JA_Domestic_REDACTED.docx.pdf

J&A Number: 18-0256

DEPARTMENT OF THE NAVY

NAVAL AIR SYSTEMS COMMAND

RADM WILLIAM A MOFFETT BUILDING

47123 BUSE ROAD BLDG 2272

PATUXENT RIVER MARYLAND 20670-1547

IN REPLY REFER TO

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 Justification and Approval (J&A) authorizes and approves on a sole source basis a contract to Lockheed Martin Rotary and Mission Systems (LM RMS) for Full Rate Production (FRP)

MH-60R aircraft for the United States Navy (USN). In addition to the aircraft, LM RMS will provide aircraft associated support including systems engineering, systems/project management, tooling, non-recurring engineering, publications, and related data in support of these items.

3. Description of Supplies/Services

The planned contract action is a new production contract for the manufacture, production, installation, and delivery of eight (8) MH-60R aircraft for the USN and associated support. The supplies and services to be procured in support of the FRP MH-60R aircraft include, but are not limited to: MH-60R Common Cockpits, Air Vehicles, tooling, publications, MH-60R Air

Weapons Systems, MH-60R Provisioned Items, and related supplies and services. Related supplies and services will include: incorporation of deficiency corrections (hardware and software); sustaining engineering, to include technology insertions, and obsolescence issues;

system engineering and project management; logistics and engineering support (including non-recurring engineering (NRE)); Diminishing Manufacturing Sources and Material Shortages

(DMSMS); and technical, administrative, and financial data. The supplies and support acquired in this procurement will satisfy the Government’s minimum needs. The total J&A estimated value for eight (8) aircraft and associated support is $400 million in Aircraft Procurement, Navy

(APN) funds. The table below provides anticipated funding.

Estimated Dollar Value in Millions

FY 2018 Total

APN-1 400 400

Total 400 $400

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

LM RMS has been the sole source designer, developer, manufacturer, and systems integrator of the MH-60R/S since 1998. LM RMS is the only source with the requisite skilled personnel, manufacturing tooling, test equipment, and proprietary data to perform in-depth programmatic, engineering, and logistics of sustainment and repair activities. It possesses the unique engineering data, technical skills, established tooling, support equipment, facilities, and requisite knowledge of the design, fabrication, and production of the H-60 aircraft required to perform these efforts. As the current MH-60 manufacturer, LM RMS is the only

Contractor able to provide to the USN the production line changes to components common with US Army UH-60 Black Hawk, and ensure alignment between USN and other services related to retrofit configurations. In addition, LM RMS is the only source with the requisite knowledge of the aircraft integrated weapon systems, mission systems, avionics, software and other subsystems, design, aircraft structural loads, safety factors, aerodynamic and structural appraisal of fatigue effects databases, unique operational performance, maintenance and support characteristics of the H-60 to meet the Government's future sustainment requirements.

The Government does not possess the requisite technical and software data packages or associated data rights to conduct a competitive procurement of these requirements. During H-

60 development and production, the requisite LM RMS proprietary data was never procured, nor will LM RMS sell or release requisite limited rights data to the Government.

Per FAR 6.302-1(a)(2)(ii)(A), substantial costs incurred by the Government from MH-60R design and development efforts would result in substantial duplication of costs not expected to be recovered through competition. AIR-4.2 estimates that an award to a source other than

LM RMS would result in approximately $2.3B of duplicative costs to develop, integrate major systems, and test the original MH-60R design. These costs are based on the Research, Development, Test, & Evaluation (RDT&E) life cycle cost for the MH-60R aircraft and 27 years of RDT&E to get to the current configuration of the MH-60R aircraft. Also included in the duplicative costs are additional Government costs associated with these efforts for logistics costs associated with maintaining multiple configurations throughout the Fleet and testing costs associated with a new aircraft design. There are no planned USN MH-60R procurements beyond the eight (8) units. The Government does not anticipate it would be able to recoup the duplicative costs detailed above based on the limited number of total aircraft units being procured over this period of time. As a result, LM RMS is the only responsible source capable of providing supplies and/or services to satisfy Navy requirements.

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

In accordance with DFARS 206.302-1(d), a Sources Sought was posted on the FEDBIZOPPS website on 26 March 2018; one response was received. American Service Network (ASN)

Corporation provided a Capability Statement that was reviewed by the Government. Based on

NAVAIR’s requirements, it was determined that ASN Corporation is incapable of meeting these requirements. NAVAIR provided a response via email on 12 April 2018 to ASN

Corporation informing them that their Capability Statement does not meet the requirement.

ASN Corporation provided concurrence to this response.

As required by FAR 5.201, a synopsis of the requirements under this J&A was published in

FEDBIZOPPS on 11 April 2018; to date, no responses have been received. The Contracting

Officer will evaluate any responses to the synopsis prior to award. Additionally, any parties interested in subcontracting opportunities will be referred to LM RMS to maximize competition in subcontracted efforts.

7. Determination of Fair and Reasonable Cost

In accordance with FAR 15.402(a), the Contracting Officer has determined that the anticipated costs to the Government for the supplies and services covered by this J&A will be fair and reasonable. The Contractor will submit cost or pricing data in accordance with FAR 15.403-4.

Analysis of proposals will be performed by the PMA-299 Program Office, NAVAIR 4.2 Cost

Department, and NAVAIR Contract Specialists, with the assistance of the Defense Contract

Management Agency (DCMA) and the Defense Contract Audit Agency (DCAA). The

Contracting Officer will analyze various cost elements that are presented in the proposal, requests for information, review actuals and data from previous procurements and programs for comparison. If a rate agreement is not in place between LM RMS and DCMA at the time of proposal evaluation, the Contracting Officer will work with DCMA and DCAA to establish a rate position, to include escalation, for negotiation of the contract action. The Contracting

Officer will utilize cost and price analysis as the basis for negotiating a fair and reasonable price.

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/services covered by the J&A. If other potential sources emerge, NAVAIR will assess capabilities and determine the feasibility of competition.