redacted_FLIR_Repair_Extension_JA_rev2_Redacted.pdf

Control No: W9113M-15-D-0001 P00014 Contractor: FLIR Surveillance, Inc.

Program/Equipment: FLIR Sensor Systems

FOR OFFICIAL USE ONLY

JUSTIFICATION REVIEW DOCUMENT

FAR PART 6 JUSTIFICATION AND APPROVAL FOR OTHER THAN

FULL AND OPEN COMPETITION

Program/Equipment: Product Manager (PdM) Electro-Optic/Infrared (EO/IR) Payloads and PdM Force Protection Systems (hereafter referred to as the Program Offices) Sensor Components Repair/Refurbishment.

Authority: 10 U.S.C. 2304(c)(1), as implemented by FAR Part 6.302-1 -- Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.

Herrin 7-0093

Reviews: I have reviewed this justification and find it adequate to support other than full and open competition.

FAR Part 6 Justification and Approval for Other than

Full and Open Competition

1. Contracting Activity: The U.S. Army Contracting Command-Redstone (ACC-RSA), Contracting & Acquisition Management Office (ACC-RSA-CCAM-CAB-B), Huntsville, AL 35807, is the contracting agency responsible for this acquisition.

2. Description of Action: The Product Manager (PdM) Electro-Optic/Infrared (EO/IR) Payloads and PdM Force Protection Systems (hereafter Program Offices) request approval to award a ontract (hereafter “FLIR contract” or “contract number W9113M-15-D-0001”), which is currently valued at The contractor, FLIR Systems, Inc., is located at 27700 South West Parkway Avenue, Wilsonville, Oregon 97070-8238, CAGE Code 64869. The Government projects award of this modification on or before 25 November of fiscal year (FY) 2018, and it is anticipated that Operations and Maintenance, Army (OMA), Overseas Contingency Operation (OCO), “pseudo” FMS (to include Defense Department and State Department initiatives), or other U.S Government (USG) agency funds (including Homeland Security may be used.

The FLIR contract was awarded non-competitively pursuant to the authority of 10 U.S.C.

2304(c)(1), as implemented by FAR Part 6.302-1 -- only one responsible source and no other supplies or services will satisfy agency requirements. All systems requiring R&R servicing under this contract are FLIR systems previously purchased and fielded by the Government (and its FMS customers). FLIR is the Original Equipment Manufacturer (OEM) of the FLIR systems and exclusively retains the proprietary rights in data and information necessary to repair the FLIR systems currently being managed by the Program Offices. FLIR is the only source for R&R services due to its proprietary control over the FLIR systems.

3. Description of Supplies/Services: The service provided by this contract extension/ceiling modification is continued sustainment support to a suite of managed by the Program Offices. These fielded sensors were previously procured from FLIR and consist of the series of sensor systems (hereafter collectively referred to as “FLIR systems”). This sustainment support effort for the FLIR systems in both the Continental United States (CONUS) and Outside the Continental United States (OCONUS), consists of integrated logistics support (ILS), proactive maintenance, sensor repair, system upgrades, and demilitarization for the Program Offices, to include Foreign Military Sales (FMS) cases.2

1 Not-to exceed (NTE) price ceiling.

2 Current support also includes the logging of system repair status in a website managed by the government and analysis of failed components to increase reliability.

4. Authority Cited: 10 U.S.C. 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. Reason for Authority Cited:

As described at FAR 6.302-1(a)(2), when the supplies or services required by the agency are available from only one responsible source, or, for DoD, NASA, and the Coast Guard, from only one or a limited number of responsible sources, and no other types of supplies or services will satisfy agency requirements, full and open competition need not be provided. In accordance with FAR 6.302-1(a)(2)(iii), services may be deemed to be available only from the original source in the case of follow-on contracts for the continued provision of highly specialized services when it is likely that award to any other source would result in substantial duplication of cost to the Government that is not expected to be recovered through competition.

FLIR, 27700 South West Parkway Avenue, Wilsonville, Oregon 97070-8238, CAGE Code 64869, is the OEM of the FLIR systems that are part of the Program Offices’ systems. System sustainment requires the use of identical/interchangeable FLIR parts/components.

The Government does not have depot capability to repair these FLIR systems due to FLIR’s proprietary rights. The current maintenance/repair concept for the Program Offices’ systems is to return them to the OEM. All faults require removal and replacement on the sensor/camera by specifically trained technicians following FLIR proprietary schematics/drawings. FLIR owns the intellectual property rights for all FLIR developed sensors and maintains tight and exclusive control over those rights for competitive and investment reasons (these are FLIR self-funded/internal research and development product and technology development items).

The Program Office’s FLIR systems are operated continuously, which requires 24/7 service of the sensors and are classified as highly specialized equipment due to specification of wavelength (FLIR proprietary information) that must be cooled to very low temperatures to operate efficiently. This cold finger technology adds significant complexity for camera repairs.

These repairs are mission critical to worldwide contingency operations. In December 2015, the Program Offices were informed that FLIR system presence in would exist into the near future with expectations that additional force protection assets would be required in order to maintain regional stability. Likewise, requirements for force protection systems and support have increased in and other undisclosed locations that counter ISIS advancement and destabilization tactics.

are operated continuously, which requires 24/7 service of the sensors specification of wavelength (FLIR proprietary information) that must be cooled to very low temperatures to operate efficiently. cold finger technology a and other undisclosed locations that counter ISIS advancement and destabilization tactics.

in order to maintain regional stability. Likewise, requirements for force protection systems and support have increased in removal and replacement on the sensor/camera by specifically trained technicians following FLIR proprietary schematics/drawings.

The requirement for the repair of the FLIR systems, based on current and projected requirements, is currently at unprecedented high levels. Aging systems and adversary technological advancements have combined to complicate and further challenge the force protection mission in OIR, OFS, and the HoA.

. The deployed FLIR systems are requiring a greater number of repairs and a gap in support will adversely affect the ability to sustain the

Obtaining sustainment support from another source would result in substantial duplication of cost not likely to be recovered through competition. FLIR owns the proprietary rights to FLIR replacement parts/components as well as the systems’ schematics/drawings necessary for the removal and replacement of failed or failing parts/components. In 2014, the Government estimated that the cost of retrofitting the Program Office’s integrated tactical systems with alternate sensors would easily exceed based on the cost of new sensors/camera, integration of sensor/camera with towers and related hardware, testing of complete systems, manuals and training. Additionally, the Government’s efforts to negotiate and obtain a technical data package (TDP) from FLIR have been unsuccessful as FLIR is not interested in compromising its competitive position in this trade space. Even if a TDP for the schematics/drawings for repair and replacement could be obtained, the Government would be faced with substantial costs related to the introduction of different parts (manufactured by other vendors) into the FLIR systems, which would require additional testing to ensure the parts met operational and interoperability requirements, and additional bench stock and training. Similarly, even if FLIR’s schematics and drawings could be reversed engineered consistent with FLIR’s existing patents and copyrights, the cost would be substantial. Thus, this increase to the current contract’s ceiling is substantially less than any of the three alternatives discussed above.

6. Efforts to Obtain Competition:

a. Effective Competition: Effective competition is not anticipated for this effort. ACC-APG Belvoir, on behalf of the Program Offices, issued an RFI on from 17 February 2017 thru 18 March 2017 as a means of conducting market research to identify parties having an interest in and the resources to support this requirement for providing sustainment support for a suite of EO/IR Sensors managed by the Program Offices.

. The Contracting Officer anticipates publishing the notices required by FAR 5.201 on 10 November 2017 and any bids or proposals received shall be considered for that effort.

b. Subcontracting Competition: The Contracting Officer will incorporate FAR clause

52.244-5 Competition in Subcontracting in the base contract via the PoP extension modification. Additionally, the current contract contains FAR 52.219-8, Utilization of Small Business Concerns. USASMDC/ARSTRAT will ensure that current goals established within the contract are followed.

7. Actions to Increase Competition: The Government is working a follow-on contract to sustain these FLIR systems, and thus attempted, unsuccessfully, to find other ways to increase competition. However, FLIR developed and owns the commercial proprietary

The requirement for the repair of the FLIR systems, based on current and projected requirements, is currently at unprecedented high levels. AAging systems and adversary technological advancements have combined to complicate and further challenge the force protection mission in OIR, OFS, and the HoA.

. The deployed FLIR systems are requiring a greater number of repairs and a gap in support will adversely affect the ability to sustain the specifications and offers commercial repair and refurbishment of Thus, actions to increase competition for this requirement are not feasible. This is a sole source IDIQ extension/ceiling increase modification to FLIR for the commercial R&R of Government-owned sensors/cameras that are currently fielded. However, as stated in paragraph 6b, the Government will require the contractor to select subcontractors (including suppliers) on a competitive basis to the maximum practical extent consistent with the objectives and requirements of the contract. This will ensure that the contractor obtains as much subcontracting competition as possible under this effort. Note that the contractor is also required to submit a Subcontracting Plan, per FAR clause 52.219-9 (Dev) September 2013.

The Government will continue to conduct informal market research to ascertain if there are changes in the market place. This will be done through internet searches, attendance at trade shows, conferences and meetings, participation in cross-functional integrated product teams (IPTs), and industry forums.

8. Market Research: In accordance with Defense Federal Acquisition Regulation Supplement (DFARS) 205.205-71, DFARS 206.302-1(d), and DFARS Procedures, Guidance and Information (PGI) 206.302-1(d), a request for information (RFI) was posted to Federal Business Opportunities on 17 February 2017 for 30 days by ACC-APG Belvoir.

One source (i.e., FLIR) responded from the commercial marketplace to the request for information and previous acquisition strategies suggest that this effort must be provided by the OEM. Through the Government’s analysis of the OEM’s capability statement, it was determined that FLIR, the sole OEM vendor that responded to the RFI, can satisfy the performance requirements of the contract. A comprehensive market research report is available in the Paperless Contracting File (PCF) cabinet.

9. Interested Sources: FLIR, 27700 South West Parkway Avenue, Wilsonville, Oregon 97070-8238, CAGE Code 64869, was the only vendor responding to the RFI. To date, no other sources have written to express interest in the acquisition. The Contracting Officer anticipates publishing the notices required by FAR 5.201 on 10 November 2017 and any bids or proposals received shall be considered for that effort.

10. Other Facts:

a. Procurement History: This is a sole source contract extension/ceiling increase modification to the IDIQ contract awarded to FLIR for the commercial R&R of Government-owned sensors/cameras that are currently fielded. Procurement history to date includes:

Basis for fair and reasonable pricing: Commercial pricing

b. Other Facts: None.

11. Technical Certification: I certify that the supporting data under my cognizance which are included in the justification are accurate and complete to the best of my knowledge and belief.

12. Requirements Certification: I certify that the supporting data under my cognizance which are included in the justification are accurate and complete to the best of my knowledge and belief.

13. Fair and Reasonable Cost Determination: I hereby determine that the anticipated cost or price to the Government for this action will be fair and reasonable based on cost analysis and independent Government estimate. Certified cost or pricing data will not be required as this is a commercial item, thus the exception at FAR 15.403-1(b)(3) applies.

Typed Name: Date:

Title: Contracting Officer

Signature:

14. Contracting Officer Certification: I certify that this justification is accurate and complete to the best of my knowledge and belief.

Typed Name: Date:

Title: Contracting Officer

Signature: