LAIRCM J_A Redacted.pdf

CUI

JUSTIFICATION FOR OTHER THAN

FULL AND OPEN COMPETITION

I. Agency and Contracting Activity.

This Justification and Approval (J&A) is to request authority for Other Than Full and Open Competition supporting requirements generated for the Air Force Sustainment Center (AFSC), 638th Supply Chain Management Group (SCMG), 408th Supply Chain Management Squadron (SCMS)/GULA. The contracting activity for this requirement is AFSC/PZABB. The purchase request number supporting this contracting action is FD2060-23-00003.

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

Due to the circumstances described herein, the requiring activity (408 SCMS) requests authority to acquire repair sustainment services listed in this document using Other Than Full and Open Competition as prescribed by Federal Acquisition Regulation (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 incentive Clauses) with a five (5) year basic with five (5) 12-mo ordering periods, one (1) Option with two (2) 12-mo ordering periods, and terms of FAR 52.217-8, Option to Extend Services to allow for up to a 6-month extension to performance on awarded task order(s). The ordering period for the Requirement IDC is projected to be 27 October 2023 through 26 October 2030.

This sole source requirement will be procured from the following company:

Northrop Grumman Systems Corporation (NGSC) 101 Industrial Park Blvd Warner Robins, GA 31088-7409

CAGE: 1LTU5

Large Business

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

The AN/AAQ-24(V), also referred to as the Large Aircraft Infrared Countermeasure (LAIRCM), is a highly sophisticated electronic warfare (EW) countermeasures (CM) system manufactured and repaired by Northrop Grumman Corporation. The AN/AAQ-24(V) LAIRCM is designed to provide defense for large transport and rotary wing aircraft from infrared-guided, heat seeking missiles by serving as a Missile Warning System (MWS) and using an IR laser energy beam to jam incoming threats The system performs this action autonomously and without aircraft crew intervention. The system serves to provide large aircraft protection during take-offs and landings, descents, low level flights, and various additional situations. The ANQ/AAQ-24(V) system variants consist of some combination of the following seven (7) basic LRU components:

1. Small Laser Transmitter Assembly (SLTA)

2. Guardian Laser Transmitter Assembly (GLTA)

3. Large Transmitter

4. Control Indicator Unit (CIU)

5. Missile Warning Sensor (MWW)

6. Processor

7. Controller Interface Unit Replacement (CIUR)

Under the contemplated contract, NGSC will provide supplies and services required for the repair of the AN/AAQ-24(V) LRUs currently installed on multiple platforms: C-5, C-17 (including FMS), C-20, C-37, C-40, C-130, CV-22, CH-53, and CH-46. Platforms currently identified to receive the AN/ AAQ-24(V) in accordance with an Agency-approved modification schedule will likewise be accommodated under this contemplated contract. To accommodate the Depot Source of Repair (DSOR) determination for this system, a Public Private Partnership (PPP) with the appropriate Implementation Agreement (IA) is in place with the Warner Robins Air Logistics Complex (WR-ALC). The WR-ALC Depot can provide labor in a supporting role but not as the lead organization responsible for performing repairs. These agreements allow for maximum organic depot participation in the repair of the previously AN/AAQ-24(V) LRUs.

The estimated value of each ordering period is as follows:

PERIOD LENGTH START END EST VALUE

Ordering Period 1 12-Months 27 Oct 23 26 Oct 24 Ordering Period 2 12-Months 27 Oct 24 26 Oct 25 Ordering Period 3 12-Months 27 Oct 25 26 Oct 26 Ordering Period 4 12-Months 27 Oct 26 26 Oct 27 Ordering Period 5 12-Months 27 Oct 27 26 Oct 28 Option 1 Ordering Period 6 12-Months 27 Oct 28 26 Oct 29 Option 1 Ordering Period 7 12-Months 27 Oct 29 26 Oct 30

*6-MONTH Ext 6-Months 27 Oct 30 26 Apr 31

TOTAL

*Applicable to awarded task orders in accordance with FAR 52.217-8, Option to Extend Services

The nominal Contract Line Item Numbers (CLINs) structure is in Attachment A and estimated cost and Best Estimated Quantities (BEQs) for each customer in Attachment B. No IP data will be delivered under this contract.

The total cost estimate of was derived from the March 2021 ABCS File Maintenance Cycle, as a base requirement for each forecast through Fiscal Year (FY) FY23 through FY31. Considering rising costs and future purchases, a 3% escalation factor was applied to the cost as an estimated unit repair price for each out-year ordering period. The total estimated value includes an estimate for overall program management, sustaining engineering, and research for engineering improvements to the system.

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

10 U.S.C. 3204(a)(1) [formerly 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 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 services available from NGSC and through the Public-Private Partnership (PPP) with the Warner Robins Air Logistics Complex (WR-ALC). NGSC is the lead designer, developer, integrator, producer, and depot maintainer of the AN/AAQ-24 LAIRCM. NGSC has the necessary facilities, equipment, and technical data to repair AN/AAQ-24(V) LAIRCM System assets. NGSC has the engineering design, repair, test, and evaluation expertise required to support the AN/AAQ-24(V) LAIRCM system and repair of LRUs. NGSC’s approved procedures are used for all repairs. The Government does not own any Depot-level Technical Orders. All of the technical data is NGSC’s proprietary.

The proposed acquisition will be a follow-on to the current AN/AAQ-24(V) LAIRCM System repair sustainment contract FA8522-18-D-0002. The contract expires on 14 December 2022.

This contract was awarded utilizing FAR 6.302-1, Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.

Depot Source of Repair (DSOR) 10-071 was approved and as a result, a PPP with an Implementation Agreement (IA) between NGSC and WR-ALC was established. In 2018, DSOR #18628F was initiated to review/validate the previous DSOR 10-071 decision. No changes were required and DSOR #18628F was approved on 14 May 2021.

The Joint Services ( USAF, US NAVY, US ARMY, and the following respective subcommands:

USAMC/AMCOPS-SMD, COMNAVAIRSYSCOM, COMMARCORLOGCOM, and HQ AFMC/A4FD) agreed that depot maintenance for item(s) can be accomplished by both commercial (NGSC) and organic source (WR-ALC). The organic repair capabilities consist of organic hands-on capability as a sub-contractor to NGSC through the PPP. Within the PPP, NGSC is the buyer and WR-ALC is the seller of labor. NGSC subcontracts to WR-ALC are expected to meet the annual BEQs for repairs. The split is approximately 67% organic and 33% commercial repair.

The WR-ALC Depot provides labor in a supporting role but not as the lead organization responsible for performing repairs. The IA allows for maximum organic depot participation in the repair of the AN/AAQ-24(V) System and associated LRUs. NGSC provides the WR-ALC Depot proprietary technical repair data to perform the repairs. The PPP and IA prohibits Government use of the proprietary repair technical data beyond Depot repair.

The Naval Air Systems Command (NAVAIR) procured some technical data for an earlier LAIRCM variant under contract DAAB07-03-D-B008 for configuration management and depot level sustainment of the baseline DoN LAIRCM system and under contract N00019-11-C-0017 procured data to support ATW variant of DoN LAIRCM. These data deliverables did not include NGSC specific manufacturing processes, test equipment, automated program tooling, and factory tooling to support competitive acquisition of the production or depot maintenance of the DoN LAIRCM system. NGSC subsequently provided NAVAIR a rough order of magnitude (ROM) of on 25 December 2013 for purchase of the remaining data necessary for competitive acquisition. NAVAIR did not pursue purchase of that data because decision was made to not stand up a depot repair capability.

The AN/AAQ-24(V) LAIRCM is another variant LAIRCM system. The AN/AAQ-24(V) LAIRCM System Single Acquisition Management Plan (approved 22 August 2002) states re-procurement technical data would not be procured, therefore there were no technical data deliverables on the initial Aeronautical Systems Center contract. The AN/AAQ-24 LAIRCM system provides countermeasure protection for vertical lift and fixed wing aircraft against the man-portable, shoulder-fired, and vehicle-launched infrared (IR)-guided missiles. The system autonomously detects and declares IR missile launches, continuously tracks the missiles threatening the aircraft, and then jams the missiles, resulting in aircrew and aircraft protection.

Highly technical skills are required to perform LRU repair services and maintain the fielded

AN/AAQ-24(V) LAIRCM system. New/upgraded LRUs continue to be fielded to achieve greater capability and reliability.

The Government sent inquiry to NGSC in 2009 to assess their interest in selling the technical data. NGSC responded with ROM of The Government reached back out to NGSC concerning procurement of the technical data and their official response (2 March 2015) stated that their position had not changed, and in fact, the ROM value would be “significantly higher based on the 2015 product line, upgraded configuration, and their projected future sales.” It further stated that NGSC has “exclusivity restrictions” placed upon some suppliers which severely limits potential competition for repairs of component parts even if the Government secured repair data as vendors could not violate those business agreements. On 30 July 2021, the Government sent inquiry again to see if NGSC position and/or ROM for sale of the technical data had changed. NGSC responded on 11 August 2021 stating they were not willing to sell the technical data to the Government. All NSN technical data still remains proprietary to NGSC.

The AN/AAQ-24(V) system variants consist of some combination of the following seven (7) basic LRU components:

I. Small Laser Transmitter Assembly (SLTA)

2. Guardian Laser Transmitter Assembly (GLTA)

3. Large Transmitter

4. Control Indicator Unit (CIU)

5. Missile Warning Sensor (MWS)

6. Processor

7. Controller Interface Unit Replacement (CIUR)

The drawing packages for the test station/equipment for the SLTA, GLTA, and Processor are owned by NGSC. The drawing package for the LRU test station/equipment is owned by Aeronautical Information Publication (AIS of United Kingdom), a vendor to NGSC. NGCS has privity of contract with AIS and the needed technical data to perform the tests, therefore contracting direct with AIS is not a viable option.

NGSC has made capital investments in proprietary specialized test equipment to troubleshoot and test the AN/AAQ-24(V) LAIRCM system and LRUs. The Versitile Diagnostics Automatic Test Station (VDATS) and Long Table has been procured by the Government to troubleshoot end items at the subassembly level. However, the test equipment cannot be operated without NGSC’s Technical Orders.

Another consideration is NGSC exclusivity restrictions established with some NGSC suppliers.

It limits the suppliers from releasing the repair technical data or providing direct repair support to the Government. If these restrictions were not in place, the WR-ALC lead engineers estimate the time needed to establish initial repair capability at six (6) to seven (7) years. The timeline is based on their expertise and the actual elapsed time to establish our organic repair capability. The timeline estimate is based upon: at least one (1) year for securing and verifying repair data; and three (3) to four (4) years to secure the proper test equipment and develop test program sets (TPS), and an additional two (2) years to award a competitive repair contract. This would cause an unacceptable delay. It would place aircraft and aircrews at significantly higher risk from MANPADs and other ground launched missile threats.

The Government Integrated Product Team (IPT) evaluated the feasibility of pursuing a reverse engineering (RE) effort. The IPT could not find record of similar projects conducted to RE the repair of an entire system or a definite answer for the initial acquisition cost of AN/AAQ-24(V) LAIRCM or its predecessor DIRCM. The IPT was able to locate the purchase, development, and install of DIRCM for the UK when leveraging funds the United States Air Force (USAF) had already placed towards development. The cost of the acquisition was in 1994. Utilizing a yearly inflation rate of 3%, it equates to in FY21 however this also includes acquisition and install cost. Also, with the lack of data our ability to perform RE on select LRUs becomes very difficult as all testing must be performed at the system level to ensure system compatibility.

The cost to RE the AN/AAQ-24 (V) LAIRCM System as a whole would require Non-Recurring Engineering (NRE) to perform the reverse engineering, all forms of qualification and flight testing, modification of all DoD related documentation, and integration between possible multiple configurations. The estimated cost is . This estimate includes NRE Qualification testing/Flight Testing ( , TDP , and other associated cost An economic analysis was performed with assumption of a 20% competition cost savings.

Based on this analysis, a return on investment (ROI) would not be recouped by the USAF until FY44. This assumes no schedule/costs overruns and no consideration to technical risks associated with the effort.

The AN/AAQ-24(V) LAIRCM system is expected to begin sun setting on U.S. military and FMS aircraft in 2035 based on the LAIRCM Sustainment Sunset Roadmap. The length of the systems sunset is an estimate and is based upon several factors including reclamation plans, repairability, supply availability, demand rates and overall fleet usage. Monitoring of this data by the program office will provide a more complete and thorough estimate of sustainment and sunset timelines.

Diminishing manufacturing sources and material shortages are major factors for establishing this projected initial sunset date of the system. Based on the program life cycle end date, it is not economically feasible to pursue a RE effort.

Accordingly, NGSC is the only firm capable of providing the repair services described in Section III without customers experiencing substantial duplication of costs that is 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, 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 Request for Information (RFI) synopsis was posted on SAM.gov on 09 June 2021 with a response date of 9 July 2021 under AN/AAQ-24(V) Request for Information. The RFI requested responses from interested vendors that possess the expertise, capabilities, and experience to meet qualification requirements for this effort. No vendors responded to the RFI.

The requirement will be synopsized on SAM.gov 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.

In accordance with AFFARS 5306.304 (a), the Senior Contracting Official (SCO) authorizes release of the solicitation concurrent with forwarding the justification package to SAF/AQC for review and SAF/AQ for approval. This authorization is required to mitigate the milestone schedule delay in awarding the follow-on AN/AAQ-24 LAIRCM sustainment contract.

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 to support the Government's evaluation of the proposed cost. The proposed skill mix of labor, labor hours, types and quantities of material and other direct costs, and direct and indirect rates will be negotiated by the Government based on recommendations from the Defense Contract Management Agency, US Navy Price Fighter Team, and System Program Office expert technical personnel assigned to the program. The contract price will be negotiated in accordance with the procedures in FAR 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 30 April 2021 to 29 July 2021 in accordance with FAR Part

10.001 and 10.002. The Market Research Report was completed on 29 July 2021. The market research techniques used are as follows:

As described in Section VI above, a RFI was posted to SAM.gov advising industry of the pending acquisition and soliciting inquiries from interested vendors. The RFI was posted on 09 June 2021. No interested vendors responded to the RFI.

The team reviewed the NSN Contract Repair Screening Analysis Worksheets for RMC/RMSC assignments and procurement history. NGSC was the only identified source.

Queries were conducted within Government databases and various internet searches (IHS Haystack, GSA Advantage, and Google) were performed using North American Industry Classification System (NAICS) code 334511 and 334515, and keywords LAIRCM and AN/AAQ-24 to search for potential vendors. No other potential sources were found to have the capability to repair AN/AAQ-24 LAIRCM NSNs.

A Small Business Administration (SBA) Dynamic Small Business Search (DSBS) query was conducted using keyword LAIRCM. This query produced two potential small business vendors, Tekla Research, Inc. (CAGE: 07EQ9) and Kanze Technology Solutions, Inc. (CAGE: 5HFE3).

Both vendors were evaluated and determined not capable of repairing these NSNs due to lack of access to the NGSC technical data and special test equipment.

The AN/AAQ-24 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 aircraft in the commercial market with the same or similar components.

The market research concluded NGSC 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.

On 30 July 2021, the Government sent inquire to NGSC to confirm ROM provided in 2009 for sell of technical data was still valid. NGSC responded 11 August 2021 stating they are no longer interested in selling the technical data to the Government.

The AN/AAQ-24(V) LAIRCM system is expected to remain on U.S. military and FMS aircraft until 2035. Pursuing a RE effort was determined not feasible due to the estimated costs of and ROI not until FY44. Organic support is currently provided through a PPP and IA with WR-ALC. The WR-ALC Depot will continue to repair items under the terms of the PPP and IA.

The Government’s plan to overcome barriers to competition for future acquisitions is as follows:

A. If AN/AAQ-24(V) LAIRCM system’s technical data becomes available and is verified as accurate and complete for the repair of the required end items, the AN/AAQ-24(V) LAIRCM IPT will:

1) Evaluate the most optimal and cost effective means of repair for the affected end items, complete a business case analysis and DSOR if needed.

2) Consider USAF, WR-ALC, Navy, and other DoD Depot repair sites for potential organic repair needs for the AN/AAQ-24(V) LAIRCM system.

B. Perform an annual review of system NSNs to identify opportunities where procurement of NSN specific technical data/drawings would return a positive Return on Investment to support competitive acquisition or performance by Government personnel.

C. Ongoing market surveillance will continue through the monitoring of technical literature, discussion with other engineers, and attendance at expos for potential repair sources/suppliers.

Should market surveillance reveal additional vendors with the capability to repair AN/ AAQ- 24(V) LAIRCM system’s LRUs, the Program Office will initiate validating the vendor’s ability to repair LAIRCM system’s LRU via USAF qualification process.

D. The Air Force Research Laboratory will periodically assess the technology maturity and development of the AN/AAQ-24(V) LAIRCM Program Office to identify potential candidates for future evolutionary development of components or replacement systems.

E. If NGSC is willing to sell some or all of the technical data, the IPT will initiate a break-even analysis to determine if procuring the repair data is economically feasible.

F. Available technical data for every item will be reviewed annually by the IPT. This review will determine the appropriate acquisition approach considering the data the Air Force possesses and its adequacy for competition.

G. Annually, the Government will pursue acquisition of IP, IP rights, or Government purpose rights to allow for future competitive acquisition; for each request, we will elevate at a higher level within the NGSC company hierarchy.

The Government’s plan to overcome barriers in the prior J&A was as follows. The planned actions were completed.

A. Determine availability of technical data: As of August 2021 NGSC is not interested in selling the Government the technical data.

B. The IPT conducts a review of system NSNs prior to each ordering period to identify opportunities where procurement of technical data/drawings would return a positive ROI to support competitive acquisition or performance by Government personnel. No opportunities were found.

C. The IPT conducted ongoing market surveillance. No potential new capable vendors have been identified.

D. Technology maturity and development was assessed by the Air Force Research Laboratory and the AN/AAQ-24(V) Program Office to identify potential for future evolutionary development of components or replacement systems. AFLCMC has determined the best approach to foster competition is through the development of new components or systems with repair data procured when justified by a business case analysis.

E. Every two years (beginning from contract award date) the IPT would initiate a break-even analysis to determine if procuring repair data maximizes the lifecycle sustainment related support. The last analysis was conducted in July 2021.

F. Perform annual review of technical data for every item. The review determined adequate data is not available to support competition.

G. Pursued annually, acquisition of data or Government usage rights. NGSC has declined to sell the Government the technical data.

H. A Business Case Analysis for overall system sustainment was conducted by the System Program Office at WPAFB. The results were used to support the Depot Source of Repair Decision (DSOR #18-628) identifies workload 67% WR-ALC and 33% Commercial.

The prior J&A was approved 26 April 2016 by SAF/AQ, Darlene J. Costello.

XII. Certification by the Contracting Officer.

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

LAIRCM J_A fully signed_Redacted