SPRBL119R0064_ JA- Redacted.pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

SOLICITATION SPRBL1-19-R-0064

In pursuit of increasing competition and saving cost, the Government continues to ascertain whether NGSC is willing to sell the hardware TDP rights and, if so, at what cost. The Government’s latest attempt to obtain STARLite hardware TDP rights was via email on 23 April 2018. NGSC’s email response on 2 May 2018 reiterated its desire to maintain sole ownership and not sell the TDP rights at this time. However, the NGSC’s company representative did state that, although NGSC does not desire to sell the hardware TDP, they may be willing to consider placing the TDP in an escrow account. A hardware TDP escrow account may help protect the Government’s interest in maintaining the STARLite SAR/GMIT system in the event NGSC elects to cease offering support services in the future. Although the Government will inquire about the terms of establishing an escrow during negotiations, it appears NGSC will continue to hold sole rights over the hardware TDP.

As a result of the Government’s inability to procure the hardware TDP from NGSC, the Government considered the practicability of reverse engineering. The Government recognizes that a reverse engineering effort would require gathering technical experts that are not readily available, and would include complex tasks associated with extremely volatile technical activities that reduce the probability of successfully executing an endeavor, which may lead to a degraded Warfighter operational capability and risk casualties. Along with these risks associated with rapidly-changing environments and continuous evolution of software and related technology, the Government estimates it would take another source approximately three (3) years to reverse engineer, conduct mandatory tests, and validate results. This projected three (3) year period represents an unacceptable delay that would severely impact the mission and pose operational, security, and safety risks for Warfighters that rely upon this critical system on the battlefield.

The feasibility of reverse engineering the STARLite SAR/GMIT hardware TDPs to enable competition is not only considered extremely high-risk for the reasons set-forth above, but competing the requirements would also present substantial duplication of costs. Specifically, efforts to replace the currently fielded system would neither be advantageous nor cost effective because of the significant cost investment that has already reached approximately $350 million since 2008. In addition to this $350 million already invested in STARLite SAR/GMIT, an estimated $75 million to $174 million would be required to reverse engineer the hardware TDPs, representing a significant duplication of costs that would not be recovered through competition. This estimate was derived from the business case analysis (BCA) entitled “Lifecycle Support Business Case Analysis Type II for Product Manager Robotic and Unmanned Sensors on STARLite Synthetic Aperture Radar Ground Moving Target Indication Mode Program.”

A full and open competition analysis for the STARLite SAR/GMIT system support was conducted and determined not feasible via a market survey and BCA. First, a market survey indicated that vendors other than NGSC would have to reverse engineer the STARLite SAR/GMIT hardware TDP items to meet the Government technical requirements. Second, the BCA analyzed the effect of introducing a second STARLite SAR/GMIT variant to the field. Consequently, the market survey and BCA determined that it would cost an additional $75 to 174 million.

This estimated cost is comprised of introducing and managing a second logistic footprint in addition to managing the current arrangement with NGSC for STARLite assets in operation, which is deemed cost prohibitive.

Consequently, reverse engineering the hardware TDP is considered extremely high-risk and would present unacceptable levels of performance, unacceptable schedule delays, and significant duplication of costs to the program. A reverse engineering endeavor will negatively affect mission capability and readiness, thereby endangering the Warfighter who depends on the STARLite SAR/GMIT tactical responsiveness of wide area, near real-time reconnaissance, surveillance, and target acquisition capabilities. At this time, the only viable option is to obtain the lay-in materials and services from NGSC. Additionally, the Army intends to upgrade the STARLite SAR/GMIT system within the next five years and anticipates the upgrade to be based on a full and open competition contract award.

[ ] 10 U.S.C. 2304(c) - _____________________________________________________________.

Brief narrative supporting the situation and weapon system:

5. If restricted to the only source(s) of supply, include source(s) and CAGE code:

CAGE Code 97942, NGSC is the OEM source for this item.

The use of the authority cited below:

[X] AMC 5. Acquire directly from the sole source contractor, who is not the manufacturer.

The use of the authority cited is based on:

[X] AMSC P. The rights to use the data needed to purchase this part from additional source(s) are not owned by the Government and cannot be purchased, developed, or otherwise obtained. It is uneconomical to reverse engineer this part. This code is used in situations where the Government has the data but does not own the rights to the data.

If only one source has the rights or data to manufacture this item, AMCs 3, 4, or 5 are valid. If two or more sources have the rights or data to manufacture this item, AMCs 1 or 2 are valid.

[ ] The supplies are urgently required to maintain________________________________________ and the using Service military capability will be seriously injured unless the agency is permitted to limit the number of sources from which it solicits bids or proposals and not delay award of the contract. The negative impact if not procured in a time manner can be described as follows:

[ ] The requisitioner has assigned a priority designator within Issue Priority Group I. The assignment of a priority designator within IPG I is controlled by the procedures of Department of Defense Directive 4410.6 and indicates that the Services’ military capability will be seriously injured unless the agency is permitted to limit the number of sources from which it solicits proposals. Requirements citing an IPG 1 priority are certified as accurate by review of the commanding officer of the requisition unit or designated representative. Only the most urgent requirements are properly coded within IPG 1.

[ ] The requisitioner has also cited an expedited handling signal of 999, N__, or E__ or an Office of the Secretary of Defense/Joint Chiefs of Staff project code beginning with a "9". (DoD 4000.25-1-M describes the circumstances where these codes may be assigned.)

[ ] Procurement from a specified source or agency is authorized by statute, _____________ (list).

[ ] This acquisition is being processed in accordance with the Class J&A which covers Diminishing Manufacturing Sources and Material Shortages (DMSMS) Life of Type (LOT)

[ ] Other:

(Explain)____________________________________________________________________________________

6. Efforts to ensure that offers are solicited from as many sources as practicable are:

[X] The acquisition will be synopsized on or about _29 August 2019__.

[ ] Manufacturers of similar products identified in the market research will be solicited.

[ ] Dealers of the manufacturers will be solicited.

[ ] A synopsis exception cited in FAR 5.202 applies. (explain) [ ] Other. (Explain)__________________________________________________________________ .

7. I hereby determine that the anticipated cost to the Government will be fair and reasonable.

Discuss relevant pricing issues, including the basis for determining that the anticipated price/cost will be fair and reasonable. Also include length of contract, quantity, and other contract particulars bearing on the price.

This NSN was previously procured on contract W15P7T-13-D-C118/KZ02, NGSC/CAGE Code 97942, Not Small Business, Single Award Indefinite Delivery/Indefinite Quantity (ID/IQ). Price Analysis will be used to determine fair and reasonable, which will incorporate the most relevant prices using two different/related Producer Price Indices (PPI) as comparison.

8. Market Research/Efforts to Obtain Competition:

Describe the market research conducted and the results.

Market research was conducted for this effort and yielded only one potential source: NGSC. Competition is not feasible at this time absent TDPs. Also, market research has found a BOA, SPE4A1-16-G-0005, NGSC, CAGE Code 97942, that will be used as the contract vehicle for this requirement.

A sources sought notice was published on the FedBizOpps website on 29 March 2019 (Sources Sought Announcement (SSA) No. SPRBL1-19-Z-0001). The notice intended to identify sources capable of supplying SRUs of the AN/ZPY-1A STARLite ER (NSN 5865-01-603-3028) configuration, which are fielded systems that require spare SRUs to support the repair efforts at CECOM TYAD. The Government only received one (1) response— from NGSC—which directly supports a finding that NGSC is genuinely the OEM and the only source capable of providing support services for the STARLite SAR/GMIT system. Furthermore, NGSC is the only source capable of providing: radar engineering; maintenance; hardware and software support; configuration management; field support; repair parts support and procurement; and integration support. Additionally, the Government determined that the outcome of the notice is undoubtedly a result of NGSC distinguishing themselves as the sole owner of the hardware TDPs. NGSC’s adequate response to the market research notice reassures the Government that the company is capable of providing the required supplies and services. Finally, NGSC expressed a willingness to enter into a Work Share Agreement (WSA) with TYAD and the CECOM Integrated Logistics Support Center (ILSC) for the repair of STARLite SAR/GMIT hardware. A WSA is an agreement between industry and the Government, in most cases involving instances in which the Government does not own nor have access to the TDP. The vendor will grant the Government limited access to agreed upon portions of the TDP in most instances to allow for compliance to 10 U.S.C. §2464(a)(1) (Core Logistics Capabilities), which states, “[i]t is essential for the national defense that the Department of Defense maintain a core logistics capability that is Government-owned and Government-operated (including Government personnel and Government-owned and Government-operated equipment and facilities) to ensure a ready and controlled source of technical competence and resources necessary to ensure effective and timely response to a mobilization, national defense contingency situations, and other emergency requirements.”

In the case of STARLite, the OEM, NGSC, has agreed to provide TYAD the required equipment, material, and training to perform limited repairs on STARLite's components as a means of its long term sustainment concept.

This agreement introduces new repair capabilities to the organic infrastructure and affords the Government to realize cost savings due to the differences experienced between OEM and organic labor and fee costs. It must be noted that the Government is only equipped to perform limited repair activities. The remaining activities will be performed by the OEM.

Market Survey [10 U.S.C. 2304(f)(3)(D)]:

[X] A market survey was conducted on/during: 29 March 2019.

Total number of vendors contacted: one (1).

Names of vendors contacted and responding: NGSC, CAGE Code 9794.

Techniques used to conduct survey: Noticed posted to FedBizOpps website.

Types of information requested: The notice intended to identify sources capable of supplying SRUs of the AN/ZPY-1A STARLite ER (NSN 5865-01-603-3028) configuration, which are fielded systems that require spare SRUs to support the repair efforts at CECOM TYAD.

Summary of information received: The Government only received one (1) response— from NGSC—which directly supports a finding that NGSC is genuinely the OEM and the only source capable of providing support services for the STARLite SAR/GMIT system.

Information received regarding the commerciality of the item(s):

No information was received regarding the commerciality of these items.

[ ] A market survey was not conducted due to the unusual and compelling urgency of the requirement.

[ ] A market survey was not conducted due to:

9. Additional facts supporting other than full and open competition are:

[ X] Based upon the technical certification as signed below – Value Engineering Proposal (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 the Government.

[ ] As stated by the requiring activity, the Military Services will be seriously injured in contract award is delayed.

The extent and nature of harm are detailed below:

[ ] When FAR 6.302-1 is cited for follow-on acquisitions as described in 6.302-1(a)(2)(ii), an estimate of the cost to the Government that would be duplicated and how the estimate was derived.

APPROVAL/CERTIFICATION

I have reviewed and approve this justification:

Competition Advocate Signature Date

APPROVAL REQUIREMENTS

[ ] Up to $700,000 Contracting Officer

[ X ] $700,000 to $13,500,000 Competition Advocate

[ ] $13,500,000 to $93,000,000 Head of Contracting Activity (HCA)

[ ] over $93,000,000 Senior Procurement Executive (AQ) (DLA General Counsel signature line required when sending to AQ)