J&A_Redacted.pdf

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

FOR OFFICIAL USE ONLY

March 2018 FOR OFFICIAL USE ONLY Page 1 of 11

NOTE: If a Justification and Approval was approved for the preceding acquisition, a copy of the approved J&A for the predecessor action must be included in the staff package for approval of the instant J&A. This applies to J&A staff packages that are submitted for review and approval at a level above the contracting officer. The predecessor J&A will be used as a reference document by the approving official.

Is this a new or amended J&A Document? New Amended ( Prior to Award Only! )

Is this a Bridge Action as defined in the AF Bridge Action Reduction Plan? Yes No

Funding level for this acquisition: < $700K > $700K and < $13.5M > $13.5M and < $93M > $93M

Contracting Activity: AFSC/PZAAA

Purchase Request / Local ID Number: FD2060-19-00015

Program / Project (and PE, if applicable): Fuel Quantity Indicator on UH-1N Helicopter

Program Type (PEO or Other Contracting): Other Contracting

Authority: 6.302-1 – 10 USC 2304(c)(1), Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements

Estimated Contract Cost (including options): $ J&A Type: Class Individual

COORDINATION (AFFARS 5306.304(a) )

Date Project Lead / Program Mgr / Requiring Activity Rodney W. Mathis

411 SCMS/GULAB, 497-9640

Signature

Date

19 Oct 2018

Contracting Officer Troy Winebarger

AFMC/PZAAA, 468-0146

Signature

Date

19 Oct 2018

Local Legal Reviewer Bradly Adams

78ABW/JA, DSN 472-0569

Signature

APPROVAL (AFFARS 5306.304(a) )

Date

22 Oct 2018

Competition Advocate Elizabeth F. Kennedy

AFSC/PZCA/ DSN 472-1102

Signature

March 2018 FOR OFFICIAL USE ONLY Page 2 of 11

I. Contracting Activity.

This Justification and Approval is to request authority for Other Than Full and Open Competition supporting requirements generated for the Air Force Sustainment Center (AFSC), 638 Supply Chain Management Group (SCMG), 411th Supply Chain Management Squadron (SCMS)/GULAB. The contracting activity for this requirement is AFMC/PZAAA. The purchase request number supporting this contracting action is FD2060-19-00015.

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

Due to the circumstances described herein, the activity requests authority to acquire the repair listed in this document 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 follow-on contract, which will be a firm-fixed price (FFP) Requirements Indefinite Delivery contract (IDC) with a basic one year plus four (4) one-year ordering periods. The validity period for the IDC is projected to be Oct 2019 through Oct 2024.

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

Ontic Engineering and Manufacturing, Inc.

20400 Plummer Street Chatsworth, CA 91311-5371

CAGE 45934

Large Business

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

This acquisition is for the repair of the Fuel Quantity Indicator (FQI) System applicable to the UH-1N helicopter. The FQI System on the UH-1N helicopter consists of two electrically separate systems: (1) Liquid-Crystal Display (LCD) and the Liquid Quantity Indicator (LQI), with five probes and (2) low level/fuel transfer sensing system. The LQI multiplexes and measures the capacitance of the usable fuel of the lower fuel cells (lower left aft, lower right aft, lower left forward, and lower right forward) and provides a bar graph displaying lower tank fuel volumes. Each bar graph segment represents 10 percent fuel contents. A four digit numeric field displays the total usable fuel weight of the four lower fuel cells and the upper aft tank. This system is mission critical and therefore required for the UH-1N helicopter to be mission capable.

National Stock Numbers (NSNs), Nouns, Part Numbers, and Best Estimated Quantities (BEQs) are listed below. The repair will require the contractor to restore the unserviceable assets to serviceable condition using the contractor developed repair and acceptance test procedures.

NSN Noun Part Number 2915-01-361-0133GA Control Unit, Pump 0201KCR01 6680-01-360-9451GA Indicator, Liquid Qty 20-246-01

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6680-01-361-0739GA Liquid Transmitter 0250KTU01 6680-01-361-0740GA Liquid Transmitter 0116KTU02 6680-01-361-0741GA Liquid Transmitter 0166KTU01

BASIC

Noun TYPE BEQs EST URC Total Control Unit, Pump (0133) Repair 8 Control Unit, Pump (0133) TT&E 6

NFF/BER

Indicator, Liquid Qty (9451) Repair 18 Indicator, Liquid Qty (9451) TT&E 5

NFF/BER

Liquid Transmitter (0739) Repair 15 Liquid Transmitter (0739) TT&E 5

NFF/BER

Liquid Transmitter (0740) Repair 8 Liquid Transmitter (0740) TT&E 5

NFF/BER

Liquid Transmitter (0741) Repair 6 Liquid Transmitter (0741) TT&E 4

NFF/BER

Total

Ordering Period 1 Noun TYPE BEQs EST URC Total Control Unit, Pump (0133) Repair 6 Control Unit, Pump (0133) TT&E 6

NFF/BER

Indicator, Liquid Qty (9451) Repair 10 Indicator, Liquid Qty (9451) TT&E 5

NFF/BER

Liquid Transmitter (0739) Repair 10 Liquid Transmitter (0739) TT&E 5

NFF/BER

Liquid Transmitter (0740) Repair 6 Liquid Transmitter (0740) TT&E 4

NFF/BER

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Liquid Transmitter (0741) Repair 4 Liquid Transmitter (0741) TT&E 2

NFF/BER

Total Ordering Period 2 Noun TYPE BEQs EST URC Total Control Unit, Pump (0133) Repair 6 Control Unit, Pump (0133) TT&E 6

NFF/BER

Indicator, Liquid Qty (9451) Repair 10 Indicator, Liquid Qty (9451) TT&E 5

NFF/BER

Liquid Transmitter (0739) Repair 10 Liquid Transmitter (0739) TT&E 5

NFF/BER

Liquid Transmitter (0740) Repair 6 Liquid Transmitter (0740) TT&E 4

NFF/BER

Liquid Transmitter (0741) Repair 4 Liquid Transmitter (0741) TT&E 2

NFF/BER

Total

Ordering Period 3 Noun TYPE BEQs EST URC Total Control Unit, Pump (0133) Repair 6 Control Unit, Pump (0133) TT&E 6

NFF/BER

Indicator, Liquid Qty (9451) Repair 10 Indicator, Liquid Qty (9451) TT&E 5

NFF/BER

Liquid Transmitter (0739) Repair 10 Liquid Transmitter (0739) TT&E 5

NFF/BER

Liquid Transmitter (0740) Repair 6 Liquid Transmitter (0740) TT&E 4

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Liquid Transmitter (0741) Repair 4 Liquid Transmitter (0741) TT&E 2

NFF/BER

Total

Ordering Period 4 Noun TYPE BEQs EST URC Total Control Unit, Pump (0133) Repair 6 Control Unit, Pump (0133) TT&E 6

NFF/BER

Indicator, Liquid Qty (9451) Repair 10 Indicator, Liquid Qty (9451) TT&E 5

NFF/BER

Liquid Transmitter (0739) Repair 10 Liquid Transmitter (0739) TT&E 5

NFF/BER

Liquid Transmitter (0740) Repair 6 Liquid Transmitter (0740) TT&E 4

NFF/BER

Liquid Transmitter (0741) Repair 4 Liquid Transmitter (0741) TT&E 2

Total

Grand Total

The total estimated cost for this acquisition is A escalation factor was applied to the estimated unit price for each Out -Year Ordering Period.

. This requirement will be funded with Consolidated Sustainment Activity Group (CSAG) Working Capital FY19-FY23 funding (Appropriation 4930). The delivery requirements for each inducted repair is 180 days after receipt of order (ARO). The validity period of the IDC will be five (5) years, anticipated to be October 2019 through October 2024. The validity period will begin after expiration of current contract FA5824-15-D-0015.

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

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CLIN DESCRIPTION COST TYPE

CLIN 0001 Repair (0739) FFP

CLIN 0002 BER/NFF (0739) FFP

CLIN 0003 Repair (0133) FFP

CLIN 0004 BER/NFF (0133) FFP

CLIN 0005 Repair (9451) FFP

CLIN 0006 BER/NFF (9451) FFP

CLIN 0007 Repair (0740) FFP

CLIN 0008 BER/NFF (0740) FFP

CLIN 0009 Repair (0741) FFP

CLIN 0010 BER/NFF (0741) FFP

CLIN 0011 DATA NSP

The subject NSNs were screened and assigned Repair Method Code (RMC)/Repair Method Suffix Code (RMSC) of R3/R:

RMC: R3. Repair, for the second or subsequent time, directly from the actual manufacturer.

RMSC: R. The Government does not own the data or the rights to the data needed to repair this part from additional sources. It has been determined to be uneconomical to buy the data or rights to the data. It is uneconomical to reverse engineer the part. This code is used when the Government did not initially purchase the data and/or rights.

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 nature of the acquisition requires the 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 Ontic Engineering and Manufacturing. The Original Equipment Manufacturer (OEM), GE Aviation Systems LLC, sold the data rights to Ontic in May 2011. Ontic is currently repairing these assets for the Government under sole source contract FA5824-15-D-0015, due to expire in Oct 2019.

The Government does not own the data or the rights to the data needed to repair these parts from other sources. The drawings, maintenance manuals and acceptance test procedures are proprietary to Ontic. The 411 SCMS/GULAB contacted Ontic via telephone and e-mail on 02 Nov 2017 to inquire about the potential purchase of data rights. On 2 Nov 2017, Ontic Technical Sales Manager Mr. Bill Nolan stated that they were not willing to sell data or data rights to the Government.

The FQI System is military unique to the UH-1N helicopter mission. Any alternate source would be required to partner with Ontic for access to technical data and additional cost incurred would be passed on to the Government as operating cost.

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NSN NOUN Phase 1 TPS Phase 2-4 Phase 5 Total Rev Eng. TPS/Dsgn/ Revese Eval/Req Dev/Delv Engineering 2915-01-361-0133 Fuel Level Monitor

NSN NOUN Phase 1 TPS Phase 2-4 Phase 5 Total Rev Eng. TPS/Dsgn/ Revese Eval/Req Dev/Delv Engineering 6680-01-361-0740 Liquid QTY Transmitter 6680-01-361-0741 Liquid QTY Transmitter 6680-01-361-0739 Liquid QTY Transmitter

NSN NOUN Phase 1 TPS Phase 2-4 Phase 5 Total Rev Eng. TPS/Dsgn/ Revese Eval/Req Dev/Delv Engineering 6680-01-360-9451 Liquid QTY Indicator Grand Total:

On 05 April 2018, AFSC/FZC-R conducted a break-even analysis. The results are as follows:

a. All costs within the analysis are in Base Year (BY) 2019$. Costs provided are considered Then Year (TY) costs and were converted to BY2019$ using 2017 United States Air Force Inflation and Producer Price Indices.

b. The analysis period is 10 years, FY2019-2028, based on the expected service life of the subject NSNs.

c. Annual repair costs are based on the current 2019 repair price (ROM provided by Ontic) adjusted for inflation. Repair quantities are based on current contract BEQs.

d. Reverse engineering effort requires three years. Investment costs are based on two engineers working for three years to develop the TDP and approve the prototype. The cost are adjusted for inflation and spread evenly across the three year effort (FY2019-2021).

e. While the reverse engineering effort is being accomplished, analysis assumes repairs are sole source to Ontic (FY2019-2021).

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f. Once a new source is qualified, repair costs are reduced by 20% based on estimated savings due to competition (FY2021-2028).

The Savings/Investment Ratio (SIR) and Payback Period are provided below. A desired SIR is 1 or greater, indicating that for every dollar invested, a dollar or more is earned as a return on investment.

The Payback Period indicates how many years it takes to recoup dollars invested.

a. SIR = 0.47 ($0.47 return on every dollar invested)

b. Payback Period = 21 years

Based on the analysis, the savings gained through competition do not offset the costs of reverse engineering within the ten year analysis. Overall, the analysis indicates a sole source repair contract is the least costly alternative.

On 31 Jan 2013 HQ AFMC/A4DC approved Depot Source of Repair #11-280 (DMI #13602F) for use of contract repair for sustainment.

The FQI System represents a relatively small workload for investing in standing up an organic depot repair capability. There are only 63 UH-IN helicopters that are supported by this system. The system is made up of the five separate repairable assets. Of the five assets that make up the FQI System, approximately 40-60 assets are generated for repair annually.

Retirement of the 63 each UH-1N fleets is projected to begin in FY2020 and will continue drawing down until completely out of Air Force inventory by FY2030. By FY2025, 24 each UH-1N Helicopters of Air Force Global Strike Command's fleet are scheduled to retire. This will result in a rapid and steady increase in asset availability with more Pump Control Unit, LQI, and Liquid Transmitters to support few helicopters (minimizing or eliminating the need for future repair sustainment). The remaining 39 UH-1N Helicopters are scheduled to retire by FY2030. Therefore, the planned retirement of the UH-1N fleet will not provide sufficient time to recover the costs of qualifying a new source/alternative solution.

Ontic has repair stations, fully developed test software and a trained workforce for repairing these assets. Award to any other source would result in unacceptable delays in fulfilling the Air Force's requirements. This system is mission critical for the UH-1N helicopter. A follow-on repair contract is required to restore the FQI System to serviceable condition. A break in repair sustainment could result in UH-1N helicopters becoming Non-Mission Capable.

Ontic is the only firm capable of providing the requirements described in Section III above without the U.S. Air Force experiencing substantial duplication of cost that could not 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.

A Sources Sought (SS) / Request for Information (RFI) synopsis was posted to Federal Business

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Opportunities (FedBizOpps) on 05 Feb 2018 with a response date of 20 Feb 2018 under Solicitation Number FA852418R0012. The SS/RFI requested responses from interested vendors that possess the expertise, capabilities, and experience to meet qualification requirements for this effort. No responses were received by the closing date of the SS/RFI.

This requirement will be synopsized on the Federal Business Opportunities (FedBizOpps) web page as required by FAR 5.201. It is anticipated that sources having an interest in subcontracting may be identified through synopsis. Although the Government does not own data to support acquisition of this repair from any other source, any source who responds to the Government as a result of this synopsis will be identified as a potential subcontractor to the Prime.

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 (DCMA) and expert technical personnel supporting the program. The contract price will be negotiated in accordance with the procedures in FAR Part 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 and completed on 2 May 2018 in accordance with FAR 10.001 and

10.002 using the following methods:

As described in Section VI above, a SS/RFI was posted to FedBizOpps on 05 Feb 2018 under Solicitation Number FA852418R0012 in which no responses were received.

The market research was conducted using search engines ILSmart, Central Contractor Registration (CCR), Google, Information Handling Services (IHS) (Haystack), and Small Business Administration website:

http://dsbs.sba.gov/dsbs/ https://www.google.com/?gws_rd=ssl https://www.ilsmart.com https://www.uscontractorregistration.com

Queries were conducted with the part numbers, NSNs, past and present manufacturers (Ontic and GE), and part names.

IHS (Haystacks) query resulted in identification of current vendor Ontic and GE Aviation Systems (Cage 35012 &058R3) due to historical association with these NSNs. No potential vendors were

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A query of the CCR database using keyword “Ontic” and North American Industry Classification System (NAICS) code 332912 resulted in identification of Ontic (Cage 45934). IHS classified the contractor as a small business but CCR indicates they are a large business.

Searches were conducted using the Dynamic Small Business Search Engine. The search was conducted using NAICS code332912 and key words “0250KTU01,” “0116KTU01,” “0116KTU02,” and “0201KCR01.” The search returned no small business results.

This repair requirement is not considered commercial. These items do not fit the definition of a commercial item as defined in FAR Part 2.101.

The market research concluded Ontic 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 Government does not own a complete drawing or TDP required to compete or develop an organic repair capability. The 411 SCMS/GULAB contacted Ontic via telephone and e-mail on 02 Nov 2017 to inquire about the potential purchase of data rights. On 2 Nov 2017, Ontic Technical Sales Manager Mr. Bill Nolan stated that they were not willing to sell data or data rights to the Government.

The total estimated cost to reverse engineer all four NSNs is and would take three years to complete. The payback period is estimated to take 21 years, therefore it would be uneconomical for the Government to invest in a reverse engineering effort since the UH-1N is scheduled for retirement by 2030.

No actions are planned to remove barriers to competition based on the present workload generated by the FQI System as well as the potentially diminished future workload.

The prior J&A plan was to re-evaluate marketplace conditions to see if full and open competition could be utilized on future requirements and to continue to attempt to procure the TDP. The current market research concluded repair of the FQI System is still limited to Ontic. As stated above, the Progam Office reached out to Ontic in which Ontic is not willing to sell the TDP. Based on completion of these actions, higher level approval in accordance with DFARS PGI 206.304(a) (S-70)

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(ii) is not required for this J&A.

XII. Certification by the Contracting Officer.

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