CJ&A_26_Jul_2017_Redacted.pdf

DEPARTMENT OF THE NAVY

NAVAL AIR SYSTEMS COMMAND

RADM WILLIAM A. MOFFET BUILDING

47123 BUSE ROAD, BLDG 2272

PATUXENT RIVER, MARYLAND 20670-1547

IN REPLY REFER TO:

CJ&A_17_0196

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 issuance of sole-source contracts with Raytheon Missile Systems (RMS) of Tucson, Arizona for the incorporation of seeker technology and processing capabilities into the modernized Tactical Tomahawk Block IV All-Up-Round (TACTOM AUR) missile system. These efforts include analysis, modeling, simulation, evaluation, prototype activities, final integration, test, and delivery of seeker technology and processing capabilities in the TACTOM AUR missile system. The above Maritime Strike Tomahawk (MST) technology efforts shall take into account concurrent integration with the planned TACTOM missile recertification program. The recertification of missiles will take place on the missile production line at the RMS Original Equipment Manufacturer facility in Tucson, Arizona. The TACTOM recertification program provides a cost-effective mechanism for the MST hardware and software to be installed within the missile.

The requirement for a seeker capability for TACTOM AUR is found in the Tomahawk Operational Requirements Document, Serial 641-76-04 dated Aug 2004. Additionally, two Fleet Urgent Operational Need (UON) Statements describe an urgent and compelling need for an improved maritime capability supporting surface strike. To fulfill the urgent need, Assistant Secretary of the Navy (Research, Development, and Acquisition) designated this MST effort a Rapid Deployment Capability on 3 October 2016, and approved the associated Acquisition Strategy on 14 October 2016. MST is a funded Resource Management Decision by OSD in FY17. MST will enable surface warfare engagement capability from U.S.

Navy Guided Missile Cruiser, Guided Missile Destroyer, and Nuclear Powered Fast Attack Submarine platforms, with planned Initial Operational Capability (IOC) in FY21.

As a result of the FY17 seven-month Continuing Resolution Authority (CRA), MST RDC program has experienced a schedule slip. The consequence of this issue is that IOC is now forecast for third quarter FY22. The installation of kits procured in FY22 is anticipated to continue into FY23. Therefore, authority to act under this CJ&A expires on 30 September 2023.

3. Description of Suppliers/Services.

This CJ&A authorizes the FY17 through FY22 development, final integration, test, and limited procurement and delivery of maritime seeker suite technologies and requisite processing capabilities for the TACTOM

AUR missile system.

The TACTOM AUR Maritime Seeker will utilize Research, Development, Test & Evaluation (RDT&E) funding in FY17-21 for the activity required to perform system architecture and algorithm development;

prototyping; conduct laboratory, modeling and simulation test analysis and integration; modernize test equipment; hardware and software development; procure test assets; captive carry build-up and test;

ground launch; and surface ship platform test.

Weapons Procurement Navy (WPN) funding in FY20-22 will provide for limited procurement and installation of 32 hardware kits in 2020, 50 hardware kits in 2021, 80 hardware kits in 2022, or other such quantities required and approved in support of IOC in 2022. The estimated dollar value covered by this CJ&A is

$457.9M. These actions are subject to FY18 Congressional approval and appropriation of funding, and inclusion of funding at PB-18 program budgeted levels. The funding profiles are shown below:

Estimated Dollar Value in Millions

FY17 FY18 FY19 FY20 FY21 FY22 Total

RDTE 8 63.5 139.2 105.3 90.5 0 406.5

WPN-2 0 0 0 8.4 16.4 26.6 51.4

Total 8 63.5 139.2 113.7 106.9 26.6 457.9

4. Statutory 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.

Joint Task Force Commanders are increasingly faced with long-range anti-ship missile capabilities which threaten their surface forces and potentially deny access to mission critical areas of operation. The increasing threat requires United States naval surface combatants to have a near-term capability to counter hostile surface forces. The referenced Fleet UON statements address this threat to mission areas and request that improved systems be installed as soon as feasible. If left unfulfilled, capability gaps as described in these UONs would occur, potentially resulting in loss of life or critical mission failure.

The TACTOM AUR missile system alone has unique flight, launch platform, and information processing capabilities to which a seeker modification may be made to achieve dominant capabilities responsive to the evolving maritime threat in a cost effective manner. In order to effectively integrate a sensor suite into a TACTOM missile in a timely manner and quickly transition that capability to the Fleet, full knowledge of the entire missile technical data package (TDP), flight software and production process is required. The TDP for TACTOM is wholly owned by RMS. Additionally, RMS is the only known source that currently possesses the required technical knowledge, expertise, data, and facilities required to produce the TACTOM AUR and to integrate seeker and processing capabilities within the required time and budget available for rapid delivery to the Fleet. Also, since 2012, RMS has invested over $55M in Independent Research and Development work to include studies, mock-ups, and engineering analysis to inform a TACTOM missile seeker solution. There is limited space inside the missile to accommodate seekers, ancillary equipment and the required processor. The RMS potential solution accounts for a seeker suite assembly, a single processor that can manage all modes, associated software, and incorporation of an additional Inertial Measuring Unit for terminal maneuvers. Management of the missile system’s power budget (to include power transfer and restrictions), and system cooling assessment and adjustments also requires extensive insight into the TDP. To pursue this procurement as a competition would inherently bring both a substantial duplication of cost that is not expected to be recovered and unacceptable delays leaving the Fleet without a validated, needed capability by the required fielding date of IOC. Government estimates show that a competition for the development, test, and integration of an alternative seeker suite would add $260M (FY16 Then Year) in cost, and an additional two years to the schedule. In order to achieve a TACTOM missile seeker solution quickly so as to meet the urgent Fleet operational requirements in FY22, the program office is pursuing this modernization capability as a sole-source procurement. This approach will require limited development, help reduce schedule risk to the government, and target affordability by leveraging the aforementioned investment already made by RMS in developing the technology.

As a result of a competitive procurement in 1994, RMS was selected as the sole producer of the TACTOM AUR missile and depot maintenance. RMS maintains and controls both the Level III technical data package (TDP) and the manufacturing documentation for the TACTOM Block IV AUR due to the performance-based nature of the TACTOM Block IV AUR development and production contracts. RMS is not willing to sell the U.S. Navy the Level III TDP, and rights which the Navy lacks, which would be required for a competitive procurement. RMS estimated that if the company was willing to sell the Level III TDP and additional rights, RMS' cost to the U.S. Navy would be well in excess of $250M (FY10$).

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

In accordance with FAR 5.201(b), this requirement has been synopsized. An initial delivery order for analysis, initial development activities and prototyping was published on 14 July 2015 with no responses received. Subsequently, a synopsis for integration and test activities was published on 3 May 2017. A response was received from BAE Systems and considered by the Procuring Contracting Officer. It has been determined that the BAE Systems solution presented does not meet the TACTOM AUR mission requirements. BAE has been notified of this assessment and concurs that they are not suitable for the integration and test activity. Additionally, a Class Waiver of DFARS PGI 206.302-1 was approved on 1 February 2017 by AIR 2.4 Department Head. No additional market research was conducted because it is not practicable, for the reasons discussed in paragraph 5 above, for any company other than RMS 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 support are procured at a fair and reasonable price. An analysis of the contractor’s proposals will be performed by technical analysts and contract specialists, with the aid of field pricing support from Defense Contract Management Agency (DCMA) and Defense Contract Audit Agency (DCAA) as needed. The contracting office will use cost and price analysis as the basis for negotiating a fair and reasonable price for the supplies/support covered by this CJ&A.

8. Actions to Remove Barriers to Future Competition.

For the reasons set forth in paragraph 5, NAVAIR has no plans at this time to compete future contracts for the types of supplies and services covered by this document. RMS is the only uniquely qualified firm to complete these requirements and ensure rapid delivery to the Fleet in the timeframe indicated. If another potential source emerges, NAVAIR will assess whether competition for future requirements is feasible.