SPE4A618R0871_Redacted.pdf

DEFENSE LOGISTICS AGENCY

AVIATION

8000JEFFERSONDAVIS HIGHWAY

RICHMOND, VIRGINIA 23297-5100

CLASS JUSTIFICATION FOR OTHER THAN

FULL AND OPEN COMPETITION

Solicitation: SPE4A618R0871

I. Contracting Activity:

This Class Justification and Approval (J&A) is submitted to request authority for Other Than Full and Open Competition to support the requirements generated for any Department of Defense (DOD) activity via a DLA formal solicitation.

The contracting activity for this requirement is Defense Logistics Agency (DLA) Aviation, Richmond, VA, Strategic Acquisition Programs Directorate. The purchase request number supporting this contracting action is 1000067003.

II. Nature and/or Description of the Action Being Processed:

Due to the circumstances described herein, this activity requests authority for the negotiation and award of a single unpriced umbrella Requirements Contract to Williams International containing terms and conditions, a single priced subsumable contract for supplies, and a single priced subsumable contract for engineering support (to include Non-Recurring Engineering) for the F107 Engine, which powers the US Air Force’s Air Launched Cruise Missile (ALCM), and for the WJ24-8 Engine, which powers the Navy’s target drone BQM-74E. Williams International is the Original Equipment Manufacturer (OEM) of the F107 Engine and WJ24-8 Engine. For the F107 Engine, anticipated initial contract support includes engineering analysis to improve weapon system configuration and sustainment support, and the procurement of approximately 103 Williams International sole source parts. Some of the 103 consumable NIINs are currently supported through a mix of DLA transactional support (non-long term contracts), surplus procurements, and Aerospace Maintenance and Regeneration Group (AMARG) cannibalization. Potential future F107 Engine support covered by the umbrella contract and awarded under separate priced subsumable contracts may also include procurement of new F107 depot level reparables (DLRs), and repair of those DLRs. The overall goal of this F107 initiative is to improve overall engine availability and reconstitute the engine’s supply chain that was permitted to go dormant after the 1990s.

The acquisitions will be conducted using Other Than Full and Open Competition as prescribed by FAR subpart 6.302-1, Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements. This action will initially result in the award of a single-year engineering analytical subsumable contract and a multi-year spare parts subsumable contract. In accordance with FAR Part 10, DLA conducted market research to identify suppliers capable of performing the required support.

While a handful of companies expressed interest in performing in an integrator capacity, only OEM Williams International has the requisite access to the proprietary drawings and technical data packages (TDPs) necessary to complete the anticipated support. The duration of the anticipated spare parts contract will be at least five (5) years, but in no event will it exceed ten (10) years in duration per 10 U.S.C. 2304a (f), unless appropriate approval is obtained.

These contracts will be negotiated with the following company:

Williams International Co., LLC

2280 E. West Maple Road Walled Lake, MI 48390

CAGE: 24235

Small Business

The length of the engineering analysis contract is anticipated to be approximately one (1) year in duration, which will afford Williams International sufficient time to complete all deliverables associated with its engineering analysis.

The five (5) year base and five (5) year option period of the spare parts contract is considered optimal for the following reasons:

It affords the contractor sufficient time to recoup its initial investments associated with its production line, as well as addressing obsolescence and reliability management issues.

It affords the contractor opportunities to enter into long term commitments with subcontractors in order to provide sustained efficiencies/economies of scale to the Government.

The ALCM is slated for retirement in 2030. With an award anticipated by early calendar year 2019, this contract will provide spare parts coverage for nearly all of the sunset period. If at the end of the period covered by this Class J&A additional support for the F107 sunset is required, this Class J&A may be amended to support that specific requirement.

Establishing a long-term contract with Williams International will minimize administrative support costs associated with DLA transactional support up to 10 years.

The estimated combined maximum value of proposed contracts is . This estimate assumes DLA Aviation will award a ten (10) year spare parts contract to Williams International.

The engineering analytical contract will be funded using DLA Headquarters War-Stopper Funding, which will be coordinated through DLA Aviation’s Tech/Quality Directorate. The spare parts procurement contract will be funded using Defense Working Capital Funds. While DLA Aviation anticipates awarding Firm Fixed Price (FFP) contracts, it may also consider other contract types if those contract types are determined to better meet DoD requirements.

III. Description of the Supplies/Services Required to Meet the Agency Needs:

This Class J&A covers a proposed umbrella contract containing terms and conditions, a single subsumable contract for supplies, and a single subsumable contract for engineering support (to include Non-Recurring Engineering) for the F107 Engine and for the WJ24-8 Engine. The umbrella contract will also cover potential future support, including procurement of new F107 depot level reparables (DLRs), and repair of those DLRs. Accordingly, the total maximum dollar value of this Class J&A is , which was calculated utilizing the estimated 10-year dollar value of NIINs included in the F107 Bill of Materials, the costs associated with the engineering analysis, consumable NIINs under multiple Federal Supply Classes (FSCs), DLRs, and possibly the repair of select DLRs. For the initial spare parts contract, a subset of the sole source population of 103 consumable NSNs, with an estimated ten (10) year value of , has been identified as the candidate items most likely to be included in the acquisition at initial award, as reflected in Attachment 1. Of this sole source population of 103 NIINs, only 13 NIINs are currently in production and could be placed on the initial spare parts contract in the near term.

Some or all of the balance of the Williams NIINs will be added to the spare parts contract after completion of the engineering analysis and development or updates to the technical data packages.

The estimated values are calculated by applying DLA’s in-stock acquisition unit cost or estimated unit price to the average annual demand quantity for the ten (10) year contract duration. The items identified in this subset population support the F107 Engine. The Defense Working Capital Fund will be used to fund material requirement; DLA Headquarters War-Stopper Funding will be utilized for the engineering analysis. The primary goals of the spare parts contract are to: (1) improve production lead times and material availability; (2) reduce administrative lead time, (3) minimize unfilled orders, and (4) reduce administrative costs associated with DLA transactional support.

The engineering analytical subsumable contract will provide DLA with a detailed assessment of out-of-production F107 NIINs, to include the identification of sources of supply, NIIN production lead times, required Technical Data Package (TDP) updates, tooling evaluation, and development of a material delivery schedule. The primary goal of the engineering analysis is to assist Williams International in reconstituting its manufacturing processes for out-of-production NIINs.

IV. Statutory Authority Permitting Other Than Full and Open Competition:

10 U.S.C. § 2304(c)(l), as implemented by FAR 6.302-1, 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:

Concerning the requirement to provide spare parts, the authority in paragraph IV above applies. Williams International is the only approved source of supply for the items identified in Attachment 1. Williams International is the OEM for the F107 Engine and is the only supplier that possesses the proprietary data packages, drawings, and tooling necessary to meet DLA Aviation’s requirements. The Acquisition Method Code (AMC) and Acquisition Method Suffix Code (AMSC) for the NIINs are identified in Attachment 1. Most of the items are identified as AMC 3, 4, or 5 which specifies the parts are to be directly acquired from the actual manufacturer, which is Williams International. A small sub-set of NIINs are coded AMC 1 & 2 which typically indicates the items can be procured competitively. In the case of this project, Williams International is the only known source of supply for these AMC 1 & 2 coded NIINs. Items in the population are sole source for a variety of reasons to include: (1) the technical data is proprietary or is not otherwise available to the Government,

(2) the parts require engineering source control approval by the design control activity, and/or (3) the parts must be acquired from the manufacturing source(s) specified in the source control drawings.

Technical certifications for the active population will be acquired prior to release of the LTC solicitation. If any NIINs are identified through the Technical certification as other than sole source to Williams International and other sources of supply are identified, those NIINs will be removed from the population.

In accordance with DLA Aviation Acquisition Workforce Guidelines (DAAWG) 6.303-2 9G, only items with a permanent AMSC will be placed on contract; therefore, items with temporary AMSCs will be excluded from consideration. In the future an item not previously assigned an AMSC, or previously assigned AMSC "A” or “H" and now reassigned with a permanent AMSC, may be eligible for addition to the contract. A complete technical review, screening, and certification of each NSN will be completed prior to inclusion to the contract.

Williams International is uniquely qualified and capable of providing this support since it is the OEM for the engines referenced above. It maintains the proprietary technical data and is the only company capable of performing the engineering analysis and manufacturing their sole source parts and sole source DLRs. Repair of DLRs for the F107 are currently maintained by the USAF. Should the USAF determine that Williams International is the only source of repair for a DLR and request their repair services, those services may be added to this initiative. Since Williams International is unwilling to provide their proprietary technical data to another entity, no other company is capable of performing these requirements.

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 subpart 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 because of this synopsis will be identified to the prime contractor as a potential for subcontracting possibilities.

VII. Determination by the Contracting officer that the Anticipated Cost to the Government will be Fair and Reasonable:

The Contracting Officer has determined the anticipated cost to the Government of the supplies/ancillary services covered by this Class J&A will be fair and reasonable. In accordance with subpart FAR 15.403-4, Williams International will be required to provide certified cost or pricing data for military unique items to support the Government's evaluation of the proposed cost. The proposed skill mix of labor, labor hours, types and quantities of material, other direct cost and direct and indirect rates will be negotiated by the Government based on recommendations for Aviation’s Cost & Pricing Division, the Defense Contract Management Agency (DCMA), and or the Defense Contract Audit Agency (DCAA). Profit will be established using weighted guidelines. Contract pricing will be negotiated in accordance with procedures in FAR part 15. On the basis of the foregoing, the Contracting Officer hereby determines that the anticipated cost to the Government will be fair and reasonable.

VIII. Description of the Market Research Conducted and the Results:

Market research revealed the initial 103 NIIN population is non-competitive and sole source to Williams International. A Sources Sought was released on 12 March 2018 with a response date of 12 April 2018 for the complete bill of materials, which included both Williams International sole source NIINs and non-Williams military unique and common NIINs. While a few companies expressed an interest in filling an integrator role for the entire population, none of the companies stated they could support the Williams sole source NIINs without Williams International proprietary data. In previous discussions with Williams International, the company stated it would not permit other companies access to its proprietary data and drawings. In addition, the Sources Sought requested feedback on any engineering analysis requirements. One of the companies responding to the Sources Sought expressed an interest in reverse engineering the out of production parts. Reverse engineering may be a long-term solution on select NIINs but may be unnecessary if Williams can develop technical data packages and sources via the engineering analysis.

The proprietary data rights remain the property of Williams International and the Government has internal information demonstrating Williams International is the sole source supplier for these items. A technical review will certify the initial items to be solicited are coded as sole source to Williams International or Williams Internal is the only known source of supply. Should any NIINs be identified as non-Williams International NIINs, those NIINs will be removed from the initial population prior to solicitation.

A FedBizOpps synopsis will be issued to advise industry of the pending procurement and solicit inquiries from interested parties. It is anticipated that no source other than Williams International, the only known source capable of meeting this requirement, will be interested in this procurement.

IX. Any Other Facts Supporting the Use of Other Than Full and Open Competition:

Williams International is not willing to sell its data rights to the Government or any other manufacturer, which means the technical data package, specifications, and engineering descriptions for Full and Open Competition cannot be developed without reverse engineering. The Government has determined that reverse engineering would be very time consuming and cost prohibitive.

X. List of Sources, if any, that Expressed Interest in the Acquisition:

As mentioned above, this requirement will be synopsized on the Federal Business Opportunities (FedBizOpps) website as required by FAR subpart 5.201. No source, other than Williams International, has expressed an interest in this acquisition to date.

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:

Williams International is the only source with the capability of furnishing the required supplies and conducting the engineering analysis; therefore, the Government does not intend to compete this procurement. Additional requirements may include procurement of new F107, sole source, depot level reparables (DLRs), and repair of those DLRs. The USAF is currently the only source for repair for the DLRs. For any individual or group of NIINs identified for addition to this contract under the authority of this J&A, a technical review, sole source certification, and synopsis will be performed prior to items being priced and added to the contract via modification. DLA may also explore reverse engineering opportunities in the future should NIINs remain unprocurable after the completion of the engineering analysis. If sources other than Williams International express an interest in the acquisition, they will be provided a copy of the solicitation.

Procurement Note M06 Evaluation of Offers for Part Numbered Items (SEP 2016), will be included in the solicitation, which provides guidance for potential suppliers. The Competition Advocate will review