SPRRA1-12-R-0054_Woodward_Signed_Justification_and_Approval_(JA)_Redacted.pdf

DEFENSE LOGISTICS AGENCY

HEADQUARTERS

8725 JOHN J. KINGMAN ROAD

FORT BELVOIR, VIRGINIA 22060·6221

JUL 1 7 2012

TITLE: Class Justification for Other Than Full And Open Competition for Solicitation SPRRAl-12-R-0054 under Authority of 10 U.S.C 2304(c)(l)

1. Introduction

Tltis Class Justification and Approval (J&A) requests authority to award an eight-year, fixed-price, Indefinite Delivety, Indefinite Quantity contract (IDIQ) with prospective price redetermination under Other Than Full and Open Competition to Woodward, Inc. (Woodward) as identified herein. The contracting authority for this requirement is DLA Aviation Strategic Acquisition Directorate at Huntsville (DLA A VN-AHE).

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

DLA Aviation is requesting approval of this Class J&A, to include the authority to acquire Depot Level Reparable (DLR) and consumable items from the various Woodward business units identified herein and any other Woodward business units that may subsequently be used by Woodward to manufacture items within the scope of the J&A. The procurement will be limited to items that are determined to be sole source to Woodward and will use Other Than Full and Open Competition procedures as prescribed by FAR 6.302-1, Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.

This Class J &A covers sole source items to be procured from Woodward business units only. This action will result in the award of a new contract, which will be a fixed-price, Indefinite Delivery, Indefntite Quantity contract (IDIQ) with prospective price redetermination with a five-year base period and a single three-year option period in which additional quantities may be ordered. The DLR and consumable items procured under the authority of this Class J&A will support numerous Air Force, Army, and Navy aircraft platforms. Contracting officers fi·om DLA, the Army, Navy, and Air Force will be authorized to issue orders under the resulting contract. The Government anticipates purchasing items from, but not lintited to, the following Contractor and Govermnent Entity (CAGE) codes:

Woodward Governor Company doing business as (DBA) Woodward 5001 N 2nd Street Loves Park, IL 61111

CAGE: 66503

Large Business ·

Woodward HRT, Inc.

25200 West Rye Canyon Road Santa Clarita, CA 91355

CAGE: 81873

Large Business

SOURCE SELECTION INFORMATION -SEEFAR2.101 AND 3.104

MPC Products Corporation DBA Woodward MPC, Inc.

5600 West Jarvis Avenue Niles, IL 60714

CAGE: 19710

Large Business

Woodward FST, Inc.

700 North Centennial Street Zeeland, MI 49464

CAGE: 65065

Large Business

Woodward, Inc.

DBA Industrial Products Group 1 000 East Drake Road Fort Collins, CO 80525

CAGE: 31361

Large Business

Woodward, Inc.

Industrial Products Group 3800 Nmih Wilson Avenue Loveland, CO 80538 CAGE: OTFMl Large Business

DLA Aviation seeks to provide and strategically source DLR and consumable items in supp011 of requirements generated by DLA and Air Force, Army, and Navy customers. This initiative contains, but is not limited to, an estimated 542 consumable items and 110 DLR items as identified on the attached Identification of Requirements (lOR) spreadsheet. The Fl5, Fl6, Fl8 and UH-60 Blackhawk aircraft are representative of the major systems that will be supported under tllis J&A. The proposed acquisition requires use of the cited statutory authority because the supplies are available only Jl'om one source as identified in paragraph II.

The estimated maximum dollar value of the period of performance for tllis proposed corporate contract, including base and option periods as well as both consumable and DLR items, is $456,745,549.89. The maximum value for consumable items and DLR items was established using planned orders table for consumable items with DLR items verified by each applicable service. Additionally, DLA spend data for fiscal years (FY) 09- 11 were provided by the Supply Relationship Manager (SRM). Historical sales information provided by Woodward for calendar years 2008-2010 was utilized to validate the supplied DLA spend data. The estimated requirements for FY12 tlu·ough FY20 were established based on historical FY09- FY 11 requirements and the consistent growth rate established tlu·oughout these years. An analysis of the growth experienced by the current contracts and the DLA spend data provides the basis for an approximate growth rate of 15% between contract years one and two with an average additional growth rate of 5% for each subsequent year. Estimated dollar values for each year of the proposed contract are as follows:

SOURCE SELECTION INFORMATION- SEE FAR 2.101 AND 3.104

Consumables DLRs Yrl $17,235,759.77 Yr I $3,643,419.54 Yr2 $19,821,123.74 Yr2 $7,630,257.06 Yr3 $23,785,348.48 Yr3 $4,872,802.00 Yr4 $29,731,685.60 Yr4 $6,578,282.70 Yr5 $38,651,191.28 Yr5 $9,209,595.79 Yr6 $52,179,108.23 Yr6 $13,353,913.77 Yr7 $73,050,751.53 Yr7 $20,030,870.82 Yr8 $105,923,589.69 Yr8 $31,047,849.77 Total $360,378,558.32 Total $96,366,991.57

Orders issued under this corporate contract for consumable items will be funded with DLA Defense Working Capital Funds (DWCF) or the Militmy Services' WCF. Additionally, DLR items may also be funded with appropriate specific program funds as directed by the program offices.

The Agency's requirements can only be satisfied by unique supplies available from Woodward. Woodward, as the Original Equipment Manufacturer (OEM), is the designer and developer of various weapon system subsystems. Woodward owns the proprietary rights to the drawings, designs, manufacturing data, software, and unique test equipment required to manufacture, test, integrate, and calibrate these assets. Woodwmd possesses the unique capabilities and specialized test equipment to ensure the integrity and reliability of the weapon systems while complying with approved Government specifications. These weapon systems and/or subsystems are highly specialized and essential to supporting the Warfighter in a diverse environment.

This Class J&A covers Woodward sole source national stock numbers (NSN) which have Acquisition Method Codes (AMC) of"3", "4", or "5". Each NSN has been subject to a complete technical review, screening, and certification process. Items associated with the financial forecast data and the items that will be awarded in the initial order have been assigned a current AMC of"3", "4", or "5" by the assigned engineering authorities. The Contracting Officer will assure that only items with a permanent Acquisition Method Suffix Code (AMSC) will be priced and placed on contract. Any AMSC of "H" will be reviewed by the appropriate engineering authority to assign a permanent AMSC before it is placed on this contract.

The rights to use the data needed to purchase these parts from additional sources are not owned by the Government and cannot be purchased, developed, or otherwise obtained.

Numerous inquiries and evaluations are performed periodically to detennine if it is feasible to purchase data for procurement Jiom other sources. Based on analysis and cost studies to include factors regarding the quantities of items forecasted to be procured, inclusion of the costs of support and test equipment, and the anticipated life-cycle of the systems, it is not feasible for the Government to purchase re-procurement data.

3. Authority for other than full and open competition (10 U.S.C. 2304(t)(3)(B)):

Use of Other than Full and Open Competition is authorized by 10 USC 2304( c )(1 ), as implemented by FAR 6.302-1, Only One Responsible Source and No Other Supplies or Setvices Will Satisfy Agency Requirements.

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

In accordance with FAR 15.403-4, Woodward will be required to provide certified cost and pricing data for all military unique items to be used in suppotting the Government's evaluation of the proposed costs. The proposed skill mix of labor, labor hours, types and quantities of material, other direct costs, and direct and indirect rates will be negotiated by the Government based on recommendations from DLA internal price analysts, Defense Contract Management Agency (DCMA) and/or the Defense Contract Audit Agency (DCAA) and expett technical persomtel supporting the program. For all military unique items, the contract price will be negotiated in accordance with the procedures in FAR Patt 15. For all commercial items, contract pricing will be determined fair and reasonable based upon FAR Part 12 negotiation procedures using price and cost analyses. Methodologies to assure this will be commercial pricing techniques utilizing publicly offered catalogs, comparison to historical contractor sales and/or analysis of limited cost and pricing information which could be made available by the contractor. In the event that limited cost and pricing information is made available, the Govermnent's negotiation objective will be developed using local technical analysis applied to direct and indirect rate factors recommended by DLA internal price analysts, DCAA and/or DCMA. Based on the foregoing, the Contracting Officer determines the anticipated cost to the Goverment will be fair and reasonable.

5. Market reseat·ch/effotts to obtain competition (10 U.S.C. 2304(t)(3)(D)&(E):

This requirement will be synopsized on the Federal Business Oppottunities (FedBizOpps) web page as required by FAR 5.201. The extent of competition anticipated is the source identified in paragraph II. In an effott to obtain maximum competition, synopsis will encourage firms that recognize and catt produce the items described in paragraph III to identify themselves.

Any firm expressing an interest in producing any of the items covered by this Class J&A will be identified to the appropriate Woodward business unit for potential subcontracting oppottunities.

Further, potential sources will be encouraged to submit a source approval request package.

Mat·ket Research has been performed as specified in FAR 10.001. The research has not identified sources other than Woodwat·d who possesses the data, capability, and technical knowledge to manufacture the items identified as sole source. An initial FedBizOpps synopsis will be issued to advise industry of the pending procurement and solicit inquiries from interested parties. Although Woodward is the only supplier expected to respond at this time, any future interested parties who learn of this acquisition through synopsis or otherwise will be offered the oppottunity to submit a source approval request package to the appropriate engineering authority for consideration.

Plans for improving or enhancing the competitive status of the acquisition include review and screening under the procedures of the Department of Defense (DoD) Spare Pmis Breakout Program, Defense Federal Acquisition Regulation Supplement (DFARS) PGI 217.7506.

Contractors m·e encouraged to submit qualification requests to the appropriate engineering authority in accordance with established procedures. Currently, there are no known outstanding qualification requests on Woodward sole source items. To date, no other sources other than Woodward have shown interest.

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

The screening results indicate these items will remain non-competitive. No action is plarmed to remove competitive ba11'iers as adequate data is not available and the Government cannot afford to purchase the data due to the cost. It is anticipated that the OEM will continue to provide these sole source items.

Attachments:

As stated

COORDINATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

DLA CONTRACTING ACTIVITY: DLA AVIATION

SOLICITATION NUMBER: SPRRA1-12-R-0054

PROGRAM COST ESTIMATE: $456,745,549.89

AUTHORITY: 10 U.S.C. 2304(c)(1), as implemented by FAR 6.302-1 TYPE JUSTIFICATION AND APPROVAL (J&A): Class

I hereby ce1iify that the information contained in this J&A is accurate and complete to the best of my knowledge.

6/5/12

DATE

Melissa A. Vandyne Contracting Officer

This J&A has been reviewed and is recommended for approval.

6/5/12

DATE

6/8/12

Patrick Finegan Strategic Contracting Division Chief

Harriett Reddrick Competition Advocate

Kenneth Winslette Chief of the Contracting Office

Source Selection Information- See FAR 2.101 & 3.104

Perkins, Benjamin G.

Chief Counsel

Date: 2012-06.11 11:1 1.01--04'00'

Yvette A. Burke Head of the Contracting Activity

7(!~/), TE DL

-{;:3/ DATE DLA Competition Advocate

I~ Na~ M. eimbaugh DLA Senior Procurement Executive

Coordination and Approval J&A for Other than Full and Open

Woodward, Inc.

SPRRA1-12-R-0054

Page 2 of2

Source Selection Information- See FAR 2.101 & 3.104