JA_Rohde and Schwarz_Redacted.pdf

Controlled Unclassified Information

JUSTIFICATION FOR OTHER THAN

FULL AND OPEN COMPETITION

I. Agency and Contracting Activity.

This Justification and Approval is to request authority for Other Than Full and Open

Competition supporting requirements generated for the 402d Electronics Maintenance Group

(EMXG), 569th Electronics Maintenance Squadron and 402d Software Engineering Group

(SWEG), 581st Software Engineering Squadron (SWES). The contracting activity for this requirement is AFSC/PZIMA. The Purchase Request number supporting this contracting action is F3QCCM0120A004, Budget Authorization Form FD2060-20-66523.

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

Due to the circumstances described herein, the activity requests authority to acquire Versatile

Diagnostic Automatic Test Station (VDATS) kits as 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 new contract which will be a Firm Fixed Price (FFP) Requirements contract with a basic year plus four (4) one-year Ordering Periods. The estimated contract award date is projected to be 01 December 2020. Orders may be issued on this Requirements contract through

30 November 2025.

The source for this requirement is as follows. They are the United States distributor for Rohde &

Schwarz GmbH & Co. KG.

Rohde & Schwarz USA, Inc.

6821 Benjamin Franklin Drive

Columbia, Maryland, 21046-2633

CAGE: 82199

Large Business

III. Description of the supplies/services required to meet agency needs (including the estimated value).

The purpose of this acquisition is to procure the kits required to assemble the VDATS stations.

The VDATS is an organically designed test station with Open Architecture and Virtual Modular

Equipment (VME) Extensions for Instrumentation (VXI) technology. The test station contains flexible hardware and software architectures that are fully expandable and customizable, and eliminate or reduce the need for active Interface Test Adapters (ITAs).

The VDATS consists of standardized, commercially available test equipment, components and software. There are two configurations of VDATS, the Digital Analog (DA)-1 and DA-2.

Additionally, there are augmentations that provide additional capability to the core DA racks:

Auxiliary Bays (ABs), Mission Equipment Support Sets (MESSs) and Radio Frequency (RFs) roll-up racks. Currently, these configurations support the A-10, B-1, B-2, B-52, C-5, C-17, C-

130, E-3, E-8C, F-15, F16, F-22, H-53, H-60, KC-135 MC-4, MQ-9, Navy ships, and UH-1 weapon systems.

All materials must be purchased as new, direct from the Original Equipment Manufacturer

(OEM) in order to maintain configuration control and performance according to test station specifications. The remaining life cycle for the VDATS system is 30 years.

The best estimated quantity (BEQ) for kits covered by this J&A are shown below:

CLIN Part

Name/Number

Unit Price

Yr 1/ Total

Unit Price

Yr 2/Total

Unit Price

Yr 3/ Total

Unit Price

Yr 4/ Total

Unit Price

Yr 5/ Total

BEQ

per

Year

Total for 5

Years

0001 RF Kit

0002 AB-19 Kit

0003 SASI Kit

CLIN 0004 Over and Above:

Over and above is estimated to accommodate potential purchases of additional individual parts above the estimated quantities. This also includes individual parts buys that may be initiated by the 410th Supply Chain Management Squadron.

Note: References to specific “order years” above are only to provide an estimated period when items will be ordered.

This Requirements contract will be for five years; a base year and four one-year ordering periods. The estimated contract award date is projected to be 01 December 2020. Orders may be through 30 November 2025. Actual delivery schedule will be determined based on the particular kits and quantities included in the delivery order. This J&A covers the ordering period of the Requirements contract through completion of all delivery orders.

The part numbers identified are applicable to PGI 217.7506 Spares Breakout Program for centrally managed replenishment or provisional parts for military systems and equipment. These parts are form, fit, and function configurations and are managed by the VDATS program office

(AFLCMC/WNA) which maintains Operational, Safety, Suitability, and Effectiveness (OSS&E) authority. These parts are not stock listed and therefore were not screened.

IV. Statutory authority permitting other than full and open competition.

10 USC 2304(c)(1), as implemented by FAR 6.302-1, Only One Responsible Source and No

Other Supplies or Services Will Satisfy Agency Requirements.

http://www4.law.cornell.edu/uscode/html/uscode10/usc_sec_10_00002304----000-.html http://farsite.hill.af.mil/reghtml/regs/far2afmcfars/fardfars/far/06.htm

V. Demonstration that the contractor’s unique qualifications or the nature of the acquisition requires use of the authority cited above (applicability of authority).

The agency’s minimum needs can only be satisfied by the unique supplies available from Rohde

& Schwarz. Rohde & Schwarz is the OEM for these parts and is the only source capable of providing them. These parts have been tested and approved for the VDATS and acquisition must remain restricted to the controlled baseline that is approved and tested for the VDATS.

There is currently no existing contract available to satisfy new FY21 through FY26 VDATS requirements. Therefore, this instant acquisition is necessary for the continued production of a highly specialized system.

AFLCMC/WNA maintains OSS&E authority. The part numbers in this requirement may be altered but form, fit and function of the parts will not change. As such, minor configuration changes may be required to accommodate operational needs or to avoid obsolescence.

Configuration changes are approved by AFLCMC/WNA. EMXG is the procuring source in accordance with Acquisition Plan WRALC-0901 dated 5 July 2012. When obsolescence occurs, the 581st Software Integration Lab (SIL) will research the replacement parts and provide recommendations to WNA. All materials must be purchased as new, direct from the OEM in order to maintain configuration control and performance according to test station specifications.

The remaining life cycle for the VDATS system is 30 years.

To maintain strict configuration control of current production efforts and to comply with the technical requirements identified in the VDATS system technical documentation, the exact part number is required and must be procured in order to maintain the configuration control baseline and promote transportability of workload between test stations. In accordance with the DoD

Automated Test Station (ATS) Selection Guide, which can be found at the following link:

https://www.acq.osd.mil/log/MPP/ats_library.html, program managers are mandated to select from appropriate, DoD approved ATS families to satisfy testing requirements.

Acquisition must remain restricted to the part number controlled baseline that is approved and tested for the VDATS ATS. Any change to the VDATS configuration potentially impacts every

VDATS user and creates a ripple effect for software and firmware within Test Program Sets

(TPS) for Line Replaceable Units or Shop Replacement Units (LRU/SRUs) tested on the

VDATS Support Equipment.

Accordingly, Rohde & Schwarz is the only source capable of providing the supplies described in

Section III above in accordance with the VDATS technical data package.

The Government does not own the data rights to these proprietary Rohde & Schwarz items. A request for purchase of data from Rohde & Schwarz was sent on 30 June 2020. Rohde &

Schwarz replied on 03 August 2020 stating they are not willing to sell the technical data for any of these items to the Government.

The DoD ATE framework that is shared by Air Force, Navy, Marines, and Army is structured around the use of commercial of the shelf (COTS) instruments. This is due to the difficulty of https://www.acq.osd.mil/log/MPP/ats_library.html re-engineering those components; the measurement science that is required for National Institute of Standards and Technology (NIST)-traceable calibration adds a great degree of complexity to the design and sustainment of these instruments. In the event of obsolescence, AFLCMC/WNA would qualify a substitute COTS item.

Qualification of substitute parts only occurs due to obsolescence, which is difficult to forecast as it is based on technological improvements by commercial entities, developmental efforts on different airframes, and/or diminishing sources of supply. The review of substitute parts is completed at a part number level, and each new part requires extensive regression testing to ensure uninterrupted production on over 2500 Test Program Sets (TPSs) that currently run on the

VDATS platforms. The research required to qualify a part includes approximately 12 months of review/testing. The cost of 12 months of analysis, testing, and integration for one part in any of the VDATS configurations is estimated at $127,154. Rohde & Schwarz has three VDATS kits comprised of 11 unique parts and the average cost per part is $31,712.39. Each kit contains an average of three unique parts. The average kit requalification cost of $476,599.17 is shown below:

Substitute Qualification Estimates

Cost per part =analysis testing + cost of the part

$127,154 + $31,712.39 = $158,866.39

Cost for all parts =Cost per part X 11 unique parts

$158,866.39 X 11 = $1,747,530.29

Cost per kit =cost per part X 3 unique kit parts

$158,866.39 X 3= $ 476,599.17

Requalification of individual parts from another vendor would add additional administrative costs such as duplication of contract efforts and supplying multiple vendors with required GFP for testing. It would also have significant detrimental effects to the delivery and EMXG’s manufacturing schedule as planning/forecasting obsolescence is difficult, if not impossible, to accomplish with enough certainty and lead time to establish alternate vendor procurement methods to meet existing performance requirements. Therefore, requalifying individual parts through alternate vendors is not a viable option. The VDATS program is capitalizing on COTS items with pricing and availability directly tied to the commercial marketplace. On average, commercial pricing in the market fluctuates +/-10%. Historically, the Government has received catalog pricing and quantity discounts up to 7% which will likely be lost if multiple alternate vendors are utilized. Based on historical purchase data, the most a competitive market would offer would be an additional 3% savings (see breakeven analysis below); therefore, it would take

21 years to breakeven (recoupment of additional upfront costs through potential long-term savings); however the life expectancy of some of the kit components is less than the breakeven due to the rapid changes in technology and obsolescence.

Breakeven analysis Average Part Cost $ 31,712.39

Previous acquisitions of VDATS parts were done on an individual basis. Due to the modular nature of requirements, the manufacturer, Rohde & Schwarz, is now providing the required parts for specific modular configurations as kits. The procurement of these items as kits is expected to result in reduced administrative burden, better configuration control, and reduced costs over individual item purchases.

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.

Unacceptable Delay: Award to any other source would result in unacceptable delays in fulfilling the Air Force’s requirements. The VDATS are highly specialized equipment; without serviceable assets that have been tested and approved, system performance in accordance with test station specifications will be placed at great risk. Lack of proper configuration impacts every VDATS, causing failure to execute mission or preventing the achievement of critical objectives. The DoD ATS Selection Guide mandates program managers select from appropriate, DoD approved ATS families to satisfy testing requirements. Significant delay would be realized if testing and approval are required from sources other than the OEM. The estimated timeline is based on a minimum of 18 months to prepare a competitive solicitation, and up to 48 months to test and approve each applicable part.

The items being acquired are critical to maintaining configuration control in all of the test stations. In order to maintain this control, Rohde & Schwarz is the only known source that can satisfy the Government’s requirement. Any attempts at Full and Open Competition at this time would cause a significant time delay. Therefore, this acquisition will be a new contract for the production of highly specialized equipment.

Accordingly, Rohde & Schwarz 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, including whether a notice was or will be publicized as required by subpart 5.2 and, if not, which exception under FAR 5.202 applies.

A Sources Sought (SS)/Request for Information (RFI) synopsis was posted to beta.SAM on 14

July 2020 with a response date of 14 August 2020 under Notice Number: F3QCCM-20-66523

3% Savings per Part $ 951.37

Requalification cost per part $ 158,866.39

Breakeven - # of buys 167

Avg Qty Purchased per year 8

# of years to Breakeven 21 titled Rohde & Schwarz VDATS Parts. The SS/RFI requested responses from interested vendors that possess the experience to meet qualification requirements for this effort. Only Rohde &

Schwarz USA responded to the SS/RFI. Rohde & Schwarz was determined to be capable based on their position as the only authorized distributor in the United States for the OEM Rohde &

Schwarz GmbH & Co. KG. Rohde & Schwarz USA can provide all of the required parts.

This requirement will be synopsized on 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 15.403-3, the Contracting Officer will require the submission of other than certified cost or pricing data. Price analysis or cost analysis based on “information other than certified cost or pricing data” will be used to examine and evaluate the proposed prices to determine fair and reasonable pricing. Price analysis techniques include comparison of proposed prices to historical prices paid for a same or similar item; comparison with published price lists, offered catalog prices and prices obtained through market research for a same or similar item;

comparison of proposed prices with independent Government estimate; or analysis of data other than certified cost or pricing information.

VIII. Description of the market research conducted and the results, or a statement of the reasons market research was not conducted.

Market research in accordance with FAR Part 10.001 and 10.002 was conducted from 26 January

2020 through completion date 17 August 2020. Techniques used included posting a SS/RFI, conducting a search of the Small Business Dynamic Small Business Search (DSBS) engine and a

General Service Administration (GSA) query.

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 14

July 2020 under Notice number F3QCCM-20-66523 titled Rohde and Schwarz VDATS Parts.

Only Rohde & Schwarz USA responded to the SS/RFI. Rohde & Schwarz was determined to be capable based on their position as the only authorized distributor in the United States for the

OEM Rohde & Schwarz GmbH & Co. KG. Rohde & Schwarz USA can provide all of the required parts.

The Dynamic Small Business Search (DSBS) engine was queried using North America Industry

Classification System code 334515 (Instrument Manufacturing for Measuring and Testing

Electricity and Electrical Signals) and key words “Test Equipment.” A search for HUBZone, 8(a), Veteran, Woman Owned and Service Disabled Veteran Owned businesses was conducted and returned 94 vendors. Several sources for “test equipment” were identified, however, due to the proprietary nature of the parts being procured, none are capable of satisfying the requirement.

A large business, Rohde & Schwarz, owns the proprietary data needed to maintain configuration control and performance according to test station specifications.

GSA was queried to determine if these items were offered under a GSA schedule. Rohde &

Schwarz USA maintains GSA schedule GS-07F-5897P however neither the kits nor the components within the kits appear to be offered under this GSA schedule. The components within the kits are available individually on GSA through Technical Communities schedule GS-

24F-0066M, however the kits themselves are not available on GSA. Rohde & Schwarz USA confirmed the components within the kits are available on GSA but stated if purchased through

GSA, five year pricing would not apply.

The VDATS is considered a commercial item as defined in FAR 2.101. The VDATS consists of standardized, commercially available test equipment, components and software.

The market research concluded Rohde & Schwarz USA 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.

Acquisition must remain restricted to the controlled baseline that is approved and tested for the

VDATS. A request for purchase of data from Rohde & Schwarz was sent on 30 June 2020.

Rohde & Schwarz USA, Inc. replied on 03 August 2020 that they ae not willing to sell the technical data for any of these items to the Government.

While the current market research indicates a sole source environment for the VDATS, the

Government will continue to engage with the OEM to determine the feasibility of procuring the technical data package. Alternate sources of supply for equivalent parts are constantly being reviewed/evaluated in order to increase competition and system responsiveness. If a replacement for the VDATS is required in the future, competition would be considered.

XII. Certification by the Contracting Officer.

As evidenced by my signature on the Coordination and Approval Document, 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 their signatures on the Coordination and Approval Document, the technical and/or requirements personnel have certified that any supporting data contained herein, which is their responsibility, is both accurate and complete