D_Signed_SM-3 Blk IB_MYP FY26-32 JA_20260205_final (LL6R)_Redacted.pdf

CUI

As this J&A focuses on missile production, the ability for to obtain competition is extremely limited. RTX is the current sole source vendor, owns the TDP used to build the missile, and holds all related production and sustainment contracts. In addition, the contract has potential , and in the past RTX has been a directed source for of the SM-3 missiles.

In addition to the MRRs, the team looked at the results of a TDP review conducted in 2021. conducted a comprehensive review of the TDP data rights assertions and intellectual property (IP) claims by RTX with the overall goal of identifying the minimum data rights necessary to compete top level assembly, determining validity of RTX IP claims and determining any existing alternate acquisition approaches to compete the production / delivery / sustainment of SM-3 missiles. The results of the TDP review found that competition of the SM-3 BLK IB missile would be undesirable as the TDP acquisition would if RTX was willing to sell it to the Government, and that competing the requirement with a Government-owned TDP would require significant personnel and financial investments that would take at least five years to complete. These costs are predicated on a rough order of magnitude provided by RTX and do not include costs for any subcontractors or suppliers who were unwilling to sell their intellectual property rights in the form of a level 3 TDP.

conducted contract research under SAM.gov and Federal Procurement Data System, Next Generation. There are 1022 active records of companies registered with the federal government to produce goods and services under North American Industry Classification System code . Of the 1,022 registered, 479 companies are cited as either minority-owned, veteran-owned, or woman-owned businesses. Of those 479, 301 companies are self-certified small, disadvantaged businesses, and 14 are U.S. Small Business Administration certified 8a business development program participants. Market research continues to reveal that no small businesses exist that can meet USG’s requirement as prime contractors. Consideration of small business concerns will be managed through the statutory requirements for RTX to render a subcontracting plan offering maximum practical opportunity to participate in the contract performance consistent with its efficient performance per FAR 19.702. Use of small business in the performance of the contract will be a requirement of the statement of work. Market research and results from the Sources Sought confirmed that a viable competitive environment for the SM-3 scope is not feasible; and as such, MDA will continue to communicate with industry to create cost effective contract structures. The market research was documented in an MRR which was endorsed by the Major Program Manager and the Procuring Contracting Officer . The SM-3 Program will remain in a sole source contracting relationship with the incumbent RTX.

currently has a large indefinite delivery/indefinite quantity (IDIQ) contract with RTX to provide system engineering, test, development, and obsolescence mitigation efforts for all SM-3 variants. is working to identify parts of that contract effort which could be removed from the IDIQ and competed as separate contract efforts.

does not see a path forward for similar efforts related to a contract solely dedicated to producing SM-3 BLK IB missiles.

Effective competition. The facts previously stated preclude offers being solicited from contractors other than RTX. RTX is the only qualified source with the technical knowledge, expertise, and test equipment necessary to meet the requirement for the SM-3 AUR production in a timely manner for both the USG customers. Effective competitions may be accomplished at the subcontract level. RTX is encouraged to promote competition for all subcontracts when possible.

Subcontracting competition. The contract for this requirement contains FAR 52.244-5, Competition in Subcontracting, which requires the contract to select contractors on a competitive basis to the maximum practical extent, and DFARS Clause 252.219-7004, Small Business Subcontracting Plan (Test Program). RTX is encouraged to promote competition for all subcontracts when possible. Applicable clauses pertaining to subcontracting are included.

7. Determination of Fair and Reasonable Cost (FAR 6.303-2(b)(7)).

In accordance with FAR 15.402, the Contracting Officer will ensure that all supplies and services under this contract are procured at a fair and reasonable price. The contractor may submit a formal price proposal and/or historical actuals will be utilized with certified cost or pricing data and sufficient information to support accuracy and reliability in the estimate. A thorough analysis of proposed costs will be conducted. Price analysis will be performed to verify that the overall price offered is fair and reasonable and may include: comparison of proposed prices to historical prices paid, whether by the Government or other than the Government, for the same or similar items; comparison of proposed prices with independent government cost estimates;

and/or analysis of data other than certified cost or pricing data provided by the offeror. Cost analysis will be used to evaluate the reasonableness of individual cost elements when certified cost or pricing data are required. Cost analysis techniques for a proposal of this requirement may include verification of cost data and evaluation of cost elements, including the necessity for, and reasonableness of, proposed costs, and the application of audited or negotiated indirect cost rates, labor rates, and cost of money or other factors. Cost realism analyses (on cost-reimbursement contract line-item numbers) to determine the probable cost of performance. Profit/fee will be assessed utilizing the weighted guidelines method. The Contracting Officer will conduct thorough negotiations to ensure the settlement of fair and reasonable costs that are in the best interest of the USG.

8. Description of Market Research Conducted (FAR 6.303-2(b)(8)).

performed market research in accordance with FAR Part 10 to arrive at the most suitable approach to acquiring, distributing, and supporting the necessary supplies and service requirements of a new production contract. Accordingly, market research was performed to collect and analyze information about capabilities within the market to satisfy agency needs before developing new requirements documents for an acquisition. The data resulting from the market research performed was analyzed and used to make informed decisions whether needs can be met by commercial products or services or, to the extent commercial products suitable to meet the agency’s needs are not available, non-developmental items are available that meet the agency’s requirements; could be modified to meet the agency’s requirements; or could meet the agency’s requirements if those requirements were modified to a reasonable extent.