Tab_06_-_2011-07-29_SBIRS_SRP_JRD_redacted.pdf

FOR OFFICIAL \'SE ONL \

.JUSTIFICATION REVIEW DOCUMENT (JRD)

Contracting Activity: SPACE AND MISSILE SYSTEMS CENTER, ISK Purchase Request!Local ldentirlcation Number: J&A 11 -07 Program Name and Progt·am E lement: Space Based Infrared Systems (SBIRS) High Element

Program clement: #35915F F.~timated Contract Cost · $3.54R Type Program: PEO Program Authority: 10 U.S.C. 2304(c)( l) as substantiated by 10 U.S.C. 2304(d)(l )(B) and implemented by FAR 6.302-1 Type J&A: Individual

Contracting Officer:

Program Manager:

Local Legal Reviewer:

Chief of the Contracting Office:

Competition Advocate:

Senior Center Contracting Official:

6 /t (:k-.t Date Signed

__ .J/z,./ _ _J

E. R ENSTEF.L, SMCIISST. ~ed

DSN: 633-194 1,COM: (310)653-1941

DSN: 633-385 1, COM: (310) 653-385 1

,•;,... i- I -

Dite Slgned

------- ~!:;; '1011 , Lt Col, USAF, SMC/P K Date Signed

DSN: 633- 1784, COM: (3 10) 653- 1784

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FOR OFFICIAL USE ONLY

Director, Space IR Systems Directorate

Air Force Program Executive Officer for Space:

A PPROVEO:

Assi tant Secretary of the Air Force (Acquisit ion):

tUKOI'tKIAI. lSt:Ol\U

1cr General, USAF Cornrn: (3 1 0) 653-33 12

ELLEN M. PAWLlKOWSKl, Lt General, USAF DSN: 633-5201 , Cornrn: (310) 653-5201

(,..Jv~/1 Date Signed

2'1JvJ II Date Signed

,, c ,, " I I

D@te Stgncd DSN : 223-6400, Comm 703-693-6400

I. Contracting Activity

Contract:

Contractor:

Contracting Agency:

Acquisition Office:

FOR OFFICIAL USE ONLY

JUSTIFICATION FOR OTHER THAN

FULL AND OPEN COMPETITION

FA8810- 12-C-TBD

Lockheed Martin Space Systems Company (LMSSC), Sunnyvale, CA

Department of Defense; U.S. Air Force

Space Based Infrared Systems (SBIRS) Directorate, Contracts Division (SMCIISK)

Contracting Office Location: SMC/ISK

Contracting Officer:

II. Description of Action

483 N. Av iation Boulevard Los Angeles AFB El Segundo, CA 90245-2808

James H. Gill DSN 633-1789, Commercial: (310) 653-1789

The purpose of this Justification & Approval (J&A) is to obtain approval to procure the GEO 5&6 satellite vehicles from Lockheed Martin Space Systems Company. A new fixed price incentive firm target (FPIF) contract will be established for this Satellite Replenishment Production (SRP) effort. The estimated cost for this contract is $3.54B.

Background/History. The original Space Based Infrared Systems (SBIRS) Engineering and Manufacturing Development (EMD) contract F0470 1-95-C-00 17 with Lockheed-Martin Space Systems Company (LMSSC) included development and production of 2 geosynchronous earth orbit satellites (GEO I and GEO 2, a.k.a. GEO 1-2), options for GEO 3-5, two (2) highly elliptical orbit payloads (HEO 1&2), the ground infrastructure to operate the SBIRS constellation, and the resources to process and disseminate mission data. To date, LMSSC has designed, procured, integrated, tested and delivered payloads HEO 1&2. Both GEO spacecraft and payloads have been delivered. The GEO 1 satellite launch occurred on 7 May 2011. The GEO 2 satellite is in vehicle-level checkout and test, with a projected launch in FY 13. In addition, the ground architecture (i.e. facilities, hardware, and software) has been developed and is in place to support the HEO payloads. The GEO ground software development necessary to support the GEO I launch is complete. Also, the infrastructure to support ground hardware and software maintenance; launch operations & early on-orbit testing; on-orbit operations, anomaly resolution and performance trending; test & support equipment; test-beds and simulations;

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training systems; and plans, procedures, specifications, drawings, and other documentation are all nearing completion on the EMD program.

Due to the delays experienced in the EMD program, the original options on the EMD contract for the GEO 3-5 satellites expired. During the I 5 November 2006 SBJRS Defense Acquisition Executive Review, the Under Secretary of Defense for Acquisition, Technology and Logistics (USD (AT &L)) concurred with the program office' s plans to begin the planning efforts to award a new contract to procure an additional geosynchronous satellite (GEO 3) and two additional highly elliptical orbit payloads (HEO 3&4). The 17 May 2007 Acquisit ion Strategy Panel (ASP), chaired by the Under Secretary of the Air Force (SAFIUS), approved the request to award a new Cost-Plus Award Fee (CPAF) I Cost-Plus Incentive Fee (CPIF) contract for SBIRS Follow-on Production (SFP). USD (AT &L) subsequently directed the Air Force to add an option to acquire the fourth GEO satellite (GEO 4) on the new SFP contract. The Justification & Approval (J&A) for HEO 3&4 and GEO 3&4 was approved 16 July 2007.

New Contracting Action. On 4 Sep 2008, USD (AT&L) directed the SBIRS Wing to plan for a fifth and sixth GEO satellite (GEO 5&6). The SBIRS Acquisition Decision Memorandum (ADM), dated I December 2008, directed the Wing to negotiate undefinitized contract options for GEO 5&6 with Not-to-Exceed pricing. This J&A is prepared in response to the ADM and OSD direction.

The acquisition strategy is to procure GEO 5 to the same technical baseline of GEO 4 with minimal design changes due to parts and materials obsolescence. GEO 6 will be procured to the same GEO 4 technical baseline.

The basic contract will also include a technical data package and rights to support potential future competition. The contract will also include options for launch integration, launch support, early on orbit testing, contractor operations support, and future producibility and affordabi lity studies. Finally, minor ground system and database changes will be included to accommodate design changes on the satellite.

Additional options wi ll be included to produce, launch, and test GEO 7 in order to provide an extra asset to protect the mission area in case of a catastrophic on-orbit fa ilure. Funding and authorization to procure GEO 7 have not been approved. If and when a decision is made to procure GEO 7, a separate J&A will be processed prior to exercising the option.

The driving need to pursue the GEO 5&6 acquisit ion at this time is the delivery schedule to meet critical mission need dates. Strategic Missile Warning was reaffirmed as a mission vital to our nation's security in the Secretary of Defense's SBIRS Nunn-McCurdy Program Certification Memorandum to Congress dated 12 Dec 2005. The objective launch date for GEO 5 is based on the functional avai lability assessment performed by HQ Air Force Space Command (AFSPC/A5) to determine when a replenishment satellite will be required to maintain a specified probability (or risk) of availability, coverage and performance to meet the critical Air Force mission to provide global strategic missile warning. Based on the functional availability model ~Q AFSPC/A5 has identified the GEO 5 need date as-. The GEO 6 need date is-.

III. Description of Supplies/Services

The SRP contract will contain the necessary contract line items (CLINs) to provide the required GEO 5&6 scope of work. This work includes non-recurring (NRE) redesign for parts obsolescence, long lead parts procurement, satellite production, launch vehicle integration, launch and early on-orbit test (EOT) support, operations support, and ground systems modifications to accommodate GEO satellite changes. Similar option CLINs will be included for GEO 7. ln addition, the contract will contain option CLINs for engineering studies, production studies, and optional design modifications for COMSEC/TRANSEC modernization, DualS-Band, GPS M-Code, and SABRS.

The above SRP scope of work will require the contractor to have detailed knowledge of the existing GEO satellite design and integration/test procedures. The contractor must also have detailed knowledge of the interfaces with existing ground architecture and the system sustainment infrastructure. LMSSC, the GEO 3&4 provider and SBIRS system integrator, would be the only qualified vendor with this knowledge.

IV. Statutory Authority Permitting Other Than Full and Open Competition

The statutory authority for this action is I 0 U.S.C. 2304(c)(l) as substantiated by 10 U.S.C.

2304(d)(l )(B) and implemented by FAR 6.302- 1, "Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements." FAR 6.302- 1 (a)(2)(ii)(B) states that supplies may be deemed to be available only from the original source in the case of a follow-on contract for the continued development and production of a major system or highly specialized equipment, including major components thereof, when it is likely that award to any other sources would result in unacceptable delays in fu lfi lling the agency's requirements.

V. Applicability of Authority

The authority cited in paragraph IV above is applicable as Lockheed Martin Space Systems Company is the original and the only responsible prime source for this fo llow-on contract for the replenishment of the SBIRS constellation with two additional space vehicles. This highly specialized space based capabi lity is a major system that supports missile warning, missile defense, battlespace awareness, and technical intelligence missions. Lockheed Martin Space Systems Company is the prime entity awarded the original SBIRS Engineering and Manufacturing Development contract in November 1996. Northrop Grumman Electronic Systems (NOES) is the subcontractor for the payload portion of this effort. Lockheed Martin Infonnation Systems and Government Services (LM IS&GS) is the subcontractor for the ground segment. This team has successfully delivered 2 HEO payloads in FY04 and FY05. They have also been designing, fabricating, testing, and preparing the space, ground and infrastructure ired to launch the first GEO satellite in FYll and GEO 2 in FY13. -

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m unacceptable schedule delays in fulfilling these Air Force requirements. Key delivery dates required to meet key mission essential warfighter need dates can only be met by the incumbent. Without the replacement satellites, the existing constellation may not meet all global strategic missile warning requirements, as explained below.

The primary mission of SBIRS is strategic missile warning, a mission that is critical to national security. The national importance of this mission area was reconfirmed in the second SBIRS Nunn-McCurdy program certification memorandum. It is of paramount importance that there is no gap between the actual end of the useful lives ofthe initial SBIRS GEO satellites and their replenishment satellites, whether they are of the SBIRS desi- r an future GEO IR satellite design. The - mission need date for GEO 5 and the mission need date for GEO 6 are d~m the AFSPC Missile Warning Gap Ana ys1s odel. Direct inputs and outputs of the model including probabilities of satellite availability, mean mission durations, and constellation health are classified. These mission need dates become the Air Force requirement and are directed to the program office through AFSPC Headquarters. Meeting the critical mission need dates for GEO satellite replenishment is the key driver in this acquisition strategy.

It would be impossible for another contractor to seamlessly continue the SBIRS effort in a timely fashion to meet the Air Force' s required GEO 5&6launch dates. The long lead, assembly, integration and test schedule for GEO 5&6 is approximately- based on performance on the cWTent GEO 3&4 contract. With a projected contract aw~uary 2012, only the incumbent contractor can meet the HQ AFSPC need date.

Award to a new contractor would require a new development program with significant schedule risk. Based on the program office' s current market research, there are several technically viable solutions, but none that have a mature, production ready design and none that could meet the SBIRS need dates. The office estimate based on the market research and historical satellite development data is from contract award to first unit delivery. A new system would also reqmre for first time on-orbit checkout and tuning. Including the checkout GEO satellite would be beyond the date for GEO

5. Such a delay would pose an risk to this nation' s warning miSSIOn.

VI. Efforts to Obtain Competition

The program office has determined that Lockheed Martin is the only contractor that can deliver the required services in the users ' required timeline, and therefore, there are no viable options to obtaining competition for this procurement. As addressed in Part V above, the users • required schedule precludes any new contractor from delivering the required products and services.

The SBIRS Directorate is aware of other space-based infrared technological developments. The SBIRS Directorate has collaborated with the Air Force Research Laboratories and the 3GIRS

Page6 of 8 program for new technology developments. There are pieces of enabling technologies in development, items such as larger staring focal plane arrays and faster signal processors; but the vendors working these technologies would not be capable of delivering a completely integrated SBIRS High satellite and ground system. The 3GIRS development was cancelled by Congress in FY09.

There are other space based IR systems that have been recently developed. For instance, the Space Tracking and Surveillance System (STSS) program has developed an IR-based sensor which was launched in FY l 0. However, this system is designed to fly in a Low Earth Orbit and to perform a different mission. STSS would not meet SBLRS requirements.

The Air Force is developing a strategy to ensure future competition for the space-based IR mission area. The Air Force and OSD have approved a new development funding line for Capability and Affordability Insertion Program (CAIP) starting in FY13. These funds will be used to define new open system architectures, mature key technologies, and build and test new prototype sensors. These efforts will enable the Air Force to compete the next production block buy of Space Based IR Satellites. The next production block is currently planned to start in FY17. The majority of the CAIP projects will be competitively awarded starting in FY13.

VII. Fair and Reasonable Costs

The negotiated cost for the GEO 5&6 production and ground system modification effort will be fair and reasonable. 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 determine the cost reasonableness based on any, but not limited to, the fo llowing recommendations: Audit Reports from Defense Contract Audit Agency (DCAA), Defense Contract Management Agency (OCMA) recommendations, program office technical evaluations, and past history/performance. Past history/performance is factored into the OSD Independent Cost Estimate (ICE), the Air Force Service Cost Position (SCP), and the Program Office Estimate (POE), and these estimates are used to formulate the President's Budget.

VIII. Market Research

A sources sought synopsis was posted on the Federal Business Opportunities (FBO) website on 15 Sep 2010. Lockheed Martin, Boeing, and Orbital Sciences responded as interested prime contractors. SMC/IS formed a technical evaluation team with Aerospace Corporation to assess the Boeing and Orbital Sciences capabilities.

The Orbital Sciences proposed capability was not deemed viable because their proposed solution would not meet the SBIRS requirements. The Boeing proposed capability was deemed viable but would not meet the required user need dates. The program office schedule estimate based on historical satellite programs, was that · solution would require

(compared to the current timeline for satellite). A new Boeing sate wou so requ1re an additional I

- for on-orbit checkout and performa~ timeline for a new development GEO satellite would result in an additional- beyond the- need date

Page 7 of8 mR OFFICIAL USE ONLY and would come with increased schedule and cost risk beyond those estimated for the incumbent Lockheed Martin system. Th is late delivery of mission capability is unacceptable to the Strategic Mission Warning mission.

The program office believes there are no viable alternative contractors at this time that could meet the SBIRS requirements for the given user need date.

IX. Any Other Facts Supporting the Use of Other Than Full and Open Competition

Not Applicable.

X. List of Sources, if any, That Expressed Interest in the Acquisition

Lockheed Martin Space Systems Company, Orbital Sciences Corporation, and Boeing Satellite Systems, Inc. (see Ylll, Market Research).

XI. Steps to Foster Competition

The Air Force is developing a strategy to ensure future competition for the space-based IR mission area. The Air Force and OSD have approved a new development funding line for Capability and Affordability Insertion starting in FY13. These funds will be used to define new open system architectures, mature key technologies, and build and test new prototype sensors.

These efforts will enable the Air Force to compete the next production block buy of Space Based IR Satellites. The next production block is currently planned to start in FY17.

Xll. Contracting Officer's Certification

The Contracting Officer' s s ignature on the Justification Review Document (JRD) is evidence that he has determined this document to be both accurate and complete to the best of his knowledge and belief.

XID. Technical/Requirement Personnel's Certification

As evidenced by their signatures on the JRD 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.

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