LRIP 6 J A posting.pdf

J&A Number: 196888

CLASS JUSTIFICATION AND APPROVAL

FOR USE OF OTHER THAN FULL AND OPEN COMPETITION

1. Contracting Activity

Naval Air Systems Command Joint Strike Fighter Contracts Division (AIR-2.6) c/o Joint Strike Fighter Program Office 200 12th Street South, Suite 600 Arlington, VA 22202-5402 POC: Paul Campbell, AIR-2.6, (301) 757-0120

2. Description of the Actions Being Approved

This Class Justification and Approval (J&A) authorizes and approves the issuance of contract actions on a sole-source basis to Lockheed Martin Corporation, Lockheed Martin Aeronautics Company (LM Aero), Fort Worth, TX, for Low Rate Initial Production (LRIP) Lot 6 F-35 Lightning II Joint Strike Fighter (JSF) aircraft, associated supplies, and sustainment support.

Authority to act under this Class J&A expires on 30 September 2014.

3. Description of Supplies/Services

Supplies and services acquired under the anticipated contract actions will commence on or about February 2011 and end on or about March 2015. United States aircraft deliveries are estimated to commence in February 2014 and complete in January 2015. Italian and Australian aircraft deliveries are estimated to commence in February 2014 and complete in March 2015. The contemplated contract actions will provide for the following supplies/services:

• Nineteen (19) Conventional Take-Off and Landing (CTOL) aircraft for the United States Air

Force (USAF) (or other such quantities as may be authorized and appropriated by Congress);

• Six (6) Short Take-Off Vertical Landing (STOVL) aircraft for the United States Marine

Corps (USMC) (or other such quantities as may be authorized and appropriated by Congress);

• Seven (7) Carrier Variant (CV) aircraft for the United States Navy (USN) (or other such quantities as may be authorized and appropriated by Congress);

• Four (4) CTOL aircraft, two (2) for the Italian Air Force (IAF) and two (2) for the Italian Navy (IN) (or other such quantities as may be authorized by the Ministry of Defence);

Ser: Air 2.6/196888

• Two (2) CTOL aircraft for the Royal Australian Air Force (RAAF) (or other such quantities as may be authorized by the Department of Defence);

• Long lead-time materials;

• Sustainment support for USAF, USMC, USN, and Cooperative Program Participants (CPP), including spares, support equipment, non-recurring autonomic logistics sustainment activities, training, autonomic logistics information system (ALIS) hardware, site surveys and activation activity, depot activation, performance-based logistics (PBL) operations, and maintenance of CTOL, STOVL, and CV hardware;

• All effort associated with the procurement of hardware for and sustainment of a United States Reprogramming Laboratory;

• Ancillary Mission Equipment (AME) and Pilot Flight Equipment (PFE);

• Production non-recurring (PNR) activities to support the F-35 Lightning II JSF production ramp rate, including tooling, test equipment, production aids, production equipment, manufacturing support equipment, support labor, diminishing manufacturing sources (DMS) redesign, and technical assistance; and

• Technical, financial, and administrative data.

Ordering line items will allow for additional supplies and services for DMS procurements, retrofit efforts required to update accepted aircraft to newer configurations, CPP-directed procurements of country-unique JSF requirements, and government-furnished equipment (GFE) maintenance.

The total dollar value allocated for the LRIP Lot 6 contract actions is estimated to be $8,079.8 Million, broken out as follows:

$ (in Millions) FY 11 FY 12 Total

APN $366.2 $2,787.2 $3,153.4

3010 $200.5 $3,280.4 $3,480.9

1A9A (Navy O&M) $0.0 $50.3 $50.3

3400 (AF O&M) $0.0 $41.7 $41.7

CPP* $0.0 $159.8 $159.8

Total $637.5 $7,442.3 $8,079.8

* JSF Cooperative Program Participant Shared Funding

4. Statutory Authority Permitting Other Than Full and Open Competition

10 U.S.C. 2304(c)(1), One source or limited sources.

5. Rationale Justifying Use of Cited Statutory Authority

Lockheed Martin Aeronautics Company is the original designer, developer, and manufacturer of the F-35 Lightning II JSF aircraft and is the only source with the requisite knowledge, experience, and technical expertise to produce the F-35 Lightning II JSF aircraft at the required ramp rate and within the required delivery schedule. Furthermore, LM Aero is the only source with the facilities and capabilities required to provide the associated air system and sustainment support for the Lot 6 requirements. Technical data packages suitable for full and open competition are not available to permit sources other than LM Aero to perform the contemplated contract efforts. The Concept Demonstration Phase of the program culminated in a flight test program designed to demonstrate the best air vehicle commonality concept. Lockheed Martin Aeronautics Company’s Concept Demonstrator Aircraft successfully demonstrated (1) commonality and modularity among service variants; (2) STOVL, hover, and transition to and from forward flight; and (3) satisfactory low-speed carrier approach flying and handling qualities. The source selection decision was reviewed at the Milestone II Defense Acquisition Board (DAB), which approved the program's entry into the development lifecycle phase.

Following the successful Milestone II DAB review, a cost-plus-award-fee contract for System Development and Demonstration (SDD) was awarded to LM Aero to develop the JSF Air System on 26 October 2001. Since the initial competitive award, all LRIP air vehicle contracts have been awarded to LM Aero on a sole-source basis.

Pursuant to the F-35 Lightning II JSF Acquisition Strategy, approved on 5 December 2008 by the Under Secretary of Defense (Acquisition, Technology, and Logistics), competition for the type of work to be performed under the LRIP and Full Rate Production (FRP) contracts is not considered practical. The Government has spent the past nine years and has committed approximately $27 Billion on the SDD contract to develop and qualify the F-35 Lightning II JSF aircraft. Delaying the Lot 6 procurements to identify, develop, and qualify another source would impede the initial operational capabilities of the USAF, USMC, and USN, as well as the CPPs.

The National Defense Research Institute and RAND conducted an independent study entitled “Assessing Competitive Strategies for the Joint Strike Fighter” in 2001, which concluded that "the establishment of a competitive production line for part or all of the JSF would require a front-end investment, together with increases in recurring costs, that would probably not be recovered through price reductions that might result from competitive forces.” Based on historical data, developing and qualifying an alternative manufacturer would take roughly seven to nine years and cost approximately $30 Billon for nonrecurring engineering, tooling, nonrecurring equipment, testing, support, and training. Therefore, LM Aero is the sole source contractor for F-35 Lightning II JSF Lot 6 requirements.

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

The proposed contract actions were synopsized on the Federal Business Opportunities (FedBizOpps) website between 15 September and 15 October 2010. The synopsis requested interested parties to submit their expressions of interest and capability statements. The Government received one response from a company based in Mumbai, India. A request for the company to submit a complete capability statement was sent 4 October 2010. To date, a response has not been received. The Government did not conduct additional market research because it is not practicable, for the reasons discussed in paragraph 5 above, for any company other than LM Aero to provide the required supplies and services.

7. Determination of Fair and Reasonable Cost

In accordance with FAR 15.402, the Contracting Officer shall ensure that all supplies and services provided under these contract actions are procured at a fair and reasonable price/cost.

Lockheed Martin Aeronautics Company will submit a formal proposal with sufficient information, including certified cost or pricing data, to support the accuracy and reliability of the proposed prices/costs. In addition, it is expected that the results of a DoD-led “should-cost” analysis effort for LRIP 5 will be completed in time to support LRIP 6 negotiations.

8. Actions to Remove Barriers to Future Competition

In accordance with the approved Acquisition Strategy, the Government did not acquire technical data suitable for competition for the F-35 or its subsystems under the competitively awarded SDD contract. Because the F-35 Lightning II JSF Program has committed to that strategy and contracts are in place, the acquisition of technical data suitable for competition would be prohibitively expensive and would not result in a commensurate return on the investment. In addition, the Industrial Participation and Objectives sections of the JSF Production, Sustainment, and Follow-On Development (PSFD) Memorandum of Understanding (MOU) place limitations on the degree of flexibility in contracting. The JSF PSFD MOU provides that, subject to the submission of best value offers, the industries participating in SDD will normally be awarded subcontracts for production, related sustainment, and follow-on development work.

Notwithstanding, where appropriate and consistent with the provisions of the MOU and the bilateral supplements thereto, the F-35 Lightning II JSF Program will assess the merits and determine the costs of acquiring the technical data that would be required to compete sustainment of subsystems in the event that the sustainment strategy changes.

CERTIFICATIONS AND APPROVAL

TECHNICAL/REQUIREMENTS CERTIFICATION

I certify that the facts and representations under my cognizance which are included in this Justification and its supporting acquisition planning documents, except as noted herein, are complete and accurate to the best of my knowledge and belief.

Signature Name (Printed) Phone No. Date

LEGAL SUFFICIENCY REVIEW

I have determined this Justification is legally sufficient.

CONTRACTING OFFICER CERTIFICATION

I certify that this Justification is accurate and complete to the best of my knowledge and belief.

Randall S. Cohen (703) 601-5727

SENIOR PROCUREMENT EXECUTIVE APPROVAL

Upon the basis of the above justification, I hereby approve, as Senior Procurement Executive of the Navy, the solicitation of the proposed procurements described herein using other than full and open competition, pursuant to the authority of 10 U.S.C. 2304 (c)(1)—One source or limited sources.

Sean Stackley Signature Name (Printed) Date