F-35_Sustainment_CJA_FY21-23_(Atch_1)_-31_July__v1.doc

J&A NUMBER

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 F-35 Joint Program Office

200 12th Street South, Suite 600

Arlington, VA 22202-5402

POC: Rene Thompson, AIR-2.6, (703) 602-8080

2. Description of the Actions Being Approved.

This Class Justification and Approval (CJ&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 non-recurring and recurring sustainment support for all fielded F-35 aircraft. This CJ&A is for award of a Site Activation and Hardware (SAHW) IDIQ contract with a 3yr ordering period, award of a Fiscal Years 2021-2023 Air Vehicle Sustainment Contract (FY21-23AVSC), and any contract modifications necessary within the foregoing scope. Authority to act under this CJ&A expires on 30 Mar 2024.

3. Description of Supplies/Services.

The SAHW effort (estimated period of performance of 1 April 2021 – 30 March 2028) to support non-recurring sustainment activities including: Training Material and Infrastructure, Support Equipment, Autonomic Logistics Information System (ALIS) Material and Infrastructure, Site Activation Activity, Depot Activation, Reliability, Maintainability and Health Maturation, Structural Integrity Program, and Low Observable Maturation. The SAHW contract includes standup of F-35 locations and associated personnel, including global depot facilities, and procurement of infrastructure needed at each site.

The FY21-23AVSC (estimated Period of Performance (PoP) of 01 January 2021 to 31 December 2025) will provide follow-on support for recurring sustainment and Performance Based Logistics (PBL) Operations across all fielded F-35 aircraft. FY21-23AVSC support includes: Program Management, Sustainment Integration Activities, Sustaining Engineering Support, Configuration Management, Product Support Management, Software Sustainment, ALIS Maintenance and Operations, Fleet Management, Security Management, Joint Technical Data Management and Upkeep, Low Observable Management, Training and Training Support, Training Systems Operations, Support Equipment, Supply Support and Management Services, Industrial Operations, Configuration Management, Reliability and Maintainability Improvements, Performance Monitoring/Trending, Cost Reporting, Operations and Support Cost Reduction Initiatives, Warfighter Support, Support of Partner/Customer Unique Requirements, Ferry of Aircraft, Engineering Change Management, Support of the Joint Reprogramming Enterprise (JRE), and Diminishing Manufacturing Sources and Material Shortages (DMSMS).

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

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

5. Rationale Justifying Use of Cited Statutory Authority.

Sole source basis is necessary because F-35 Enterprise participants, to include the U.S. Services, International Partners, and our Foreign Military Sales customers, will experience unacceptable delays in fulfilling requirements necessary to complete the mission of sustaining the F-35 weapon system.

LM Aero is the original designer, developer, and manufacturer of the F-35 aircraft and is the only source with the engineering capabilities required to provide sustainment support for the F-35 aircraft. As the original designer of the F-35, LM Aero solely possesses the unique design knowledge, experience, and engineering technical data needed to perform the required sustainment support without unacceptable delays in fulfilling the F-35 Program’s requirements.

The F-35 Lightning II JSF Acquisition Strategy version 5.0, was approved on 16 October 2018 by the Under Secretary of Defense (Acquisition and Sustainment). The F-35 Air System is still maturing, and has yet to enter Full Rate Production. F-35 Program sustainment baseline specification does not yet exist. The Air Vehicle and Autonomic Logistics Information System (ALIS) requirements are progressing towards sustainment baselines in both hardware and software. Technical configuration differences between the various LRIP aircraft procurements translates to a dynamically evolving sustainment environment. During this PoP, the F-35 fleet will be in the process of fielding a wide range of modifications requiring LM Aero technical data and site support to include a critical Service Life Limited Program (SLLP) phase. These aircraft modifications are needed to progress the fleet towards a population reflective of the newly established production line standard. These evolving aircraft configurations drive numerous variations of technical data packages to support each specific configuration. Procuring data packages prior to achieving a technical baseline among a large enough population of fielded aircraft is cost prohibitive, detrimental to F-35 sustainment program stability, and would not occur in time to support the F-35 program’s sustainment needs. At this time, competition for the type of work to be performed under the FY21-23AVSC and SAHW is not considered practical.

The FY21-23AVSC contract provides the remaining vital recurring sustainment support to the F-35 fleet of aircraft. Without the services provided under the contract, warfighting operations tempo would decline, F-35 fleet readiness would be negatively impacted, Pilot and Maintainer training would be delayed, and sustaining engineering work critical to aircraft performance and safety would not be performed. This would create delays in participant milestones such as Initial Operating Capabilities and First Aircraft Arrivals.

Additionally, key Sustainment hardware such as training devices, support equipment, and ALIS equipment along with site activation processes are to be procured under the SAHW contract. These assets and services are required to sustain the aircraft outlined above. In order to avoid infrastructure stand-up delays, and based upon the projected first aircraft arrival dates at new global locations for the F-35, the procurement of key Sustainment hardware and execution of processes must begin in order to support the warfighter. Having another contractor redesign and qualify equipment, such as training systems, would take at a minimum five years and would require sufficient data in aircraft software in order for another company to integrate the systems with the F-35. The timeline for this acquisition would unacceptably delay the provision of training systems to the fleet.

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 from 15 September 2017 thru 16 October 2017. The Government received one response to the synopsis. The response was a capability statement provided by The Boeing Company. The response did not alleviate the Government’s concerns that given the variations between the aircraft LRIP buys, the wide-range of configuration states, and a dynamically evolving sustainment environment, it is not feasible for this work to be performed by another company. After evaluating the response, the Government could not move forward with a competitive procurement.

In accordance with DFARS PGI 206.302-1, a waiver from posting sources sought notice was approved on 11 September 2018.

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. LM Aero will submit a formal proposal with sufficient information, including certified cost or pricing data, as well as updated verifiable actuals, to support the accuracy and reliability of the proposed prices/costs. The Defense Contract Management Agency and Defense Contract Audit Agency at LM Aero will be requested to provide input. In addition, the results of previous sustainment negotiations and performance data will provide a baseline and lessons learned to inform follow-on negotiations.

8. Actions to Remove Barriers to Future Competition.

The Government will continue to conduct market research to gauge the marketplace capabilities for future requirements. The program will work to identify core sustainment requirements and has instituted a data review process where data to be developed and delivered under the contract will be identified and procured for future competition needs. As such, the Government will be looking for opportunities to compete future requirements. As the Government has continued to evaluate the SAHW and AVSC requirements from the last CJ&A AIR-2.6/17-0005, the program has determined that training support and security support under AVSC could be competed in the future. The program intends to contract with LM for transition support and compete the requirements in FY23.

The F-35 program is unique in that it is a joint program of 3 U.S. Services and 8 international partners. The program, with its partners, supports the Government efforts to identify opportunities, acquire data, and move towards a more competitive environment. 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. Currently, LM Aero fosters a competitive environment among subcontractors to the maximum extent practicable, particularly for airframe commodities, such as machined or composite parts where numerous qualified sources exist. The Government promotes competition for subcontract opportunities on the FedBizOpps website by directing expressions of interest to the LM Aero Subcontracts Department.

CJ&A Air-2.6/17-0005

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