JA_Redacted.pdf

Controlled Unclassified Information

JUSTIFICATION FOR OTHER THAN

FULL AND OPEN COMPETITION

I. CONTRACTING ACTIVITY

This Justification and Approval (J&A) amendment requests authority for Other Than Full and Open Competition (OTF&OC) supporting requirements generated for the Air Force Sustainment Center (AFSC), 638 Supply Chain Management Group (SCMG), 409th Supply Chain Management Squadron (SCMS)/GUMC. The contracting activity for this requirement is AFSC /PZAAB. The purchase request number supporting this contracting action is FD2060-18-01879.

II. NATURE AND/OR DESCRIPTION OF THE ACTION BEING PROCESSED

Due to the circumstances described herein, this activity requests authority to acquire the repair services for the Programmable Armament Control Set (PACS-46) Converter Programmer (CP) listed in this document using Other Than Full and Open Competition as prescribed by FAR 6.302-1, Only One Responsible Sources and No 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) consisting of a one-year basic and four (4) ordering periods as well as the 6-month option per FAR Clause 52.217-8, Option to Extend Services. Orders may be issued on this Requirement IDC from estimated 19 May 2021 through 18 Nov 2026, if the 6-month extension is exercised.

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

Hamilton Sundstrand 10007 E. University Dr.

Phoenix, Arizona 85034 Cage: 0CAM5 Large Business

III. DESCRIPTION OF THE SUPPLIES/SERVICES REQUIRED TO MEET THE

AGENCY’S NEEDS

This requirement is for the repair of the Programmable Armament Control Set (PACS-46) Converter Programmer (CP), Part Number (P/N) 11241-46, National Stock Number (NSN):

1270-01-550-2010FX. The PACS-46 is applicable to the F-15E. The original J&A for this action was approved in Nov 2019 with an estimate of . Prior to award, the effort was changed from non-commercial (utilizing FAR Part 15) to commercial (utilizing FAR parts 12 and 13) and the total value increased by based on inclusion of the 6-month option. This amendment will revise the new contract total to .

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

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 Hamilton Sundstrand, as they are the only qualified source. Repair of the PACS-46 is highly specialized, as it requires skill and expertise to perform maintenance in accordance with the design and performance specifications HS15447, and the Acceptance Test Procedures, ATP11283-35. The performance specification contains extremely stringent design requirements and must meet exact form, fit, function and interface requirements for effective F-15 mission accomplishment. The PACS-46 system is a military-unique item that must conform to the Original Equipment Manufacturer (OEM) engineering drawings, 11241-46. The PACS-46 controls the logic for fail-safe monitoring, arming, releasing and jettisoning of all air-to-air and air-to-ground weapons and stores on the F-15E. This particular CP configuration has been certified for nuclear weapons capability. Hamilton Sundstrand has provided PACS-46 maintenance for the F-15E for over 15 years.

Research and review of the PACS-46 for both commercial and military markets found no other existing items that meet the form, fit, function and interface requirements of the F-15. The PACS-46 was specifically designed for the F-15’s mission and operational requirements.

Hamilton Sundstrand is the OEM and is the only company with the full source documentation detailing the design, operation and manufacturing details of the PACS-46. Existing unique design capability, engineering skills, and manufacturing knowledge by the qualified source requires repair of the part from only the approved source. The approved source, Hamilton Sundstrand, retains data rights, repair knowledge, and technical data that is not economically available to the Government. This data and knowledge are essential to maintaining the quality of the part. A complete data package was not acquired by the Government during initial efforts of production for this item which was provisioned by WPAFB. Hamilton Sundstrand is the only firm capable of providing the supplies and services described above without the U.S. Air Force experiencing substantial cost in reverse engineering that could not be expected to be recovered through competition. The PACS-46 is expected to remain on the F-15E fleet for its remaining life cycle, currently scheduled for 2045.

This repair requirement is a follow-on to repair contract FA8538-16-D-0002, awarded 19 Nov 2015 and set to expire on 18 May 2021. The repair contract was awarded sole-source to Hamilton Sundstrand.

There is no other commercial or non-developmental product available which meet the requirements. This is a unique item for fighter aircraft and the safe and effective operation of the F-15 requires the programmable armament control set to meet an exact form, fit, and function as determined by mission requirements. Even though this is an item developed by Hamilton Sundstrand specifically for military use in the F-15, the previous repair contract was determined to be commercial of a type due to the nature of the contractor’s repair processes and workforce.

The Government does not have access to the complete technical repair data. This repair data was requested Nov 2018 from Hamilton Sundstrand. On 12 Dec 2018, Hamilton Sundstrand declined via email any interest in selling the intellectual property or proprietary data for this item. Therefore this instant acquisition is necessary for the continued repair performance of a highly specialized item/system.

Award to any other source would result in substantial duplication of cost to the Government that is not expected to be recovered through competition in fulfilling the Air Force’s requirements. In order to reverse engineer, another contractor would be required to develop reverse engineering drawings, and tooling, as well as conduct field testing, OFP development, and complete nuclear certification for the newly re-engineered PACS-46, which is expected to take at least 60 months.

Cost Analysis was performed using the reverse engineering of the F-15 PACS-25 at a cost of $20.3M in 2014. The outcome of the Cost Analysis is that reverse engineering would net the Government a savings to investment ratio of 0.18, which means that the government would only recoup 18 cents in savings for every one dollar invested in reverse engineering. The Payback Period for reverse engineering would far exceed the remaining 30 years of the life cycle.

Therefore, reverse engineering to obtain repair data is not considered cost efficient.

Accordingly, Hamilton Sundstrand is the only firm capable of providing the supplies and services described in Section III without the U.S. Air Force experiencing substantial duplication in 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 DEEMED PRACTICABLE

A Sources Sought (SS)/Request for Information (RFI) synopsis was posted to Federal Business Opportunities (FedBizOpps) on 29 May 2018 with a response date of 29 June 2018 under Solicitation Number FA85381801879. The SS/RFI requested responses from interested vendors with capability to repair the F-15 PACS-46. The applicable North American Industry Classification System (NAICS) code was identified as 336413 for the item, however applicable repair services NAICS is 811219. No responses to this RFI were received.

The requirement will be synopsized on FedBizOpps 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 for subcontracting possibilities.

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 negotiated in accordance with procedures in FAR Part 12 and FAR 13.106-3(a) (2), and include a statement of price reasonableness confirming the ultimate price to the Government is fair and reasonable. Additional pricing methodologies to negotiate fair and reasonable price may include reviewing publicly offered catalogs, comparison to historical contractor sales, and/or analysis of limited cost or pricing information provided by the contractor. In the event that limited cost or pricing information is made available, the Government's negotiation objective will be developed using local technical analysis and direct and indirect rate factors recommended by the Defense Contract Management Agency.

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 in accordance with FAR Part 10.001 and 10.002. The market research was completed on 10 Dec 2018 and revised with updates on 01 Sep 2020. Market Research techniques used are as follows:

As described in Section VI above, a SS/RFI was posted to FedBizOpps advising industry of the pending acquisition and soliciting inquiries from interested vendors. The SS/RFI was posted on 29 May 2018 under Solicitation Number FA85381801879. No other sources stating interest or capability.

Internet searches were performed using keywords “Programmable Armament Control Set”, “Armament Control Set” and NAICS 336413/811219 on AerospaceTechnology.com, GlobalSpec.com, EEM.com, and the Small Business Administration (SBA) database (dsbs.sba.gov). There were no potential vendors identified that had access to the proprietary technical data to qualify them as capable vendors for the repair of the PACS-46.

The Air Force Master Item Identification Database, D043A, was also researched along with acquisition historical records. The D043A database contains all qualified sources identified at the time of initial cataloging and through subsequent revisions. Hamilton Sundstrand was the only qualified repair source identified.

PR package and J&A was initiated as a FAR Part 15 requirement. The Government solicitation was issued as non-commercial. However, once the solicitation was accomplished and received by the contractor, Hamilton Sundstrand indicated that this requirement was commercial. The contractor submitted a proposal under FAR Part 12 and provided price information to support that position. The Gov’t requested additional information and performed further research which did not result in sufficient data to overturn the previous commercial item determination dated Dec 2015. As well, the previous two contracts for this repair was accomplished as a FAR Part 12 commercial requirement. This repair is a follow-on contract to the previous contract. Even though this is an item developed by Hamilton Sundstrand specifically for military use in the F-15 and is certified for nuclear use, the previous repair contract was determined to be commercial of a type due to the nature of the contractor’s repair processes and workforce. Therefore, the Government will continue to pursue the repair services as commercial.

The market research concluded Hamilton Sundstrand is the only capable source for repair of the

PACS-46.

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 necessary data required for repair of the PACS-46. At the current time, the Government has a requirement to use this part until the F-15E retires, projected in 2045.

On 12 Dec 2018, Hamilton Sundstrand declined interest in selling their intellectual property or proprietary data for this item. While the current market research indicates a sole source environment for the PACS-46, the Government will periodically request Hamilton Sundstrand’s consideration of selling the technical data. If they agree, the Program Office will accomplish a cost/benefit analysis to determine if buying the data is economical for the remaining life of the program. If determined economical, the Program Office will take action to obtain funding to acquire the technical data.

The plan to break barriers to completion in the prior J&A approved by AFSC/PZC-R Competition Advocate on 13 Jan 2015 stated that we would determine if possible to leverage data from the tests and procedures for the organically repaired PACS-25, used on the F-15C/D.

Discussions with engineering, 578 SMXG, and Nuclear Project Officers at the Nuclear Project Officer Meeting concluded it not feasible because of the specific interoperability and nuclear certification requirements present in the F-15E. This approach was determined not feasible without the benefit of a reverse engineering effort. Reverse engineering was considered, but determined not economically feasible due to the estimated cost of $20.3M in 2014 dollars. Cost Analysis calculated a savings investment ratio of 0.18, which means that the Government would only recoup 18 cents in savings for every one dollar invested in reverse engineering. The Payback Period for reverse engineering would far exceed the remaining 30 years of the life cycle. Based on fulfillment of the prior plan, the current J&A does not require higher level approval in accordance with DFARS PGI 206.304(a) (S-70) (ii).

XII. CONTRACTING OFFICER’S CERTIFICATION

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