TAB 1 - JALOCKHEEDCOI _ SPE4AX16D9473JSF - PEST and C130 AMENDMENT KO DORTCH _Redacted.pdf

FOR OFFICIAL USE ONLY

Source Selection Information – See FAR 2.101 & 3.104

DEFENSE LOGISTICS AGENCY

HEADQUARTERS

8725 JOHN J. KINGMAN ROAD

FORT BELVOIR, VIRGINIA 22060-6221

MEMORANDUM FOR THE RECORD

SUBJECT: Amendment to the Class Justification and Approval (J&A) for Other than Full and Open Competition, Contract SPE4AX16D9473.

Defense Logistics Agency (DLA) Aviation currently acquires sole source consumable parts manufactured by Lockheed Martin under the Captains of Industry (COI), Long Term Contract SPE4AX16D9473.

1. Statutory Authority: 10 U.S.C. 2304(c)(1). Regulatory Authority: FAR 6.302-1, Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.

This Amendment relies upon the statutory and regulatory authority cited in the original J&A and the purchase is sole source for the reasons stated therein. This amendment specifies the inclusion of Joint Strike Fighter (JSF/F-35) Post-Egress Survival Training (PEST) equipment used for PEST operational unit training in direct support and sustainment of the JSF/F-35 weapon system, and expands the scope of the COI contract with Lockheed Martin beyond aircraft maintenance to any sole source item, requirement, ancillary support, or service that DLA may be required to procure on a sole source basis.

a. Lockheed Martin is the sole Original Equipment Manufacturer (OEM) for the JSF/F-35.

Under an existing Joint Program Office (JPO) Contractor Logistics Support (CLS) Sustainment Contract, Lockheed Martin currently provides the entire PEST NIIN population in support of USAF, USMC, and USN JSF operation squadrons. Due to CLS Sustainment Contract scope & JSF-unique ordering issues, PEST operational units that need to be familiar with and train on the PEST items are unable to utilize the existing CLS Sustainment Contract for consumable item support. The PEST items are unique to JSF aircrew egress and survival requirements and are not utilized on other DoD weapon systems. The only known source to provide PEST consumable items is from the OEM Lockheed Martin, CAGE Code 81755.

b. This Amendment to the Class J&A will authorize the procurement of PEST consumable items under the COI SPE4AX16D9473. This authorization will allow for the acquisition of PEST material requirements that were not identified or known at the time the original J&A was signed, which is within the approval authority of the official that approved the J&A.

2. Statutory Authority: 10 U.S.C. 2304(c)(1). Regulatory Authority: FAR 6.302-1, Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.

This Amendment relies upon the statutory and regulatory authority cited in the original J&A and the purchase is sole source for the reasons stated therein. This amendment is to also specify that Lockheed Martin will provide holistic logistic management services for the C- 130 platform, which include, but are not limited to, wholesale supply planning and logistics support, inventory management, maintenance planning, configuration management, depot-level support, material management, engineering support and sustainment elements, packaging, storage, transportation reliability improvements and field engineering support.

a. As the Original Equipment Manufacturer (OEM) for the C-130, Lockheed has all the proprietary technical data, drawings, and tooling necessary to support any C-130 contract with DLA or the military services. Its robust engineering capabilities include managing Critical Safety Item (CSI), obsolescence issues, reliability improvements and Engineering Change Proposals (ECPs). The company also has considerable resources to assist with field engineering support.

b. The objectives of the holistic initiative/support will include:

- Minimize Work Stoppages

- Improve Overall Material Availability

- Leverage Industry Engineering Experience

- Achieve Material and Inventory Savings

- Reduce Material wait-time

- Provide baseline performance metrics at a level commensurate with expected support and incentivize both up and down

- Link profit to performance with lower base profit with opportunities for incentives.

c. This J&A amendment covers performance based support for Lockheed aviation C-130 platforms and components. Only Lockheed can provide the necessary expertise, capacity, capability, and proficiency to perform this work. Lockheed is also the only contractor that has in-depth knowledge of the supplier base capable of supporting this weapon system at the required level of support. With regard to the material support for the repair of aviation components at DOD repair depots, Lockheed’s systems engineering knowledge and technical experience in the C-130 platform’s systems integration make it singularly capable of performing the full scope of the depot support requirement. No contractor other than Lockheed has the capability to perform all the requirements for the comprehensive performance based supply chain management program. Lockheed is the only entity with the systems engineering expertise to fully support the complete range of depot maintenance requirements.

d. Performance based metrics and incentives will be developed to reduce component repair turn-around times, improve reliability, improve maintenance planning, and make recommendations for ECPs. In addition, Lockheed would be required to aggregate all material requirements (i.e. production, repair, allowances, etc) in order to leverage the best value for material support. This requirement would represent a comprehensive and holistic performance based supply chain management program to support the Lockheed C-130 platform.

e. One of the key objectives of this holistic logistic support is to maximize the availability of the C-130 weapon system by providing timely material support through initiatives such as: incentivizing reliability improvements, streamlining supply chain management, and improving maintenance processes and procedures. In order to meet this objective, the logistic provider must have the ability to drive changes into weapon system configuration and, more importantly, understand, analyze and assess the implications of any potential configuration change. This effort will require engineering and logistics support personnel with an unfettered ability to reach back to the OEM (i.e. Lockheed) to support engineering investigations, fault detection & isolation, repair development, modification development, supportability analysis, and the associated technical documentation development and support. Lockheed is the only source that can provide this capability. Once modifications or process changes are made by the Government, only Lockheed has the existing infrastructure to ensure timely execution of such changes.

f. 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 to assure the continued effective, reliable, and safe sustainment of the supply chain. In summary, no contractor other than Lockheed has the requisite data and detailed systems engineering and integration knowledge to execute the highly integrated and complex performance based supply chain management and depot maintenance support requirements detailed in this justification.

3. Lockheed’s unique engineering expertise and support infrastructure make it the only company capable of providing support of the magnitude and complexity needed for the JSF/F-35 PEST program and C-130 holistic management. Further, supporting why this support package is not suitable for Full and Open Competition.

4. The combined J&A approximate estimated value of the PEST and C-130 holistic efforts is $850M. This will be added to the dollar threshold of the existing J&A of for a new total J&A value of . The cost of any requirements included within this expanded scope will be analyzed in accordance with FAR 15.404-1. I hereby determine the anticipated cost to the Government will be fair and reasonable in accordance with FAR 15.404-1.