Redacted_DI_CJA_2017.pdf

DEPARTMENT OF THE NAVY

PROGRAM EXECUTIVE OFFICER

TACTICAL AIRCRAFT PROGRAMS

47123 BUSE ROAD BLDG 2272

PATUXENT RIVER MARYLAND 20670-1547 IN REPLY REFER TO

Ser: AIR-2.2.4.3

CJ&A_17_0059

CLASS JUSTIFICATION AND APPROVAL

FOR USE OF OTHER THAN FULL AND OPEN COMPETITION

1. Contracting Activity.

Naval Air Systems Command (NAVAIR) Headquarters

2. Description of the Action Being Approved.

This Class Justification and Approval (CJ&A) authorizes and approves the sole source award of an Indefinite Delivery Indefinite Quantity (IDIQ) contract to BAE Systems Information and Electronic Systems Integration, (hereinafter referred to as “BAE Systems”), Greenlawn, New York. This contract will procure a Class 1 ECP to design a replacement for obsolete AN/UPX-41(C) Digital Interrogator (DI) components, FY2017-FY2019 AN/UPX-37 and AN/UPX-41(C) DIs, Mode 5 Kits, Mode 5/S software upgrades, associated equipment, engineering support, logistics support, repairs, and technical data. It is anticipated that various other Engineering Change Proposals (ECPs) will also be negotiated and procured. Authority to act under this CJ&A ends on 31 December 2019.

3. Description of Supplies/Services.

The AN/UPX-41(C) DI is used to satisfy Mark XIIA Identification Friend or Foe (IFF) requirements and incorporates Mode 5 capability. The Mode 5 capable DI provides positive, secure, and reliable identification of friendly air and surface platforms. Interrogators are required to operate in a tactical environment and will encounter shipboard conditions and interference.

These procurements include supplies and services required for the following: 1) a Class 1 ECP to modify the existing AN/UPX-41(C) DI to address parts Obsolescence; 2) production and delivery of AN/UPX-37 and AN/UPX-41(C) DIs and Mode 5 Kits; 3) Mode 5/S software for converting the AN/UPX-37 into an AN/UPX-41(C); and 4) engineering support, logistics support, testing and hardware support for the AN/UPX-37 and AN/UPX-41(C) DI and Mode 5 Kits. The total estimated quantity being procured is 183, including other customer funds (OCF) or other such quantities that may be authorized and appropriated by Congress, to include units being procured for international partners using Foreign Military Sales (FMS) funding or Special Defense Acquisition Funding (SDAF). Included in the 183 units are 44 units currently planned for FMS customers.

Mode 5 Kits will be procured to convert the existing AN/UPX-37 to the AN/UPX-41(C) DI configuration for installation into platforms for which the Mode 5 capability is required.

This CJ&A provides coverage for a basic contract award in FY17, with options for FY18 and FY19 requirements.

An IDIQ contract with delivery orders, in accordance with Federal Acquisition Regulation (FAR) 16.202-2 and 16.301-2, will be utilized. The majority of requirements are sufficiently mature and stable, and there is adequate cost or pricing information available to establish fair and reasonable prices.

Delivery orders or modifications to existing orders may be awarded for engineering and logistics support to address parts obsolescence or to implement engineering changes to comply with updates to Department of Defense IFF performance specification ECPs throughout the life of the contract.

The total estimated value of this requirement is $40,726,000 and will be funded with multiple types of funds, as follows:

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

The statutory authority permitting other than full and open competition is Title 10 of the United States Code, Section 2304 (c)(1) as implemented by FAR 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.

BAE Systems is the original designer, developer, and manufacturer of the AN/UPX-37 and AN/UPX-41(C) DI. BAE Systems has the unique knowledge, experience, special skills, facilities, manufacturing techniques, and technical data required to produce or modify the AN/UPX-37 and AN/UPX-41(C) DI and Mode 5 Kits.

Full and open competition for the AN/UPX-37 and AN/UPX-41(C) DI requirements addressed in this CJ&A would result in an unacceptable delay in fulfilling the agency’s requirement to field and integrate Mode 5 across multiple platforms, to reach Joint Full Operating Capability (JFOC) by 2020, and to meet the cease-key date for Mode 4. The Navy did not procure the drawings that would allow another source to produce the AN/UPX-37 and AN/UPX-41(C) DI. Selection of any source other than BAE Systems for the AN/UPX- 37 and AN/UPX-41(C) DI systems would result in time consuming non-recurring engineering and production startup for a new supplier to implement Mode 5/S capabilities, develop a test bed equipment suite, establish a software support activity, sparing hardware, integration and multiple levels of certification.

Integration of alternate source equipment on Navy platforms would require obtaining National Telecommunications & Information Administration Spectrum Certification and Frequency assignments for the new source equipment and for each individual platform configuration, requiring a three year serial process. Even if the drawings were available, the Mode 5 Program could not achieve JFOC in 2020 which results in an unacceptable delay to the program.

Award to a source other than BAE Systems would also result in substantial duplication of costs to the Government that is not expected to be recovered through competition. AIR-4.2 estimates that an award to a source other than BAE Systems would result in approximately $32M of duplicative cost. This assumes the new source would need to conduct design efforts, system productionization, qualification, and testing which has been accomplished by BAE. Not included in the $32M are logistics costs associated with maintaining multiple configurations throughout the Fleet, which would be required in the event the alternate source was not a form, fit and function replacement of the existing equipment. Also not included in the $32M estimate is $40M associated with procuring the full DI technical data package. As a result, BAE Systems is the only responsible source capable of providing supplies and/or services to satisfy the US Navy’s requirements.

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

A market survey conducted by NAVAIR indicates that there are other industry sources which provide similar IFF products; however, as discussed in paragraph five, the requirements are available from only one responsible source due to substantial duplication of cost and unacceptable delays which would result from awarding to a source other than BAE Systems. In accordance with FAR 5.201, this proposed requirement was posted on the FEDBIZOPPS website on 26 February 2016. No responses were received.

Any future responses will be evaluated by the Procuring Contracting Officer prior to award. A Waiver of DFARS PGI 206.302-1, Request for Information/Sources Sought Requirement, was approved.

7. Determination of Fair and Reasonable Cost.

In accordance with FAR 15.402(a), the Contracting Officer shall ensure that all supplies and services authorized under this CJ&A are procured at a fair and reasonable price. The negotiated actions will be conducted in accordance with FAR 15.4 by the Contracting Officer, with support, as needed, from Defense Contract Management Agency and Defense Contract Audit Agency personnel to ensure that fair and reasonable prices are established. In order to support the Contracting Officer’s determination, the contractor will be required to substantiate its proposed cost or price by providing varying types of cost or pricing information as defined under FAR Subpart 15.4. The Contracting Officer's determination of fair and reasonable price(s) will be based upon information received from historical data, field audits, independent technical evaluations, and thorough cost/price analysis.

8. Actions to Remove Barriers to Future Competition.

For the reasons set forth in paragraph five, NAVAIR has no plans at this time to compete future contracts for any subsequent acquisition for the supplies and services required. If another potential source emerges, NAVAIR will assess whether competition for future requirements is feasible.