-LRIP_10_Propulsion_J A_-_Approved_20140725_(REDACTED).pdf

DEPARTMENT OF THE NAVY

NAVAL AIR SYSTEMS COMMAND

RAOM WILLIAM A. MOFFET BUILDING

47123 BUSE ROAD, BLDG 2272

PATUXENT RIVER, MARYLAND 20670-1547

CLASS JUSTIFICATION AND APPROVAL

IN REPLY REFER TO:

Ser: AIR/2.6/331141

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 F-35 Joint Program Office

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 Pratt & Whitney, Military Engines (P&W), East Hartford, CT, for Low Rate Initial Production (LRIP) Lot 10 F135 propulsion systems, associated supplies, and sustainment support. Authority to act under this Class J&A expires on 30 September 2018.

3. Description of Supplies/Services.

Supplies and services acquired under the anticipated contract actions will commence on or about December 2014 and end on or about December 2018. The contemplated contract actions will provide the following supplies/services:

• Forty-four (44) F135-PW-100 propulsion systems for the United States Air Force (USAF), or such other quantities as may be authorized and appropriated by Congress;

• Nine (9) F135 -PW-600 propulsion systems for the United States Marine Corps (USMC), or such other quantities as may be authorized and appropriated by Congress;

• Two (2) F135-PW-100 propulsion systems for the USMC and United States Navy (USN), or such other quantities as may be authorized and appropriated by Congress;

• Three (3) Fl35-PW-600 propulsion systems for the British Royal Navy (RN), or other such quantities or variants as may be authorized by the Ministry of Defence;

• Six (6) F135-PW-100 propulsion systems for the Norwegian Air Force (NAF), or other such quantities or variants as may be authorized by the Ministry of Defence;

• Eight (8) F135-PW-1 00 propulsion systems for the Royal Australian Air Force (RAAF), or other such quantities or variants as may be authorized by the Department of Defence;

• Two (2) Fl35-PW-100 propulsion systems for the Italian Air Force (IAF), or other such quantities or variants as may be authorized by the Ministry of Defence;

• Two (2) F135-PW-600 propulsion system for the Italian Navy (IN), or other such quantities or variants as may be authorized by the Ministry of Defence;

• Two (2) F135-PW-100 propulsion systems for the Turkish Air Force (TAF), or other such quantities or variants as may be authorized by the Ministry of National Defence;

• Four (4) F135-PW-100 propulsion systems for the Canadian Air Force (CAF), or other such quantities or variants as may be authorized by the Department of National Defense;

• Long lead-time materials;

• Group 2 Inlet Debris Monitoring System kits and Group 4 Variable Area Vane Box Nozzle, and

Group 10 Roll Post Hydraulic Control Units long lead hardware for future low rate or full rate lots, as necessary to meet the extra long lead schedule;

• Non-recurring sustaimnent activities to include autonomic logistics planning and management;

development of technical data; supply chain management activities for order and delivery of spare engines, initial spare modules, initial spare parts, rotable pool containers, support equipment and packaging, handling, shipping, and transportation (PHS&T) for site stand-up at operational bases; and depot activation activities;

• Recurring sustainment support for fielded propulsion systems after unit and depot activations at production, training, and operational locations to include maintenance and repair, fleet management, material management, sustaining engineering, and joint services technical data

(JTD);

• Engineering changes (including all efforts associated with upgrading the configurations of accepted Fl35-PW-100 and F135-PW-600 propulsion systems);

• Production non-recurring (PNR) activities to support the F135 propulsion system affordability, producibility, production transition initiatives, and production ramp rate, including special tooling, special test equipment, production aids, production equipment, manufacturing support equipment, support labor, diminishing manufacturing sources (DMS) management and redesign, and technical assistance;

• Technical, financial, and administrative data; and

• Ordering line items to allow for additional supplies and services for DMS procurements, Participant-directed procurements of country-unique F135 requirements, and government furnished equipment (GFE) maintenance and repair.

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The total dollar value allocated for the LRIP Lot I 0 contract actions is estimated to be

4. Statutorv Authority Permitting Other Than Full and Open Competition.

10 U.S.C. 2304(c)(1), Only one responsible source and no other supplies or services will satisfY agency requirements.

5. Rationale JustifYing Use of Cited Statutory Authority.

Pratt & Whitney is the original designer, developer, and manufacturer of the F135 propulsion system and is the only source with the requisite knowledge, experience, and technical expertise to produce the F135 propulsion system at the required ramp rate and within the required delivery schedule. Furthermore, P& W is the only source with the facilities and capabilities required to provide the associated propulsion system and sustaimnent support for the LRIP Lot 10 requirements. Technical data packages suitable for full and open competition are not available at this time to permit sources other than P&W 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, using a P&W propulsion system, successfully demonstrated (1) commonality and modularity among service variants; (2) short take-off vertical landing, 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 P&W to develop the F135 propulsion system on 26 October 2001. Since the initial sole-source award, all LRIP Fl35 propulsion system contracts have been awarded to P&W on a sole-source basis.

Pursuant to the F-35 Lightning II JSF Acquisition Strategy, approved on 27 March 2012 by the Acting Under Secretary of Defense (Acquisition, Technology & Logistics), P&W is designated as the sole source to provide the Fl35 propulsion system for the F-35 Lightning II aircraft. The Government did explore the possibility of two interchangeable propulsion systems, the P&W Fl35 propulsion system and the GE Rolls-Royce Fighter Engine Team (FET) Fl36 propulsion system, per the procurement approach summarized in paragraph 8. The FET was awarded a SDD contract for the F136 propulsion system in 2005. However, on 25 April2011, the F136 SDD contract was terminated for the convenience of the Government.

The Government has spent the past twelve years and has committed approximately on the P&W SDD contract to develop and qualifY the F135 propulsion system for use in the F-35 air system. For the reasons cited above, P&W is the only source currently capable of producing and sustaining propulsion systems for LRIP Lot 1 0.

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 5 June 2014 and 19 June 2014. The synopsis requested interested parties to submit their capability statements for purposes of determining whether to initiate a competitive procurement. To date no responses have 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 P&W to provide the required LRIP Lot 10 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. Pratt & Whitney 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 accordance with FAR 15.403. Experienced technical analysts and contract specialists, with the aid of necessary field pricing support, will perform the analysis of the contractor's proposed price/costs in accordance with FAR 15.404. The Defense Contract Management Agency (DCMA) and Defense Contract Audit Agency (DCAA) at P&W will be requested to provide input. In addition, the results of prior DoD-led "should-cost" analysis and any information from combined LRIP Lot 6/7 negotiations, as well as LRIP Lot 8 negotiations, will inform negotiations in LRIP Lot 10. The Contracting Officer will use these analyses to determine and negotiate a fair and reasonable price/cost.

8. Actions to Remove Barriers to Future Competition.

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With regard to the Fl35 engine itself, in accordance with the approved Acquisition Strategy, the Government did not acquire technical data suitable for competition for the baseline Fl35 engine or its subsystems under the SDD contract. Because the F -35 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.

Furthermore, due to the level of concurrency in the baseline program-SDD, LRIP, and initial sustainment-the complexity and risk of introducing configurations that may .deviate from the established configuration baseline are too great a programmatic and financial stress prior to delivery of the ORD-threshold-compliant F-35 Air System for competition in the near-term. In addition, the Industrial Participation and Objectives sections of the JSF Production, Sustainment, and Follow-On Development (PSFD) Memorandum of Understanding (MOU) provide 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, statute, and policy, planning for follow-on procurements will include data rights/data management strategies that will support, to the extent practical, the option for competition through the remainder of the program lifecycle. The F-35 Program will assess the merits of acquiring current and future technical data that could support future competition through the lifecycle. This assessment will include the acquisition of operations, maintenance, installation, and training (OMIT) data that could support sustainment and operations efforts. It is intended that this strategy include a variety of competitive options, but this is dependent on the specific needs in sustainment and operations. A multiple-phase sustainment business case analysis, which began in the third quarter FYll, analyzes current stakeholder sustainment requirements to identify an acceptable sustainment solution given the program changes in the wake of the Nunn-McCurdy driven program restructure. This analysis will provide the basis for identifying the data and data rights required to reduce the sustainment footprint making the F-35 Program more affordable in the out years.

J&A Nmnber: 331141

CERTIFICATIONS AND APPROVAL

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