JA_SPE4A516R0471__Redacted.pdf

DEFENSE LOGISTICS AGENCY

AVIATION

8000 JEFFERSON DAVIS HIGHWAY

RICHMOND, VIRGINIA 23297-5002

Solicitation Number: SPE4A5-16-R-0471 Source Selection Info-See FAR 2.101 & 3.102

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

Solicitation SPE4A5-16-R-0471

I. CONTRACTING ACTIVITY

This Class Justification and Approval (J&A) to request authority for Other Than Full and Open Competition supports requirements generated for Defense Logistics Agency (DLA) Aviation.

The contracting activity for this requirement is DLA Aviation, Richmond, VA, Supplier Operations OEM Directorate, Engines and Auxiliary Components Division.

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

Due to the circumstances described herein, this activity requests authority to acquire the items/spares listed 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 and no other type of supplies or services will satisfy agency requirements. This action will result in the award of a new contract, which will be a Firm Fixed Price, Indefinite Quantity Contract (IQC) for DLA Direct Support. The contract will include a one-year base period and four, one-year option periods for a total of five years. This requirement will be limited to purchases from the following responsible sources:

Honeywell International Inc.

Parent CAGE: 02LU7 Large Business

M&M Aerospace Hardware Inc.

DBA KLX Aerospace Solutions (Honeywell’s Licensee)

CAGE: 2N935

Large Business

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

AGENCY’S NEEDS

DLA Aviation, Supplier Operations OEM Directorate, seeks to establish an Indefinite Quantity Contract (IQC) with Honeywell International or Honeywell International’s licensee, KLX Aerospace Solutions, for items managed and procured by any DLA activity. The items support various weapons systems including, but not limited to, the C-5, C-130, K/C-135, F-15, F-16, F/A-18 Aircraft. The estimated annual quantities vary for each NSN. The Working Capital Fund will be used for the appropriation of orders resulting from this contract. Funding will be made available when a delivery order is issued against the contract.

This Class J&A will cover all sole source Honeywell International spare parts for the following Federal Supply Classes (FSCs).

Source Selection Info-See FAR 2.101 & 3.102 4

FSC Title 1420 Guided Missile Components 1630 Aircraft Wheel and Brake Systems 1650 Aircraft Hydraulic, Vacuum, and De-Icing System Components 1660 Aircraft, Air Conditioning, Heating and Pressurizing Equipment 1680 Miscellaneous Aircraft Accessories and Components 2805 Gasoline Reciprocating Engines Except Aircraft and Components 2835 Gas Turbines and Jet Engines, Except Aircraft and Components 2840 Gas Turbines and Jet Engines, Aircraft and Components 2910 Engine Fuel System Components, Non-Aircraft-10 2915 Engine Fuel System Components, Aircraft 2925 Engine Electrical System Components, Aircraft 2930 Engine Cooling System Components, Non-Aircraft-10 2995 Miscellaneous Engine Accessories Aircraft 3040 Miscellaneous Power Transmission Equipment 3110 Bearings, Antifriction Unmounted 3120 Bearings, Plain, Unmounted 4310 Compressors and Vacuum Pumps 4320 Power and Hand Pumps 4330 Centrifugals, Separators and Pressure and Vacuum Filters 4710 Pipe and Tube 4720 Hose and Tubing, Flexible 4730 Fittings and Specialties; Hose, Pipe and Tube 4810 Valves, Powered 4820 Valves, Non-Powered 4920 Aircraft Maintenance and Repair Shop Specialized Equipment 5305 Screws 5306 Bolts 5307 Studs 5310 Nuts and Washers 5315 Nails, Keys and Pins 5320 Rivets 5325 Fastening Devices 5330 Packing and Gasket Materials 5331 O-Ring 5340 Hardware, Commercial 5342 Hardware, Weapon System 5355 Knobs and Pointers 5360 Coil, Flat, Leaf, and Wire Springs 5365 Bushings, Rings, Shims, and Spacers 5905 Resistors 5910 Capacitors 5935 Connectors, Electrical 5940 Lugs, Terminals, and Terminal Strips 5970 Electrical Insulators and Insulating

6210 Indoor and Outdoor Electric Lighting Fixtures 6220 Electric Vehicular Lights and Fixtures 6670 Scales and Balances 9905 Signs, Advertising Displays, and Identification Plates

An initial class population of 297 NSNs with an estimated 5-year value of has been identified as the candidate items for this acquisition, as provided in Attachment 1. A group of thirty-four (34) NSNs with an estimated 5-year value of has been identified from the class population as the initial items to be solicited. This contract may be expanded by adding items in groups or phases throughout the contract period. The estimated values were calculated by applying the material acquisition unit cost to the projected annual demand quantity for the five year period. A 100% escalation factor was then added to cover fluctuations in demand.

Contract Base Period Option Periods Total Length 1 Year 4 Year 5 Years Estimated Total Contract Value

This initiative involves identifying demand patterns for sole source NSNs in various FSCs and placing those NSNs on contract as demands warrant. Continuous spare parts support is required to avoid impacting the mission requirements of the various weapons systems that utilize these parts. The primary goals are to improve Production Lead Time (PLT) and material availability (MA), reduce Administrative Lead Times (ALT) and set-up costs, and reduce and stabilize unit pricing.

The Acquisition Method Code (AMC) and Acquisition Method Suffix Code (AMSC) for each currently identified item are listed in Attachment 1. All items have an AMC of 3, 4, or 5 which specifies that the parts are to be directly acquired from the actual manufacturer or the sole source contractor, which is either Honeywell International or Honeywell International’s licensee, KLX Aerospace Solutions. The items are sole source for a variety of reasons, including that the technical data is proprietary or is not otherwise available to the government, the parts require engineering source control approval by the design control activity, and/or the parts must be acquired from a manufacturing source specified on a source control drawing. Additionally, although all of the items identified in Attachment 1 are under license to KLX Aerospace, Honeywell retains all rights to the data and is the approval authority for any changes to drawings.

The delivery and surge and sustainment requirements for each NSN will be established using the Industrial Base Management System (IBMS). IBMS has identified eight (8) NSN’s in the initial population with surge and sustainment requirements.

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 CONTRACTORS’ UNIQUE QUALIFICATIONS

OR NATURE OF THE ACQUISITION REQUIRES THE USE OF THE AUTHORITY

CITED ABOVE

The authority in Section IV above applies because the Class of sole source Honeywell International spare parts for the Federal Supply Classes (FSCs) identified in Section III of this J&A are available from only one or a limited number of responsible sources, Honeywell International and KLX Aerospace. The initial Class population is identified in Attachment 1.

Honeywell, the original equipment manufacturer (OEM), and KLX, entered into a definitive thirty (30) year licensing agreement for 36,001 items on July 28, 2008 upon the divesture of Honeywell’s Consumable Solutions business to KLX. All of the items in the initial Class population are covered by the license agreement..

As the OEM’s licensee, KLX possesses the data, tooling, machining, and assembly capability to produce the items in accordance with Honeywell drawing requirements. The licensing agreement granted KLX Aerospace rights as the licensee with respect to the manufacturing and sale to the global aerospace industry of Honeywell proprietary fasteners, seals, gaskets and electrical components associated with such products as Honeywell's Engines, APU's, avionics, and wheels and brakes. The agreement further states that Honeywell retains all rights to the data and is the approval authority for any changes to drawings.

The initial Class of 297 NSN’s identified in Attachment 1 are a subset of “Non-Exclusive” licensed items per the agreement that may be offered for sale by either Honeywell or KLX.

Therefore, Honeywell International and KLX Aerospace are the only responsible sources which possess the full capability to satisfy the agency’s requirements.

Technical certifications for the initial 297 NSN population are included as Attachment 2. Based on the technical certifications, the acquisition is restricted to the only sources of supply known to have the capability of furnishing the required items/spares.

VI. DESCRIPTION OF EFFORTS MADE TO ENSURE THAT OFFERS ARE

SOLICITED FROM AS MANY POTENTIAL SOURCES AS DEEMED PRACTICABLE

This requirement will be synopsized on Federal Business Opportunities (FedBizOpps) as required by FAR 5.201. It is anticipated that sources having an interest in subcontracting may be identified through synopsis. Although the Government does not own data to support acquisition of these items from any other source, any source who responds to the Government as a result of this synopsis will be identified to the prime contractor as a potential source for subcontracting possibilities. A Sources Sought Notice was posted in FedBizOpps on February 17, 2016. The notice was posted as a means of conducting market research to determine if other companies are capable of manufacturing (or legitimately obtaining) the identified NSNs. Interested parties were requested to identify their interest and capability to respond to the requirement. No responses were received to the notice.

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 in supporting the Government’s evaluation of the proposed cost for non-commercial items.

The proposed skill mix of labor, labor hours, types and quantities of material, other direct costs, and direct and indirect rates will be negotiated by the Government based on recommendations from the Defense Contract Audit Agency (DCAA) and expert technical personnel supporting the program. Profit will be negotiated using the Weighted Guidelines Method.

The Contractor will not be required to provide certified cost or pricing data for commercial items. 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 for commercial items. 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. The contract price will be negotiated in accordance with the procedures in FAR Part 15. 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

Efforts were made to conduct market research since the Government has internal information that demonstrates the items are not competitive. Methods used for research included Internet searches and direct contact with potential sources.. Market research revealed that KLX acquired a thirty year licensing agreement from Honeywell International in July 2008 for 36,001 parts affecting 25,154 NSNs. All of the NSNs in the initial Class are covered by the license agreement. he proprietary data rights remain the property of Honeywell International, however, and the Government has internal information demonstrating Honeywell is the prime vendor source for these items. A technical review certified the initial 34 items to be solicited are coded as sole source to Honeywell International. Coordination with the DLA Aviation Competition Advocate reveals that there is extensive history to support that these items have been and will continue to be sole source to Honeywell International. As previously indicated, a Sources Sought Notice was posted to FedBizOpps to request responses from industry concerning their interest and capability in supplying the parts. A FedBizOpps synopsis will be issued to advise industry of the pending procurement and solicit inquiries from interested parties. It is anticipated that no sources other than Honeywell International or Honeywell International’s licensee, KLX Aerospace, the only known sources capable of meeting this requirement, will indicate interest in this procurement.

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

OPEN COMPETITION

Honeywell International maintains ownership rights under the licensing agreement and is unwilling to sell data rights to the Government, which means a technical data package, specification, and engineering description suitable for Full and Open Competition cannot be developed without reverse engineering. The Government has determined that reverse engineering is cost prohibitive.

X. LIST OF SOURCES, IF ANY, THAT EXPRESSED 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

As previously stated, Honeywell International and Honeywell Internationals’ licensee, KLX Aerospace Solutions, are the only sources with the capability of furnishing the required supplies;

therefore, the Government does not intend to compete this procurement. For any groups of NSNs to be potentially added to the contract under the authority of this J&A, a technical review, sole source certification, and synopsis will be performed prior to the items being priced and added to the contract via modification. DLAD 52.217-9002, Conditions for Evaluation/Acceptance of Part Numbered Items will be included in the solicitation, providing guidance to potential suppliers.

The Competition Advocate will review the solicitation and all potential add-on items to locate additional sources of supply. Any items which become competitive after award will be removed from the contract in accordance with DLAD 52.216-9006, Addition/Deletion of Items.

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.