GBSD RSRV JA Final_Redacted.pdf

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

FOR OFFICIAL USE ONLY

March 2020 FOR OFFICIAL USE ONLY Page 2 of 7

I. Agency and Contracting Activity.

United States Air Force AFNWC/NI ICBM Systems Directorate AFNWC/PZB Contracting Office 6008 Wardleigh Rd, Bldg 1580 Hill AFB UT, 84056-5802 Contracting Officer: Kenneth L. Tilby/AFNWC/PZBG

II. Nature and/or description of the action being approved.

A. The United States Air Force (USAF) entered into a new sole source contract with Lockheed Martin Space Systems Company (LMSSC) on 5 June 2019 to procure services for the sustainment of the Minuteman III (MMIII) Re-entry Systems/Re-entry Vehicle (RS/RV) Subsystem on contract FA8214-19- D-0001. The contract supports the MMIII Intercontinental Ballistic Missile (ICBM) Weapon System.

LMSSC, CAGE Code 79272, is located at 230 Mall Boulevard, King of Prussia, PA 19406. The J&A for this contract was approved on 4 Jan 2018 by Darlene Costello, Principle Deputy Assistant Secretary of the Air Force (Acquisition & Logistics)

B. The Re-entry Systems/Re-entry Vehicle (RS/RV) Subsystem contract only included work performed for the MMIII weapon system. The intent of this J&A is to enable a task order of the same type and scope of work to be completed for the Ground Based Strategic Deterrent (GBSD) Re-entry Systems/Re-entry Vehicle (RS/RV) Subsystem on contract FA8214-19-D-0001.

C. Contract Type and Structure: This is a services contract. The contract type is an indefinite-delivery indefinite-quantity (IDIQ) contract. The pricing arrangement of the delivery and task orders is a combination of Firm Fixed Price (FFP), Fixed Price Level of Effort (FPLOE), Cost Plus Incentive Fee (CPIF), Cost Plus Fixed Fee (CPFF), Cost Plus Award Fee (CPAF), Fixed Price Incentive Firm (FPIF), and Cost Reimbursement - No Fee. The Option to Extend Services Clause, FAR 52.217-8, is included and was evaluated in contract FA8214-19-D-0001.

III. Description of supplies/services required to meet agency needs (including the estimated value).

A. FA8214-19-D-0001 is a follow-on contract to provide engineering, software, and maintenance services for sustainment, modification, development, test and evaluation, procurement, production, repair and refurbishment of the MMIII RS/RV Subsystem and related support equipment. This J&A adds the GBSD Weapon System to the in-scope work that can be accomplished on this contract and does not require any addition to the type of work previously identified on contract FA8214-19-D-0001.

B. FA8214-19-D-0001 was awarded on 5 June 2019, and the contract includes a five-year ordering period with an option for an additional five-year ordering period. The contract also includes an option to extend sustaining engineering services for six months if necessary. The basis of the rationale to contract for more than one fiscal year is referenced above and detailed in Sections V, VIII, and IX.

C. The total cost for the added GBDS effort is estimated to be $9.7M. This cost is based on the 3 March 2020 cost estimate, “Reentry System SSC Contract Modification for GBSD Support”. The funding appropriations will be Air Force Appropriation Code 3600-Research, Development, Test and Evaluation. Below is the

March 2020 FOR OFFICIAL USE ONLY Page 3 of 7 estimated cost per year (in $Millions):

FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29

$0.14 $0.45 $0.59 $0.80 $1.13 $1.48 $1.53 $1.45 $1.28 $0.88

IV. Statutory authority permitting other than full and open competition.

The statutory authority that permits other than full and open competition for this acquisition is 10 U.S.C.2304 (c)(1), as implemented by FAR 6.302-1, Only One Responsible Source.

V. Demonstration that the contractor's unique qualifications or the nature of the acquisition requires use of the authority cited above (applicability of authority).

A. System Description: The ICBM mission is to deter a nuclear missile attack against the United States and execute the land-based leg of the strategic nuclear triad. This requirement necessitates engineering services for integration, testing, analysis, and qualification of the Mk21 RV and related support equipment.

1. Adding GBSD requirements to contract FA8214-19-D-0001 is required to reduce weapon system integration and qualification risks. This construct retains the integrity of the Mk21RV engineering support across MMIII and GBSD and ensures safe, secure and reliable supportability for the duration of this effort. The age and complexity of the Mk21 RV, the specialized legacy talent/support and test equipment required to sustain it, the limited availability of historical design and process documentation, and the need to qualify the Mk21 RV onto the GBSD weapon system requires continued performance of this highly specialized service.

2. LMSSC has designed and built the majority of USAF RV flight and support equipment since the 1960's. This includes the Mk21 RV, Mk21 Arming and Fuzing Assembly (AFA or fuze), Low Frequency Instrumentation Consoles (LFIC) and the Radio Frequency Instrumentation Consoles (RFIC). The LFIC and RFIC are unique/ peculiar support equipment required for the majority of the Mk21 RV technical workload. LMSSC developed procedures for Mk21 AFA refurbishment, so their workforce is trained and qualified. This contract encompasses many different services related to overarching Mk21 RV engineering support, including integration activities, support equipment expertise, testing, analysis, and qualification.

3. Since the beginning of the MMIII program the RV workload has been performed by LMSSC, either as a subcontractor to a MMIII prime contract or via a sole-source prime contract. These services were previously contracted under the IPIC, but transitioned to a sole-source prime contract to LMSSC in June 2014. FA8214-19- D-0001 is a follow-on contract to that effort. These same services are now required for the GBSD weapon system.

B. Unique/Highly Specialized Capabilities and Qualifications: As the designer or integrator of all Mk21 fuzes and related peculiar support equipment, LMSSC has unique expertise, equipment and historical documentation required for integration and qualification. The majority of the Mk21 RV technical workload requires the use of specialized support equipment. There are 11 LFICs and two RFICs in existence. Six of the LFICs are Government owned and are being utilized to their maximum capacity and cannot be offered as Government-Furnished Equipment (GFE) to potential offerors. LMSSC owns the remaining five LFICs and the two RFICs. Additionally, LMSSC has unique skills and equipment required for Mk21 AFA environment qualification. This includes centrifuges, shaker tables, shock simulators, and environmental chambers combined with support equipment that is required to power and analyze the fuze during testing. This specialized hardware may be required during the integration, testing, and qualification of Mk21 onto GBSD.

C. Soliciting and awarding the GBSD requirement for Mk21 RV qualification on a separate contract or to any other source would result in a substantial duplication of cost to the Government that is not expected to be recovered

March 2020 FOR OFFICIAL USE ONLY Page 4 of 7 through competition and would result in unacceptable delays - up to eight years to develop and procure new support equipment - in fulfilling critical USAF nuclear integration and qualification requirements. The Government estimated cost to duplicate the existing LFIC/RFIC capability is approximately $295M.

D. Unique expertise: Reentry Field Support Equipment (RFSE) was developed to replace the Reentry System Test Set (RSTS) and Safety Enhanced Reentry Vehicle (SERV) Field Test Set (SFTS) that is used to test Mk21 Reentry Vehicles (RV's). RFSE production was competitively awarded to LMSSC as the only technically acceptable offeror in July 2016. Though the award was protested by the unsuccessful offeror, the Government Accountability Office denied the protest. RFSE support will be required by the services related to this J&A. Furthermore, LMSSC expertise will be required to provide unique support to Mk21 RV testing on the new GBSD Integrated Test Bed (GITB). This expertise includes running and maintaining the System Test Console (which powers the fuze during testing), configuring the RV for test, constructing and configuring RV electrical load simulators, and analyzing the fuze and telemetry output. As the weapon system integrator for the replacement fuze, LMSSC is also uniquely qualified to assist in integrating a replacement AFA Mk21 RV onto GBSD. LMSSC provided Mk21 RV integration expertise during the SERV program, which integrated the Mk21 RV, originally built for Peacekeeper, onto MMIII.

E. As a result of the foregoing, it has been determined that LMSSC's unique capabilities and expertise make it the only responsible source that can provide the required service without the Government incurring substantial duplication of costs that are not expected to be recovered through competition and/or unacceptable delays in contract performance.

VI. Description of efforts made to ensure that offers are solicited from as many potential sources as practicable, including whether a notice was or will be publicized as required by subpart 5.2 and, if not, which exception under

FAR 5.202 applies.

Efforts made in relation to the award of contract FA8214-19-D-0001:

A. On 27 April 2017, a Sources Sought Synopsis (SSS) was published on FedBizOpps/FA8214-17-RRSRV in relation to the solicitation and award of contract FA8214-19-D-0001. This SSS was published to determine if the effort could be competitive and to identify all interested parties and Industry’s LFIC/RFIC capabilities. A description of the market research conducted and results are documented in section VIII below.

B. The requirement for contract FA8214-19-D-0001 was synopsized on FedBizOpps as a Notice of Proposed Contract Action IAW FAR 5.201.

VII. Determination by the Contracting Officer that the anticipated cost to the Government will be fair and reasonable.

The following steps were taken prior to award of contract FA8214-19-D-0001 to ensure the anticipated cost of this acquisition was fair and reasonable. GBSD requirements will utilize the same cost and pricing structure established on the contract. These steps are IAW the procedures and criteria contained in FAR Part 30 - Cost Accounting Standards Administration, Part 31 - Contract Cost Principles and Procedures, and Subpart 15.4 - Contract pricing:

1) Contractor was required to submit Certified Cost and Pricing Data.

2) Technical evaluation was performed by the ICBM RS/RV Program Office to include evaluation of the contractor’s proposal.

3) Defense Contract Audit Agency (DCAA) audit of the contractor’s cost proposal was performed.

4) AFSC/PZCF Pricing Office evaluated the contractor’s cost/price proposal and considered inputs from

March 2020 FOR OFFICIAL USE ONLY Page 5 of 7

DCAA and the Program Office technical evaluation in establishing the Government’s cost/price position.

5) A Final PNM was completed following negotiations, determining all contract pricing to be fair and reasonable.

6) Office of Secretary of Defense Pre-Award Phase I and II Peer Reviews were completed.

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

The following is a description of the Market Research conducted for contract FA8214-19-D-0001 and is determined to be current and applicable to the addition of GBSD requirements on this contract. To date, the Air Force has not found or been presented with any new or additional information to indicate that this work can be accomplished by any vendor other than Lockheed Martin Space Systems Company (LMSSC).

A. In 2011, the previous RS/RV team conducted an Industry Day conference, performed market research (to include a Request for Information (RFI) and SSS), and site visits. Responses to the RFI included Northrop Grumman Corporation (NGC), Textron Defense Systems (TDS), LMSSC, and M.R. Research.

M.R. Research was determined to be a small corporation with no prior MMIII or RS/RV experience and was not considered a viable source. NGC had significant weapon system knowledge, but had never accomplished the actual touch labor in the RS/RV production environment. TDS is a MK21 Original Equipment Manufacturer (OEM), but had not built a MK21 fuze in over 20 years.

B. Site visits were conducted at both NGC and TDS in March 2011. The RS/RV Program Team observed that NGC and TDS did not have a LFIC/RFIC capability. Neither NGC nor TDS were qualified to perform the MK21 and MK12A AFA repair and refurbishment activities. Neither had the capability to satisfy RS/RV requirements without the Government incurring substantial duplication of cost and unacceptable delays. As discussed in Section V, the Government estimated cost to acquire a LFIC/RFIC capability and become technically qualified would be approximately $295M and could take up to eight years.

C. A site visit was conducted at LMSSC in January 2012. The RS/RV Program Team observed that LMSSC possesses the required equipment and technical qualifications to perform the work within the scope of this contract.

D. The Reentry Support Equipment Replacement Program (RSERP) was a program initiated specifically with the intent of opening competition for the RS/RV workload by replacing the aging Reentry Support Equipment and providing the new GFE for industry use. Acquisition began as competitive, but technical capability unique to LMSSC drove the strategy to sole-source. Following receipt of proposal, the RSERP program was determined to be unaffordable and unviable and the program was cancelled in 2016.

E. The 309th Missile Maintenance Group (MMXG) currently performs depot sustainment operations for the MK21, MK12A and RS subsystems. This includes repair of nosetips, arming and fuzing assemblies, forward/fuze sections, aft sections, rear covers, body sections, bulkheads and cable repairs. In addition, they perform aging surveillance and Service Select Test Assess & Report testing on RV assets. The 309th MMXG does not possess the capability to test radar components and subcomponents. They are highly integrated with LMSSC as the OEM of the AFA and support equipment. MMXG relies on LMSSC to perform troubleshooting and data package review of repaired/refurbished assets.

March 2020 FOR OFFICIAL USE ONLY Page 6 of 7

F. In accordance with FAR Part 10, the RS/RV Program Team began conducting market research in April 2017 for the follow-on contract. These activities included a SSS, internet searches, trade journal reviews, and other communication with industry colleagues. Respondents to the SSS included The Bionetics Corporation (Bionetics), LMSSC, and NGC.

G. The number of responders to the 2017 SSS dropped to three from four in 2011, and only NGC and LMSSC responded again. As stated previously, NGC did not have the facilities nor the capability to perform the work. In the five years since, there is no evidence that they have increased their facilities or capabilities to handle the current contract requirements. NGC instead proposed using the LFIC and IAU test equipment that currently resides at the 309th MMXG at Hill AFB for Fuze assessment and testing.

The 309th MMXG is currently at capacity and cannot entertain a partnership with industry to share resources. NGC is not capable due to lack of expertise and support equipment.

H. Bionetics, a small business, has been a subcontractor to The Boeing Company since 1998 and provides sustaining engineering support for the MMIII Guidance Repair Contract. Bionetics does not have the suite of support equipment (i.e., LFIC, RFIC, TCS, Centrifuge, IAUs, Special Fixtures, etc.) to directly support the testing of the RS/RV systems at this time. Currently Bionetics does not have adequate information to demonstrate the ability to access the necessary equipment, nor can we provide any specifics on how long it would take to get the equipment. Bionetics is not capable due to lack of expertise and support equipment.

I. Barriers to Full and Open Competition: Market Research concluded the lack of available LFICs/RFICs within Industry presents a clear barrier to competition. The RS/RV Program Team inquired about the ownership of the LFIC/RFIC equipment in their possession. LMSCC provided information validated by the Defense Contract Management Agency that this test equipment was procured as a capital investment by LMSCC. As discussed in Section V, all Government-owned LFICs/RFICs are being utilized to their maximum capacity and cannot be offered as GFE to potential offerors. Market Research also determined there are no commercial applications available to meet agency requirements.

J. The RS/RV Program Team determined that LMSSC is the only vendor capable of meeting the Government’s requirement on the schedule required and without substantial duplication of cost that would not be recovered through competition. Other respondents lacked the critical capabilities and equipment to support the program. Based on the market research, the Government concluded that the acquisition strategy for the RS/RV subsystem support contract should be “other than full and open competition” in accordance with FAR 6.302.

K. In July of 2019 Market research was updated with the conclusion that the market conditions that existed at the time the original market research was conducted had not changed. Specifically, it was concluded that there was a lack of available LFICs/RFICs within Industry, which presented a clear barrier to competition.

Lockheed Martin was the only contractor that had capital-owned LFICs/RFICs in their possession. The Government-owned LFICs/RFICs were still being utilized to their maximum capacity and could not be offered as GFE to potential offerors. Market research also determined there were no commercial applications available to meet agency requirements. Market research indicated LMSSC currently employed the majority of the RS/RV engineering expertise which is critical to the success of this effort.

L. Current market conditions indicate no change to the market research update that concluded in July of

March 2020 FOR OFFICIAL USE ONLY Page 7 of 7

2019.

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

While the drawings/data are available through the USAF, additional technical data is required for repair or refurbishment of the Mk21 RV and the Mk21 AFA. The OEM floor level documentation that defines the detailed processes/procedures is proprietary and facility unique. Equivalent documentation would have to be developed by each potential contractor and Government approval by the cognizant engineering authority would be required prior to performing work on any operational asset. The OEM will not sell the data or license the data rights for these processes/procedures. Therefore, the Government is unable to secure this data to help facilitate a competitive environment.

X. List of any sources 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 subsequent acquisitions for the supplies or services required.

As set forth in Section VIII above, the Government’s prior attempt to foster a competitive environment for the RS/RV subsystem support work through the RSERP program was unsuccessful and was cancelled in 2016. If an offeror can demonstrate to the Government that they have acquired a LFIC/RFIC, or developed a suitable substitute, the Government will take steps to validate their capability and the offeror will be considered for all future acquisitions. However, due to the current life-cycle stage of the Minuteman III Weapon System as a limited lifecycle system, there are no plans for the Air Force to invest in the development of new support equipment in an effort to introduce competition. In addition, future requirements for the GBSD Weapon System will be re-evaluated at the conclusion of this contract and additional Market Research will be conducted to determine if another viable solution can be obtained.

XII. Certification by the Contracting Officer.

As evidenced by my signature above, I have determined this document to be both accurate and complete to the best of my knowledge and belief.

XIII. Certification by the technical/requirements personnel.

As evidenced by my (our) signature(s) above, I (we) certify that any supporting data contained herein, which is my (our) responsibility, is both accurate and complete.