ID08190036 MQ-9 JA Final Redacted.pdf

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

I. Contracting Activity

General Services Administration Federal Acquisition Services, Region 8 Assisted Acquisition Services Contracting Officer:

Denver Federal Center Lakewood, CO 80225

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

This justification for a sole source contract is to develop a Detect and Avoid System (DAAS) capability for the National Guard Bureau (NGB)-owned, MQ-9 Reaper systems first procured in 2007, which includes modifications to the unmanned aircraft and associated Ground Control Station (GCS). The applicable authorities are FAR 6.302-1 and 10 USC 2304(c)(1), Only One Responsible Source and No Other Supplies or Services will satisfy agency requirements. General Atomics Aeronautical Systems, Inc. (GA-ASI) is the Original Equipment Manufacturer (OEM) for the MQ-9 system (air vehicle and GCS) and is the only vendor capable of performing the work due to the proprietary nature of the flight control software embedded in the system. Upon approval of this J&A, a contract will be awarded to:

GA-ASI

14200 Kirkham Way Poway, CA 92064 CAGE Code: OYJB5

The estimated value of the NGB DAAS Cost Plus Fixed Fee/Cost Reimbursable (Travel and Materials) contract is $24M.

III. Description of the supplies/services required to meet agency needs

Unrestricted operations in the National Airspace System (NAS) (e.g., “file and fly”) require aircraft to follow the “See and Avoid” requirements (e.g., 14 CFR 91.111 and 91.113). The capability that fulfills this requirement for Unmanned Aerial Systems (UAS) is known as Sense and Avoid (SAA). In particular, UAS must employ methods for both self-separation and collision avoidance that provide an acceptable level of risk for people and property in the air and on the ground.

GA-ASI will provide non-recurring engineering, integration, test and evaluation support, materials, and travel for the DAAS capability for the MQ-9 system to enable the air vehicle to operate in the NAS. GA- ASI will specifically provide a DAAS solution for the NGB owned MQ-9 Block 5 and Block 1 Barrett Asymmetric Digital Data-link Computer (BADDC) air vehicle along with the associated Block 15 and Block 30 GCS, which has not been previously been procured . GA-ASI will provide engineering support to assist the NGB in achieving an Air Worthiness Certification for operation of the Block 5 and Block 1 MQ-9s in the NAS.

IV. Statutory authority permitting other than full and open competition

10 USC 2304(c)(1), as implemented by FAR 6.302-1, Only One Responsible Source. There is only one responsible source for the MQ-9 system and no other sources can satisfy the agency’s requirements due to the proprietary nature of the system.

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

The MQ-9 is already owned and operated by the NGB, but must be able to safely operate with other aircraft in the National Air Space. An MQ-9 must be capable of avoiding other aircraft operating in the same airspace. This capability is essential for the safety of manned and unmanned operations. The Government currently does not have the data rights to the MQ-9 and associated flight control software. The Government requested to purchase these data rights and was notified that GA-ASI, the manufacturer of the MQ-9, was unwilling to sell the data rights. Another vendor would have to build an exact MQ-9, Block 1, Block 5 with the exact same flight characteristics as well as the associated Ground Systems with the exact same software and system controls. Another vendor would then have to reverse engineer to include develop, test and manufacture the MQ-9 system (air vehicle and ground system) in order to integrate a “see and avoid” capability into the MQ-9. The cost of development and reverse engineering would be more expensive than awarding this sole source contract to GA-ASI. Due to the lack of data rights and its cost implications, GA-ASI is the only vendor capable of developing the

DAAS.

Based on the above, GA-ASI is the only company capable of providing the supplies and services described in Section III above that are necessary to meet the minimum needs of NGB. GA-ASI proved their capability to provide the DAAS support by being the OEM and developing the MQ-9 System.

Since development of the MQ-9 system, GA-ASI has provided continuous support to the MQ-9 system through maintenance, updates, and upgrades. This expertise is not easy to replace without NGB experiencing substantial duplication in cost through reverse engineering, development, integration, and testing. NGB does not have the technical expertise to reverse engineer the system. Furthermore these costs could not be expected to be recovered through competition and would cause unacceptable delays in filling this immediate requirement needed to continue to safely operate the

MQ-9.

VI. Description of efforts made to ensure the offers are solicited from as many potential sources as practicable.

A Sources Sought/Notice of Intent Synopsis was posted on FEDBIZOPS on 11 June 2019 requesting interested vendors provide their specifics regarding capability when responding to this requirement. The only response received from the Sources Sought was GA-ASI. No other contractors provided a response.

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

The Contracting Officer will ensure cost of the DAAS will be fair and reasonable prior to the award of this contract action. In accordance with FAR 15.403-4, the contractor will be required to provide certified cost and pricing data to be used in supporting the evaluation by NGB and the Contracting

Officer. The proposed skill mix of labor, labor hours, types and quantities of material, other direct costs, direct and indirect rates, and profit/fee will be negotiated by the Contracting Officer based upon input from technical experts from the NGB. The contract prices will be negotiated in accordance with the procedures in FAR Part 15 to allow the Contracting Officer to ensure that the ultimate cost/price to the NGB is fair and reasonable.

Specifically, the Contracting Officer will use a mix of price and cost analysis techniques. For price analysis, the Contracting Officer will use a combination of analysis techniques to include: 1) comparison of proposed prices to the Independent Government Cost Estimate (IGCE) and 2) analysis of data other than certified cost or pricing data. For cost analysis, the Contracting Officer will use a combination of analysis techniques to include: 1) verification of cost or pricing data and evaluation of cost elements, 2) comparison of individual cost elements proposed with any Forward Pricing Rates provided, 3) use of weighted guidelines to evaluate fixed fee, and 4) cost realism analysis.

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

To specifically support this MQ-9 requirement, GSA issued a sources sought/notice of intent to sole source in June 2019. The sources sought/notice of intent to sole source only received response from one vendor, GA-ASI. No other vendors expressed interest or the capability to perform the DAAS requirements. The results of that market research further supported that only one responsible source was capable of performing the work. At this time there are no companies other than GA-AIS that have the capabilities to develop and integrate DAAS capability into the MQ-9 without a duplication of costs that cannot be recovered through competition and excessive development time that will not meet the minimum needs of the customer.

IX. Any other factors support the use of Other Than Full and Open Competition.

Award of a contract to any contractor other than GA-ASI for an alternate UAS to the MQ-9 or for a second source for production of the MQ-9 would result in substantial duplication of cost to the

Government that is not expected to be recovered through competition and unacceptable delays in filling the agency requirements.

Based on historical MQ-9 development costs from USAF data, it would take over $1.3B to develop an alternate source for the acquisition of an MQ-9 system. The estimated costs to develop an identical system includes ($M):

Ground Control System Development $262.91 Aircraft Hardware Development $228.07 Software Development $188.56 System Development $181.05

Program Support $384.91 Total Cost $1,344.51

In addition to the development costs, NGB would incur costs for the DAAS integration and test.

Developing a second source, in lieu of this sole source award, would also result in unacceptable delays in fulfilling the agency requirements. The estimated time line for delivery of the first system by a second source would be in excess of 10 years due to the development, testing, and production time-lines. The MQ-9 in its current state has been developed, upgraded, and tested for over 18 years.

X. List of any sources that expressed, in writing, an interest in this 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 any Subsequent Acquisition for the Supplies or Services Required.

To overcome or remove barriers, GSA will include any appropriate data rights clauses such as DFARS 252.227-7013, which will require GA-ASI to identify the type of rights allowed to the Government for any technical data developed during performance of the contract. Provision DFARS 252.227-7017 will also be included in the solicitation, which will require GA-ASI to identify any current restrictions on technical data developed under previous contracts, which may be used in the course of this effort. There are certain barriers that GSA will not be able to overcome in the future. The MQ-9, including the internal MQ-9 system, was built by GA-ASI using GA-ASI internal funding and have historically no-bid to providing the Government with the proprietary data. Based on this, GSA does not foresee being able to overcome this specific barrier to allow for full and open competition.

Concurrence:

Approval:

XII. Certification by the Contracting Officer.

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

Contracting Officer, Region 8

XIII. Certification by technical/requirements personnel As evidenced by my signature, I certify that supporting data contained herein, is both accurate and complete.

Branch Chief, NGB/A5RS, Special Mission Aircraft

Competition Advocate, GSA Region 8

Head of the Contracting Agency, GSA Region 8