JA_Final_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 to support requirements generated for the program office, AFLCMC/WIUAA. The contracting activity for this requirement is AFLCMC/WIUKA. The Purchase Request number supporting this contracting action is FD2060-22-30005.

II. Nature and/or Description of the Action Being Approved.

Due to the circumstances described herein, the activity requests authority to acquire the Contractor Logistics Support (CLS) services listed in this document using Other Than Full and Open Competition as prescribed by Federal Acquisition Regulation (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 follow-on contract which will be a Firm Fixed Price (FFP), definitive “C” contract, with a 12 month basic period plus six (6) 12 month options. The period of performance (PoP) is projected to be 1 January 2022 through 31 December 2028, if all options are exercised.

This sole source requirement will be procured from the following:

Wescam Inc.

DBA: L-3 Communications Wescam 649 North Service Rd.

Burlington, Ontario, Canada L7P 5B9

CAGE: 3AC24

Large Business

III. Description of the Supplies/Services Required to Meet Agency Needs (including the estimated value).

This requirement is for continued CLS sustainment as indicated below:

A. This requirement establishes CLS services for three (3) configurations of L-3 Com/Wescam

MX Electro/Optical Infrared (EO/IR) Sensor System Line Replaceable Units (LRUs) installed on the Special Operations Forces (SOF) Strike aircraft identified as the AC-130W/J.

The configurations of MX EO/IR Sensor System LRUs are: MX-20HADD (AC-130W), MX-20HD (AC-130J), and MX-25D (AC-130J). The MX EO/IR Sensor System is a

20 and the MX-25 turrets provide sophisticated image processing, on-board Global Positioning System that provides precise geo-location and added Line-Of-Sight (LOS) jitter/wander reduction, and both high definition and analog video.

Wescam maintains authorized Service Centers via Technical Assistance Agreements with L-3 Com. The Service Centers provide technical training and house special tools and test equipment that supports Component Overhaul and Repair (COR) of the MX EO/IR Sensor System configurations at various CONUS and OCONUS locations. They support the Air Force and commercial customers. In June 2020, Wescam opened a COR facility in Mason, Ohio. It provides repair and thermal testing of the MX sensor systems. Additionally, the L-3 Com/Wescam operates a Depot Repair facility in Burlington, Ontario, Canada and CLS repair facility (WARF) at Hurlburt Field, Florida.

Attempts to Purchase or Lease Proprietary Data: The Government inquired in October 2012, August 2015, and again in June 2020 Wescam’s interest in leasing or selling their proprietary data to the Government. On all occasions, Wescam noted there was no interest in selling the data to the USG

Reverse Engineering Considerations: Reverse engineering the Wescam turrets is not a technically or financially feasible proposition. A reverse engineering effort is estimated at a minimum of five years and more than to complete. The Government projects three years will be needed to re-engineer the MX-Sensor systems and an additional 1.5 years for implementation, plus additional time for contracting efforts. Based on similar systems used on the AC-130U, the cost to develop, from scratch, a singular production-level TDP effort is estimated to exceed , compounded by the need for multiple systems to support the AC- 130J. To reverse engineer and develop TDPs on these highly specialized systems would be, at best, time consuming and very expensive; it is possible the current capabilities could never be replicated exactly. The cost to reverse engineer the Wescam systems would far exceed the cost to purchase new Wescam production systems. It would also cost more than the total repair cost over the lifetime of the Wescam systems. The AC-130W and AC-130J Gunships employ three

(3) different configurations of Wescam turrets, with on-going modifications. The Technical Data Package (TDP) contains all proprietary components: optical materials, optical prescriptions/coatings, custom focal plane array designs, servo design, thermal and motion stability designs, unique materials, proprietary firmware and software, etc. Another obstacle is the issues involved with reverse engineering the technical details of Wescam trade secrets and then providing these trade secrets to other vendors who may be Wescam competitors.

Similar System Cost Comparison: Fourteen years ago, Lockheed Martin was involved with a somewhat analogous effort when they developed the AN/AAQ-39 used on the AC-130U. The AN/AAQ-39 is a Wescam MX-20 turret-shell with Lockheed Martin payloads and equipment installed. The Lockheed Martin payloads/equipment had to be integrated into the Wescam turret, so there was some very basic information exchange between the contractors, but all of the development of the sensors, lasers, stabilization hardware, vibration-isolation hardware, firmware, and software, and LOS reporting hardware was exclusively Lockheed Martin. The development of this Lockheed Martin system, with the minor integration assistance from Wescam, was approximately . If a contract were awarded to a contractor (other than L-3 Com/Wescam) to develop a production-level TDP, the cost of the Non-Recurring Engineering for the reverse engineering effort is estimated to exceed . This estimate is based the similar AN/AAQ-39 effort. This estimate is based on development of TDPs for the MX- 20HADD, MX-20HD, and MX-25D.

For a contractor to reverse engineer three different Wescam products, most likely without any assistance from Wescam, would certainly exceed the cost to develop the AN/AAQ-39, which received minimal assistance from Wescam. An added difficulty that reverse engineering the Wescam systems will encounter versus the AN/AAQ-39 project is that Lockheed Martin was able to design their payloads and other hardware freely, whereas the reverse engineering the system dictates that the current design must be duplicated in all its facets exactly. Only minor reflection on this fact is necessary to reveal that there is little chance of a return on investment using this approach.

Reverse Engineering Timeframe: Based on the development of similar EO/IR turreted systems, the Government estimates a reverse-engineering effort would take a minimum of three years. Integration, re-qualification, and flight-testing would take an additional 1.5 years. If successful, the new contractor may be capable of generating repaired units five years after contract award. The estimated cost and lead-time for testing and re-qualification is based on completion of all the various unique and specialized turret configurations and the development of their associated depot support equipment. Pursuing a new support contractor would result in substantial duplication of costs that is not expected to be recovered by retirement of the system.

It should also be noted, during this length of time, the original Wescam systems may have obsolete and vanishing vendor components issues requiring resolution. This may impact the completion of a reverse engineering effort and development of a TDP. Another significant impediment to reverse engineering these turret sensor systems is L-3 Com/Wescam’s use of anti-tamper technology and techniques which renders key components useless if unauthorized access is attempted.

The AC-130W has the MX-20HADD installed; ACW full fleet retirement is scheduled for September 2022. It is not economically feasible to reverse engineer this requirement given the AC-130W retirement schedule.

The AC-130J has the MX-20HD and the MX-25 installed. The MX-20HD currently being used on the AC-130J is undergoing upgrades by Wescam to meet aircraft needs. The first upgrade is expected to be completed in January 2021, and testing is expected to take several months. The timeframe is estimated at one year to complete one MX-20HD full upgrade and flight test. In order to complete a TDP specifically for the upgraded MX-20HD, all upgrades and testing must be complete since no other contractor is capable of conducting necessary upgrades. The sensor upgrade schedule is undetermined, but estimated at four (4) years.

With the projection of another contractor creating a usable, non-Wescam TDP in five (5) years is not feasible. Provided another contractor was able to successfully complete a TDP within the allotted time, they would have to immediately begin creating another TDP that will support the upgraded MX-20HD. This would be more duplication of costs and efforts for the Government;

in addition to a grounded fleet.

An additional considerations is Wescam is conducting MX-20HD upgrades to ensure compatibility with MX-25. It is unknown at this time if the TDP for the MX-25 will remain unchanged after the MX-20HD upgrades are complete. Once the MX-20HD upgrades are completed, the MX-25 may require changes to facilitate systems communications. Having a new contractor establish MX-25 TDP prior to MX-20HD upgrades could lead to a duplication of cost and effort and possibly a grounded fleet until an accurate TDP could be created.

Organic Depot Repair Considerations: The Government has determined that establishing an organic depot for repair of the sensor systems is not a viable option due to the non-availability of a complete TDP; non-availability of a skilled workforce to perform the complex repairs required;

non-availability of specialized labs (laser-safe and thermal); specialized equipment necessary to test the sensors; and the required significant capital investment to establish an organic depot.

The Government’s current sustainment plan is to continue using the L-3 Com/Wescam Sensor Systems installed on the SOF aircraft until either aircraft retirement or the capability becomes obsolete. L-3 Com/Wescam projects average operational life expectancy of approximately ten years usage for each configuration before the product becomes obsolete.

Conclusion: L-3 Com/Wescam is the only firm capable of providing the supplies and services described in Section III without the U.S. Air Force experiencing substantial duplication of cost that could not be expected to be recovered through competition.

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) was posted to the beta.Sam.gov on 22 May 2020 with a response date of 6 July 2020 under Solicitation Number FA8509-20-R-0019.

The SS/RFI requested responses from interested vendors that possess the expertise, capabilities, and experiences to meet qualification requirements for this effort.

As of 6 July 2020, no responses were received. L-3 Com/Wescam submitted a late response on 14 July 2020 that meets the specified requirements for MX-20 and MX-25 sensor repairs and capabilities as defined within the RFI.

The requirement will be synopsized in beta.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.

VII. Determination by the Contracting Officer that the Anticipated Cost to the Government will be Fair and Reasonable.

In accordance with DFARS PGI 225-870-1 (d) (ii) (A) (1), the Contracting Officer (CO) plans to utilize the CCC for cost and price analysis services to support the CO’s determination of fair and reasonable pricing. The PCO may require submission of other than certified cost or pricing data, to the extent necessary, to determine fair and reasonable price(s).

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 22 May 2020 through 07 August 2020 in accordance with FAR Part 10.001 and FAR Part 10.002. The market research report was completed on 20 August 2020. The market research techniques used were as follows:

A SS/RFI was posted to beta.SAM on 22 May 2020 under Solicitation Number FA8509-20-R- 0019. L-3 Com/Wescam was the only respondent.

Queries were conducted within Government data bases and various internet searches, followed by searches within Small Business Administration's database, and internet searches for both “military electro optical infrared” and “MX-sensor repair” capabilities.

Additional market research inquiries utilized the Small Business Administration's (SBA) Dynamic Small Business Search (DSBS) engine: https://web.sba.gov/pro-net/search/dsp_search-help.cfm?goto=Keywords. North American Industry Classification System Code (NAICS) 33451 was used to research in the DSBS database. The search rendered zero SB, Woman or Woman Owned, HUBZone, Service-Disabled or Veteran, or 8A certified businesses meeting the qualifications to support this requirement.

An internet inquiry using a keyword search of "military electro optical infrared" resulted in identification of the Business Wire Report, titled Top 5 Vendors in the Military Electro-Optical and Infrared Systems Market from 2016 to 2020 at:

https://www.businesswire.com/news/home/20161124005016/en/Top-5-Vendors-Military- Electro-Optical-Infrared-Systems. The Report provided several large business companies who possess EO/IR technology, but do not have access to the L-3 Com/Wescam TDP and therefore are considered not capable of meeting this requirement.

The MX-Series sensors are considered a commercial item as defined by FAR 2.101. The MX- Series sensors are used by the military, law enforcement, emergency management services, and the commercial aviation industry.

The market research concluded L-3 Com/Wescam 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 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.

As the OEM, L-3 Com/Wescam has unique capabilities and possesses the proprietary TDP to support the MX-Sensor Series. Due to L3Harris/Wescam patents and proprietary data, the Government cannot establish organic support.

The cost to reverse engineer the MX-sensors is estimated to exceed and take a minimum of three years to complete. Integration, re-qualification, and flight testing would require an additional 1.5 years to complete which may enable a new qualified vendor to begin generating repaired units five years after contract award. The AC-130W (MX-20HADD) is scheduled for retirement in Sep 2022. The last AC-130J is due to be delivered in FY24 and lifecycle of the program is projected through 2040. A reverse engineering effort would be a substantial duplication of costs to the Government that is not expected to be recovered through competition, therefore is not economically feasible to pursue.

The plan to break barriers to competition in the prior J&A was to continue engaging the OEM on selling the TDP to the Government. That plan was executed on 2 June 2020 via email, but the

OEM continues to decline to sell the TDP to the Government. Based on fulfillment of this prior plan, the current J&A does not require higher level approval in accordance with DFARS PGI 206.304(a) (S-70) (ii).

Future plans to break barriers requires access to proprietary TDP. L-3 Com/Wescam must agree to provide the government or another company with the necessary TDP to conduct all repairs and modifications for the MX-Sensors. If the government is allowed access to TDP, through either sell or lease, the cost/benefit of organic support can be researched. If L-3 Com/Wescam releases TDP to another company, Market Research will identify another potential contractor capable of supporting this effort. The government will continue to seek proprietary TDP to break barriers by direct inquiries to L-3 Com/Wescam for lease or sell of proprietary TDP.

XII. Certification by the Contracting Officer.

As evidenced by my signature on the Coordination and Approval (CAD), 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) on the CAD, I (we) certify that any supporting data contained herein, which is my (our) responsibility, is both accurate and complete.