JA__Redacted.pdf

Controlled Unclassified Information

JUSTIFICATION FOR OTHER THAN

FULL AND OPEN COMPETITION

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 Life Cycle Management Center (AFLCMC) /WNZCA/Support Equipment and Vehicles Division. The contracting activity for this requirement is AFLCMC/WNKAB. The Purchase Request supporting this contracting action is

FD2060-19-33907.

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

Due to the circumstances described herein, the activity requests authority to procure the Electronic System Test Set listed in the 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 Firm-Fixed-Price (FFP) Requirements Indefinite Delivery Contract (IDC) with five (5) annual ordering periods. Orders may be issued on this Requirement Contract for the projected period of Dec 2020 to Dec 2025.

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

Howell Instruments, Inc.

8945 South Freeway Fort Worth, TX 76140-4911 Cage: 98869 Small Business

III. Description of the Supplies/Services Required to Meet Agency Needs.

This requirement is for the procurement of the Electronic Systems Test Set, commonly known as JetCal Analyzer, National Stock Number (NSN), 4920-01-497-2965RN, Part Number (P/N) BH112PA-77-3. The JetCal Analyzer provides military unique troubleshooting capability for uninstalled engines (in the test cell) and on-wing trimming/functional check of the General Electric (GE) J85 series turbojet afterburning engines, utilized with the T-38 aircraft. This Requirement IDC will support Air Force and Foreign Military Sales (FMS) requirements.

The JetCal Analyzer is a turbine engine data collection and analysis system used to determine J85-GE-5 engine condition and performance. The system contains hardware that collects and displays data, an executive software program that controls the configuration of the hardware, and engine specific application software that facilitates maintenance tests. Executive software provides the capability to perform system activities such as data acquisition, calibration, and report production. Application software is specifically designed to support testing of the GE J85-GE-5 turbojet afterburning engine. The system provides automated data recording, fault monitoring, and report production. The projected requirements are as shown below:

PERIOD ESTIMATED

UNIT

COST

BEST

ESTIMATED

QUANTITY

TOTAL

Ordering Period 1 (12 mos.)

6 EA

Ordering Period 2 (12 mos.)

4 EA

Ordering Period 3 (12 mos.)

4 EA

Ordering Period 4 (12 mos.)

4 EA

Ordering Period 5 (12 mos.)

4 EA

Total 22 EA

The total estimated contract value is A 3% escalation factor was applied to estimated unit price for each Out-Year Ordering Period. The bases for the estimated cost was derived from historical pricing and the Federal Logistics (FedLog) Information Service. This requirement will be funded with 3010 Investment funds and FMS funds.

The Requirement IDC is projected to award in Dec 2020, therefore orders can be issued Dec 2020 to Dec 2025. Delivery of the JetCal Analyzer is estimated at 180 days After Receipt of Order. This J&A covers the entire Requirement IDC ordering period through completion of all delivery orders.

This NSN was screened and assigned an Acquisition Method Code (AMC)/Acquisition Method Suffix Code (AMSC) of 3R:

AMC 3. Acquire, for the second or subsequent time, directly from the actual manufacture.

AMSC R. The Government does not own the data or the rights to the data needed to purchase 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 t he Authority Cited Above (Applicability of Authority).

The agency’s minimum needs can only be satisfied by the unique supplies or services available from Howell Instruments as demonstrated in the following paragraphs.

The BH112PA-77-3 provides extensive diagnostics capability during testing of the engine. This capability incorporates a health assessment of the fuel control system, compressor section, turbine section, and Variable Exhaust Nozzle/Inlet Guide Vanes rigging. The test set records data when specific run conditions are met and fills in the appropriate fields in the Jet Engine Test log data sheet or the Air Force Technical Order Form 153, Engine Trim Checklist. The JetCal Analyzer performs the following functions: locates and identifies engine trouble before extensive secondary damage occurs (prognostics), specifies and verifies needed repairs by providing before and after diagnostic comparisons, allows operators to verify accuracy of cockpit engine instrumentation, verifies engine performance, provides printed performance history and maintenance audit trail, and establishes a performance database for individual engines and engine types.

HQ AETC (Head Quarters Air Education and Training Command) had a contract with GE in 1984. Howell Instruments Inc., as a subcontractor to GE, developed the JetCal Analyzer for specific application with the T-38 aircraft. Howell Instruments Inc. provided a JetCal Analyzer (which remained the property of Howell Instruments Inc.) for Aircraft Compatibility Testing under a contract with Robins AFB in 2006. The testing successfully showed compliance with the requirement of Drawing Number BH112PA-77-3 and Government prepared Statement of Work.

Attempts to acquire the Technical Data Package (TDP) from Howell Instruments were made in Dec 2011 and April 2016. They reiterated each time they were not interested in releasing or selling the TDP necessary for competitive purposes. Request was elevated to the Howard Instruments Inc., Director of Department of Defense Programs, on 12 Feb 2020 in regards to the sale of the TDP to the Government. Howell Instrument’s Director responded on 12 Feb 2020 reiterating “Howell Instruments is not willing to sell or otherwise release any drawings, designs, data, software, or hardware information or any complete or partial TDP for the BH112PA-77 series engine analyzer. All aspect of this design remain propriety to Howell Instruments Inc.”

There have not been any changes in the marketplace since the Air Force’s last purchase in Jan 2017 under sole source contract FA8533-17-C-0002 for acquisition of 2-ea units.

Howell Instruments, Inc. is the only source technically capable of manufacturing this highly specialized test set. The company has been our source of supply for this item since 2006.

Any development, modification or reverse engineering effort for the JetCal Analyzer would require access to proprietary engine data from GE which they have refused to sell or otherwise make available to the Government. Likewise, Howell Instruments owns all the data including hardware/software for the JetCal Analyzer.

The Government has determined that reverse engineering the JetCal Analyzer would be cost prohibitive based on comparison to a similar reverse engineering effort for the Engine Warning Test Set (EWTS). An economic cost-benefit study was accomplished during the business case analysis (BCA) in Mar 2019 for this similar tester component part. It was estimated to cost more than to reverse engineer and take more than two years before final acceptance by the United States Air Force (USAF). Based on the analysis, savings (10%) gained through competition would not offset the costs of reverse engineering within the five year analysis period. Overall, the analysis indicates sole source procurement is the least costly alternative.

A Cost Breakeven Analysis (CBA) for the EWTS made the following assumptions:

• All costs within the analysis are in BY2019$. Costs provided are considered TY costs and were converted to BY2019$ using 2019 USAF Raw and Weighted Indices for 3400 Operations and Maintenance, Non-Pay.

• The analysis period is 5 years, FY2019-2023, based on the contract period of performance.

• Annual procurement costs are based on the current 2019 procurement price adjusted for inflation. Procurement quantities are based on one NSN and are used for the duration of the period of analysis (FY2019-2023).

• Reverse engineering effort requires one year. Investment costs are based on the similar Synchrophaser System Test Set (SPSTS).

• While the reverse engineering effort is being accomplished, analysis assumes procurement is sole source (FY2019).

• Once a new source is qualified, procurement costs are reduced by 10% based on estimated savings due to competition (FY2020-2023).

• The Savings/Investment Ration (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 = ( return on every dollar invested)

b. Payback Period = 132 years

c. Total Present Value of new Investment =

Based on the analysis, the savings gained through competition do not offset the costs of reverse engineering within the five year analysis period. Similar results are expected in an analysis of the similar JetCal Analyzer.

A reverse engineering effort for the JetCal Analyzer would require access to a JetCal Analyzer, proprietary engine data from GE, support equipment, and extensive involvement from the T-38 community for determination of engine performance parameters, specifications, and testing parameters. A new source would be required to complete first article testing and evaluations, further delaying availability of production units an additional 12-18 months.

Because of the low demand for this item, award to any other source would result in substantial duplication of cost to the Government that could not be expected to be recovered through competition. Additionally, delays associated with reverse engineering and qualification testing of a new source would result in unacceptable delays in fulfilling our requirements. A two-year plus delay is unacceptable to the USAF because this delay would put the Government past the need date. If there are any further delays in procuring this test set, the warfighter will have limited-to-no capability to test, repair, troubleshoot, or analyze T-38 variant aircraft engines, resulting in grounded aircraft impacting aircraft availability and mission readiness rates. As of June 2020, there are currently six (6) backorders; however, there may be some testers that are close to their end of life.

The lifecycle of the T-38 aircraft is expected to go through 2030 as procurement action for the T-X replacement aircraft is in process. The T-X aircraft is expected to be operational on or before 2030.

Accordingly, Howell Instruments is the only firm capable of providing the requirements described in Section III above without the USAF experiencing a 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 beta.SAM on 11 Feb 2020 with a response date of 12 Mar 2020 under Notice ID FA8533-2-R-JETCAL.

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

Only one (1) vendor (Howell Instruments, Inc.) replied on 9 Mar 2020 to the SS/RFI and provided the Government with documentation stating their interest in performing the task and validating their capabilities to perform the requirements outlined in the SS/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.

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 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 during Feb-Jul 2020 and report completed on 08 Jul 2020 in accordance with FAR Part 10.001 and 10.002. Market research techniques used are as follows:

As described in Section VI above, a SS/RFI was posted to beta.SAM advising industry of the pending acquisition and soliciting inquiries from interested vendors. The SS/RFI was posted on 11 Feb 2020 under Solicitation Number FA8533-2-R-JETCAL. Only one (1) vendor (Howell Instruments, Inc.) replied on 9 Mar 2020 to the RFI and provided the Government with documentation stating their interest in performing the task and validating their capabilities to perform the requirements outlined in the RFI.

Documentation in the Program Execution and Tracking System, Purchase Request Process System database, and FedLog Information Service was reviewed.

Internet searches using http://www.qualityaeroparts.com/military- products, http://www.qualityaeroparts.com, http://apri.com, http://www.interorbital.com was also accomplished. The searches revealed that none of the vendors evaluated have experience in gas turbine engines and are considered not capable of producing the item.

A Small Business Administration Dynamic Small Business Search query was conducted utilizing North America Industry Classification System code 334515. The search revealed four potential vendors, including the incumbent but after evaluation Howell Instruments was determined the only capable vendor as the other vendors do not have engine component testing capability, therefore were determined not capable of fulfilling this requirement.

The JetCal Analyzer 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. The Government requires parts that meet an exact form, fit, and function as determined by the specific mission. There are no aircraft in the commercial market with the same or similar components.

The market research concluded Howell Instruments is the only vendor capable of fulfilling the Government’s requirement for the JetCal Analyzer.

IX. Any Other Facts Supporting the Use of Other Than Full and Open Competition.

None.

X. List of Sources, if any, That Expressed 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 possess the TDP for the JetCal Analyzer to support full and open competition.

A reverse engineering effort is estimated to cost and take two years to complete. This would not be cost effective and would cause unacceptable delay in meeting our Air Force requirements, therefore determined not feasible.

The life of the T-38 aircraft is expected to be through 2030 as procurement action for T-X replacement aircraft is in process. The T-X aircraft is expected to be operational on or before 2030.

The plan to break barriers to competition in the prior J&A was to “…reassess the feasibility/possibility of procuring the data by elevating the request to upper management with Howell or acquiring and providing a J-85 engine and JetCal Analyzer to develop a new source in a reverse engineering scenario.” A request was sent to Howard Instrument’s Director on 12 Feb 2020 in regard to sell of the TDP. The Director responded, “Howell Instruments is not willing to sell or otherwise release any drawings, designs, data, software, or hardware information or any complete or partial TDP for the BH112PA-77 series engine analyzer.” This action fulfilled the prior plan, therefore this instant J&A does not require higher level approval in accordance with DRARS PGI 206.304(a) (S-70) (ii).

While the current market research indicates a sole source environment for the JetCal Analyzer, the Government will continue to engage with the OEM on an annual basis, prior to the entrance of each ordering period to determine the feasibility of procuring the TDP.

XII. Certification by the Contracting Officer.

As evidence by my signature on the Coordination and Approval Document (CAD), I have determined this document to be both accurate and complete to the best of my knowledge and belief.

XIII. Technical/Requirements Personnel’s Certification.

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