J-A_09-35_Amend_Redacted.pdf

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COORDII\ATIO~ A~D APPROVAL DOCC.\lf.:\"T

C ontracting Acthity: SPACE A?\0 MISSILE SYSTEMS (['l'-:TER Y11LSATCOM Systt!tr.s Dircctor;lie

Purchac;c Request/Loca l fdcntification Nu mber: /\t tachrnc:1r:: I to J&A 09- )5 Program ~a me (and Program F:lcmcnt, if applicable): Ath' m~cd Extremel y Hi).!h Fr~qu~.:m:y 1

Program Fh.:mcm · -!\ 360-l F Estimat(.'d C ontr·act C ost {including options): S 150.000.000 - Parts Obsolescence ($:;. 1 13 total) T~·pc Pro~r:tm: PFO Program Auth ority : I 0 U.S.C. 2304(c)(l ), a s implemented by I'A R (:d02-l (a)(2)(ii) Type J&A : Individual

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Competi t ion Advocnt~:

Senior Center

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Air F0rcc Program E\ccutivc Ofliccr for Space:

Deputy Asst Secretary (Contracting):

APPROVED:

Senior Procurement r:x ccutivc:

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FOR OFFICI.\L liSE 0:'\LY

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COORDI~ATlON AKD APJlROVAL })OCTMENT

Contracting Activity: SPACE AND MISSILE SYSTEMS CEI':TSR MILS A TCOM Systems Directorate

J>urcbase Request/Local Identification Number: Amendment 1 to J&.A 09-35 Program Name (and Program Element, if applicahlc): Ad\·anccd Extremely High Frequency I Program Element: f/33604F Estimated Contract Cost (including options): Space Vehicle Five (SV 5) and <;\' 6 (excludes S\'4) $3.100,000.000: $150.000,000 - Parts Obsolescence ($3.250B Total) Type Program: PEO Program Authority : 10 U.S.C. 2304(c)(l), as implemented by FAR 6.302-1(a)(2)(ii) Type .J&A: Individual

Contracting O fficer:

Chief of the Contracting Office:

Program Ma,.,ager/ Director:

Local Legal Reviewer:

Competition Advocate:

Senior Center Contracting Official:

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Air Force Program Executive: Officer for Space:

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P..~.:i":>btl· Deputy Asst Secretary (Contracti:1g):

APPROv'tD:

Scnioi Procurement Executive:

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Date Signed q>9 ,qp\J___!l Date Signee

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FOR OFFIC L\L t'Sl: ONLY

JUSTIFICATION FOR OTHER THAN

f uLL AND OPE~ CO~PETITION

Amendment 1 to .J&A 09-35

I. CONTRACTING ACTIVITY

Acquisition Office:

Contracting Office And Location:

Space and Missile Systems Center/ MILS A TCOM Systems Directorate

SMCfPKJ 483 N. Aviation Blvd El Segundo, CA 90245

11. NATURE AND/OR DESCRIPTION OF TilE ACTION BEING PROCESSED

The purpose of the Justification and Approval (J&A) amendment is to obtain approval for the Space and Missile Systems Center (SMC). Military Satellite Communications Systems Directorate (MC), Protected Satellite Communications Division (MCA) to issue a sole source acquisition of parts obsolescence mitigation for potential future Advanced Extremely High Frequency (AEH}') procurements (beyond SV6) to Lockheed Martin. In addition, J&A (09-35) is amended to reflect the procurement of AEHF Space Vehicles Five (SVS) and Six (SV6). including the fo llo\\ing:

(1) Move procurement of SV6 from fY 14 to FY1 2 to synchronize with SV5;

(2) Merge SVS and SV6 Advance Procttrement into a single acquisition of long lead parts;

(3) Change the contract type for SVS from CPfF to FPIF with Firm Target.

SVs 5-6 will be procured as a block buy in FY12. The obsolescence mitigation \Yi ll include an obsolescence surveillance effort, procurement of parts that are about to be discontinued, and redevelopment of parts that are no longer available.

III. DESCRIPTION OF THE SUPPLIES/SERVICES R~:QUIRED TO MEET THE

AGENCY'S NEEDS

Background The AEI IF satellite communications (SATCOM) system will provide secure. survivable, anti-jam communications to U.S. war fighters at all levels of conflict. AEHF will be the protected backbone of Department of Defense (DoD) Military Satellite Communications (MILSA TCOM) architecture.

The Air Force will procure Advanced E>.'tremely High Frequency (AF.HF) Space Vehicles 5 and 6;

these communications satellites will be manufactured, integrated. tested. and delivered. The satellites v..ill be accepted via 0 0250 (Material Inspection and Receiving Report) during orbit. after demonstrating compliance \.\ith Government acceptance requirements. The original J&A (09-35) approved the sole source award of AEHF SVS and SV6 procurement to Lockheed Martin.

Strategy Update

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This amendment to J&A 09-35 updates the acquisition ·approach to move the procurement ofSV6 from 2014 to 2012, combining the procurements of SVs 5 and 6 and associated long lead parts, and add parts obsolescence mhigation for future procurements. Also, the planned use of a CPJF tor SV5 \vill be changed to be FPlF. resulting in a block buy of SVs 5-6 in FY 12 on an FPif' contract.

This amendment changes the acquisition strategy as described below to procure SV 5-6 as a block buy and adds parts obsolescence mitigation for potential future AEHF satellite procurements (SV 7-8) at an estimated total cost of $3.2508. The original J&A included $2.1758 for SV 4. SV 4 has been aw-arded and is not included in this amendment.

Current Requirement The acquisition of AEIIF SVS and SV6 implements the Department of Defense's plan for a block buy of two production AEHF satellites. as well as obsolescence mitigation for future satellites. Both satellites will be procured be1:,rinning Vvith FY1 1 Advance Procurement 3020 funds for long lead parts and obsolescence work, FY12 Procurement 3020 appropriations for satellite production, 3600 Research and Development funds for obsolescence surveillance. and both 3020 and 3600 appropriations for obsolescence mitigation. SVS and SV6 v.ill be required to be ready -to launch in 2018 and 2019 respectivel y. Both satellites are to be functionally identical to the four AEHF satellites currently on contract. They must be fully backward compatible with existing ground infrastructure. to include fielded Low Data Rate (LDR) and Medium Data Rate (MDR) terminals; in-development extended data rate (XDR) terminals; all clements of the AEHF Mission Control Segment: as well as planned or on orbit Milstar and AEHF sate llites via their crosslink communications.

Obsolescence mitigation for future satellites is necessary to bridge the potential gap bct\\·ecn production of SVs 5-6 and the nc7\.'1 block of AEHF satellites. Obsolescence mitigation will include a surveillance effort, procurement of parts that are about to be di scontinued, and redevelopment of parts that are no longer available. The estimate for this AEHF parts obsolescence mitigation effort is $150,000,000.

The surveillance effort will be funded by 3600 Research and Development funds. and the procurement of parts that are about to be discontinued and the redevelopment efforts will be funded through 3020 and 3600 appropriations. The period of performance of this contract is expected to be 2012-2015.

IV. STATUTORY AUTHORITY PERMITTING OTHER THAN FULL AND OPEN

COMPETITION

The statutory authority for this action is Title 10 U.S.C. 2304(c)(I) as implemented by FAR 6.302-l(a)(2)(ii), ·'Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements. Supplies may be deemed to be available only from the original source in the case of a follow-on contract for the continued development or production of a major system or highly specialized equipment". The Government would experience a substantial duplication of cost and unacceptable delays in fulfilling its requirements that are not expected to be recovered through competition.

V. APPLICABILITY OF AUTHORITY: DEMONSTRATION THAT THE

CONTRACTOR'S UNTQUE QUALIFICATIONS OR NA TlTRE OF TlfE ACQUISITION

REQUIRES THE USE OF THE AUTHORITY CITED ABOVE

Lockheed Martin Space Systems Company (LMSSC) has exclusive experience \\ith Advanced

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Extremely High Frequency (Advanced EHF) that reaches back to the inception ofthe program. This unique position affords LMSSC unparalleled expertise. LMSSC has functioned as the prime contractor for Advanced EIIF for over nine years

The contractor. Lockheed Martin, possesses:

( l) A high confidence solution 'With mature technologies and minimal Non-Recurring Engineering

(2) Thorough understanding of technical interface requirements

(3) Thorough understanding of AEHF information assurance requirements

(4) Extensive systems engineering experience, knowledge, and backr,.rrotmd in Extremely High

Frequency (EHF) secure satellite communications

(5) Experience and understanding of US Government foreign disclosure requirements.

(6) Exclusive experience with the assembly, integration. test, and launch associated with this particular satellite

Since the award of SVl in 2002 through the recently awarded SV4 effort in Decem her of 20 10, the Government has made a substantial investment in Advanced EI IF research and development. As the developer. integrator, and space vehicle (satellite) manufacturer, LMSSC developed and possesses unrivaled Advanced EHF skill and expertise. If the Government anempts to recreate this level of expertise with another contractor, the agency would experience substantial duplication of costs to the government in the amount estimated amount of $3 Billion for RDT &E that :1re not expected to be recovered through competition. The cancelled Transformational Satellite Communication System (TSAT) program which was planned to replace AEHF satellites, expended over $38 in systems engineering. risk reduction. and ground terminal segment efforts over a period of 4 plus years without awarding a production contract.

In addition, any other contractor would experience significant schedule delays in order to develop an adequate workforce with necessary proficiency, work through the initial learning curve, and recreate the significant systems engineering effort already accomplished. Using the experienced gained from developing technical and systems engineering processes at the inception of the AEl IF program and the experience that MILSA TCOM endured through the TSA T prob,rram. delays estimated at 4 to 6 years could be experienced. These are considered unacceptable.

Because of Lockheed Martin's experience and expertise in building AEII F satellites. the U.S. Air Force would experience substantial duplication of cost and unacceptable delays in ftJi filling its requirements if it contracted with any other source for AEHF obsolescence management.

VI. DESCRIPTION OF EFFORTS MADE TO ENSURE THAT OFFERS ARE SOU CITED

FROM AS MANY POTE~TIAL SOURCES AS DEEMED PRACTICABLE

A Sources Sought Synopsis (Pre-Solicitation Notice F A8808-11-R-0007) pursuant to the Evolutionary Acquisition for Space Efficiency (EASE) initiative was published at Federal Business Opportunities (www.fbo.gov) for Jiftccn business days. The notice included parts obsolescence mitigation for future Advanced Extremely High Frequency (AEHF) satellite vehicles and was published on 19 Jan 2011.

Since the original competition for the AEHF satellite, the program office has been involved in the

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FOH OH' J\1,\L l'SJ:: ONLY market place for the deYclopmcnt of protected communication satellites. As we have incrementally added requirements such as clone satellites, the market research has yielded consistent resuJts. Market research has repeatedly concluded that only the AEHF incumbent contractor is capable of meeting the Government techrucal requirements v.ithin Government schedule requirements and v .. ithout substantial reinvestment by the Government in the development of a new sate1lite. In addition to past research, market research was updated through publication of a 19 January 2011 sources sought synopsis confirming the only responsible source to be Lockheed Martin. This is consistent with past research.

VII. DETERMI:"'ATION BY THE CONTRACTING OFFICER THAT THE ANTICIPATED

COST TO THE GOVER~1E~T 'WlLL BE FAIR Al\'D REASONABLE

In accordance with FAR 15.402, the Contracting Officer \>Jill ensure the proposed prices arc fair and reasonable. using both price and cost analysis techniques. Evaluation of the proposed price and costs for this effort will be based on previous AEHF pans obsolescence ntitigation efforts.

The contractor will be required to provide Basis of Estimate (BOE) with supporting hours. labor mix, and rates and factors. In accordance v..ith FAR 15.404-1. "Proposal Analysis Techniques.' ' cost and price analysis shall be used. In addition, the Contracting Officer will judge the costs based on DCAA audit reports, DCMA recommendations, technical evaluations, and historical costs. Recent historica l data was analyzed as part of the comparison. 'The AEHF program performed obsolescence mitigation efforts for the SV4 production and similar efforts for the SV4, 5, and 6 Long-Lead procurements. The Contracting Officer will use these reports and recommendations to establish negotiation objectives in order to achieve a fair and reasonable price.

VIII. DESCRIPTION OF THE MARKET RESEARCH CONDUCTED Al'ID TIIF. RESULTS, OR A STATEMENT OF TilE REASONS MARKET RESEARCH WAS NOT CONDUCTED

As described in Section VI above. market research. in accordance with FAR Part 10. was updated by a synopsis of the proposed acquisition, advising industry of the pending acquisition and soliciting inquiries from interested parties. Market research data obtained through past incremental purchases of AEHF sate llite clones were also analy7cd. The fact that Lockheed Martin Space Systems Company was the only contractor that responded to the 19 January 2011 sources sought synopsis indicated that there were no changes in the market dynamics confirming our previous research.

IX. ANY OTHER FACTS SUPPORTTI\G THE USE OF OTHER THAN FULL AND OPEN

COMPETITION

Since the initial development of the AEHF satellites. many of the original vendors have gone out of business or been purchased by other companies. The remaining vendors have been reluctant to support limited quantity buys associated with a relatively small production lot of satellites. Lockheed Martin Space Systems Company (LMSSC) is the only known source capable of managing this obsolescence mitigation effort as it would be prohibitive to have other suppliers re-qualifying parts on Lockheed Martin AET-IF satellites.

Additionally, the Government docs not own data rights to critical bus and payload technologies, Page 6 of7

FOR OFF!CUI.l iSE ONLY software. and manufacturing processes nor is the data available for release since it was developed by LMSSC and Northrop Grumman for commercial applications. much of which were throuszh the use of company funded research. Procurement of data rights was previously not pursued. Lockheed Martin stated that they are not interested in selling the data rights and it \\Ould likely be cost prohibitiYe for the Government at this juncture. Without the rights to this proprietary data, the Government will not be able to competitively acquire the sustainment or the production of future AEHF satellites. The cost of acquiring the data would never be offset by the anticipated savings obtained by competition.

X. LIST OF SOURCES, IF ANY. THAT EXPRESSED INTEREST IN T HE ACQUISITION

As described above in Section VI, the following sources expressed in ~Tiring. via a Statement of Capabi lities, an interest in this acquisition:

Lockheed Martin Space Systems Company (LMSSC) 1111 Lockheed Martin Way Sunnyvale, CA 94089

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

R EMOVE OR OVERCOME ANY BARRIERS TO COMPETITION BEFORE MAKING

SUBSEQUEKT ACQt;ISlTlONS FOR THE SUPPLIES OR SERVICES REQLIRED

The GoYemment wi ll continue to issue sources sought to seek other sources for potential competition in the future. However. LMSSC is the only known qualified source interested in participating as the prime contractor for the AEHF parts obsolescence mitigation. The sole source is required from contract award through 2015 to align with the production and deliYery ofSVS and SV6 satellites, and through anticipated award of SV7. The Government will review the requirements prior to contract award to assure that the justification to procure using other than full and open competition remains val id.

Effective subcontract competition is both feasible and desi rable. Subcontract competition will be promoted and sustained throughout the course of the acquisit ion with the Government's desire to stimulate and increase small business opportunities. There are no known barriers to increasing subcontract opportunities as a result of this J&A. The Prime contractor. LMSSC, v.~ll accomplish this in accordance with the approved Subcontracting Plan.

XII. CONTRACTI:"olG OFFICER'S CERTIFICATION

The contracting officer's signature on the Coordination and Approval Document evidences he has determined this document to be both accurate and complete to the best of his knO\vicdge and belief

XIII. TECH~ICALIREQUfREI\1E;\1S PERSO~:"olEL'S CERTIFICATION

As evidenced by their signatures on the Coordina1ion and Approval Document, the technical and/or requirements program manager has certified any supporting data contained herein that is their responsibility is both accurate and complete.

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