SPE7LX18RX021_-_reviewed_Redacted.pdf

SPE7LX18RX021

For Official Use Only See FAR 2.101 & 3.104 Page 1

MEMORANDUM FOR RECORD

SUBJECT: Justification for Other than Full and Open Competition for acquisition of one

NSN under authority of 10 U.S.C. 2304(c) (1)

SOLICITATION: SPE7LX18RX021

1. Summary/introduction:

a. Field activity/agency: The purchasing activity for this acquisition is the Defense

Logistics Agency (DLA), Land andMaritime.

b. Item being purchased: This requirement is for the acquisition of one NSN, a circuit card assembly (power supply), used in military and commercial radio systems, such as the RT-1702 and the RT- 1523. The sources and part number information is listed below and includes the Reference Number Category Code (RNCC), a code that designates the relationship of the part number to an item of supply, as well as the Reference Number Variation Code (RNVC) which indicates that a cited part number is or is not item identifying, or is for information only. The Acquisition Method Code (AMC) and Acquisition Method Suffix Code (AMSC) is also listed below. The AMC code describes to the contracting officer and other Government personnel the results of a technical review of a part and its suitability for breakout, and the AMSC code provides the contracting officer and other Government personnel with engineering, manufacturing, and technical information.

NSN Part Number RNCC RNVC AMC AMSC CAGE NAME 5998-01-535-4013 A3307032-1 5 2 3 C 14304 Harris Corporation

A3307032-1 5 2 3 C 31550 Harris Corporation A3307032-1 3 2 3 C 80063 U.S. Army Communications

RNCC

Code:

3 – Design control reference.

5 – Secondary Reference. Assigned to an item of production or supply by a commercial or government organization, which represents the same item of production or supply to which the national stock number was assigned.

RNVC

Code:

2 – A design control reference or other reference number that is an item-identifying number for an item of production, or is either a source control reference, a specification or a standard part, type, or similar reference number that is an item-identifying number for an item of supply.

AMC Code: 3 - Acquire, for the second or subsequent time, directly from the actual manufacturer.

AMSC

Code

C - This part requires engineering source approval by the design control activity in order to maintain the quality of the part. Existing unique design capability, engineering skills, and manufacturing knowledge by the qualified source(s) require acquisition of the part from the approved source(s). The approved source(s) retain data rights, manufacturing knowledge, or technical data that are not economically available to the Government, and the data or knowledge is essential to maintaining the quality of the part. An alternate source must qualify in accordance with the design control activity's procedures, as approved by the cognizant Government engineering activity. The qualification procedures must be approved by the Government engineering activity having jurisdiction over the part in the intended application. If one source is approved, AMCs 3, 4, or 5 are valid. If at least two sources are approved or if data is adequate for an alternate source to qualify in accordance with the design control activity's procedures, AMCs 1 or 2 are valid.

c. Estimated value and purchase order duration: The proposed action is for the solicitation and award of a five-year, Firm-Fixed-Price, Indefinite Delivery Purchase Order (IDPO). The five-year period is inclusive of one three-year base period and two one-year option periods. The procurement values are listed below.

For Official Use Only See FAR 2.101 & 3.104 Page 2

National Stock Numbers on

Solicitation (NSN) Estimated Annual

Demand Value (ADV) Purchase Order

Maximum (ADV x 5.5 ) Purchase Order

Minimum (ADV x 1% )

2. Description of agency’s need (10 U.S.C. 2304(f)(3)(A))

a. Origin of the procurement: The proposed solicitation will provide circuit card assemblies, used in military and commercial radio systems, such as the RT-1702 and the RT-1523. The annual demand is listed below.

NSN ITEM

ANNUAL

PROJECTED

DEMAND

(ADQ)

5998-01-535-4013 Circuit Card Assembly 1920

b. Description of the supplies needed: The one NSN being procured is a circuit card assembly, used in military and commercial radio systems, such as the RT-1702 and RT-1523. The NSN being procured has one approved source, Harris Corporation (CAGEs 14304 & 31550). A description of the Federal Supply Group (FSG) and the Federal Supply Class (FSC) is listed below. The FSG is represented by the first two digits of the NSN and identifies, by title, the commodity area covered by classes within the group. The FSC is represented by the first four digits of the NSN and the code covers a relatively homogeneous area of commodities, in respect to their physical or performance characteristics, or in the respect that the items included therein are such as are usually requisitioned or issued together, or constitute a related grouping forsupply managementpurposes.

FSG 59: Electrical and Electronic Equipment Components

FSC 5998: Electrical and Electronic assemblies, Boards, Cards, and Associated Hardware

Excludes circuit card and electronic component assemblies which can be identified to a more definitive Approved Item

Name.

c. Specific need of use for the items: As previously stated, the NSN being procured is a circuit card assembly, used in military and commercial radio systems, such as the RT-1702 and the RT-1523. The description of the item is included below and was supplied by , Mechanical Engineer, DLA Land andMaritime.

5998-01-535-4013 – P/N A3307032-1; Circuit Card Assembly – Power Supply Card The Power Supply Card incorporates switching power supplies and provides the voltages needed by the radio. This function is very much the same as the power supply in other systems, both military and civilian.

3. Statutory Requirement - (10 U.S.C.2304(f)(3)(B)):

The statutory authority permitting other than full and open competition is 10 U.S.C 2304(c)(1), the property or services needed by the agency are available from only a limited number of responsible sources and no other type of property or services will satisfy the needs of the agency.

The Government requires spare parts that are form, fit, and functionally interchangeable with the parts currently being used on the supported weapon systems. The only manufacturing source approved by the military customer’s design control activity with the comprehensive knowledge and expertise necessary to manufacture this item is Harris Corporation (CAGEs 14301 & 31550). The Government does not

For Official Use Only See FAR 2.101 & 3.104 Page 3 currently possess detailed technical data sufficient to provide a description of all required form, fit, and function characteristics of this part.

4. Price/cost considerations (10 U.S.C.2304(f)(3)(C))

a. Relevant pricing issues: This solicitation will be conducted under the policies of FAR Subpart

13.5 “Simplified Procedures for Certain Commercial Items”. As this is a commercial solicitation, Certified Cost or Pricing Data is not required. The price analysis of historical contracts, as well as current and future years will be based on the Global Insights Producer Price Index (PPI) forecasts. The Global Insights PPI forecast data is provided by the DLA Land and Maritime Pricing Support group, and provides timely, accurate price & cost analysis, allowing procurement professionals to understand supplier cost structure and better negotiate supplier quotes.

b. Length of procurement, quantity, and other procurement particulars bearing on the price/cost: As previously mentioned, this is a five-year, Firm-Fixed-Price, Indefinite Delivery Purchase Order (IDPO). The five-year period is inclusive of one three-year base period and two one-year option periods. As such, the price analysis for future years will be based on the Global Insights Producer Price Index (PPI) forecasts. The Global Insights PPI forecast provides timely, accurate price and cost analysis, and historical records for thousands of commodity prices and wages around the globe allowing procurement professionals to understand supplier cost structure and better negotiate supplier quotes.

c. The Contracting Officer determines that the anticipated cost to the Government will befair and reasonable.

5. Market research/efforts to obtain competition (10 U.S.C. 2304(f) (3) (D) & (E).

a. DLA Land and Maritime conducted various forms of market research including the publishing of a formal sources sought notice and market survey to the Government Point of Entry, www.fbo.gov. In addition to the publishing of a sources sought notice, the Contract Specialist also researched the procurement history and approved source of supply for the subject NSN on the proposed solicitation. The Strategic Sourcing Specialist and the Contract Specialist emailed the approved source of supply, requesting market survey information. Furthermore, the contract specialist researched Reference Number Category Code (RNCC), the Reference Number Variation Code (RNVC), the Acquisition Method Code (AMC) and the Acquisition Method Suffix Code (AMSC) for the item on the proposed solicitation. The results of the marketresearch are listedbelow.

Sources Sought Notice:

The Strategic Sourcing Specialist published a formal sources sought notice and market survey to the Government Point of Entry (GPE), www.fbo.gov on June 21, 2016 with a response date of June 28, 2016, and no responses were noted. The Contract Specialist posted a formal sources sought notice on April 28, 2017 with a response date of May 5, 2017. Several responses were received from businesses requesting drawings in order to manufacture the item. The drawings are unavailable to the Government, as the item is sole sourced to Harris Corporation, and this information was communicated to businesses.

NSN 5998-01-535-4013 does not currently have an open 339 or SAR package. Per Equipment Specialist/Value Analyst for the Value Engineering Division, on 2/9/18, DCX-Chol’s latest SAR package was rejected for several reasons, including missing drawings.

Competition Advocate, stated that on 2/9/18, DCX-Chol was notified, via email, that their SAR package had been disapproved as incomplete. also stated that Value Engineering had coordinated with the ESA (DSCC-VE-17-96490) in an attempt to make subject NSN competitive. However, the TDP provided by the ESA was determined to be inadequate, as it was missing many drawings. stated that at this time there is only one approved source for this item, Harris Corporation, p/n A3307032-1.

For Official Use Only See FAR 2.101 & 3.104 Page 4

Procurement History and Approved Sources:

The contract specialist researched the procurement history and the approved source of supply for the NSN on the proposed solicitation; the procurement history indicates that the approved source of supply, Harris Corporation (CAGEs 14304 & 31550), has provided this item, along with one of their dealers, a large businesses. The Strategic Sourcing Specialist contacted Harris Corporation in April 2016, requesting a market survey, which Harris Corporation returned. The Contract Specialist contacted the approved source and several dealers in April and May 2017, emailing market surveys and requesting updated information. A summary of the most recent responses received are listed below and a recap of the market research conducted by the Strategic Sourcing Specialist and the Contract Specialist is included as an attachment to this document.

Harris Corporation - (CAGEs 14304 & 31550): Harris stated that they are a large business manufacturer and that they prefer to deal directly with the Government. Harris stated that they have a commercial distribution network, and that their dealers are not exclusive. Harris stated they were interested in pursuing a Long Term Contract, , as the item is commercial and not subject to the C/P requirement.

Science Application International Corporation (SAIC) - (CAGE 79343): SAIC stated they were a large business distributor and they were independent from the OEM, Harris Corporation (14304). SAIC stated they were interested in a Long Term Contract

SAIC

stated the item is not commercial.

Kampi Components Co., LLC - (CAGE 7Z016): Kampi stated that they were an independent, small business distributor for Harris (14303). Kampi stated they were interested in a Long Term Contract and stated the item was not commercial.

A market survey was also sent to Phoenix Trading CAGE 4LF36, with no response received.

Market Surveys were received from Naprotek Inc. (3EUZ6) and DCX-CHOL Enterprises (27456) from the second sources sought notice posted in April 2017, with both companies stating they would like to manufacture the item. Naprotek Inc. and DCX-CHOL were informed that the item is sole sourced to Harris Corporation. Two additional responses were received, from the sources sought notice, from Controltek, Inc.

(3DPA4) and RBB Systems (0NYH2), requesting technical information, and they were also informed that the item is sole sourced to Harris Corporation. (See Attachment 2 – Market Survey Recap.)

For Official Use Only See FAR 2.101 & 3.104 Page 5

Market Research Conclusion:

Based on the information received and presented in the above market research and the market research attachment, the bidders list will include all interested companies responding with a market survey, or any companies who did not state directly that they were not interested.

b. Synopsis, and other efforts made to publicize the requirement and generate competition:

In accordance with FAR 5.204 and 5.203(a), a pre-solicitation notice will be published to the Government Point of Entry at least 15 days, and will run concurrently with the solicitation.

6. Actions Being Taken to Overcome Barriers to Competition (10 U.S.C. 2304(f) (3) (F)).

The Government will continue to conduct market research to ascertain if changes occur in the marketplace that would enable future actions for this item to be competitive. The Government will also include a clause in this solicitation that provides that the Government will consider alternate offers, and that alternate offerors should submit a source approval request (SAR) package that will be referred to the engineering activity. If the current procurement cannot be delayed, due to mission requirements and to allow sufficient time for the engineering activity to determine whether to approve the alternate offer, the SAR package will be considered for future awards.

The technical and requirements personnel have reviewed and certified as accurate and complete all necessary data to support their recommendation for other than full and open competition.

Based upon the technical certification on file in DLA Land and Maritime-VEP technical data is not available and cannot be developed to permit full and open competition. The data presently available reflects the minimum needs of theGovernment.

In addition to the specific actions being taken by Technical Support personnel to overcome barriers to competition before any subsequent acquisitions or recertification of class determination are made, this item is subject to the following methods of locating additional sources:

Per PGI 206.304, the requirement states that “the justification shall include a copy of the previous justification to assist the approval authority in determining whether the planned actions to remove any barriers to competition cited on the previous justification were completed.” Based on a review of the contract history of NSN 5998-01-535-4013, there is one prior award over the Simplified Acquisition Threshold of $150,000.00. The J & A (Attachment #3), the only large contract for NSN 5998-01-535- 4013. SPE7M515C0055, dated 8/20/2015, was reviewed to determine whether the planned actions to remove any barriers to competition were completed. This previous J&A indicates that the item was to be synopsized on FedBizOps for 15 days during March and April 2015, and then the solicitation was to be posted to DIBBS for 30 days. The market research was conducted with responses received from then sole source Exelis (CAGE 31550), (Exelis was later purchased by current sole source Harris), Avcom SMT (5YBN6), CMS Associates, Inc. (79488), and TJR Electronics (5ZRD1). A Sources Sought notice was posted to FedBizOps in January 2015 for 5 days.

Based on this information from the previous J & A, it is determined that the planned actions to remove any barriers to competition were completed. This NSN, 5998-01-535-4013, has an AMC/AMSC of 3C, which means that this part “requires engineering source approval by the design control activity in order to maintain the quality of the part. Existing unique design capability, engineering skills, and manufacturing knowledge by the qualified source(s) require acquisition of the part from the approved source(s). The approved source(s) retain data rights, manufacturing knowledge, or technical data that are not economically available to the Government, and the data or knowledge is essential to maintaining the quality of the part. An alternate source must qualify in accordance with the design control activity's procedures, as approved by the cognizant Government engineering activity. The qualification procedures

For Official Use Only See FAR 2.101 & 3.104 Page 6 must be approved by the Government engineering activity having jurisdiction over the part in the intended application”. At this time, the requirement/guidance in PGI 206.304 has been fulfilled.

CONTRACTING OFFICER CERTIFICATION

I hereby certify that the information contained in this justification is accurate and complete to the best of my knowledge and belief.

KRAFFT Digitally signed by KRAFFT

SPAYDE.CARRIE.L.129937 SPAYDE.CARRIE.L.1299372029 03/08/18

_2_0_29 D_at_e:_2_01_8_.0_3_.0_8_08_:0_0_:0_6_-0_5_'0_0'

Carrie Krafft Spayde Date Contracting Officer

Approval / Certification

I have reviewed and approve this justification. The estimated total value of the J&A is

MARY E. COUTURE Date Competition Advocate

APPROVAL REQUIREMENTS

( ) Up to $700,000 Contracting Officer

(X) $700,000 - $13,500,000 Competition Advocate ( ) $13,500,000 - $93,000,000 Head of the Contracting Activity (HCA) ( ) over $93,000,000 Senior Procurement Executive (AQ)

Attachments:

1. Sources Sought Notice

2. Market Research Summary

3. J&A for prior contract SPE7M515C0055

COUTURE.MAR

Y.E.1230253613

Digitally signed by

COUTURE.MARY.E.1230253613

Date: 2018.03.21 12:52:46 -04'00'