FD20201701711_Redacted.pdf

FD2020-17-01711-01

B. Total estimated cost is: . This estimate is based on USAF mission requirements as computed by the D200 Requirements Determination System. This action will use 4930 FC04 working capital funds.

C. Since the government does not control the design or own the data required to manufacture the KC-135 Directional Sleeve, there are no feasible actions that could develop future competition as referenced in Section V, below.

IV. STATUTORY AUTHORITY PERMITTING OTHER THAN FULL AND OPEN

COMPETITION:

10 USC 2304 (c) (1) as implemented by FAR 6.302-1 -- Only One (or a limited number of) 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 AUTHORITY CITED

ABOVE (APPLICABILITY OF AUTHORITY):

A. The above authority was selected because the requirement is for manufacture of a highly specialized component whose design is currently limited to Hydro-Aire, Inc. Per the 417 SCMS/GUEA Engineer, the KC-135 Directional Sleeve is considered highly specialized because of the geometry, materials and processing requirements have been optimized by Hydro-Aire, Inc. to meet the government’s requirements, as part of the KC-135 brake system. If the wrong materials, processes or geometry are used for the KC-135 Directional Sleeve, it could be ineffective, unreliable, or both. Therefore, this acquisition will be for the procurement of highly specialized assets.

B. The Air Force does not control the design or the data required to manufacture the KC-135 Directional Sleeve. The 417 SCMS/GUMB team contacted Ermine Melkonian and Michael Agnew at Hydro-Aire, Inc. on 11 January 2018 regarding their willingness to sell/license the data to the government to use for a competitive procurement. Hydro-Aire responded to the request that they are unwilling to sell/license the data to the government. The government does not possess the design, data, or license rights required to allow full and open competition for the manufacture and procurement of the KC-135 Directional Sleeve.

C. The 417 SCMS/GUEA Engineer has determined that reverse engineering/duplicate costs to develop a qualification package and encourage competition are estimated to exceed $ Based on this cost it would take over 534 years to break even. The parameters for this component are limited to the Original Equipment Manufacturer (OEM) with the designs, data and drawings created at Hydro-Aire’s own expense. Since the data required to manufacture the KC-135 Directional Sleeve is limited to Hydro-Aire, Inc., interested vendors would have to be willing to invest the time, funding and manpower required to reverse engineer the entire KC-135 Directional Sleeve at their own expense.

D. Accordingly, Hydro-Aire Inc. is the only firm capable of providing the supplies described in Section III above without the Government experiencing substantial duplication of cost that could not be expected to be recovered through competition and would cause unacceptable delays in fulfilling the requirement. Based on the preceding information, the AMC/AMCS code assigned to this NSN is 3/R.

VI. DESCRIPTION OR EFFORTS MADE TO ENSURE THAT OFFERS ARE

SOLICITED FROM AS MANY POTENTIAL SOURCES AS DEEMED PRACTICABLE:

A. A combined Request for Information and Sources Sought Synopsis (RFI/SSS) SPRHA1-18- R-0020 was posted to FedBizOpps.gov on 2 October 2017. The RFI/SSS closed on 16 October 2017. The contracting office was not notified of any interest from industry.

B. This requirement will be synopsized in FedBizOpps, as a notice of contract action IAW FAR

5.201. If other sources express interest as a result of this synopsis or other action, they will be listed in the official contract file.

C. Other actions: 417th SCMS engineers regularly pursue discourse with industry manufacturers who may be interested in reverse engineering, or redesigning the KC-135 Directional Sleeve in an effort to expand the manufacturing base. Furthermore, the 417th SCMS IPTs inquire approved manufacturers as to the possibility of sharing or selling data rights to proprietary technology, designs, or processes utilized in military aircraft landing gear manufacturing.

D. Qualifying Country Sources: None

VII. DETERMINATION BY THE CONTRACTING OFFICER THAT THE

ANTICIPATED COST TO THE GOVERNMENT WILL BE FAIR AND REASONABLE:

The following steps will be taken to ensure that the anticipated cost of this acquisition will be fair and reasonable. The Contracting Officer will comply with the procedures and criteria contained in Federal Acquisition Regulation (FAR) under Part 30 - Cost Accounting Standards, Part 31 - Contract Cost Principles and Procedures, Subparts 15.4 - Contract Pricing; to include technical evaluations and audits, as appropriate. Additional steps to ensure price reasonableness will be under the guidance of the Contract Pricing Reference Guides, jointly developed by the Federal Acquisition Institute and the Air Force Institute of Technology. The Contracting Office will obtain cost and pricing data IAW FAR Subpart 15.403. The final step is to include the Price Negotiation Memorandum (PNM). This detailed documentation and justification of price reasonableness will be disclosed in the official PNM, to be prepared upon completion of negotiations.

VIII. DESCRIPTION OF MARKET RESEARCH CONDUCTED AND THE RESULTS

OR A STATEMENT OF THE REASONS MARKET RESEARCH WAS NOT

CONDUCTED:

A. As described in Section VI above, market research, in accordance with FAR Part 10, was conducted by a Sources Sought Synopsis of the proposed acquisition, advising industry of the pending acquisition and soliciting inquiries from interested parties. There were no interested sources.

B. In addition, the 417 SCMS/GUMB Integrated Product Team conducted market research that yielded the following results:

1. On 11 Jan 2018, a review of commercial catalogs, company literature, proprietary data rights and individual experience was initiated by IPT members. The review indicated no other alternate commercial item or non-developmental item (NDI) will meet the requirement, nor can the requirement be modified to permit use of existing commercial items or NDIs.

2. On 11 Jan 2018, a review of the procurement history for this item identified Hydro -Aire (81982) as being the only manufacturer utilized for procurement of this item.

3. Contacted knowledgeable individuals in Government regarding market capabilities to meet requirements. The USAF IPT consisting of the KC-135 Program Manager, Item Manager, and system Engineer, through market research and years of combined professional knowledge of the KC-135 weapon system, have concluded with a high level of confidence that there are no additional sources capable of meeting the government’s needs.

4. On 11 Jan 2018, the Governments Purchase Request Process System (PRPS) was also searched using the items NSN, in which the results showed the only approved source as Hydro-Aire (81982). Additionally, the 761 AMC/AMSC Screening Analysis Worksheet only indicated Hydro-Aire, Inc. as a source. The search did not yield any additional approved sources.

5. On 11 Jan 2018, a search and review of the below internet sites was accomplished in which no viable, authorized manufacturing sources were identified.

- Google (http://www.google.com)

- ThomasNet (http://www.thomasnet.com)

- IHS Haystacks (http://login.ihserc.com/cgi-bin/ihslogin)

C. The 761 screening action for NSN 1650-01-168-3691, P/N 39-24110-1, was reviewed for consistency. No discrepancies were found and only Hydro-Aire Inc. was identified as an approved source.

D. 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 this proprietary item nor are there any other commercial or nondevelopmental items which could be utilized to meet needs or which could be modified to meet the needs.

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

OPEN COMPETITION:

The 417 SCMS/GUMB team contacted Ermine Melkonian and Michael at Hydro-Aire on 11 January 2018 regarding their willingness to sell/license the data for the KC-135 Directional Sleeve. Hydro-Aire responded that they are unwilling to sell/license the data to the government.

Only Hydro-Aire Inc. owns the technical data sufficient to manufacture the parts.

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

AQUISITION:

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 OR SERVICES REQUIRED:

The Air Force regularly inquires the manufacturers in regards to sharing or selling the proprietary data rights for use in free and open solicitations. Furthermore, the Air Force regularly performs analysis to determine the feasibility and cost effectiveness of reverse engineering the proprietary technology.

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 (FAR 6.303-2(b)12).

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 (FAR 6.303-2(c)).