REDACTED - NGATS JA - Control No. CAO-21-0176 (1-4-2023).pdf

Controlled Unclassified Information

Control No: CAO-21-0176

Justification and Approval for Other Than Full and Open Competition

1. CONTRACTING ACTIVITY: U.S. Army Contracting Command – New Jersey

2. DESCRIPTION OF ACTION: Product Director Test Measurement and Diagnostic Equipment (PD TMDE) requests approval to award a three year follow-on Firm-Fixed- Price (FFP) Indefinite Delivery Indefinite Quantity (IDIQ) Contract to produce the Next Generation Automated Test System (NGATS) for fielding to the Active Army Armor Brigade Combat Teams (ABCTs) and the National Guard (NGREA). It is anticipated that will be used to satisfy requirements.

3. DESCRIPTION OF SUPPLIES/SERVICES: Next Generation Automated Test Systems (NGATS) is the latest addition to the Army’s approved family of Automated Test Equipment (ATE). It is a highly mobile, rapidly deployable, general-purpose, reconfigurable automatic test system which directly supports testing and screening of Army weapon systems to maintain their readiness to shoot, move, and communicate.

NGATS is a modern, state of the art system designed and built utilizing open architecture and commercial instrumentation. The NGATS was designed and developed to replace the Direct Support Electrical System Test Set, Integrated Family of Automated Test Equipment Version (V) 3 and Version (V) 5 and to support future weapon systems requirements. The NGATS is the only Army automated test system which has the capability to perform field level diagnostics at the Brigade level for the repair of multiple Army platforms, including Abrams, Bradley, Stryker, Husky Mounted Detection System, and Common Remotely Operated Weapons Systems.

The current NGATS Full Rate Production Contract, W15QKN-14-D-0106, was competitively awarded to The Boeing Company, St. Louis, MO (hereinafter referred to as Boeing) in September 2014. Under contract W15QKN-14-D-0106, the contractor provides the Army with NGATS consoles, self-test adapters and shelter integration to meet the Army’s fielding schedule. The console is a standalone unit and requires a self-test adapter which allows the system to be tested and to ensure it is functional. Shelter integration is the process of integrating the console into an International Standard for Organization (ISO) Container or “Shelter” to protect the console from the elements while being used outdoors. Shelter integration will be required to support the consoles to be field ready for active Army units. The NGATS program has no known requirements for production past FY24.

In 2019, there was an identified requirement to procure 160 NGATS systems to support the ABCTs, the NGREAs and the Abrams, Bradley, Stryker, Blackhawk, depots, and the school house programs for a five-year period. The Government commenced work on a competitive solicitation while the requirements for the five year IDIQ were being finalized. In the 4QFY20 the requirements were reduced via a Program Objective

Memorandum (POM) decision from Army Leadership. Additionally, the AMC Commander made a decision in 4QFY20 to only field a total of 50 NGATS for the ABCTs and the NGREAs, which significantly reduced the requirement in terms of quantity and period of performance. The current POM only supports the acquisition of new consoles thru FY24. A follow-on contract award to the incumbent, Boeing, is necessary to meet the fielding requirements for the NGATS consoles, self-test adapters and shelter integration in order to meet the FY22 through FY24 Army fielding plan.

The proposed IDIQ contract will contain three (3) one-year ordering periods. The maximum ceiling amount for this contract is for the combined three (3) year period which includes an estimated total of 50 NGATS consoles, 50 self-test adapters and 2 8 shelter integrations. The anticipated award date is 21 September 2021.

The proposed ceiling includes yearly estimated requirements for the NGATS Console, Self-Test Interface Adapters (STIA), and Shelter Integration requirements which are outlined in the chart below. The calculations include Government estimates for each item in a given year. Standard inflation is applied in the out-years based on historical inflation for the requirements.

IGE Consoles, Self Test adapter, Shelter Integration

Fiscal Year Quantity Requirements Unit Price Extended

FY22 Army 6 Console, STIA, & Shelter Integration

6 Console

6 STIA

6 Shelter Integration

FY22 NGREA 10 Console & STIA

10 Console

10 STIA

FY23 Army 6 Console, STIA, & Shelter Integration

6 Console

6 STIA

6 Shelter Integration

FY23 NGREA 10 Console & STIA

10 Console

10 STIA

FY23 Other 11 Console, STIA, & Shelter Integration

11 Console

11 STIA

11 Shelter Integration

FY24 Army 5 Console, STIA, & Shelter Integration

FY24 NGREA 2 Console & STIA

2 Console

2 STIA

Total

4. AUTHORITY CITED: Title 10, United States Code (U.S.C.) Section 2304(c)(1), as implemented by Federal Acquisition Regulation (FAR) 6.302-1(a)(2)(ii)(B) Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.

5. REASON FOR CITED AUTHORITY: As described at FAR 6.302-1(a)(2)(ii)(B), supplies may be deemed to be available only from the original source in the case of a follow-on contract for the continued development or production of a major system or highly specialized equipment, including major components thereof, when it is likely that award to any other source would result in unacceptable delays in fulfilling the agency's requirements. This authority is applicable for the acquisition of NGATS consoles, self-test adapters, and shelter integration. Boeing is the current and only producer of NGATS production systems, and the only company that can manufacture and deliver the NGATS consoles, adapters and shelter integration in the time frame necessary to meet the fielding requirements.

The current Army fielding plan for the NGATS consoles, self-test adapters and shelter integration supported by this J&A is as follows: 50 NGATS Consoles and self-test adapters and 28 shelter integrations in FY22-FY24. While recent market research indicates that there may be other companies in the marketplace with the potential to have NGATS production capability, none of these companies currently have the production capability required to meet the aforementioned Army fielding plan. A vendor other than Boeing would have to build the First Article, conduct First Article Testing (FAT), conduct Qualification Testing, produce, and deliver the required quantities, to meet the fielding requirements. All of these events, which need to be accomplished sequentially, would take approximately to complete, and would potentially result in the delivery of only the first production units. The details of these timelines are depicted in the chart below, and discussed in detail thereunder.

Event Non- Competitive

Duration

Competitive Duration

Delay

Award Contract 7 months 9 months 2 months

Build First Article N/A

Conduct FAT and Qualification Testing

N/A

Establish Production Line N/A

Delivery of First production unit to the Government

Unacceptable Delay

a. Building a First Article involves procuring materials and instruments, developing detailed work instructions, and ensuring the facility is set up to produce the first article. Based on the two previous contracts, this step will take a company not currently producing the system approximately to accomplish. The orders for the required parts have long lead time items which include key instruments, cable sets, , which can take up to to be delivered. A new vendor building the first article would request an order for a single quantity buy of individual items which significantly increases the lead-time, due to the fact that suppliers prioritize orders that contain larger quantities. Most of these items only have single a source of supply.

b. The completion of FAT testing involves a variety of comprehensive tests to ensure that the item produced will perform to the intended system specification. Often times, this testing involves comprehensive coordination with specialized facilities. The tests are typically conducted serially in nature which is time consuming. This step will take a company not currently producing the system to accomplish, based on experience with the previous two contracts.

c. Ramping up to full scale production involves establishing a line with trained employees. Establishing a line entails ordering materials, developing quality, inspection and testing processes, and manufacturing the items. This will take a company not currently producing the system to accomplish. The build process for the initial first article NGATS Console is not accomplished via a production line. The first article unit is built in a shop with employees working through procedures and making notes to assemble the production line once the first unit is accepted. This has been the process demonstrated in both previous contracts for this requirement. Once the first article is accepted, the Contractor begins setting up a production line in preparation for a Production Readiness Review, which includes ordering parts, building the production line and establishing work instructions.

d. Based on observations from the previous contract at least is required to deliver the initial NGATS console and self-test adapter for a new vendor after the production line is complete. This additional required time is due to the learning curve for conducting the Acceptance Test Procedures 1 and 2 and developing internal work instructions/processes for shelter integration and testing procedures. Work instructions take time to refine which allows the producer to become more efficient at building consoles. Boeing’s first consoles took an average of to produce initially. After of achieving efficiencies in the production line and work instructions Boeing is currently able to produce the NGATS systems in , on average.

It should be noted that the above dates are aggressive in that there is an assumption a first-time contractor would be successful at building the first article, and passing FAT. To this end, there is inherently more risk in a contractor other than Boeing attempting to build the NGATS consoles, self-test adapters and shelter integration as Boeing has previously demonstrated successful FAT and delivery. It should also be noted that the standard Army Procurement Acquisition Lead Time (PALT) to issue a solicitation and award a contract of this dollar value would be at least 9 months. Changes in appropriations to procure more consoles, self-test adapters and shelter integration came as a result of Army Materiel Command senior leadership's direction. These additional requirements came to fruition in 4QFY20. Specifically, the Army received authority to procure additional NGATS consoles, self-test adapters and shelter integration in 4QFY20. Taking into consideration PALT to competitively award a new contract and the manufacturing timelines above, delivery of the initial NGATS console and self-test adapter would not occur until FY25. Based on the analysis herein, this delay is unacceptable as the Army fielding plan which requires deliveries in FY22, 23 and 24 would not be met. The inability to meet the Army fielding plan results in harm to the Army due to lost capabilities in repairing Army weapon system platforms.

The NGATS provides the Army with the ability to quickly and accurately diagnose, troubleshoot, and repair faulty line replaceable units (LRUs) (i.e. electronic components and hardware to allow full-functionality of the weapon system) in battlefield conditions. Without this ability, there is a high likelihood that brigade units would endure reduced operational capability in battlefield conditions.

Ultimately, this equates to degraded readiness and lethality for the Army, which is unacceptable.

6. EFFORTS TO OBTAIN COMPETITION:

a. Effective Competition: This is a sole-source action; effective competition is not anticipated. The notices required by FAR 5.201 shall be published and any proposals received shall be considered.

b. Subcontracting Competition: The Government intends to ensure there is as much subcontracting competition as possible. To further support competitive subcontracting possibilities, the resultant contract will include FAR 52.244-5 “Competition in Subcontracting”, FAR 52.219-8 “Utilization of Small Business Concerns” and FAR 52.219-9 “Small Business Subcontracting Plan (DoD Contracts)”.

7. ACTIONS TO INCREASE COMPETITION: The NGATS program has no known requirements for production past FY24. The Army has Government Purpose Rights to the technical data and computer software relating to the NGATS and STAs. These rights would allow the Government to effectively compete the requirement in the future through full and open competition if requirements beyond FY24 materialize to allow for a contract duration that would offset any unacceptable delays. The Government would then issue a competitive solicitation for the production of additional Units.

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 Sources Sought Notice (W15QKN-21- X-0DY9) was posted to Federal Business Opportunities on 02 October 2020 and eight responses were received and are detailed below.

The sources sought notice identified all the salient requirements of the effort and requested that industry respond with their capabilities. As per the sources sought notice, interested parties were required to have knowledge and experience in the following functional areas:

Production - The vendor was required to have the capability to produce and integrate a complex ATE system in high volume detailed technical data such as re-procurement technical data packages, Engineering Change Proposals (ECPs), specification data, etc.

Production Life Cycle - The vendor was required to have the capability and extensive experience to perform continual large-scale production of major, Army general-purpose automated test systems. The vendor shall have extensive experience with major Army ATE development, production, production support and fielding. The vendor was required to be knowledgeable with all NxTest policies and directives, Department of Defense (DoD) common framework for ATE, and the appropriate Industry, DoD and Army ATE standards.

Integration - The vendor was required to have the capability to integrate complex ATE subsystems into a final configuration item that meets the final system level requirements and specifications.

Interfaces and System Software - The vendor was required to have extensive knowledge and experience with the development, integration and implementation of a fully-functional, system- level software environment that allows multiple Run Time System (RTS) to coexist and implement a system health monitoring and management application. The vendor was also required to possess knowledge and experience with the development of an ATE Graphical User Interface.

Management - The vendor was required to have extensive knowledge and experience in production management and have the capability to implement a program to manage performance, cost, schedule, and data delivery requirements. The vendor was required to have a Capability Maturity Model Integration (CMMI) Level 3 certification and/or an International Organization for Standardization (ISO) 9001 certification.

There were eight (8) vendors who submitted capabilities statements in response to the Sources Sought Notice (W15QKN-21-X-0DZF). These eight businesses are

. Five (5) of the eight are large businesses. and are small businesses and

. A summary of each contractor’s market research evaluation is provided below.

experience and understanding of Army operating systems and procedures.

provides its customers with Technical Source Data Packages that fully support operation, maintenance, and calibration of the supplied equipment. Data packages typically include engineering and logistic data at the organizational level of operation and maintenance in accordance with the specification requirements.

• Vendor did not include any specific warehouses or facilities information required for large scale production.

• is certified to ISO 9001:2015.

has been evaluated to not be fully capable because they did not provide enough evidence of being able to ramp up to full scale production in time to be able to meet the Government’s requirements. would need to develop these abilities before being able to produce the NGATS requirements. Therefore, this company is assessed as not being able to meet the established fielding schedule.

• The Vendor has indicated they have the ability or capability to produce various ATE and test programs. designs/develops, produces, delivers, supports, and sustains Automatic Test Systems (ATSs) and TPSs designed, integrated and produced the

• Vendor is familiar with Government Policies and Standards. Their experienced engineers and leadership have supported the Army automated testing mission for over 30 years. already maintains a detailed working relationship with PD TMDE, Combined Arms Support Command, Futures Command, PM Force Protection and PEO CS&CSS program and have an extensive history of manufacturing products from Level 2 and Level 3 TDPs, including the

• Vendor addressed large-scale production ability, but did not specify production of actual or projected number of ATE Systems. mentioned the ability to manage, upgrade, maintain, produce and support large-scale DoD test systems that support 5,000 Abrams and Bradley vehicles. They have 400,000 square feet in their for manufacturing and production operations and an additional 250,000 square feet of production space to meet production surge requirements.

• ISO 9001:2008 and AS9100-D certified.

systems requirements. They are also National Defense Industrial Association (NDIA) Automated Test Systems (ATS) corporate members and participate in associated committees. Their active participation in these organizations enable to remain very knowledgeable with all NxTest technologies, policies and directives including the DoD common framework for ATE.

• Vendor does not addresses large-scale production capabilities. They claim that they will be able to manufacture, test and ship two sheltered and three standalone systems per month once production is established, which would meet the Government’s requirement, however the vendor did not provide enough evidence of this claim, as it would require a significant expansion of their current capacity. As a means to double throughput including sheltered NGATS ATS configurations, stated they will lease appropriate space to accommodate up to ten shelters, however they did not provide the timeframe to do so. Each standalone NGATS system will include one self-test adapter. If they were to build only self-test adapters they could produce six of each per month, which doesn’t allow enough production capacity to produce the required Consoles simultaneously to fulfill the Government’s needs.

• AS9100D certified Quality Management System (QMS). This certification does not meet the government requirement for being ISO 9100 certified.

Although meets some of the requirements, the criticality of not having a ready production-line results in this company not being able to meet the fielding schedule.

• The Vendor has indicated their extensive ability or capability to produce various ATE and test programs. The engineers and their management team are very familiar with the NGATS console system and shelter integration, together comprising the NGATS tactical system. engineers previously served as lead engineers at where they oversaw the integration and installation of tactical systems within shelters. This included the production of several of the Limited Rate Initial Production (LRIP)

• Vendor is familiar with Government Policies and Standards. team have participated in the DoD TPS IPT, DoD NxTest IPT, DoD Common Framework IPT, and DoD NxTest IPT and Army ATS/TPS IPT.

team members are familiar with the DoD NxTest policies, and were part of the core team responsible for their development, establishment, and implementation.

• Vendor addressed large-scale production capabilities. Their facility has a combined 60,000 square feet supporting offices, storage/warehousing space, seven manufacturing lines, and 10,000sf for manufacturing growth. They have the capacity to build systems/month, which would meet the Government’s annual production capacity requirement in the first two years of , during the FY22-FY27 timeframe accommodating any surge requirements. The 10,000 square feet of unallocated factory floor would be used to integrate the NGATS consoles and other components, such as the Environmental Control Units (ECUs), into the ISO shelters from . At full rate, they could deliver tactical systems month.

• ISO 9001:2015 certification.

Although meets all other requirements, this company is not able to meet the required fielding schedule due to the time is would take to qualify, produce and deliver the first units.

Based on the evaluation of the responses to the sources sought notice, there are sufficient sources in the marketplace that have the capabilities to produce and integrate NGATS ATE systems. and have demonstrated the most extensive capabilities, including large scale production and are familiar with the Government’s policies and standards. Although there are multiple vendors that are potentially capable of producing NGATS consoles, self-test adapters and shelter integration, if this acquisition were to be competed under Full and Open Competition, it would take an additional months to qualify a new vendor capable of producing NGATS consoles and an additional months to build and start delivery for a total of months thereby causing unacceptable delays in meeting the Army’s fielding requirements.

9. INTERESTED SOURCES: To date, no other sources have written to express an interest.

10. OTHER FACTS:

a. Procurement History.

(1) Contract Numbers/Dates:

a) W15QKN-14-D-0106 P00022 / 2019 December 23

b) W15QKN-14-D-0106 / 2014 September 24

c) W15QKN-10-C-0040 / 2009 November 20

(2) Competitive Status of these actions:

a) Other Than Full and Open Competition

b) Full and Open Competition

c) Other Than Full and Open Competition

(3) Authority previously cited if less than full and open competition was used :

a) FAR 6.302-1 Only One Responsible Source and No Other Supplies or Services will Satisfy Agency Requirements

b) Not Applicable

c) FAR 6.302-1 Only One Responsible Source and No Other Supplies or Services will Satisfy Agency Requirements

(4) Summary of J&A Paragraph 7 of contract action W15QKN-14-D-0106 P00022:

The Army has obtained Government Purpose rights to all of the technical data and computer software relating to the NGATS and self-test adapters. A five-year Full and Open Competitive follow-on was planned to be released in January 2020 to procure 160 NGATS systems to support the ABCTs, the NGREAs and the Abrams, Bradley, Stryker, Blackhawk, depots, and the school house programs. The Government commenced work on a competitive solicitation. While preparing a competitive five year IDIQ, a Program Objective Memorandum (POM) decision from Army Leadership in 4QFY20 significantly reduced the requirement. The budgetary and schedule requirements after the POM prohibited the use of full and open competition due to unacceptable delays.

(5) The base contract, W15QKN-14-D-0106, was awarded using Full and Open Competition. Modification P00022 was a bridge modification to extend the initial period of performance for two additional years and increase the ceiling value. The requirements to support a follow-on contract were not finalized in time to be able to meet the current schedule requirements of the program with a competitive solicitation.

A sole source award was the only approach that met the Government’s fielding requirements while a competitive solicitation was planned.

(6) There were no unusual patterns that were revealed in the context of this action.

(7) Circumstances Justifying the Procurement in the JA of contract action W15QKN-14- D-0106 P00022: The Government would incur a unacceptable delay if Full and Open Competition were pursued. The Army’s Fielding Plan Requirements for FY20 and 21 would not have been met.

b. Other Facts. There are no other facts