demonstrate adequate experience in all areas requested above. While not a viable prime contractor, xxxxxxxx may be a qualified subcontractor.

xxxsxxxxxxxxx xxxxxx demonstrated limited Milstar, AEHF and DSCS III satellite and payload design, fault isolation, maintenance and engineering experience. xxxxxxx applicable experience is limited to the satellite communications terminals and Air Force Command Post Terminal (AFCPT) daily operations and hardware support to mission and systems integration, and operations and maintenance (O&M) for the 3 rd

Space Operations Squadron (3 SOPS). xxxxxxx did not demonstrate adequate experience in all areas requested above.

xxxxxxxxxxx (SOC voluntarily withdrawn)

Lxxxxxxxt supports xxxxxxxxxxxxxxxxxxxxxx program within MILSATCOM by providing

Systems Engineering and Integration support for Protected SATCOM systems. This activity would result in a potential Organizational Conflict of Interest under FAR 9.505-1. Lxxxxxxt personnel are located in the MCSW offices and have direct access to Lockheed Proprietary

Information. This puts them in the unique situation of having access to information not ordinarily provided to other potential offerors. Lxxxxxxt voluntarily withdrew their submittal from consideration after the program office requested clarification in their OCI mitigation plan.

LMSSC

Under the OOS and MLSS contracts, LMSSC has continually provided excellent satellite engineering support for both the Milstar and DSCS III constellations in support of satellite health, safety, system, and mission operations. The LMSSC MOP team is composed of highly-experienced hardware, software and systems engineering personnel with detailed knowledge of the, Milstar and DSCS III satellite mission operations, subsystems and ground segments.

LMSSC currently maintains a group of satellite operations engineers at Schriever Air Force Base

(SAFB), CO, to provide Milstar and DSCS III on-site real-time problem resolution and daily direct mission control support to the operating squadrons.

LMSSC personnel located at LMSSC factories in Northern and Southern California and the East

Coast provide engineering advice and satellite subsystem analysis evaluation for both normal operations and anomaly resolution based upon detailed spacecraft knowledge acquired during interaction with spacecraft designers during the Milstar and DSCS III development programs.

LMSSC’s ability to draw upon the expertise of the original, DSCS III and Milstar design experts provides additional capability to assist the LMSSC team of core on-orbit mission specialists with the resolution of major problems as required. LMSSC’s payload providers also contribute engineering expertise from their factories when necessary via subcontract agreements with

LMSSC

Based upon the program office assessment of each potential offeror’s statement of capabilities, it was determined that only LMSSC adequately demonstrated the ability to provide the knowledge, skill, and experience to meet all of the Milstar and DSCS III requirements. The government’s analysis determined that to develop additional sources would result in substantial duplication of costs that could not be recovered through competition. The effort required to build new facilities, purchase new equipment and transition to a new provider would be cost prohibitive.

No commercial service providers were identified through market research and none of the respondents indicated they are commercial providers of these services. As a result, FAR Part 12 procedures will not be used for this acquisition.

The program office continues to monitor the market for other potential sources since the Sources

Sought Synopsis was published. No other sources have materialized or been identified since the posting of the notice on 30 June 2008.

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

OPEN COMPETITION

The Milstar and DSCS III constellations collectively include 14 satellites. These 14 essential and highly complex Milstar and DSCS III satellites are built in four different design blocks. Upon the award of this proposed new contract, the satellites' ages will vary from 6 years to more than 15 years. As these satellites age the opportunity for mission disruption increases significantly each year. This requires contractor personnel have expert-level Milstar/DSCS III system design knowledge and specialized facilities to perform these tasks.

These services require the capability to provide extremely quick reaction response, problem identification, analysis and resolution activities which can only be accomplished by highly experienced personnel well trained and familiar with the system design, integration and interfaces.

X. A LISTING OF THE SOURCES, IF ANY, THAT EXPRESSED, IN WRITING, AN

INTEREST IN THE ACQUISITION.

See section VIII above.

XI. A STATEMENT OF THE ACTIONS, IF ANY, THE AGENCY MAY TAKE TO

REMOVE OR OVERCOME ANY BARRIERS TO COMPETITION BEFORE MAKING

ANY SUBSEQUENT ACQUISITION FOR THE SUPPLIES OR SERVICES REQUIRED.

Program office personnel will continue to assess the capabilities of the market place to perform the requirements of this contract. The Milstar and DSCS communications systems are aging constellations that have exceeded their design life. The Government doesn’t anticipate development of alternative sources to be cost effective.

XII. CONTRACTING OFFICER CERTIFICATION.

The Contracting Officer’s signature on the Justification and Approval signature page is evidence that she has determined this document to be both accurate and complete to the best of her knowledge and belief.

XIII. TECHNICAL/REQUIREMENTS PERSONNEL’S CERTIFICATION.

As evidenced by their signatures on the Justification and Approval signature page, the technical and/or requirements personnel have certified that any supporting data contained herein, which is their responsibility, is both accurate and complete.