SPE4AX18R0009_REDACTED.pdf

DDEFENSE 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 Class Justification and Approval (J&A) is submitted to request authority for Other Than Full and Open Competition to support requirements generated by the Department of Defense and Foreign Military Sales via an incremental approach which includes standard DLA Direct Long Term Contract, Supplier Initiated Orders, and Performance Based Logistics (PBL). Acquisition of Depot Level Repairable (DLR) and consumable parts, or outcomes tied to these parts, will be supported through one of the various types of activity under this program.

The contracting authority for this requirement is DLA Aviation, Strategic Acquisition and Programs Directorate.

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 contract action on a sole-source basis, to Meggitt Aircraft Braking Systems (MABS) for sole source commercial and non-commercial parts. MABS is a combination of individual business units specializing in aircraft wheels and brakes. MABS products are on many commercial and military aircraft. MABS CAGEs involved in this acquisition include, but are not limited to: 0B9R9, 21849, and K1037. Sole source MABS parts from any other associated facility will be candidates for possible inclusion in the contract.

The acquisition will be conducted 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.

It is anticipated that three separate contracts will be awarded from this solicitation, with each individual business unit having its own unique contract. Each contract will include terms and conditions unique to each business unit and will include firm-fixed pricing.

This action will result in a program with numerous individual/staggered work requirements; each will consist of one (1) ten (10) year Long Term Contractual arrangement. Each requirement will consist of a five (5) year ordering/base period and one five (5) year unilateral option period.

Market Research has been conducted for those NSNs which will become part of the initial awards, and has determined that there is no source, other than MABS, which is able to support the desired outcome of the stock support portion of this project. In accordance with FAR Part 10, additional Market Research will be accomplished prior to the implementation of subsequent work requiremenets and all associated options. In no event will a requirement’s total contract period exceed the ten-year period authorized by 10 U.S.C. 2304a(f), unless appropriate approval is obtained.

It is anticipated that the following activities may take place under this contract:

- Standard Long Term Contract (LTC). Pricing to be negotiated with individual business units and incorporated through individual contracts. This requirement is a follow-on contract to the current LTC with MABS. The structure of this part of the Supplier Capability Contract (SCC) project will be the same or similar to the current LTC arrangement with MABS.

- Supplier Initiated Orders (SIO) for specific business units of MABS. This will not apply to all MABS business units. SIO is a concept where the supplier, using specific demand data provided by the DLA, forecasts and builds parts to support the DLA’s future requirements. This gives the supplier strategic latitude to efficiently support DoD requirements. The greater visibility into the DLAs demands will allow the supplier to buy raw materials in efficient quantities and establish level-loaded production lines. The DLA will share in the savings obtained through this program.

Prior to implementation of any SIO arrangement, a Business Case Analysis (BCA) will be conducted to ensure that it is in the best interest in the Government. As further explained in Section V of this document, appropriate levels of Market Research will also be performed to ensure parts involved in SIO are sole source to

MABS.

- PBL support. This will enable the DoD to buy a level of support from MABS to support any of its end-items. A level of support is being used as a general term in this document because it can vary depending on the requirement. Examples include, but are not limited to, purchasing brakes by cost per landing, Wheels and Brakes improvements, and carbon reutilization. Projects will be measured by establishing a price per landing or a price per flight hour and any other pertinent, measurable outcome. The type of outcomes to be supported through this effort will vary, but each will go through a BCA and appropriate Market Research to ensure the project is in the best interest of the DoD and that the NIINs involved are sole source to MABS. This part of the contract will not be limited to PBLs for sole source MABS product lines and higher assemblies. Performance-based sustainment and engineering efforts to support service-life extension programs and other modernization upgrades or safety modifications will fit into this area of the overall program.

As requirements will be developed at different times, it is anticipated that award of diverse work requirements will be staggered. It is the intent of the contracting officer to award requirements other than stock support within a five-year window of the initial award, with each contract having a ten-year total term (one five-year base and one five-year option period) to afford each individual requirement the same optimal period of performance.

Any addition of SIO or PBL-type activities to the SCC will be supported by an acquisition plan and supporting BCA, along with appropriate levels of review, depending on the dollar amount of the project.

Length of Contract:

- It affords the contractor sufficient time to recoup initial investments associated with facilities, parts, obsolescence issues and reliability management.

- It affords the contractor opportunities to enter into long term commitments with subcontractors (including organic depots) in order to provide sustained efficiencies/economies of scale to the military service user.

- It enables the contractor to implement logistical and technical changes required to realize reliability improvements.

- It allows for the elimination of duplicative contract and program administration costs for like and similar items.

- It allows the contractor the opportunity to leverage investment in support processes across similar items, thereby saving additional costs.

This support strategy supports DoD Directive 5000.01 and various DLA initiatives with PBL sustainment for component and repairable parts across multiple weapon systems via “developing and implementing performance-based product support strategies that optimize total system availability while minimizing cost and logistics footprint.”

Pricing will be negotiated directly with each individual business unit as pricing information is received. The total estimated value is $485 Million -- total value is based on stock support and possible SIO/PBL activities over 10 years.

The contract will primarily be funded by the Defense Working Capital Fund. Provisions will be incorporated to include service provided funding to enable the Services to leverage this contract to increase savings for depot maintenance, platform and system modifications and service life extension programs. Again, it is anticipated that this program will be implemented in phases, with individual contracts awarded as requirements fully develop.

Although all requirements/contracts will operate via “D” type ordering arrangements, application of PBL sustainment (i.e. pricing arrangements, metrics, disincentives) may vary for each contract.

III. DESCRIPTION OF THE SUPPLIES/SERVICES REQUIRED TO MEET

THE AGENCY’S NEEDS

This Class Justification and Approval covers the acquisition of supplies and services which are sole source to MABS via the incremental strategy mentioned above. Tehnical certifications for the initial population of 187 NIINs (155 Consumables and 32 DLRs) are attached to this document. The total number of NIINs for this project could grow to 1780.

SIO and PBL requirements are more strategic in nature and will include a holistic support strategy to be identified in individual Acquisition Plans specific to each project. Those strategies may include supply chain management, logistics & engineering services and sole source repair services to include, but not limited to, repair of DLRs and unplanned depot maintenance activity repair services.

This initiative will involve identifying demand patterns and emergent needs for parts in various Federal Supply Classes, which are only manufactured by MABS, and to place those

NSNs on contract through one of the various project methods as demand warrants.

IV. STATUTORY AUTHORITY PERMITTING OTHER THAN FULL AND

OPEN COMPETITION

Use of Other than Full and Open Competition is authorized by 10 U.S.C. 2304(c)(1) and FAR 6.302-1, as there is only one responsible source and no other supplies or services will satisfy agency requirements. The acquisition is restricted to MABS who is the sole manufacturing source for all NSNs to be included in this project.

V. DEMONSTRATION THAT THE CONTRACTOR’S UNIQUE

QUALIFICATIONS OR NATURE OF THE ACQUISITION REQUIRES THE

USE OF THE AUTHORITY CITED ABOVE

The authority in paragraph IV above applies because MABS is the Original Equipment Manufacturer (OEM) with design control, authorization, and documentation to overhaul and manufacture the NSNs tied to this acquisition.

The parts provided by MABS include critical machining processes which are proprietary and owned by the OEM. In order for the parts to perform properly and stay within required parameters and tolerance limits, these critical processes must be followed. Since the data required to properly support this effort is owned by MABS, interested vendors would have to be willing to invest the time, funding, and manpower required to reverse engineer these parts at their own expense.

As each weapon system plays a key role in the support of the Global War on Terrorism and the overall mission of the Department of Defense, asset availability is critical to uninterrupted logistical support.

The initial population of NSNs has been verified to be sole source to MABS through a Material Master review, which consists of an analysis of the Acquisition Method Codes/Acquisition Method Suffix Codes (AMC/AMSC) maintained inside Government databases. The AMC/AMSC is fed into DLA databases by the Service with Engineering Authority for the respective NIIN. This review concluded that the initial population of NIINs are sole source to one of the MABS business units specified in Section II of this document. In addition to the AMC/AMSC review, a subsequent NIIN-by-NIIN technical review was performed to validate that only MABS CAGEs are associated with the attached NIIN population in DLA systems. This has been done for the initial population of NIINs which will be part of the initial awards. Any future additions to the stock support contracts will follow a similar process to verify that the Government does not own sufficient data to obtain competition, or develop a manufacturing source other than MABS.

Prior to pursuing PBL-type activities, DLA will verify that all applicable NSNs are indeed sole source to MABS, or that the appropriate bundling and/or consolidation analysis has been performed and approved. As the program matures, and projects relating to PBL are more clearly identified, market research will be performed to ensure these subsequent work requirements are sole source to MABS. Market research techniques will include, but are not limited to, industry feedback, synopses, Requests for Information, technical reviews, and information obtained from the applicable Services regarding drawings and technical data rights. Prior to issuing any solicitation for a strategic requirement under a SIO or PBL construct, coordination with the Small Business office and Competition Advocate will be accomplished to verify that MABS is, indeed, the sole source with the capability and technical data to support the future requirement.

The overall objective under possible PBL activities will be to incentivize productivity and innovation, utilizing performance based arrangements, where appropriate, to maximize the availability and / or use of various weapon systems and platforms and provide timely material support through initiatives such as incentivizing reliability improvements, streamlining supply chain management and improving maintenance processes and procedures. As future follow-on and new requirements develop and are awarded under this effort, it is anticipated cost reductions will be achieved through a decrease in the number of contracts awarded and administered, an increase in availability and reliability of parts supported and a reduction to the cost of material supplied. This will enable one infrastructure managed by MABS, creating an agreement that balances performance, risk and cost.

In essence, the DoD will be able to buy a level of support from MABS on any one of its sole source end-items. A level of support is being used as a general term in this document because it can vary depending on each requirement. This will involve identifying demand patterns and emergent needs for parts in various federal supply classes (FSC) which are only manufactured by MABS, and to place those items on contract as demand warrants. Projects could likely be measured by establishing a price per landing or any other pertinent, measurable outcome. The type of outcomes to be supported will vary, but each will go through a Business Case Analysis (BCA) and appropriate market research in accordance with FAR Part 10 to ensure the project is in the best interest of the DoD and that the items or services involved are sole source to MABS.

Market research techniques may include industry feedback, synopses, Requests for Information (RFI), technical reviews and information obtained from the applicable Services regarding drawings and technical data rights. Prior to issuing any solicitation for a strategic requirement for performance based sustainment activities, an acquisition plan along with appropriate levels of review depending on the dollar amount of the project as well as coordination with the Small Business Office (SBO) and / or Competition Advocate will be accomplished to verify that MABS is indeed the sole source with the capability and technical data to support the requirement. Performance based sustainment and engineering efforts to support service-life extension programs and other modernization upgrades or safety modifications will fit into this phase of the overall program.

In order to achieve the overarching objective of this effort, the provider must have the ability to drive changes into the weapons system configuration and, more importantly, understand, analyze, and assess the implications—both in terms of weapons system performance and operational usage—of any potential configuration change. To do so, this effort requires engineering and logistics support personnel with an unfettered ability to reach back to the OEM, MABS, to support engineering investigations, fault detection and isolation, repair development, modification development, supportability analysis, and the associated technical documentation development and support. MABS is the only source that can provide this capability.

Additionally, MABS has the ability to optimize the entire demand fulfillment chain and mitigate the challenges associated with traditional supply process issues such as volatile demand and lack of control over procurement and production scheduling. MABS has experience in understanding demand signals and moving requirements closer to the source of supply / industrial base. MABS performs supply chain planning through the use of logistics engineering based data analytics, advanced demand planning and inventory management decision support tools in conjunction with collaborative supplier engagement. MABS utilizes competitively sourced (where able), long term supplier agreements that eliminate standard lead-times and optimize supplier production capacity planning and resourcing.

Only MABS can provide the necessary expertise, capacity, capability and proficiency to perform a PBL effort under this program. MABS is the only company which possesses the requisite engineering expertise, configuration management, tooling and management knowledge to ensure that items conform to the proper form, fit and function, thus keeping complex items reliable and safe. MABS is the only source that possesses the full range of technical data (some of which is proprietary) required to manufacture the items and provide the services that may be required under this effort. MABS is the only contractor that can leverage it’s production capability and has an in-depth knowledge of the vendor base capable of supporting the parts and services at the required level of support. For the sole source material anticipated, it has been determined the Government does not have complete, unrestricted data packages available. Additionally, MABS has established internal production processes and qualified various industrial support contractors as suppliers. No contractor other than MABS, the OEM of the various end items to be supported, has the capability to perform all the requirements of the comprehensive performance based supply chain management program.

MABS is the only entity with the full data rights to provide all the sole source material as well as the OEM based data and systems engineering expertise to fully support the complete range of performance based sustainment activities across the full spectrum of support anticipated.

Only MABS has personnel with the requisite breadth and depth of experience and understanding of the totality of technical data necessary to fulfill a PBL requirement for these end items and ensure the currency, accuracy and completeness of the technical data and associated databases. Once modifications or process changes are initated by the Government, only MABS has the existing infrastructure to ensure timely execution of such changes, including the ability to efficiently execute changes simultaneously into production and fielded aircraft.

Furthermore, by having only one contractor responsible for the bulk of supply chain management, the Government has a single focal point with management accountability and contractual responsibility. No other source has the long-standing business relationships with the supplier base that MABS has developed relative to this requirement. No other source can leverage this supplier base as well as MABS can to assure the continued effective, reliable and safe sustainment of the supply chain. Any other contractor would introduce an unacceptable degree of risk into the supply chain effort. In sum, no contractor other than MABS has the requisite data and detailed systems engineering and integration knowledge to successfully execute the highly integrated and complex performance based supply chain management support requirements anticipated under this project.

Additionally, by leveraging MABS’robust capabilities DLA is expected to see improvements in material availability, material, and reduced inventory investment requirements.

Any performance based sustainment efforts initiated under the contract(s), will have its own unique sub-contract and unique contract number, reflecting negotiated pricing and any unique requirements that were not previously agreed upon by MABS, and will contain a unique/specific Statement of Work (SOW) and performance requirements.

Accordingly, MABS is the only firm capable of providing the services and supplies described in Section III above without the government experiencing delays in fulfilling its requirements.

VI. DESCRIPTION OF EFFORTS MADE TO ENSURE THAT OFFERS ARE

SOLICITED FROM AS MANY POTENTIAL SOURCES AS DEEMED

PRACTICABLE

This requirement was synopsized on the Federal Business Opportunities (FedBizOpps) web page as required by FAR 5.201 on June 20, 2017. It was anticipated that sources having an interest in subcontracting may be identified through synopsis, but no response other than from MABS was received. 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 the synopsis will be identified to MABS as a potential for subcontracting possibilities. Future interest from additional sources is not anticipated at this time, but future work requirements will nevertheless be advertised via FedBizOpps as well to ensure that potential alternate sources are aware of the requirement and can identify interest in support for the applicable items.

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/services covered by this Class J&A will be fair and reasonable. MABS will be required to provide appropriate proposal supporting data in accordance with FAR Part 12.

MABS will not be required to provide certified cost or pricing data for items deemed commercial. Price analysis will be used to determine price reasonableness for commercial items. Should data other than certified cost or pricing data be utilized, the Government’s negotiation objective will be developed using local technical analysis. Additionally, the Government will analyze sales data to non-governmental entities to ensure that the same or similar parts are sold in substantial quantities in the commercial market. Should an item be deemed non-commercial and the extended value exceed the threshold at FAR 15.403- 4(a)(1), MABS will be required to provide certified cost and pricing data. Should MABS refuse to provide such data, the item will not be added to the contract.

The ten-year term of each possible contract (5-year base plus one 5-year option), and the tenets of each method of support, will motivate MABS business units to continually seek out opportunities for reliability improvements, obsolescence management, process improvements and more efficient operations over the contract period. This contract will be negotiated assuming decreased costs associated with efficiencies that will be gained through the potential ten-year performance period of each requirement. 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, OR STATEMENT OF THE REASONS MARKET RESEARCH WAS

NOT CONDUCTED

NSNs included in the initial population for the initial awards are deemed to be sole source to MABS based on Market Research, which included an analysis of the AMC/AMSC coding inside of Government systems to verify if the Government owns sufficient data to compete or find additional sources. The result of the query is that the Government does not own sufficient technical data to develop Source Qualification documentation to seek out, and find, additional sources. In addition to the AMC/AMSC analysis a Technical Review was performed on the NIIN list to determine if additional sources are listed in Government databases; that review yielded no additional CAGEs outside of the MABS business units listed in Section II of this document. Additional Market Research in accordance with FAR Part 10 will be conducted prior to adding NSNs to the contract beyond the initial population.

These parts have been supported through a sole source contract with MABS that was awarded in August of 2013. Vendor surveys were conducted with MABS business units via email and teleconferences to determine a strategy to improve support and the Government’s buying power under the new program. Feedback from those meetings have been incorporated into the overall structure and strategy of this program.

A review of the class population confirmed that the initial items to be solicited are sole source to MABS. Technical certifications will be required for every NSN involved in this program. A synopsis will be posted to FedBizOpps to advise industry of the procurement and solicit further inquiries from interested parties prior to issuance of the Request for Proposal. It is anticipated that no other source other than MABS, the only known source capable of providing these parts, will be interested in this procurement.

A Sources Sought notice was posted to FedBizOpps on 01 June 2017 accordance with DFARS PGI 206.302-1. One response was received, from a Large Business, asserting that they have the capability to manufacture approximately 10 of the consumable items.

The vendor asked that the government provide drawings and/or manufacturing data, which the government does not possess. The potential source was advised to submit source approval requests for the items of interest.

Based on the market research conducted, there is a high level of confidence that there are no additional sources capable of satisfying the agency's need for these proprietary items nor are there any other commercial or nondevelopmental items which could be utilized or modified to meet the agency's need.

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

AND OPEN COMPETITION

As detailed above, MABS is the OEM for all parts associated with this procurement.

MABS’ unique engineering expertise and world wide support infrastructure make it the only company capable of providing support of the magnitude and complexity needed to support all possible methods of support under this acquisition. Additionally, the Government does not own sufficient data that could be made available to any other source to perform all of the requirements anticipated by this comprehensive level of support.

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

THE ACQUISITION

As indicated in Section VI above, this requirement was synopsized on the FedBizOpps website as required by FAR 5.201, on June 20, 2017. No source other than MABS expressed interest.

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 nature of this work, there is no opportunity at this time to remove barriers to competition at the prime contractor level. However, the Government intends to include FAR 52.219-16, Liquidated Damages- Small Business Subcontracting Plan in the contract and work in close coordination with both the DLA Small Business Office and MABS 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. DLAD Clause 52.217-9002, Condition for Evaluation/Acceptance of Part Numbered Items, will be included in the solicitation which provides guidance for potential suppliers. Additionally, MABS may be required to obtain common consumables required for the later ins of this effort from the Defense Logistics Agency, and all applicable competitive processes will continue to be utilized for acquisition of common consumables.

This acquisition will include DLAD 52.216-9006, Addition/Deletion of Items, which allows additional sole source items to be added to the contract after the initial award. Prior to pricing and adding items to the contract, a complete technical review, sole source certification and synopsis will be completed. Any items found to have additional sources of supply will be excluded as candidates to be added. Conversely any item which becomes competitive after award will be unilaterally deleted from the contract.

The Contracting Officer will continue to synopsize items that may be added to this contract in order to investigate the possibility of competition. The Competition Advocate will review the requirements to verify that all requirements are sole source. As stated above, MABS is the only known source with the capability of furnishing the required logistics support.

Future work requirements and/or additions to the contract will nevertheless be advertised in the FedBizOpps website (www.fedbizopps.gov), prior to execution, in order to ensure that potential alternate sources are aware of the requirement and can identify interest in support for these items.

XII. CONTRACTING OFFICER’S CERTIFICATION

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

Attachments:

Signed Technical Certifications