MDA_JnA_20-0030_Redacted_20210816.pdf

4. Description of Supplies and/or Services Required to Meet the Agency's Need (Including the Estimated Value) (FAR Part 6.303-2(b)(3)).

The THAAD Weapon System provides the Missile Defense System with a globally-transportable, rapidly-deployable capability to intercept and destroy ballistic missiles inside or outside the atmosphere during their terminal or final, phase of flight.

The total estimated costs for this requirement is , of which will be for the procurement of Battery 8 ground components, and will be for the life-of-type-buy of 30 HEMTT A2s. The THAAD Project Office received notification that procurement funding was approved in the FY 2021 Defense Appropriations Bill passed December 27, 2020.

Battery 8 will consist of six launchers, a THAAD Fire Control and Communication (TFCC), associated Peculiar Support Equipment, and the provision of New Equipment Training. The Battery 8 procurement of six HEMTTs will be synergized with the FMS procurement in FY 2021 to gain significant cost, schedule and technical synergies.

In addition, the THAAD Project Office is procuring 30 HEMTT A2s as a life-of-type-buy. The USG intends to procure these HEMTT A2s with the KSA and UAE procurement in 2Q FY 2021 to ensure no loss of synergy or the need to fund the restart of the A2 production line. The loss of efficiencies are estimated to increase the cost of a HEMTT by approximately 30%.

The previous ground component procurements were procured as Firm-Fixed-Priced Contract Line Item Numbers (CLINs). The Battery 8 HEMTTs and life-of-type-buy HEMTTs will be procured on a Firm-Fixed-Price CLIN based on synergies with FMS pricing and design. The rest of the Battery 8 ground components will utilize Fixed-Price-Incentive-Fee CLINs to motivate the provider to find efficiencies with updates due to obsolesce.

The MDA Program Executive for Ground-Based Weapon Systems signed the Acquisition Plan, "Terminal High Altitude Area Defense Acquisition Plan for Battery 8 Production and HEMTT Life-of-type-buy,” on March 17, 2021. The Acquisition Plan addresses the synergized Battery 8 ground components procurement and USG/FMS HEMTTs buy authorized by the Under Secretary of Defense for Acquisition and Sustainment Acquisition Decision Memorandum (unless delegated).

The Independent Government Cost Estimates for these efforts are:

Then-Year $M FY 2021 FY 2022 FY 2023 FY 2024 TOTAL Battery 8

HEMTT

5. Statutory Authority Permitting Other than Full and Open Competition (FAR Part 6.303- 2(b)(4)).

The statutory authority permitting other than full and open competition is title 10, United States Code 2304(c)(1) as implemented by Federal Acquisition Regulation (FAR) 6.302-1(a)(2)(ii), "Only one responsible source and no other supplies or services will satisfy agency requirements," which states:

"(ii) Supplies may be deemed to be available only from the original source in the case of a follow-on contract for the continued development or production of a major system or highly-specialized equipment, including major components thereof, when it is likely that award to any other source would result in-

(A) Substantial duplication of cost to the USG that is not expected to be recovered through competition; or,

(B) Unacceptable delays in fulfilling the agency's requirements."

6. Demonstration of Contractor's Unique Qualifications or the Nature of the Acquisition Requires use of the Authority Cited (FAR Part 6.303-2(b)(5)).

LM is the prime contractor (provider and integrator) for the THAAD Weapon System. LM was under contract initially for system development, and is currently under contract for manufacturing and production. No other source possesses the extensive knowledge, experience, facilities and/or equipment to meet the Government need at this time. The THAAD Weapon System consists of highly-complex technical data requiring special knowledge and engineering expertise to ensure and maintain stringent performance requirements and extremely tight tolerances. The current THAAD Weapon System technical data package does not include special and/or critical processes required to manufacture a first-time quality product. In addition, the procurement and qualification of tooling and test equipment at a new prime contractor and supplier facilities would incur significant costs above the assumed budget estimates which would also result in unacceptable delays in fulfilling the Agency's needs should the requirement be competed. By utilizing the current contractor, the THAAD Project Office will not be impacted by potential costly redesigns necessary to mitigate obsolete parts if the contractor is required to furnish new tooling and test equipment to produce the THAAD Battery 8 ground components.

7. Description of Market Research Conducted (FAR Part 6.303-2(b)(6), (8) and (10)).

The MDA THAAD Market Research Report, August 19, 2020, concluded that no contractor, other than LM, possesses the insight, experience, and expertise on the THAAD Program to meet the needs of this effort.

Details of the market research include:

To achieve the objectives outlined in the Department of Defense Manual 4120.24, common requirements must be identified and jointly contracted to the same vendor to ensure common hardware and software. To do otherwise creates varying solutions that would promote fragmented configurations between the USG and FMS system users, and undermine interoperability requirements needed to achieve coalition warfare objectives.

In order to continue the benefits of THAAD Fleet standardization and maintain continuity throughout the lifecycle of the THAAD Weapon System, it is in the best interest of the Government to keep LM as the lead integrator.

The requirement to post a request for information or sources sought notice was waived by the MDA Director, based on the market research report which determined that there is no other contractor who possesses the insight, experience, and expertise on the THAAD Program to meet the needs of this effort.

8. Determination of Fair and Reasonable Cost (FAR Part 6.303-2(b)(7)).

In accordance with FAR 15.402, the Contracting Officer shall ensure that all supplies and services ordered under this contract are procured at a fair and reasonable price. The contractor will submit a formal price proposal with Certified Cost or Pricing Data and sufficient information to support the accuracy and reliability of the estimate. The Contractor's proposed cost will be reviewed by experienced technical analysts, contract specialists, and price analysts with the aid of field pricing support. Analysis will be based on historical cost data, current market data, rate information and assist audit reports provided by USG field pricing support agencies. The Contracting Officer will use the cost and price analysis as the basis for negotiating a fair and reasonable price.

9. Any Other Facts Supporting the Use of Other Than Full and Open Competition (FAR Part 6.303-2(b)(9).

FAR clause 52.244-5, Competition in Subcontracting, is included in the contract. LM is required to select subcontractors on a competitive basis to the maximum extent practicable. LM submits a Comprehensive Small Business Subcontracting Plan annually that is evaluated and approved by the Defense Contract Management Agency. LM is also required to submit a "Small Business Utilization Report" semiannually to the THAAD Project Office and the MDA's Small Business Office for evaluation and approval.

10. Actions Taken to Remove Barriers to Competition (FAR Part 6.303-2(b)(11).

For the reasons stated in paragraph six above, LM is currently the only source for the continued production of the THAAD Interceptor. The Deferred Ordering of Technical Data or Computer Software Clause resident in the THAAD contracts will be used, as practicable, to acquire data or software needed to develop second sourcing opportunities for parts and services procured in the coming years.

In addition to FAR Part 52.244-5, Competition in Subcontracting, the THAAD Project Office will carefully consider requirements for competition, to the maximum extent practicable, as emerging needs become known to the USG.