APPROVED 4yr Extension J A.pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

10 U.S.C 2304(c)(1)

Pursuant to the requirements of the Competition in Contracting Act (CICA), as implemented by FAR Subpart 6.3 and in accordance with the requirement of FAR 6.303-1, the justification for the use of the statutory authority under FAR subpart 6.3 is justified by the following facts and rationale required under FAR 6.303-2 as follows:

1. Agency and Contracting Activity. The Department of Homeland Security, United States Coast Guard (USCG), Office of Contract Operations, C4ISR Systems Contracting Division, proposes to enter into a contract modification on the basis of other than full and open competition.

2. Nature and/or Description of the Action Being Approved. Award of a contract modification to General Dynamics C4 Systems (GDC4S), 8201 East McDowell Road, Scottsdale, Arizona 85257, contract number DTCG23-02-D-NDRS02, to incorporate a continuation of production, deployment, operations and support efforts currently being performed for the Rescue 21 (R21) program, at a total estimated cost of $305 million.

3. Description of Supplies/Services. The planned award of a contract modification will provide for a second extension of the ordering/base period of contract DTCG23-02-D-NDRS02 in order to continue R21 deployment efforts to build, test, install and support the replacement of the Legacy National Distress and Response System (NDRS) for FY11-FY14. Extending the ordering period of this contract allows for continued deployment of the system, enables System Block Upgrades to complete, and closeout activities to commence—efforts that would not be able to be completed within the current base period of the contract. Further, due to unforseen delays such as environmental, leasing, and tower re-planning issues, another base period extension is necessary to ensure all production efforts finish under this legacy contract. Without a vehicle in place to facilitate completion of the Deployment phase, the program is at risk for achieving completion; as well, efforts listed above would not be able to be completed within the current base period of the contract.

During the ordering period, delivery orders may be placed for requirements including project management; technical services such as engineering, maintenance, training and logistics; sector infrastructure preparation; and R21 system installation. Additional efforts may include disaster recovery system implementation, retrofit activities, and relocation of equipment.

The technical representatives have verified that the requirement, as detailed in the statement of work, represents the Government’s minimum requirements. The total estimated value for this requirement is planned as follows:

Estimated Dollar Value ($ millions) FY11 FY12 FY13 FY14 Totals

OE 32 10 5 5 50

AC&I 85 65 55 50 255

Total 115 75 60 55 305

4. Identification of justification and the rationale. This acquisition is being conducted under the authority of 10.U.S.C. 2304(c)(1), as implemented by the Federal Acquisition Regulation (FAR) Subpart 6.302-1 entitled “Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.”

5. Demonstration that the Nature of the Acquisition Requires Use of the Authority Cited. The

R21 major system acquisition strategy consists of a two-phased approach designed to broaden competition and reduce risk. Phase I, Concept and Technology Development (C&TD), utilized full and open competition in 1999 to award contracts to three different vendors to develop preliminary designs for the R21 system: Motorola (later bought by General Dynamics), SAIC, and Lockheed Martin. Upon successful completion of the Phase I contracts in February 2002, R21 formally entered Phase II, the Capability Development and Demonstration (CD&D) and Production and Deployment (P&D) Phase. The USCG held a limited competition, open to the three successful Phase I contractors, for the development of a final production design and the building, designing, testing and ultimate deployment of the R21 system. General Dynamics Decision Systems (now GDC4S) was awarded the Phase II contract in September 2002 and now serves as the R21 prime contractor. The base period of the R21 Phase II contract expires on 30 Sep 2010.

The first ordering/base period extension executed in September of 2008 was brought about by the following: Early on in the CD&D Phase, R21 experienced significant technical issues. This caused unexpected delays in the deployment of the project’s Initial Operating Capability (IOC) regions, and consequently negatively impacted the deployment schedule of the project’s Low Rate Initial Production (LRIP) and Full Rate Production (FRP) sectors. The USCG and GDC4S corrected the issues that were experienced early in the production contract and subsequently, the contractor was delivering FRP sectors at the rate of approximately one per month.

The R21 Project is now experiencing real property issues (difficulty obtaining leases), changed site conditions during the construction phase of deployment, as well as encountering environmental concerns at the remaining deployment sites. Thus, the contractor is unable to complete all FRP deployment prior to the expiration of the R21 Phase II contract base period.

Extending the Phase II contract base period is necessary to continue uninterrupted deployment of the R21 system.

Ultimately, R21 is a search and rescue system; any delays in deployment cause a severe impact on the USCG’s ability to carry out its fundamental mission of saving the lives of mariners in distress.

If the USCG were required to re-compete this requirement, then the R21 project would experience major disruptions to the deployment schedule, substantial duplication of costs that would not be recovered through competition, and the agency would be required to rely on the increasingly obsolete National Distress and Response System (NDRS) in those sectors in which R21 is not yet deployed. The legacy NDRS is an analog based system which contains obsolete and non-standard equipment, has limited interoperability and direction finding capability, and numerous documented coverage gaps. Hence, completing deployment of the current R21 system is the most expeditious method by which the USCG can facilitate national compliance with the International Maritime Organization’s Safety of Life at Sea (SOLAS) treaty. This lack of compliance, besides impacting safety issues, also puts in jeopardy another role of the USCG, that of Port State Control agency for the United States. In this capacity, the USCG ensures SOLAS compliance for all U.S.

port facilities as well as all U.S. flagged vessels including offshore drilling rigs.

GDC4S is the sole capable and qualified source for R21 and is the only company that has at its disposal all of the requisite design, production, software, and support capabilities to meet the USCG’s requirements for the continued Phase II work of R21.

6. Description of Efforts made to ensure that Offers are solicited From as Many Potential Sources as is Practicable. The proposed contract action was synopsized via the Federal Business Opportunities (FedBizOpps) website on May 21, 2010 in accordance with FAR 5.201.

7. Determination by the Contracting Officer that the Anticipated Cost To the Government will be fair and Reasonable. The Contracting Officer determines that the anticipated cost to the government for the supplies/services will be fair and reasonable based on prior acquisition history.

For example, Delivery Orders for FRP Group III have been negotiated and awarded. Actuals from FY09 and FY10 program management, system support and maintenance, and FY09 Block Upgrade efforts will be used as a basis of comparison for similar FY11 - FY14 efforts. Certified cost and pricing data will be obtained and an audit will be obtained if necessary.

8. Description of Market Research. No additional market research was conducted because it is not practicable, for the reasons discussed in paragraph 5 above, for any company other than GDC4S to provide the required supplies and services at this time. Once full deployment of R21 is complete, the USCG will assess whether competition for future requirements is feasible.

9. Any Other Facts Supporting the Use of Other Than Full and Open Competition. This procurement is for the continued development and deployment of a major system, including major components thereof. The potential period of performance for contract DTCG23-02-D-NDRS02 is nineteen years (19) (inclusive of award terms); this extension of the ordering period does not extend the contract beyond that total period of performance. All remaining FRP sectors have been awarded, the last of which were awarded over two years ago with over $110 million of work complete. The R21 Project Office, CG-9331, estimates that to qualify another producer could require up to seven years and approximately $100 million in development costs and in addition, incur costs associated with source code development, facility set-up, and time to advance a new workforce to the same level of familiarization with the R21 Program as the current contractor’s workforce. As such, any effort to qualify a second source would, besides causing interruption of current services, be duplicative in nature, prohibitive in cost while causing a significant negative impact on continued deployment.

10. A Listing of the Sources, if Any, that Expressed in Writing an Interest in the Acquisition.

No vendors at this time have expressed an interest in this acquisition in writing.

11. Statement of the Actions, if any, the Agency May Take to Remove or Overcome any Barriers to Competition before any Subsequent Acquisition for Required Supplies or Services. The USCG has determined that Government standards and specifications that could inhibit the use of off-the-shelf R21 equipment were not needed and were not used. Use of commercial/industry practices permits technology insertion and evolutionary changes to the system as required.

Furthermore, the use of commercial and non-developmental items has been required. The USCG is obtaining an independent verification and validation agent to ensure that the data required to be supplied by the prime contract is limited to only that needed for management, operations, system support, quality management and configuration control. The USCG also anticipates including an option for a re-procurement data and license package for the proprietary code used in the R21 system configuration which could facilitate the Coast Guard’s ability to compete R21 System Sustainment functions after deployment is completed. Moreover, opportunities for competition also exist at the subcontractor level as a large portion of the site preparation, survey, construction and installation activities at the system’s numerous installations within each sector/region are accomplished by multiple local subcontractors, many of which are small businesses.