MOO LSS J A with Redactions 09-20.pdf

FOR OFFICIAL USE ONLY – PRE-NEGOTIATION SENSITIVE

JUSTIFICATION & AUTHORIZATION FOR OTHER THAN

FULL AND OPEN COMPETITION

I. AGENCY/CONTRACTING ACTIVITY IDENTIFICATION

Acquisition Office: Space & Missile Center (AFSPC)

MILSATCOM Wing Contracting Office (MCSW/PK)

483 N. Aviation Blvd

El Segundo, CA 90245

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

This individual Justification and Approval document is to authorize the award of a Cost Plus

Award Fee (CPAF) sole-source contract for Orbital Operations and Logistics Sustainment

Support. Operations and logistics contract support will provide operations and sustainment activities to support the Milstar and 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. A CPAF contract with Time & Material CLINs is appropriate for these support services due to unknown situations which may arise in the space environment and the uncertainty associated with estimating the number of hours required to analyze and overcome unforeseeable problems with hardware failures and software anomalies as they emerge. The period of performance will commence 25 Jul 2010 with a basic year and 4 option years continuing until November 2014.

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

AGENCY’S NEEDS (INCLUDING THE ESTIMATED VALUE)

The current Orbital Operation Support (OOS) contract was awarded December 2003 with a one-year base period and four (4) one-year options. All options have been exercised including a one year extension. The current contract expired 30 November 2009, culminating in a total contract value of $449M. The current logistics sustainment support contract, MILSATCOM Logistics

Sustainment Support (MLSS), was awarded December 2005 with a base year and two one-year options, and one six (6) month option. All options have been exercised including a 6-month extension. The current contract expired 8 December 2009, with a total contract value of $78.1M.

In order to gain efficiency and reduce cost for protected SATCOM sustainment effort in the future, a new acquisition strategy approach was adopted in May 2008 to combine both the OOS and MLSS tasks under a single contract.

To prevent loss of satellite control and subsequent loss of warfighter-critical satellite communications, a UCA (NTE $57.3M) and J&A were approved at the SMC level to bridge

Milstar and DSCS III sustainment support pending approval of the subject J&A.

The total estimated value of a five (5) year contract to provide orbital operations and logistics sustainment support for Milstar and DSCS III is approximately $646M. 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. Both Milstar and

DSCS have required contractor support for orbital operations since they became operational.

Lockheed Martin Space Systems Company currently provides services for both Orbital

Operations Support and MILSATCOM Logistics Sustainment Support on two separate contracts.

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 respondents. 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 in the first 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.

The costs presented in this estimate represent the duplicative costs that would be incurred by awarding a new contract to a prime contractor other than the incumbent, Lockheed Martin Space

Systems. It was not possible to capture or quantify all of the cost risks that were identified in the assumptions above. It is not possible for the Government to recoup the costs over the period of performance as a result of a competitive proposal process. Therefore, based on the information presented, it is in the best interests of the Government to pursue a contract using other than full and open competition.

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 $74.4M over 6 years. The estimated cost savings from a competitive procurement would be inadequate to offset the estimated $346M in duplicative costs. The estimated cost savings for a new contractor would have to exceed $60.8M per year over the life of the contract for the

Government to recoup the 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. 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 for ten (10) years; this requirement was later reduced to five (5) years. 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 whether or not other potential sources were available to provide the required services.

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 Government posted a sources sought synopsis on 30 Jun 2008 requesting interested offerors submit statements of capabilities to provide services for this requirement. 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 following four companies responded providing statements of capabilities. Each one had some capability or experience in at least one of the areas listed above. However, only LMSSC adequately demonstrated knowledge and expertise in all areas of the requirement.

a.i. solutions

Harris IT Solutions

LinQuest Corp (SOC withdrawn from Consideration)

LMSSC

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.

Basis of Estimate for Duplication of Costs

This estimate also assumes the incumbent contractor provides seamless support to the

Government and all training necessary to facilitate smooth transition between themselves and the new prime contractor. This requirement is highly specialized and extremely complex and the transition period is estimated to be 12 months. Operations and Logistic support costs were estimated using the historical contract costs to provide support under the current contracts and escalating those costs using current inflation indices to arrive at costs of performance in 2010.

The estimates for facilities costs were provided by LMSSC based on costs for contractor and

Government facilities and equipment currently used and maintained under the existing contract(s). OOS and MLSS Support costs are taken from actual contractor costs in performance of the current contracts. The costs have been escalated from 2007 dollars using a factor of 3.5% from Air Force inflation indices for O&M. The costs represent the total cost to the Government to transition work to a new prime contractor in the first year of operations.

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

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

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 he has determined this document to be both accurate and complete to the best of his 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.