JA_ETS_Redacted.pdf

Controlled Unclassified Information

JUSTIFICATION FOR OTHER THAN

FULL AND OPEN COMPETITION

I. Agency and Contracting Activity.

This Justification and Approval is to request authority for Other Than Full and Open Competition supporting requirements generated for the Air Force Life Cycle Management Center, Agile Combat Support Program Executive Office (PEO), Support Equipment and Vehicles Division, Propulsion Section, AFLCMC/WN-SEV. The Contracting Activity for this requirement is AFLCMC/WNKAB. The Purchase Request number supporting this action is

FD2060-22-30012.

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

Due to the circumstances described herein, the activity requests Senior Acquisition Executive approval to acquire repair/sustainment services for the Air Force fleet of Engine Test Stands (ETS) using Other Than Full and Open Competition as prescribed by FAR 6.302-1, Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements. This action will result in the award of a new, follow-on contract which will be a Firm-Fixed Price (FFP), Cost Reimbursable No Fee (CRNF), Cost Plus Fixed-Fee (CPFF), and Time and Material (T&M) Requirements Indefinite Delivery Contract (IDC) with a five-year basic period and five one-year options for a total of 10 years. Based on the projected contract award date, orders may be issued from 23 Jan 2023 through 22 Jan 2033, if all options are exercised.

This sole source requirement will be purchased from the following company:

Atec, Inc.

12600 Executive Drive Stafford, Texas 77477-3604

CAGE: 09552

Small Business

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

This requirement is for the repair and overall sustainment of the Air Force fleet of ETSs. The ETS consists of six (6) National Stock Numbers (NSNs) representing the various configurations.

This effort includes teardown and evaluation (TD&E), repairs, telephone support, and travel.

The ETS has two (2) main configurations, the T-20 and T-21. The T-20 test stand supports testing at the Field and Intermediate Maintenance Level for turbojet and turbofan aircraft engines to troubleshoot problems to support repair efforts and perform acceptance test runs after repairs are complete. The T-21 test stands accomplish the same objective for turboprop engines.

Each T-20 test stand consists of four (4) major parts: Thrust Trailer, Fuel Trailer, Control Cab, and the Instrumentation Data and Control (ID&C) System, plus a minor Equipment Kit. The T- 21 test stands have the same major and minor parts except the Thrust Trailer is replaced by a Turboprop Trailer Assembly. The adapter kits (included in the minor Equipment Kit) allow the engines to be mounted to the test stands. ETSs are repaired to the latest configuration which will eventually bring all ETSs into two (2) standard configurations.

The requirement includes phone-based technical support to troubleshoot and/or resolve the field users' issue(s). If issue(s) cannot be resolved through phone support, travel to the on-site location may be required to perform a TD&E to provide a proposal for the repair. The Government will negotiate and award a task order to support the ETS repair effort. The repair work may be performed at the on-site location, contractor's facility, or a combination of both. Major repair components are used to support repair efforts which may be ordered as long lead.

The total estimated contract value is . The estimated value is based on prior work/prices in FY20 and escalated at a rate of 3% per a year to FY23 for an estimated value of

. Each subsequent year is escalated by the same 3% factor. This requirement will be funded with 3400 Operation and Maintenance funds.

The nominal Contract Line Item Numbers (CLINs) structure is as follows:

CLIN DESCRIPTION P/A BEQ U/I

X001 Tech Support FFP 12 MO

X002 TD&E FFP 15 EA

X003 Major Repair Components FFP 1 LO X004 Unique Repairs CPFF 15 EA X005 Travel CRNF 30 EA X006 Cybersecurity FFP 1 LO X007 Emergency Repairs T&M 1 LO

PERIOD FISCAL YEAR ESTIMATED TOTAL

Basic FY23-27 $ Option 1 FY28 $ Option 2 FY29 $ Option 3 FY30 $ Option 4 FY31 $ Option 5 FY32 $

TOTAL $

There are no separately priced CLINs for intellectual property (IP) and IP rights as that data is generated during the course of a CPFF repair CLIN. The Government will receive unlimited data rights for any Engineering Change Proposals (ECP), Technical Data Packages (TDP), and Technical Orders (TO) funded under this contract; however; historically, there is often a piece of the data package below the top level package that was developed with private funding, thus hindering the Government’s ability to use the data to compete. Contract clauses DFARS 252.227-7013 Rights In Technical Data--Noncommercial Items and DFARS 252.227-7014 Rights In Noncommercial Computer Software And Noncommercial Computer Software Documentation will be included in the contract.

Orders can be issued on this Requirements IDC for 10 years after contract award, anticipated to be from 23 Jan 2023 through 22 Jan 2033, if all options are exercised. This J&A covers the ordering period of the Requirements IDC through completion of all delivery/task orders.

The ETS NSNs are as follows:

Part Number National Stock Number Nomenclature

A/M37T-20 4920-01-041-5863 TEST STAND, AIRCRAFT ENGINE

A/M37T-20A 4920-01-515-4970 TEST STAND, AIRCRAFT ENGINE

A/M37T-20B 4920-01-325-8120 TEST STAND, AIRCRAFT ENGINE

A/M37T-20C 4920-01-470-6508 TEST STAND, AIRCRAFT ENGINE

A/M37T-21 4920-01-041-5862 TEST STAND, AIRCRAFT ENGINE

A/M37T-21D 4920-01-458-2053 TEST STAND, AIRCRAFT ENGINE

These NSNs were screened and assigned Repair Method Code (RMC)/Repair Method Suffix Code (RMSC) of 3H. A RMC “3” means to repair with original manufacturer for the second or subsequent time. RMSC “H” means the Government does not have in its possession sufficient, accurate, or legible data to repair this part from other than the current source.

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

10 U.S.C. 2304(c)(1), as implemented by FAR 6.302-1, Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements..

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

The agency's minimum needs can only be satisfied by the unique supplies or services available from Atec, Inc.

The ETS is a highly complex and specialized system to test multiple variants of turbojet, turbofan, and turboprop aircraft engines at the Field and Intermediate Maintenance Level. Repair of an ETS requires skilled labor and engineering expertise to support the varying configurations.

ETS has been in the Air Force inventory since the 1970s and has gone through many upgrades and configuration changes. A centrally managed, standard configuration was established in the 1990s, but the Air Force does not possess the technical data rights necessary for competition.

The Air Force has limited technical data for these complex systems. The Air Force possesses the technical data for cables and hoses, cab shell assemblies, limited adapter kit components, some thrust frame components, and fuel trailer assemblies. However, this data is not sufficient to compete the repair of the ETS system. The Air Force does not possess data for the Instrumentation Data and Control (ID&C) System, modern fuel and oil preservation systems, or limited thrust frame components. While the ETS has multiple major subsystems such as Thrust Trailer, Fuel Trailer, and Control Cab, the core of the ETS is the ID&C System which controls all other systems.

Prior to 2011, Celtech was the sole source sustainment provider. Atec, who was already in the commercial engine test facility market, bought Celtech and all of Celtech’s technical data.

Celtech’s ID&C system, Engine Data Acquisition System (ENDAS), was suffering from obsolete parts and technology advances, therefore the Air Force planned to replace the ENDAS with a modern digital ID&C system. In 2013, the Air Force awarded strategic contract to Atec which included qualification testing for Atec’s replacement ID&C system, Advanced Data Acquisition (ADAQ). The ADAQ was developed by Atec to solve obsolescence and performance issues by the ENDAS. Atec’s ADAQ was a customization of their existing commercial solution which had been developed at private expense. Atec’s first installation of ADAQ was in the private sector with Air Logistics Inc. in 2006. This installation was prior to Atec’s first contracted Government installation of the ADAQ in 2012. Atec’s purchase of Celtech allowed the Air Force to only replace ENDAS with ADAQ when necessary through attrition. Atec is able to repair minor ENDAS issues through the data and cannibalization of removed ENDAS systems. No future transitional event has been identified to replace ADAQ with a new ID&C system.

The Government contacted Atec via email on 30 June 2021 to inquire in their interest in selling the Technical Data Package (TDP) suitable for competition to the Government. On 9 July 2021, Atec responded they were not interested in selling the TDP or authorizing Government purpose rights to the TDP. Atec maintains their data rights for data which was developed at private expense. Air Force ETS repairs are the core of Atec’s business so the Air Force has no expectation that Atec will sell this data unless it exits the market.

Previous contracts included DFARS 252.227-7013 Rights In Technical Data--Noncommercial Items but technical data sufficient for competition was not a deliverable. This applied to ECPs and minor drawings updates. Atec asserts limited rights for parts of data deliverables which were developed at private expense. The Deferred Ordering Clause (DFARS 252.227-7027) was not in any of the previous contracts.

The Government team reviewed historical records to determine why the Government did not acquire sufficient IP deliverables and IP rights under prior contracts. The Government team determined that technical data rights for ECPs and TDP updates were obtained; however, those rights did not cover the whole system and some sub-drawings are marked restrictive. The Government did obtain full data rights for TO updates which are for operation, but that data is not sufficient for another contractor to understand ADAQ enough to repair it. Historically, data is delivered with unlimited rights, but Atec does restrict rights on components which were first created for their commercial business. When Atec submits data with restrictions, the Government challenges the restrictions; however, Atec has consistently provided sufficient explanations on how those piece parts were developed with their own funding, therefore the restrictive markings are supportable. The Government has no challenges for Atec’s assertions of development at private expense for ADAQ, as Atec has provided sufficient documentation to support ADAQ was created and installed for commercial customers prior to Atec entering the USAF program.

To date, Atec has refused the Government’s request to sell a complete TDP adequate for competition.

AFLCMC/WN-SEV has determined that award to any other source would result in substantial duplication of cost to the Government that is not expected to be recovered through competition and unacceptable delays in fulfilling the Government’s requirements. If the Air Force was to replace all ADAQ systems with another manufacturer’s ID&C system, this manufacturer would have to perform significant engineering work to integrate their ID&C system into the Thrust Trailer, Fuel Trailer, and Control Cab with extensive testing and access to engine test stands which are all performing significant missions. The mission tempo would not allow the ETSs to be down to support engineering efforts.

To replace all current ID&C systems, another contractor would have to perform integration efforts on all six subsystems for all three variants. USAF Senior engineer estimates that it would cost per a subsystem ( x 6 subsystems x 3 variants = ). Test program sets (TPS) would need to be designed and tested for each of the engine variants tested with the ETS. Each TPS is estimated to cost for design work based upon a recent negotiated order with Atec for a new engine variant to be used on ETS. TPS must be tested on a functional ETS and witnessed by Robins, Tinker, and Air Force Metrology and Calibration (AFMETCAL) Engineers for acceptance. The travel cost is estimated for for all Government personnel for each TPS. ( ( TPS design and test + Gov travel) x engine variants = ).

The installation cost of this new ID&C system is based on the current FFP price for ADAQ installation ( each) for the ETS in inventory. ( ADAQ price x stands = ). The estimated cost for a new ID&C system is + for TPS creation + installation = )

If the Government were to save 10% of the estimated contract cost ( ) by going competitive ( ), it would take approximately 33 years to recoup this investment. In addition to the cost, the Air Force would experience an unacceptable delay of approximately 3-10 years of repair services while another contractor attempts to develop the replacement ID&C system and knowledge base required to perform the instant requirement.

Reverse engineering (RE) efforts would include both hardware and software. On the hardware side, the Program Office estimates were based upon a smaller recent effort for a small piece of test equipment which was priced at . Program Office engineer estimate that the ETS would equivalent in complexity and size to 10 of that effort. ( small system RE x 10 equivalent systems = hardware RE cost). The engine adapter kits would also need to be RE. The Program Office based the cost on a 2015 effort for a single adapter that cost which ultimately failed. This price was escalated by 3% per a year to get to today’s dollars. There are engine adapter kits. ( single RE x 1.03^7 escalation x systems = ). The Program Office also estimated a 3D drawing package format from a recent proposal for an engine trailer at . On the software side, the executive software would have be reverse engineered. Based upon the cost of a TPS but scaled up for complexity, the Program Office estimates that effort at . Because of changes in executive software, TPS would also have to be rewritten. The Program Office estimates that this would be comparable to the cost of new software which was calculated from the replacement program. ( Hardware RE +

Adapter Kits RE + 3D formatting + executive software + TPS =

If the Government were to save 10% of the estimated contract cost ( ) by going competitive ( ), it would take approximately 20 years to recoup this investment. The Program Office considers RE to be a high risk venture based upon the past failure on the adapter RE effort. In addition to the cost, the Air Force would experience an unacceptable delay of approximately 3-10 years of repair services while another contractor attempts to develop the replacement ID&C system and knowledge base required to perform the instant requirement.

If the Air Force were to breakout major subsystems for repair by different contractors or via organic support, it would create an extreme logistical issue. The ETS has to be run through acceptance testing which would require installing an engine on the stand. All contractors would have to perform the test and if other subsystems are in need of repair, the contractor would need to schedule those repairs for a later date and perform acceptance testing upon completion of those repairs. This would incur additional contractor and Air Force travel costs. It would also increase ETS unavailability time and interfere with user missions to support multiple trips and tests. For organic repair, the Air Force does not have sufficient data for subsystems to be accepted by any Air Force Depot. Integration with ADAQ would still be an issue without the necessary data.

Repairs to stands vary widely in their scope. Sometimes these repairs involve replacing the entire ID&C and fuel system, while other times only minor fixes need to be addressed. Each repair is separately negotiated. Atec’s experience with Air Force (AF) ETS and commercial engine test stands is invaluable to the AF as they also provide telephone support which avoids approximately 40 on-site repairs per year. If those repairs are estimated on the lowest end of the range of repairs ( ), it saves the program per year. This follow-on acquisition is necessary for continued provision of highly specialized services. The last sole source repair contract for these services was Requirements IDC FA8533-18-D-0001. This contract was awarded to Atec on 23 Jan 2018 and expires on 22 Jan 2023.

Accordingly, Atec is the only firm, due to their proprietary rights, capable of providing the requirements described in Section III above without the United States Air Force (USAF) experiencing substantial duplication of cost that could not be expected to be recovered through competition and unacceptable delays in fulfilling its requirements.

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.

A Sources Sought (SS)/Request for Information (RFI) synopsis was posted to SAM.gov on 5 Aug 2021 with a response date of 10 Sep 2021 under Solicitation Number FA8533-22-R- ETSFY23. The SS/RFI requested responses from interested vendors that possess the expertise, capabilities, and experience to meet qualification requirements for this effort. One vendor, (Atec) responded to the SS/RFI.

The requirement will be synopsized in SAM in accordance with FAR 5.201. It is anticipated that sources having an interest in subcontracting may be identified through synopsis. Any source who responds to the Government as a result of this synopsis will be identified to the prime contractor as a potential subcontracting possibility.

In accordance with AFFARS 5306.304 (a), the Senior Contracting Official (SCO) authorizes release of the solicitation after forwarding the justification package to SAF/AQC for review and SAF/AQ for approval. An early solicitation release provides the time needed for proposal preparation, technical and pricing evaluation, negotiations, various review/clearance cycles, and award to ensure no break in coverage.

VII. Determination by the Contracting Officer that the anticipated cost to the

Government will be fair and reasonable.

The overall cost of this acquisition will be fair and reasonable to the Government. In accordance with FAR 15.403-4, the contractor will be required to provide certified cost or pricing data to be used to support the Government's evaluation of the proposed cost. The proposed skill mix of labor, labor hours, types and quantities of material and other direct costs, and direct and indirect rates will be negotiated by the Government based on recommendations from the Defense Contract Management Agency and expert technical personnel supporting the program. The contract price will be negotiated in accordance with the procedures in FAR 15 ensuring the ultimate cost to the Government is fair and reasonable.

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

Market research was conducted 15 June 2021 to 12 Oct 2021 in accordance with FAR Part

10.001 and 10.002. The Market Research Report was completed on 12 Oct 2021. The market research techniques used are as follows:

As described in Section VI above, a SS/RFI was posted to SAM.gov advising industry of the pending acquisition and soliciting inquiries from interested vendors. The SS/RFI was posted on 5 Aug 2021 under Solicitation Number FA8533-22-R-ETSFY23. Only Atec responded to the

SS/RFI.

Queries were conducted within Government databases and various internet searches (IHS Haystack, GSA Advantage, and Google) were performed using North American Industry Classification System (NAICS) code 336413 and keywords “test stand” and just “test stand” to search for potential vendors. No firms were identified to be suitable candidates.

A Small Business Administration (SBA) Dynamic Small Business Search (DSBS) query was conducted using NAICS code 336413 and keywords “test stand.” This query produced zero potential vendors. Review of narrative description did not identify any vendors within this niche market.

The ETS does not fit the definition of a commercial item as defined in FAR Part 2.101. This item is defined as military unique and is not customarily used by the general public or by non- Governmental entities. While the commercial market does conduct engine testing off the wing of the aircraft, the Air Force tests low bypass engines which requires safety standards beyond what the commercial market has yet to achieve due to sensitive instruments working in an environment with extremely high noise, high thrust, small diameter, high fuel flow requirements, and very high heat. There are no engine testing solutions in the commercial market with the same or similar environmental or strength conditions.

The market research concluded Atec, Inc. is the only vendor capable of fulfilling the Government’s requirement.

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

None.

X. List of any sources that expressed, in writing, an interest in the acquisition.

See Section VI 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.

The previous J&A’s plan to remove barriers to competition was to submit a Program Office Memorandum (POM) to request funding for partial replacement of the T-20 fleet. The POM was submitted in Dec 2013 and it was disapproved.

The plan to remove barriers to competition is to continue to request technical data from Atec and request a requirement for a T-21 (the smaller fleet) replacement system from the Lead Command, AFMC/A4MM. This requirement will be submitted using the AF Form 1067, Modification Proposal. The AF Form 1067 will be submitted and routed through the MAJCOM and AFMC/A4MM. As a part of this follow on effort, the ETS technical requirements matrix document was recently requested, received and reviewed. If the AF Form 1067 is approved, the Program Office will submit an input on the FY26 POM for a fleet wide replacement program for the entire T-21 engine test stand fleet. If the Government proceeds with replacement of the T-21 fleet, a standard configuration test stand with a complete TDP will be competitively procured. As a result, all future sustainment requirements will be supported through full and open competition.

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.

XIII. Certification by the technical/requirements personnel.

As evidenced by my signature, I certify that any supporting data contained herein, which is my responsibility, is both accurate and complete.