Redacted Justification and Approval.pdf

Justification and Approval (J&A) for Other Than Full and Open Competition

FOR OFFICIAL USE ONLY

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I. Contracting Activity.

This Justification and Approval is to request authority for Other Than Full and Open Competition supporting requirements generated for the Air Force Sustainment Center (AFSC), 638 Supply Chain Management Group (SCMG), 411 Supply Chain Management Squadron (SCMS)/GULA. The contracting activity for this requirement is AFSC/PZAAA. The purchase request number supporting this contracting action is FD2060-20-00027.

II. Nature and/or description of the action being processed.

Due to the circumstances described herein, the activity requests authority to acquire the repair listed in this document using Other Than Full and Open Competition as prescribed by FAR 6.302-1, Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements. This action will result in the award of a follow-on contract, which will be a Firm-Fixed Price (FFP), Requirements Indefinite Delivery Contract (IDC) with a basic one-year plus four (4) one-year ordering periods. The validity period for the IDC is December 2020 through December 2025.

This sole source requirement will be acquired from the following company:

KeyW Corporation (KeyW) 7740 Milestone Pkwy Ste 400 Hanover, MD 21076-1754

CAGE: 54JR5

Large Business NAICS Code: 811219

III. Description of supplies/services required to meet agency needs.

This requirement is for depot level repair of the Small Lightweight Ultra High Frequency (UHF) Diplexer (SLUD), National Stock Number (NSN): 5985-01-527-4843GA, Part Number (P/N) 500020-02, a component of the AN/ARC-231 Radio System contained in the UH-1N helicopter.

The UH-1N helicopter is a light-lift utility platform with primary mission purposes to include airlift of emergency, security and disaster response forces, security surveillance of off-base nuclear weapons convoys, response to search and rescue operations, medical evacuation and transport, emergency evacuation of government officials, support for school training and testing, airborne cable inspections, airlift for distinguished visitors, and transport/security for Intercontinental Ballistic Missile (ICBM) support personnel. The Diplexer is a component of the AN/ARC-231 Radio System. When transmitting, the Diplexer is designed to combine and amplify non-coherent carriers into a single radio frequency (RF) antenna output of 85 watts per carrier while providing adequate isolation between the transmit and receive RF paths. In receive mode, the Diplexer splits, filters, and amplifies the incoming signals while maintaining low overall system noise.

This repair IDC includes all tasks required for planning, testing, and support to return unserviceable, exchangeable units of this mission critical system to a serviceable condition for return to the Air Force Supply. This requirement includes all labor, services, and replacement parts necessary to return unserviceable assets to “serviceable,” ready-for-issue condition required for the UH-1N helicopters to maintain airworthiness and remain mission capable.

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• X001: TT&E/BER/NFF (FFP)

• X002: Repair (FFP)

• X003: Data Deliverable (NSP)

This NSN was screened and assigned Repair Method Code (RMC)/Repair Method Suffix Code (RMSC) of R3/R. An RMC of “R3” means to repair, for the second or subsequent time, directly from the actual manufacturer. An RMSC of “R” means the Government does not own the data or the rights to the data needed to repair this part from additional sources. It has been determined to be uneconomical to buy the data or rights to the data. It is uneconomical to reverse engineer the part. This code is used when the Government did not initially purchase the data and/or rights.

IV. Statutory authority permitting other than full and open competition.

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

V. Demonstration that the contractor's unique qualifications or nature of the acquisition requires the use of the authority cited above (applicability of authority).

The agency's minimum needs can only be satisfied by the unique supplies or services available from KeyW. The UH-1N helicopter requires the communications capability to increase operational effectiveness while providing air and ground reconnaissance support during day and night tactical operations. The Diplexer is a specialized component of the AN/ARC-231 Radio System that allows two UHF secure communication platforms to simultaneously utilize a single Satellite Communication (SATCOM) antenna to facilitate coordination of tactical maneuvers on land, air, or sea. The Diplexer has special characteristics which, if not conforming to the original design of the part, could cause failure of the Diplexer and lost capability of the Radio System.

This acquisition is a follow-on to contract FA5824-16-D-0001 awarded sole source to KeyW on 22 December 2015 and expires on 21 December 2020. KeyW owns the drawings, maintenance manuals, acceptance test procedures, and all data rights to the UHF Diplexers. KeyW is the only contractor that has complete design qualification and can provide the unique repair services necessary to provide deliverables without a break in production. A complete technical data package (TDP) is required in order to repair the UHF Diplexers. The Government does not own the data or the rights and does not possess any commercial product sheets, test data, qualification data, support manuals or related data that defines the performance and manufacturing characteristics of the UHF Diplexers, precluding organic and competitive repair. SORAP 05-015 (28 Nov 05) and DMI 06-0034 (12 Feb 2007) has determined that the Diplexer will remain contract repair choice due to high initial expenditure required for startup, the present workload generated by the Diplexer, and the planned retirement of the UH-1N fleet.

Prior repair contracts were sole source to Northrop Grumman Space & Missile Systems (NG), however they subcontracted the repairs to KeyW. The KeyW Corporation Engineering Team designed the SLUD 7981 series originally offered by Windermere, which was subsequently acquired by Northrop Grumman. Given the market demand, KeyW developed a form, fit and function drop

March 2018 FOR OFFICIAL USE ONLY Page 6 of 10 the assumptions that were used while conducting the analysis.

o All costs within the analysis are in Base Year (BY) 2020$. Costs provided are considered Total Year (TY) costs and were converted to BY2020$ using 2018 USAF Raw and Weighted Indices for 3400 Operations and Maintenance, Non-Pay.

o The analysis period is 21 years, FY2020-2040, based on the expected service life of the subject NSN.

o Annual repair costs were based on 2020 repair price adjusted for inflation. Repair quantities are based on best estimated quantities from that same contract.

o Reverse engineering effort requires 4 (four) years. Investment costs are based on 6 (six) engineers working for 4 (four) years to develop the TDP and approve the prototype. The reverse engineering, prototype, and data development were based on an FY2019 effort, adjusted for inflation, and spread evenly across the 4 year effort (FY2020-2023).

o While the reverse engineering effort is being accomplished, analysis assumes repairs are sole source (FY2020-2023).

o Once a new source is qualified, repair costs are reduced by 10% based on estimated savings due to competition (FY2024-2040).

The Savings/Investment Ratio (SIR) and Payback Period are provided below. A desired SIR is $1 or greater, indicating that for every dollar invested, a dollar or more is earned as a return on investment.

The Payback Period indicates how many years it takes to recoup dollars invested.

a. SIR = 0.12 ($0.12 return on every dollar invested)

b. Payback Period = >30 years

c. Total Present Value of New

Based on the analysis, the savings gained through competition do not offset the costs of reverse engineering within the 21 year analysis. Overall, the analysis indicates sole source procurement is the least costly alternative versus qualifying another source. This is additionally supported by the lack of available data/test data and test equipment required to compete the effort, plus the low usage/low demand of these items.

The fleet of 63 each UH-1N Helicopters are retiring and will be replaced by a new aircraft through competition. Retirement of the UH-1N fleet is estimated to begin in FY2020 and will continue drawing down until completely out of AF inventory by FY2040. By FY2025, 24 each UH-1N Helicopters of Air Force Global Strike Command's fleet are scheduled to retire. This will result in a rapid and steady increase in asset availability with more Diplexers to support fewer helicopters (minimizing or eliminating the need for future production). The remaining 39 UH-1N Helicopters are scheduled to retire by FY2040. Therefore, the planned retirement of the UH-1N fleet will not provide

March 2018 FOR OFFICIAL USE ONLY Page 7 of 10 sufficient time to recover the costs of qualifying a new source/alternative solution. Additionally as demonstrated above, award to an alternative source would result in unacceptable delays of more than a decade negatively impacting the Air Force's mission critical ability to ensure the UH-1H helicopter is mission capable.

Accordingly, KeyW is the only firm capable of providing the requirements described in Section III above without the U.S. Air Force experiencing substantial duplication of costs that could not be expected to be recovered through competition and unacceptable delays and in fulfilling its requirements.

VI. Description of efforts made to ensure that offers are solicited from as many potential sources as practicable.

A Sources Sought (SS) / Request for Information (RFI) synopsis was posted to Federal Business Opportunities (FedBizOpps) on 27 November 2018 with a response date of 12 December 2018 under Solicitation Number UH-1N-DIPLEXER_20-00027. The SS/RFI requested responses from interested vendors that possess the expertise, capabilities, and experience to meet qualification requirements for this effort. No vendors responded to the SS/RFI.

This requirement will be synopsized on the Federal Business Opportunities (FedBizOpps) web page as required by FAR 5.201. It is anticipated that sources having an interest in subcontracting may be identified through synopsis. Any source who responds to the Government as a result of this synopsis will be identified to the prime contractor as a potential subcontracting possibility.

VII. Determination by the Contracting Officer that the anticipated cost to the Government will be fair and reasonable.

The overall cost of this acquisition will be fair and reasonable to the Government. In accordance with FAR 15.403-4, the contractor will be required to provide certified cost or pricing data to be used to support the Government's evaluation of the proposed cost. The proposed skill mix of labor, labor hours, types and quantities of material and other direct costs, and direct and indirect rates will be negotiated by the Government based on recommendations from the Defense Contract Management Agency (DCMA) and expert technical personnel supporting the program. The contract price will be negotiated in accordance with the procedures in FAR Part 15 ensuring the ultimate cost to the Government is fair and reasonable.

VIII. Description of the market research conducted and the results, or a statement of the reasons market research was not conducted.

Market Research was conducted on 07 Jan. 2019 and completed 15 May 2019, in accordance with FAR Part 10.001 and 10.002. The market research techniques used included Sources Sought Synopsis (SS)/Request for Information (RFI), Internet searches, and Government databases.

As described in Section VI above, a SS/RFI was posted to FedBizOpps advising industry of the pending acquisition and soliciting inquiries from interested vendors. The SS/RFI was posted on 27

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November 2018 under Solicitation Number UH-1N-DIPLEXER_20-00027. No responses were received.

Internet searches were conducted at the following websites to search for possible repair sources using search criteria “P/N: 500020-02, NSN: 5985-01-527-4843GA, and keyword “Aircraft Diplexer”.

Google: using search criteria “P/N: 500020-02” via https://www.google.com/?gws_rd=ssl.

Search returned many references to chemical (1.6, Hexanediaminium) and references to the OEM (KeyW). No other repair sources with access to the necessary technical data were found.

Thomasnet.com: using search criteria keyword “Aircraft Diplexer” via https://www.thomasnet.com.

Two companies were identified. However, due to lack of proprietary data neither of these companies can meet this Government requirement.

Joint Engineering Data Management Information Control System (JEDMICS): using NSN:

5985-01-527-4843GA via https://jedmics.af.mil/webjedmics/index.jsp.

Results showed that the Government does not own any data to allow competing this effort or to establish an Organic Depot Level repair capability.

Small Business Administration Dynamic Small Business Search: using NAICS Code 811219 and key words “0250KTU01”, “0116KTU01”, “0116KTU02 and “0201KCR01” via https://dsbs.sba.gov/dsbs/, and https://catalog.data.gov/dataset/dynamic-small-business-search-dsbs. This query produced no potential small business and small disadvantaged business opportunities.

Lastly, vendor surveys were conducted on past and present manufacturers. As a result, it was determined that prior manufacturers do not have the repair capability, they were only used as pass-through contractors.

This item does not fit the definition of a commercial item as defined in FAR Part 2.101. This item is for military unique and is not customarily used by the general public or by non-Governmental entities. The Government requires parts that meet an exact form, fit, and function as determined by the specific mission.

The market research concluded KeyW is the only vendor capable of fulfilling the Government's requirement. No other repair sources exist with access to the necessary technical data. As stated in Section V, the Government has limited repair data that is insufficient for using other than current source(s) as indicated by JEDMICS. Based on available information and engineering knowledge of the item and the aerospace industry, the only viable source for the manufacture or repair of this part is KeyW.

IX. Any other facts supporting the use of Other Than Full and Open Competition.

None.

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X. List of any sources that expressed, in writing, an interest in the acquisition.

See Section VI above.

XI. A statement of the actions, if any, the agency may take to remove or overcome any barriers to competition before making subsequent acquisitions for the supplies or services required.

The Government does not possess the TDP for the SLUD to support full and open competition. An inquiry for sell of the TDP was sent to the OEM on 12 July 2019. The OEM responded on 15 July 2019 and declined interest in selling the TDP.

A reverse engineering effort is estimated and up to a decade for delivery of first production assets. Due to the high cost anticipated with pursuing a reverse engineering effort as well as the long lead time, the Government would not see a Return on Investment (RIO) before the expected program end life in 2040. This would cause an unacceptable delay in meeting our Air Force requirements, therefore determined uneconomical for the Government to pursue.

There are no plans to remove barriers to competition given the present workload generated by the Diplexer as well as the potentially diminished future workload associated with the UH-1H Helicopter as its fleet of 63 each are being replaced by a new aircraft via competition. Retirement of the UH-1N fleet is estimated to begin in FY2020 and will continue drawing down until completely out of AF inventory by FY2040. By FY2025, 24 each UH-1N Helicopters of Air Force Global Strike Command's fleet are scheduled to retire. The remaining 39 UH-1N Helicopters are scheduled to retire by FY2040. Therefore, the planned retirement of the UH-1N fleet will not provide sufficient time to recover the costs of qualifying a new source/alternative solution.

The plan to break barriers to competition in the prior J&A was to continue engaging the OEM on selling the Technical Data Package (TDP) to the Government. That plan was executed but the OEM continues to decline to sell the TDP to the Government. Based on fulfillment of the prior plan, the current J&A does not require higher level approval in accordance with DFARS PGI 206.304(a)(S-70) (ii).

XII. Certification by the Contracting Officer.

As evidenced by my signature above, I have determined this document to be both accurate and complete to the best of my knowledge and belief.

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XIII. Certification by the technical/requirements personnel.

As evidenced by my (our) signature(s) above, I (we) certify that any supporting data contained herein, which is my (our) responsibility, is both accurate and complete.