JUSTAPPR_17-00749_Redacted.pdf

Justification and Approval (J&A) for Other Than Full and Open Competition

FOR OFFICIAL USE ONLY

March 2018 FOR OFFICIAL USE ONLY Page 2 of 7

I. Contracting Activity.

This Justification and Approval (J&A) requests authority for Other Than Full and Open Competition (OTF&OC) supporting requirements generated for the Air Force Sustainment Center (AFSC), 638th Supply Chain Management Group (SCMG), 408th Supply Chain Management Squadron (SCMS)/ GULB. The contracting office for this requirement is AFSC/PZABB. The purchase request number supporting this contracting action is FD2060-17-00749.

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

Due to the circumstances described herein, the activity requests authority to acquire the services 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 follow-on Requirements Indefinite Delivery Contract (IDC), which will include five (5) one-year ordering periods (FY19-FY23).

The anticipated contract line item number (CLIN) structure is listed below:

• Firm Fixed Price (FFP) for repair of each National Stock Number (NSN).

• FFP for Tear-Down Test and Evaluation (TT&E) of NSNs.

• Cost Plus Fixed Fee (CPFF) for Over and Above efforts.

• FFP for Specialized Test Equipment repairs

• Cost Reimbursement No Fee (CRNF) for travel FFP for Data Deliverables

The sole source requirement will be obtained from the following source:

EDO, LLC

1500 New Horizons Blvd Amityville, NY 11701-1130 Cage Code: 82340 Large Business

III. Description of supplies/services required to meet agency needs.

This requirement is for repair of EDO LLC unique AN/ALQ-161A Radio Frequency Source/ Electronic Countermeasure (RFS/ECM) System Line Replaceable Units (LRUs) and Shop Replaceable Units (SRUs). A total of 153 NSNs will be repaired under this effort as provided in Attachment 1.

Due to the level of redesign, update, or part number substitution, some NSNs under this effort may be changed in such a way that could result in the establishment of a new NSN. NSN changes that result from the above are considered within scope of this J&A.

The total estimated cost of this repair requirement is . The basis for the estimated repair price(s) is from the current contract, FA8522-14-D-0002; with a 3% inflation factor added each year. The Best Estimated Quantities (BEQs) estimates for the basic and ordering periods is based on Secondary Item Requirements System (SIRS) D200A computations. The contract is projected to award by 28 Jun 19. The current contract expires 10 Dec 2018. EDO has not agreed to an extension to the current contract, therefore the Government will have a lapse in coverage. The validity period of the follow-on Requirement IDC will be 1 Jul 19 through 30 Jun 24.

This requirement is for repair services of NSNs listed Attachment 1. Additionally, the estimated cost and BEQs for each NSN is listed on Attachment 1.

March 2018 FOR OFFICIAL USE ONLY Page 4 of 7

The Source of Repair Assignment Process (SORAP) for the entire AN/ALQ-161A, Tracker #09-147 was approved on 10 May 2010 and a Periodic Review was completed on 13 May 2015. The SORAP was approved for organic repair of 21% WR-ALC and contractor repair 79%. The Government cannot currently support organic repair of the EDO LRUs/SRUs.

The items covered by this acquisition are part of the AN/ALQ-161A RFS/ECM system installed on the B-1B aircraft. The AN/ALQ-161A is highly specialized Electronic Warfare equipment that provides RFS/ECMs, such as radar tracking warning and radar jamming capabilities. The ALQ-161A system is unique to the B-1B aircraft. There are no commercial applications for these items. As indicated by the RMC/RMSC and discussed further below, the items can only be repaired by EDO.

This acquisition is for a follow-on contract to sole source contract FA8522-14-D-0002. The current contract expires 10 Dec 18. This follow-on contract will be a continuation of these highly specialized repair services.

EDO is the original equipment manufacturer (OEM) and Design Authority for the AN/ALQ-161A.

EDO has been providing these services since the initial fielding of the system in 1983 via the initial repair contract F33657-85-C-0074, awarded by the B-1B System Program Office (SPO).EDO designed and developed the system during the initial development and acquisition of the B-1B aircraft and owns the specifications, test equipment software, test procedures, and all the necessary documentation to accomplish the repairs of the AN/ALQ-161A. In addition, they are the only known source that possesses the necessary skills, support equipment (test stations, test adaptors, and test software) and facilities required to repair and test all the items covered by this acquisition. Only EDO possesses the detailed design packages (equivalent to Level III drawings) which provide the necessary schematic diagrams needed to repair these items. The Government has no product data for these NSNs other than top level drawings which are not adequate to support competitive acquisition of these repair services. The Government sent an inquiry to buy the data/drawings to EDO on 18 Apr 2018.

EDO responded they were not interested in selling the data but will continue to support the Government.

The NSNs associated with this effort have been determined of such complexity and criticality that first article testing measures and specialized test equipment/tooling are required for all unproven sources.

As detailed below, the Government does not possess the technical data so an interested source would be required to reverse engineer the parts and qualification of a new repair source would require the repair-candidate to develop and provide two first articles that pass qualification testing. The Government estimated it will take a minimum of ten years to complete this Qualification process for all NSNs associated with this effort. The basis of this estimate is based on previous estimates for reverse engineering of similar items of different Electronic Warfare systems.

The Government has determined that a break in this critical repair service will cause unacceptable delays and would seriously impair the mission capability or cause serious damage or harm to the B-1B aircraft program. Specifically, failure to repair these assets will lead to increased Mission Impaired Capability Awaiting Parts (MICAP) and Surge requirements that will ground aircraft and ultimately result in mission failure or loss of life.

With the limited life cycle of the B1-B, it would not be feasible for the Government to reverse engineer the repair data to allow for future competition.

The Government estimates a reverse engineering effort for all 153 NSNs would cost in excess of $225 million and require a minimum of 10 years to complete. This is based on previous estimates for reverse engineering of similar items of different Electronic Warfare systems, such as the LRU 2, 3 and 6 of the F-15 ALR-56C. If reverse engineering were to occur, there would not be ample life cycle on the legacy system for the Government to recoup the cost incurred in a reverse engineering effort.

Accordingly, EDO is the only firm capable of providing the services described in Section III above

March 2018 FOR OFFICIAL USE ONLY Page 5 of 7 without the U.S. Air Force experiencing substantial duplication of cost that could not be expected to be recovered through competition as well as creating 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 Federal Business Opportunities (FedBizOpps) website on 13 Sep 2017. The solicitation number was FA8522-17- ALQ161-ECMS and interested parties were afforded 30 calendar days until 13 Oct 2017 to provide documentation supporting their company's capability to meet the requirements for qualification and repair of the AN/ALQ-161 requirement. No parties responded to the publication.

The requirement will be synopsized in FedBizOpps in accordance with FAR 5.201. It is anticipated that sources having an interest in subcontracting may be identified through this synopsis. Any source who responds to the Government as a result of the 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 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 in supporting the Government's evaluation of the 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 Audit Agency (DCAA), Defense Contract Management Agency (DCMA) 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 as outlined by FAR 10.001 and 10.002 and completed on 16 Apr 2018. Market research techniques used are as follows: reviewing industry reports, trends, and product developments; discussions with industry representatives; internet searches; and industry knowledge possessed by the ALQ-161A Integrated Product Team (IPT) and Engineering staff. Engineering has been actively engaged in component product sustainment, staying abreast of industry developments by reviewing industry reports, trends and product developments, talking with field personnel, and maintaining an active dialog with the OEM.

A SS/RFI synopsis was released on FedBizOpps 13 Sep 2017 under solicitation number FA8522-17- ALQ161-ECMS. No vendor responded to the publication after being posted for 30 calendar days.

The team conducted a review of several industry-wide searches on the Internet using the following search engines. The key terms used in the searches were “Electronic Combat system repair, RF Repair for ALQ-161A, Digital Repair, and Microwave Repair”

• http://www.aerospace-technology.com/contractors/index.html,

• http://www.globalspec.com/ProductFinder,

• http://www.eem.com/,

• http://web.sba.gov/pro-net/search/dsp_dsbs.cfm

• http://www.google.com

March 2018 FOR OFFICIAL USE ONLY Page 6 of 7

Vendor Survey: With exception to EDO, there are no other depot level repair sources with AN/ ALQ161A expertise who can support repair of the NSNs identified in this requirement. Other AN/ ALQ161A vendors do not repair EDO unique AN/ALQ-161A NSNs. Three AN/ALQ-161A vendors were surveyed but they do not have the technical data required to perform the unique EDO NSN repair services. They only have the capability to repair items they originally manufactured. In addition, a survey of secondary vendors used by EDO was completed for potential breakout purpose. This survey resulted in the identification of one breakout vendor, however the vendor was shown to not have full repair capability due to lack of technical data. Other secondary vendors were found to repair only lower assembly items with engineering support from EDO and the items are consumed with the repair of the Next Higher Assembly (NHA), therefore they were not viable repair sources for this requirement. Other items are of such low quantity they could not be economically broken out. Based on the analysis of the secondary vendors utilized by EDO, no further breakout is justified. The Air Force's minimum requirements can only be satisfied by the unique capabilities of EDO.

The items listed for AN/ALQ-161A do not fit the definition of commercial item as defined in FAR

2.101. These items are 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. Market research revealed that there is no commercial application that can fulfill the AN/ALQ-161A ECM system repairs.

The market research concluded that EDO, LLC 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.

The Government does not possess the data, trained personnel, support equipment and facilities required for accomplishment of this requirement. The Government made a request to buy the data/ drawings from EDO on 18 Apr 2018. In response, EDO stated they were not interested in selling the data but will continue to support the Government.

A reverse engineering effort is estimated to take 10 years to complete at a cost of $225M. If reverse engineering were to occur, there would not be ample time to recoup the investment cost

The Government's plan to remove competitive barriers is as follows:

1. The Government will conduct annual (prior to each ordering period) market research to determine if the market has changed and new source(s) of supply for the AN/ALQ-161A are identified. If potential source(s) sources are identified, they will be evaluated and a determination will be made of their supply capability for future efforts.

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2. The Government will continue to inquiry EDO on an annual basis their interest in selling the technical repair data.

The previous J&A did not include a plan to remove barriers to competition, therefore higher level approval of this instant J&A is not required [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. Certification by the technical/requirements personnel.

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