JA__15000_0_LRIP_-FedBizOpps.pdf

CT 028-PEO LS G/ATOR

J&A Number: 15,000.0

JUSTIFICATION AND APPROVAL

FOR USE OF OTHER THAN FULL AND OPEN COMPETITION

JUSTIFICATION

1. Contracting Activity

Marine Corps Systems Command

Program Executive Office Land Systems (PEO LS) – G/ATOR

2200 Lester Street

Quantico, VA 22134-6050

2. Description of the Action Being Approved

The use of other than full and open competition to award a modification to Contract Number M67854-07-C-2072, with Northrop

Grumman Corporation (NGC), 1580A W. Nursery Road, Linthicum

Heights, MD 21090, to incorporate options into the contract for the procurement of six additional Low-Rate Initial Production

(LRIP) systems for the Ground/Air Task Oriented Radar (G/ATOR)

System. Currently, the contract contains an option for NGC to produce two LRIPs, which has expired and must be renegotiated based on the current design and updated program support requirements. Therefore, this J&A is for a total of eight

LRIPs.

3. Description of Supplies/Services

The G/ATOR program is a single material solution for the Multi-

Role Radar System (MRRS) and the Ground Weapons Locating Radar

(GWLR) requirements. It is structured as an evolutionary acquisition program consisting of four discrete increments.

Each increment builds upon the capabilities of the preceding increment(s). Increment I, Air Defense/Surveillance Radar

(AD/SR) will satisfy the Short Range Air Defense (SHORAD) and

Tactical Air Operations Center (TAOC) Air Surveillance missions including Identification Friend or Foe (IFF). The Increment I design will provide for growth to all Increments without equipment re-design and will provide a computer software architecture that allows for the computer software and firmware to be upgraded via open architecture with the functionality of all following Increments. Increment II will address Ground

Weapons Locating Radar (GWLR) functions. Increment III, which has been deferred, will address the air mission’s additional requirements for Decoys, Mainbeam Cancellation, Non-Cooperative

Target Recognition (NCTR), Composite Tracking Network (CTN) upgrade, sensor netting, and an Integrated Data Environment

(IDE) capability. Increment IV, Expeditionary Airport

Surveillance Radar (EASR) will incorporate an Air Traffic

Control (ATC) capability and Mode 5/S Identification Friend or

Foe (IFF).

The purpose of the proposed contract action is to add options to the contract to procure six additional LRIP units for a total of eight LRIPs and onboard spares in FYs 2013-2017 in accordance with the Government Performance Specification, as updated by the results of the ongoing Engineering and Manufacturing Development

(EMD) test program and the product descriptions to be approved and validated at the Production Readiness Review (PRR) anticipated to occur in 1 st Quarter 2013. Additionally, the

Statement of Work (SOW) will include, but not be limited to, value engineering change proposal implementation, engineering change proposals, technical data packages, and other necessary product and functional requirements to support the LRIP phase.

The LRIP phase will also include initial operating spares for

LRIP, contractor engineering services and support, Developmental

Test/Initial Operational Test and Evaluation Engineering

(DT/IOT&E) and logistics test support, spares for DT/IOT&E, DT/IO&E logistics planning, and transition to production. It is also anticipated that the Anti-Tamper (AT) functionality will be introduced via a change order. Finally, the contractor will be required to conduct Production Verification Testing (PVT) on each LRIP unit and ensure all LRIP units represent the production configuration in accordance with the Physical

Configuration Audit (PCA).

If the options are exercised, the estimated delivery requirements for all eight LRIPs and their ancillary supplies and services as described above are as follows:

LRIP 1 – 3

rd

Qtr 2015

LRIP 2 – 4

th Qtr 2015

LRIP 3 – 2

nd Qtr 2016

LRIP 4 – 3rd Qtr 2016

LRIPs 5 & 6 – 1 st Qtr 2017

LRIPs 7 & 8 – 2 nd Qtr 2017

The total estimated dollar value for this effort is

$389,840,000. The table below provides the funding profile by fiscal year and appropriation.

Estimated Dollar Value in Millions

APPROP FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Total

RDT&E $2.23 $7.20 $14.13 $2.90 $18.43 $44.88

PROC $87.29 $106.25 $151.30 $0.11 $0.00 $344.96

Total $89.52 $113.46 $165.43 $3.01 $18.43 $389.84

4. Statutory Authority Permitting Other Than Full and Open

Competition

The statutory authority permitting other than full and open competition is 10 U.S.C. Section 2304(c)(1), as implemented by the Federal Acquisition Regulation (FAR) Section 6.302-1 “Only

One Responsible Source and No Other Supplies or Services Will

Satisfy Agency Requirements.”

5. Rationale Justifying Use of Cited Statutory Authority

NGC was competitively awarded the G/ATOR Increment I EMD contract, M67854-07-C-2072, in March 2007. As such, they are responsible for the design, development, fabrication, and developmental testing of the Increment I hardware and software, and will perform all aspects of system integration. The contract includes an option for purchase of the Technical Data

Package (TDP), which the USMC intends to exercise at the conclusion of the LRIP phase of the program, i.e. Technical

Evaluation, Operational Evaluation, and IOC of Increment I in

FY2016. However, prior to contract award, Northrop Grumman and its subcontractor Sensis asserted their rights to proprietary data they intended to utilize in the design and development of the G/ATOR EDM of which the Government has limited and restricted rights.

At this point in time, the TDP is still a work in progress and is far too immature to support replication of the G/ATOR design by an alternate manufacturer. This is why the current contract includes the LRIP option, because it was anticipated that only the incumbent developer would be able to produce the LRIP systems given the ongoing evolution of the design and the maturity of the TDP. That rationale has not changed; it is only the number of LRIP units that must be increased in order to support the multifaceted exigencies of the program.

During the LRIP years, without the availability of a mature data package and/or incurring a significant amount of re-engineering, another contractor will be unable to manufacture a G/ATOR LRIP to the established standard represented by the G/ATOR

Engineering Development Model (EDM). Furthermore, the G/ATOR

EDM design is unique relative to other systems currently in the marketplace by virtue of its use of ambient air cooling of the radar array and auto-calibration across a wide range of operating temperatures; whereas, other radars use liquid cooling to maintain a nearly constant array temperature. Thus, NGC is the only known source currently qualified to manufacture

Increment I G/ATOR LRIPs based on their inherent knowledge, expertise, and capability as described herein.

6. Description of Efforts Made to Solicit Offers from as Many

Offerors as Practicable

A Request for Information (RFI) was issued on 03 March 2011 to solicit industry for information on their capability to manufacture G/ATOR LRIPs.

The RFI stated the Government’s intent was to increase the

G/ATOR LRIP quantities from two (2) to eight (8). The RFI also specifically notified industry that the TDP is very immature and a significant amount of hardware and software data is proprietary to the incumbent, NGC, and is therefore not available. Two responses were received; one from the Increment

I incumbent, NGC, and the second response from Lockheed Martin

Corporation (Lockheed Martin). Industry’s responses were reviewed by the Government’s subject matter experts, and their assessment was provided in a report to the Contracting Officer dated 28 June 2011. The technical assessment of these two responses resulted in the following conclusion: both contractors have the facilities, expertise and manufacturing capabilities to produce radar systems. However, Lockheed Martin’s response stated its ability to manufacture LRIPs is dependent on receiving copies of all Contract Data Requirements List (CDRL) deliverables under the Increment I development contract and receipt of the software source code. Since the software source code is undergoing developmental testing, and much of the design information represented in these CDRLs will be updated significantly during transition to production and LRIP, it is not realistic to anticipate the Government’s fulfillment of this stipulation, especially given the amount of NGC proprietary data. Therefore, the technical assessors concluded that

Lockheed Martin cannot successfully manufacture and deliver

G/ATOR LRIP units within the required time frame without being provided a mature and complete TDP, which will not be available for several years and will not be releasable in its entirety due to the restricted and limited rights provided.

As the designer and developer, NGC is inherently positioned and capable of manufacturing LRIPs with the least amount of risk based on their prior experience and steps taken to prepare for transition to production through their procurement and manufacturing of system benches and special tooling specific to

G/ATOR. The technical assessment report indicated that Lockheed

Martin has the facilities and capabilities to manufacture radar systems, which it is currently doing for other customers.

However, Lockheed Martin would need to establish system benches and special tooling needed to support a G/ATOR LRIP production.

Lockheed Martin did not demonstrate how it would adapt its current manufacturing process based on another vendor’s design without engaging in re-engineering and/or re-designing. Lockheed

Martin’s proposed three month plan to transition to production is extremely aggressive considering the amount of system benches and special tooling that are specific and unique to G/ATOR, and is again predicated on the unrealistic assumption of immediate delivery of a mature and complete TDP. In addition, Lockheed

Martin did not provide any unit cost estimates, which contrasts sharply with NGC’s very detailed pricing data derived from its

EMD experience. The factors delineated herein further support the Contracting Officer’s determination that Lockheed Martin is not realistically capable of manufacturing the G/ATOR LRIPs.

7. Determination of Fair and Reasonable Cost

In accordance with FAR 15.402, the Contracting Officer will determine the anticipated cost to the Government for supplies and support covered by this J&A will be fair and reasonable.

The Contractor will be required to submit a formal proposal with certified cost and pricing data and sufficient information to support the accuracy and reliability of the total price.

Analysis of the proposal will be performed by technical analysts and contract specialists, with the assistance of Defense

Contract Management Agency (DCMA) analysts and Defense Contract

Audit Agency (DCAA) auditors as needed. The Contracting Officer will analyze the various cost elements that are presented in the proposal, as well as review the actuals from the EMD effort.

The Contracting Officer will use government expertise, including

DCMA, DCAA, and the Program Manager for G/ATOR, to evaluate the proposed material, labor, and subcontract positions.

8. Actions to Remove Barriers to Future Competition

Ongoing integration and test activities combined with the transition to production process will result in a mature and complete TDP package delivered to the Government by FY2016.

However, the delivered TDP will contain proprietary data that

NGC will provide to the Government with restricted and/or limited rights. Marine Corps Systems Command will assess its ability to pursue competition for Full Rate Production by using a Request For Information to Industry, followed by a

Business Case Analysis.

APPROVED 12-11-2012