JA_Redacted.pdf

CUI

SOLE SOURCE (INCLUDING BRAND NAME) JUSTIFICATION

Simplified Procedures for Certain Commercial Items

I. Contracting Activity.

This Sole Source Justification is to request 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)/GUMA. The contracting activity for this requirement is AFSC/PZAAB. The purchase request number supporting this contracting action is FD2060-23-00037.

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

Due to the circumstances described herein, the activity requests authority to acquiring the services of the Multi-functional Control Display Unit (MCDU), NSN 5895-01-699-2055UC, P/N CDMS-3829L listed in the document using Other Than Full and Open Competition as prescribed by 10 U.S.C. 3572, Implementation of Simplified Acquisition Procedures (41 U.S.C. 1901). This action will result in the award of a Requirements Indefinite Delivery Contract which will be a Firm-Fixed Price consisting of a basic 12-month period and four 12-month ordering periods. The length of performance is projected to be 1 July 2023-30 June 2028.

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

ScioTeq BV President Kennedypark 35A, Kortrijk 8500 Belgium

CAGE: B8086

Large Business

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

The anticipated contract will be for the repair, teardown, analysis, testing, services, packaging, handling, storage, transportation, as well as data collection, of the MCDU, NSN 5895-01-699- 2055UC, P/N CDMS-3829L, used on the C-5 Galaxy Aircraft. There are three (3) MCDUs per aircraft. MCDU acts as a slave text terminal for the Flight Management Computers and other subsystems in the aircraft. Up to seven subsystems can be connected simultaneously to the MCDU. The MCDU provides for aircrew data entry, avionics mode selections, and system status display. The MCDU's interface to the pilot is a pushbutton keyboard and a multifunction alphanumeric display. The MCDU incorporates built-in test for maintenance diagnostics, power up, in flight, and post flight system check.

Total estimated contract value is The ordering periods unit price is based on the MCDU production estimate provided by C-5 Program office (AFLCMC/WLS). A 3% escalation factor was applied to estimated unit price for each out-year ordering period. The ordering periods include repair costs, No Fault Found (NFF) costs, and Beyond Economical Repair (BER) costs.

This acquisition will use Working Capital Funds (4930) appropriation. The contract ordering periods of the firm-fixed priced contract will be five years following contract award. The delivery schedule is 60 Days ARO.

The item was assigned Repair Method Code/Repair Method Suffix Code (RMC/RMSC) of R4/R; RMC R4: Repair, for the first time, directly from the actual manufacturer. RMSC R: The Government does not own the data or the rights to the data needed to contract repair of 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. The Government did not initially purchase the data and/or rights.

Only one source has the rights or data to repair this item. Form 762 reports ScioTeq BV (Cage B8086) is the Supplier.

IV. Statutory Authority Permitting Other Than Full and Open Competition.

10 U.S.C. 3572, Implementation of Simplified Acquisition Procedures in accordance with procedures of FAR 13.5, Simplified Procedures for Certain Commercial Items.

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 services available from ScioTeq BV, as identified on the design requirements and source-controlled drawings (SCD).

The legacy MCDU, NSN: 5895-01-490-0705UC, PN: V9519311, was manufactured specifically for use on military transport C-5 Galaxy.

In 2018, due to obsolescence and DMSMS, Diminishing Manufacturing Sources and Material Shortages, issues of legacy MCDU the C-5 Program Office tasked Lockheed Martin with identifying a form, fit, function replacement for the current C-5M MCDU. This was achieved under the SPO’s SETSS, Sustaining Engineering & Technical Support Services, contract, FA8525-19-D0001, Delivery Order FA8525-19-F-0032. Lockheed identified subcontractor, ScioTeq BV, the manufacturer of the legacy MCDU, to manufacture the next generation MCDU.

Lockheed Martin provided qualification testing and test report data to C-5 SPO authorizing ScioTeq BV’s next generation MCDU’s use in the C- 5M. This effort is the first-time repair for NSN 5895-01-699-2055UC, P/N CDMS-3829L, ScioTeq BV's new C-5 MCDU design qualified in October 2021 with Lockheed Martin.

The 409th SCMS has purchased 77 of NSN:5895-01-699-2055UC, PN CDMS-3829L through the SPO’s CLS, Contractor Logistical Support, contract, FA8525-21-D-0003, with an estimated delivery date of November 2023. The 409th SCMS is establishing a Five Year Buy Contract with

DLA, Defense Logistics Agency, to purchase a projected quantity of thirty-two assets per ordering period, PR FD20602300036, with an estimated award date of April 2023.

An inquiry, on 3 March 22, was sent to Scioteq BV to determine if they would sell repair TDP to the government. It responded on 8 March 22 and their response confirmed that this repair TDP is proprietary to ScioTeq BV and stated that ScioTeq BV is not willing to sell or lease the repair data to the government nor any of company.

A breakeven analysis for reverse engineering of the previous MCDU, Part Number V9519311, was done in 2017 as part of a Market Research Report. The analysis of the previous MCDU is a suitable comparison for the subject MCDU, given the similarities in components and complexity of the two units.

The breakeven analysis calculated the cost of reverse engineering, to include repair capability and producing 263 assets (enough for 52 aircraft and spares) at $21.1M ($24.9M scaled to FY22 Dollars.The FY 2022 cost were calculated by scaling utilizing the gross domestic product deflator over the period of Q1 2017 – Q2 2022 (annual, not fiscal) ). The timeline for reverse engineering was calculated to be six years. Conditions at the time of the analysis did not include the global supply chain disruptions present today, the estimate for completion today would be extended by at least 2 years.

The projected breakeven, at the rate of repair in 2017, was projected to be 2047, well beyond the expected serviceable life of the C-5 airframe. Given costs and timelines associated with reverse engineering the MCDU, such an effort is considered uneconomical.

Accordingly, ScioTeq BV is the only firm capable of providing the requirements described in Section III above without the United States Air Force (USAF) 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 RFI was posted to SAM.gov on 3 March 22 under notice ID, RFI_UC_5895016992055C5 and closed on 4 April 22. The RFI requested responses from interested vendors that possess the expertise, capabilities, and experience to meet qualification requirements for this effort. The RFI is closed, and no responses were received.

This requirement will be synopsized onSaAM.gov in accordance with 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 manufacture/production of the MCDU from any other source, 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 18 April 22 to 25 July 22 in accordance with FAR 10.001 and

10.002. The Market Research Report was completed on 25 July 22. As part of the Market Research, a RFI was posted to SAM.gov on 3 March 22 under notice ID, RFI_UC_5895016992055C5 and closed on 4 April 22 with no responses received.

Recent communication between the program and ScioTeq BV (CAGE B8086) confirmed it is located in Belgium and had no history of performing business directly with the Government.

Upon request it initiated registration in SAM. ScioTeq BV confirmed it is the current manufacturer of applicable NSN and are willing to support a five-year contract. ScioTeq BV program manager Dominique Coude confirmed the MCDU was indeed manufactured at the Belgium facility and clarified the relationship ScioTeq LLC (CAGE 4DL36) located in Duluth, GA. ScioTeq LLC (Duluth) is a sales and product management representative for ScioTeq BV (Belgium).

Prior to initiating this SSJ, the 409th SCMS/GUMAA contacted Mr. Mike Weems at ScioTeq BV by email on 3 March 22 to verify that the manufacturing data is proprietary to ScioTeq. Mr.

Mike Weems responded on 8 March 22 confirming that this item is proprietary to ScioTeq and stated that ScioTeq is not willing to sell or lease the manufacturing data to the government.

Dutch Valley managed the legacy unit repair contact, FA8538-19-D-0008, for Scioteq. Scioteq’s previous company name was Esterline and Barcoview, LLC. In 2015, Esterline purchased Barcoview LLC. In 2019, Esterline changed their company name to Scioteq.

A RFI was posted to SAM.gov on 3 March 22 under notice ID, RFI_UC_5895016992055C5 and closed on 4 April 22. The RFI requested responses from interested vendors that possess the expertise, capabilities, and experience to meet qualification requirements for this effort. The RFI is closed, and no responses were received.

An internet query utilizing the Google search engine with criteria “CDMS-3829L” yielded no results. A search of "B8086" on https://cage.report/NCAGE indicates ScioTeq is a Non-US manufacturer. ScioTeq responded to a 16 May 2022 inquiry of commerciality of MCDU identifying it as a modified commercial item.

The market research concluded ScioTeq 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, 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 own the data rights and ScioTeq is not willing to sell the data required to repair these items to the government nornore another company. The feasibility of purchasing the data could not be ascertained due to the vendor's failure to provide a quote for the sale of the data. At the current time, the Government has a requirement to use this part, NSN:5895-01-699- 2055UC, PN CDMS-3829L, until it is retired, which is projected to be 2040. The DSOR, Depot Source of Repair, for the MCDU determined a shift in workload from the projected organic to contractor repair because it would be uneconomical to stand up an organic repair capability.

Based on the AFSC Engineering breakeven analysis for the MCDU, it was determined to not be cost effective to invest in a reverse engineering effort.

As a means to break barriers to competition, the Program Office will periodically request To purchase from ScioTech the technical data necessary for repair. If Scioteq agrees, the Program Office will accomplish a cost/benefit analysis to determine if buying the data is economical for the remaining life of the program. This is the first configuration of the MCDU and is a sole-source effort. Vendor surveys will also be conducted in an attempt to locate additional repair sources so that the benefits of competition may be realized. In addition, the Government will request of purchasing the licensing agreement currently offered by Scioteq for future requirements.

XII. Certification by the Contracting Officer.

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.