JA - Redacted.pdf

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 in support of requirements generated for the Air Force Life Cycle Management Center (AFLCMC)/WNZ Support Equipment and Vehicles Program Office. The contracting activity for this requirement is AFLCMC/WNKAB. The purchase request number supporting this contracting action is FD2060-20-36276.

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

Due to circumstances described herein, the activity requests authority to acquire the National Stock Number (NSN) 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 year plus four (4) one-year ordering periods. The ordering period is projected to be March 2021 to March 2026.

This sole source requirement will be from the following company:

Honeywell International, Inc.

3520 Westmoor Street South Bend, IN 46628-1373 Cage: 06848 Large Business

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

This requirement is for the procurement of the Control Test Set, NSN: 4920-01-455-4974, Part Number (P/N): 2754660-0501. The Control Test Set is used on the Boeing B-52, C-135, and KC- 135 aircraft. Within the airplane, the Control Test Set functionally tests, calibrates, and trouble shoots all temperature control systems manufactured by Honeywell. This is a military unique item with no commercial equivalent. The projected requirements are as shown below:

Proposed Ordering Periods and Quantities

Ordering Periods BEQ Unit Cost Totals

Basic, O/P 1 8 only source from which to procure the test set, as the sole owner of the design, manufacturing, and testing data.

Within the airplane, the Control Test Set functionally tests, calibrates, and trouble shoots all temperature control systems manufactured by Honeywell International, Inc. for use on Boeing B- 52, C-135, and KC-135 airplanes. The tester is used with adapter kits and cable assemblies furnished with the Universal Tester, PN F233-1. As temperature control systems are added to the airplane, additional adapter kits are furnished with the tester. Since 2003, procurement history shows that Honeywell has been the sole vendor to provide the test set to the Government.

The previous contract FA8518-14-C-0003 was awarded 11 September 2014 and expired 10 September 2017. Therefore, this instant acquisition is necessary for the continued 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 and unacceptable delays in fulfilling the Air Force's requirements. The data rights are proprietary to Honeywell, who declines to sell or otherwise release the data rights. This test set is unique to military applications. There are no commercial products in the current market that will fulfill the Government's requirements.

Suitable technical data, Government data rights, or manufacturing knowledge is not available to permit acquisition from other sources.

In May 2020, Honeywell was asked if they would be willing to sell their technical data rights to the USG. On 26 May 2020, Honeywell stated that they would not be interested in selling their technical data rights.

In order to reverse engineer the test set, development money must be allocated to fund the effort.

A new vendor would be required to complete the reverse engineering effort, manufacture four

(4) preproduction units, go through qualification testing, and develop technical manuals before production is authorized. Engineer estimates the cost to be approximately each for the preproduction units (including test reports and first article quality testing). The qualification testing is contingent on aircraft availability for test. Development of technical manuals is estimated to cost to . The Government estimates a new vendor would require two (2) legacy units for the reverse engineering effort. One unit would be used for cannibalization; the other for side by side test once compatibility test is arranged. Total developmental cost is estimated to be . The reverse engineering effort is estimated to 24-36 months based on reverse engineering efforts for similar items. The Government expects a savings as a result of competition, however; based on this projected saving, it would take the Government 18 years to recover a reverse engineering investment. The shelf life of the tester is 15 years, lasting through 2036, therefore undertaking a reverse engineering effort and the risk associated with such an effort was determined to be uneconomical to pursue. This would be a duplication of cost the Government may not recoup through competition. In technical terms, any vendor interested in developing or adapting another tester to meet our needs will be required to complete several design reviews requiring Major Commands (MAJCOM) (16) and Air Force Metrology and Calibration Program Office (AFMETCAL) participation. Delays in meeting our mission requirements would cause a work stoppage. Fielding of a new tester would require operational training estimated to take an additional 6-12 months . Delays associated with qualifying a new vendor could seriously impact our ability to meet mission requirements.

Honeywell maintains the technical capabilities, facilities, and expertise needed to manufacture the test set. There have been no changes in the market for this item since the last contract buy.

Accordingly, Honeywell is the only firm capable of providing the supplies and services described in Section III above without the U.S. Air Force 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.

A Request for Information (RFI) for the Control Test Set was posted to beta.SAM web page on 2 December 2019, with a response date of 1 January 2020. This Request for Information (RFI) solicited sources from which to purchase the Control Test Set. Two (2) vendors responded to the RFI, University of Dayton Research Institute (UDRI) and Ohio Semitronics, Inc. (OSI). The vendors were evaluated for their capability and determined to be not capable since Honeywell owns all of the technical data and drawings for this tester.

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.

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 15.403-3 the contractor will be required to provide certified cost or pricing data to be used in supporting the Government's evaluation of proposed cost. The proposed skill mix of labor, labor hours, types and quantities of material, other direct costs, and direct and indirect rates will be negotiated by the Government based on recommendations from the Defense Contract Management Agency (DMCA) and expert technical personnel supporting the program.

The contract price will be negotiated in accordance with procedures in FAR 15 ensuring the ultimate price 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 in accordance with FAR Part 10 and completed on 16 June 2020. Market Research findings are summarized below.

The Control Test Set is a military unique item with no commercial equivalent. Various methods were used to perform the research to identify potential sources including internet and data base searches as well as email communications. Honeywell was asked if they would be willing to sell their technical data rights to the USG. On 26 May 2020, via email, Honeywell stated that they would not be interested in selling their technical data rights.

A general internet search was done using Google. Internet search terms used were “Control Test Set temperature control systems”, “Control Test Set temperature systems”, and “Test Set temperature control”. Search queries were performed on: https://cage.dla.mil/, Fed Log, Haystack, Purchase Request Process System, System for Award Management, J018/Contracting Information Database System and Small Buiness Association Dynamic Small Business Search (DSBS). There were no other potential vendors other than the two vendors that responded to the RFI and both wanted to complete reverse engineering. The Original Equipment Manufacturer (OEM) owns and maintains the technical capabilities, facilities, and data needed to manufacture the test set.

As described in Section VI above, an RFI was posted to beta.SAM advising industry of the pending acquisition and soliciting inquiries from interested vendors. The RFI was posted on 2 December 2019 under Notice ID FA8533-20-R-CTRLTS. Two (2) responded to the SS/RFI.

The vendors were evaluated for their capability and determined to be not capable since Honeywell owns all of the technical data and drawings for this tester, UDRI and OSI did not qualify.

One (1) response to the Request for Information was from a small business, Ohio Semitronics, Inc. (OSI), that was interested in reverse engineering. However, the Government does not have the asset availability for OSI to reverse engineer the tester and Honeywell owns all technical data and drawings.

The Control Test Set 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 systems in the commercial market with the same or similar components.

Market Research concluded that Honeywell maintains the technical capabilities, facilities, and data needed to manufacture the test set. There have been no changes in the market conditions since last purchased from Honeywell. Honeywell has been the sole awardee, due to proprietary data rights, of the previous five (5) Government procurement contracts to produce this test set. The Government does not own the technical data package (TDP), nor is the product under the configuration control of the US Government to allow for full and open competition at this time.

Based on the results of the market research, Honeywell, is the only capable source for this acquisition.

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.

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

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 but the OEM continues to decline to sell the TDP to the Government. 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. 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. Technical/Requirements Personnel’s Certification.

As evidenced by our signatures above, we certify that any supporting data contained herein, which is our responsibility, is both accurate and complete.