SPE4A219R0055_Redacted.pdf

DEFENSE LOGISTICS AGENCY

HEADQUARTERS

8725 JOHN J. KINGMAN ROAD

FORT BELVOIR, VIRGINIA 22060-6221

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

I. CONTRACTING ACTIVITY

This Justification and Approval (J&A) to authorize Other Than Full and Open Competition supports requirements generated by the United States Air Force (USAF) and the Defense Logistics Agency (DLA) through a limited source competition solicitation.

The contracting activity for this requirement is DLA Aviation, Strategic Acquisition Programs Directorate, Richmond VA.

II. NATURE AND/OR DESCRIPTION OF THE ACTION BEING APPROVED

Due to the circumstances described herein, this activity requests authority to acquire the temporary aircraft engine remanufacturing augmentation support described in this document using Other Than Full and Open Competition as prescribed by FAR 6.302-1(a)(2), only one or a limited number of responsible sources. This activity requests authority to negotiate and award a limited competition contract(s) for temporary augmentation support of whole engine remanufacture of the F108-100 (CFM56-2B). This will be a new contract(s), which will be firm-fixed price, ID/IQ, with a one (1) year base period and four (4) one year option periods. At this time, only CFM International (CFMI) and Lockheed Martin Commercial Engine Solutions (LMCES) are certified under the Air Force Materiel Command (AFMC) Form 762, Contract Repair Screening Analysis Worksheet, to perform this temporary augmentation work. This sole source requirement will be limited competition and purchased from the following companies:

CFMI LMCES

6440 Aviation Way 7171 Boul De La Cote-Vertu Ouest West Chester, OH 45069-4546 Saint-Laurent, H4S 1Z3

CAGE: 58828 CAGE: L06Y2

Large Business Large Business

III. DESCRIPTION OF THE SUPPLIES/SERVICES REQUIRED TO MEET THE

AGENCY’S NEEDS

This J&A covers the acquisition of temporary whole engine remanufacturing augmentation support of F108 engines. This requirement can only be satisfied by CFMI or LMCES, the only USAF approved repair sources. CFMI, the first USAF approved repair source, is the Original Equipment Manufacturer (OEM), the designer and developer of the F108 engine, and is certified on the USAF AFMC Form 762 to perform F108 whole engine remanufacturing work. LMCES, the second USAF approved repair source, is also certified on the USAF AFMC Form 762 to perform F108 whole engine remanufacturing work.

The goal of this effort is to temporarily augment, over a period not to exceed five years, the USAF’s F108 remanufacturing production capability, maintenance, and phasing requirements, and to establish a robust commercial augmentation remanufacturing capability to enhance overall F108 supportability. This procurement action will support major remanufacturing requirements for the F108 engine, to include requirements for disassembly, cleaning, inspection, repair, major overhaul, and scheduled delivery of a quality product.

The whole engine remanufacture includes overhaul and upgrade of the engine from the F108-100 to the F108-100A. As shown at Table 1 below, the USAF estimates a total of 100 engines to be remanufactured under the augmentation requirement herein. The upgrade consists of full overhaul of F108-100 engines, using the CFMI Propulsion Upgrade Program (C-PUP) kit and also installing Contractor sourced Quick Engine Change (QEC) kits. Engines are to be remanufactured to like new condition in accordance with GE, CFMI, and Boeing technical manuals, and each engine will attain specified Exhaust Gas Temperature (EGT) margin on correlated test cells before being returned to the Government as an F108- 100A serviceable engine. Material for CFMI C-PUP kits will be provided as Government Furnished Material. The use of Contractor sourced material in support of this engine overhaul program shall not impact existing Government parts support contracts.

The estimated total contract value inclusive of the option years is as summarized in Table 1:

Table 1

Qty Engine Overhaul *Over & Above Estimated Total Base Year 20 Option Year 1 20 Option Year 2 20 Option Year 3 20 Option Year 4 20 5-Year Estimated Total

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)(2), only one or a limited number of responsible sources and no other type of 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

This J&A covers all USAF repair sources who have met the certification requirements to perform whole engine remanufacture of the F108-100 (CFM56-2B). Currently, only two companies have met all of the requirements of the USAF certification process, CFMI and LMCES.

Companies who self-identify as being capable of performing this work, without proper certification on the USAF AFMC 762, cannot be considered as a viable source of repair and/or overhaul for this effort.

A sources sought notice was issued on 18 March 2019; three (3) parties responded but only two vendors, CFMI and LMCES, are approved USAF repair sources. Attachment 1, provided by the USAF, includes a signed letter and documentation validating that only CFMI and LMCES completed the engineering review process to satisfy certification requirements and are approved to perform whole engine remanufacture of the F108-100 (CFM56-2B).

VI. DESCRIPTION OF EFFORTS MADE TO ENSURE THAT OFFERS ARE SOLICITED

FROM AS MANY POTENTIAL SOURCES AS DEEMED PRACTICABLE

This requirement will be synopsized and solicited on Federal Business Opportunities (FedBizOpps) as required by FAR 5.201. It is anticipated that only two responsible sources will respond. If other vendors become certified prior to solicitation closing, this J&A will be modified.

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 15.404, it is anticipated that negotiations will be conducted using information other than cost or pricing data from the Contractor since the acquisition will be conducted using FAR Part 12 (commercial) procedures.

Thorough price analysis will be conducted using available information and approved pricing techniques that will support the contracting office in making a determination that the price paid to the Contractor is fair and reasonable to the Government. Based on the foregoing, the Contracting Officer hereby determines the anticipated cost to the Government will be fair and reasonable.

VIII. DESCRIPTION OF THE MARKET RESEARCH CONDUCTED AND THE RESULTS,

OR STATEMENT OF THE REASONS MARKET RESEARCH WAS NOT CONDUCTED

Market research was conducted both prior to, and after, the release of the sources sought notice. Initial market research consisted of a search and review of potential commercial sources capable of repairing the commercial equivalent engine of the F108, the CFM56-2B. Additionally, the DLA Program Manager reviewed work specifications provided by the USAF.

A sources sought notice was posted to FedBizOpps on 18 March 2019 to advise industry of the pending procurement and solicit inquiries from interested parties. Three companies responded: CFMI, LMCES, and Global Turbine Services (GTS). Only two of the companies are certified to perform the work, CFMI and LMCES.

Separate market research meetings were conducted with each company who expressed interest in the opportunity. The DLA Program Manager and Contracting Officer along with a USAF team consisting of PM, Engineering, and personnel from the F108 Program Office, provided an overview of the effort and also provided written questions for the vendors. The questions were thoroughly discussed with each vendor to learn specific capabilities, potential limitations, and both Government and Contractor requirements. In addition, the Government team explained certification requirements to the only non-approved source, GTS.

IX. ANY OTHER FACTS SUPPORTING THE USE OF OTHER THAN FULL AND OPEN

COMPETITION

As detailed herein, CFMI and LMCES are the only approved sources able to perform the requirements of the F108 remanufacture. As such, these are the only two Contractors that can be considered for this limited competition contract opportunity.

If other Contractors become certified prior to the required proposal submission date, this J&A will be updated and the Contractor(s) will receive equal consideration.

X. LIST OF SOURCES, IF ANY, THAT EXPRESSED INTEREST IN THE

ACQUISITION

As indicated in Section VI, this requirement will be synopsized on the FedBizOpps website as required by FAR 5.201. To date, three sources have expressed interest in the acquisition as a result of the sources sought notice. In addition to CFMI and LMCES, GTS responded to the sources sought notice; however, they are not certified by the USAF on the AFMC Form 762, Contract Repair Screening Analysis Worksheet. During market research, GTS was provided with information on how to become certified.

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

Due to the complex technical nature of this work and the fact only two sources are certified by the USAF to perform this work, there is no opportunity to remove barriers to competition. However, the Government intends to include FAR 52.219-16, Liquidated Damages – Subcontracting Plan, in the contract and work closely with both the DLA Small Business Office and CFMI and/or LMCES to select subcontractors on a competitive basis to the maximum practical extent consistent with the objectives and requirements of the contract, and sound business case analyses.

XII. CONTRACTING OFFICER’S CERTIFICATION

The Contracting Officer’s signature on the Coordination and Approval Document evidences that he/she has determined this document to be both accurate and complete to the best of his/her knowledge and belief.

XIII. TECHNICAL/REQUIREMENTS PERSONNEL’S CERTIFICATION

As evidenced by their signatures on the Coordination and Approval Document, the technical and/or requirements personnel have certified that any supporting data contained herein, which is their responsibility, is both accurate and complete.

Attachment: AFMC Form 762, Contract Repair Screening Analysis Worksheets