VPMs - J-and-A for VPM 8600A (Public Release Copy).pdf

Commandant, US Coast Guard (CG-9127) 2703 Martin Luther King Jr. Ave SE, Stop 7828

Washington, DC 20593-7828

JUSTIFICATION AND APPROVAL FOR OTHER THAN FULL

AND OPEN COMPETITION

IN ACCORDANCE WITH 10 U.S.C 2304(c)(l) Only One Responsible Source and No Other Supplies or Services will Satisfy Agency

Requirements

Pursuant to the requirements of the Competition in Contracting Act (CICA) as implemented by the Federal Acquisition Regulation (FAR) Subpart 6.3 and in accordance with the requirements of FAR 6.303-1, the justification for the use of the statutory authority under FAR 6.3 is supported by the following facts and rationale required under FAR 6.303-2 as follows:

(1) Agency and Contracting Activity.

The Department of Homeland Security (DHS), United States Coast Guard (USCG) Headquarters, Office of Contract Operations – Formal Contracts Division VII (CG-9127), Washington, D.C., proposes to enter into a contract on the basis other than full and open competition.

(2) Nature and/or Description of the Action being Approved.

The USCG seeks approval to obtain, on a sole source basis, Video Processing Modules 8600A (VPM- 8600A) from Intertrade, which is a subsidiary of the Original Equipment Manufacturer (OEM), Collins Aerospace (formerly Rockwell Collins). These VPM-8600As are in support of the USCG’s MH-65E helicopter production and sustainment program. USCG pilots and crew use the VPM-8600As in conjunction with the Common Avionics Architecture System (CAAS) on board each MH-65E helicopter to take in and analyze flight and equipment data. This ensures a successful and safe operation of the helicopter.

The USCG will acquire the VPM-8600A units via a firm fixed price (FFP) contract. USCG anticipates this contract having a two-month (or 60 day) period of performance, as Intertrade has said it can deliver the VPM-8600As within roughly 45 days. The estimated value of this contract is $240,000.00, which will have five-year Procurement, Construction, and Improvement (PC&I) funding obligated to it.

The name and address of Intertrade is as follows:

INTERTRADE LIMITED

400 COLLINS ROAD NE

MAIL SERVICE (MS) 153-220

CEDAR RAPIDS IA 52498-0505

(3) Description of Supplies/Services.

The USCG needs new VPM-8600As as it upgrades and performs maintenance to convert its existing MH- 65D helicopter fleet to the MH-65E configuration. This conversion includes modernizing the avionics systems and improving the reliability of the Automatic Flight Control System (AFCS), which communicates with the CAAS and relies, in part, on data computed by the VPM-8600A. USCG pilots and crew rely on the VPM-8600As, in conjunction with the CAAS on board each MH-65E helicopter, to ensure successful and safe operation of the helicopter. The OEM, Collins Aerospace, and its subsidiaries, are the only companies that provides the compatible VPM-8600As for the MH-65E helicopter.

(4) Identification of Statutory Authority Permitting Other Than Full and Open Competition.

The statutory authority permitting other than full and open competition is 10 U.S.C. 2304 (c)(1), as implemented by the FAR Subpart 6.302-1 – Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.

(5) Identification of Exception to the Buy American Statute.

This section does not apply, as the Buy American Act statute does apply.

(6) Demonstration that the proposed contractor’s unique qualification or the nature of the acquisition requires use of the authority cited.

The subject VPM-8600A (part number of 822-2017-001 and a National Stock Number (NSN) of 5836-01- 545-0765) is manufactured by Intertrade and is integrated through software into the CAAS. CAAS is a government-owned system that was acquired through a full and open competition by the US Army. USCG selected CAAS for the MH-65 modernization project to capitalize on the US Army’s CAAS integration effort. The US Army does not have contract capacity to support the USCG’s hardware purchases, necessitating the USCG to initiate a new contract for this critical component.

This action is for the purchase of hardware only. Software integration and developmental sub-system testing is complete. Use of a VPM-8600A other than that produced by Intertrade would result in significant program schedule delays, increased/duplicated costs, and technical risk, as discussed below:

Schedule: CAAS is currently integrated and operationally used by the USCG with only the Intertrade VPM-8600A, so the hardware and software integration effort for a different VPM-8600A would require significant time, which would, in turn, impact the program schedule. Such integration effort would minimally require engagement with the avionics integrator for software development, subsystem testing, and additional Developmental Test and Evaluation (DT&E) on the prototype aircraft. Including the time needed to conduct a new competitive source selection and to execute additional contracting modification(s) with the current avionics integrator to accept other VPM-8600As, the schedule delay for flight testing is estimated to exceed eighteen (18) months.

Duplicated Cost: The approved MH-65 Acquisition Plan (# HSCG-13-005, approved in May 2019) cited the need to maintain Department of Defense (DOD)/USCG commonality to reduce Non-recurring Engineering (NRE) costs. The USCG is using the Intertrade VPM-8600A in the MH-65E with no resulting NRE costs associated with the air data integration, as this has had already been performed by the US Army in conjunction with the CAAS system. Selecting another VPM8600A would require paying for a new integration effort. Specifically, in accordance with Coast Guard (CG-7) airworthiness procedures, a new VPM-8600A would require software modifications to CAAS, its sub-system and system test events, changes in technical drawings, and possibly changes to the airframe mounting racks. Based on the current software contract, historical contracts for testing with the Naval Air Systems Command (NAVAIR), and operational aircraft costs for test flights, these duplicative costs have been conservatively estimated to exceed $900,000 for all of the previously mentioned tasks. NRE costs to integrate a new VPM-8600A into the aircraft and software modifications to the already mature CAAS architecture would exceed any savings that might be gained by competition. Additionally, all necessary Intertrade software is preloaded into the VPM-8600As for the MH-60T and the MH-65E models. Such commonality reduces supply and logistics costs for the Aviation Logistics Center by ensuring that the VPM-8600As may be used on either platform when mission requirements necessitate interoperability.

Technical Risk: The Intertrade VPM-8600A’s function and software integration are proven in USCG airframes, its operating environment, and in the CAAS architecture. Use of a new, unproven system, increases the risk of technical failure as other VPM-8600As have not been fully integrated into the CAAS.

Failure to properly integrate the VPM-8600A into the existing CAAS will cause an inability to process video displays, and an unacceptable risk in the safe operation of the aircraft. Use of a VPM-8600A other than the Intertrade VPM-8600A would result in delays due to software re-work and repeated test events necessary to ensure safe operation. These would further delay the delivery of mission-essential capabilities to the MH-65 fleet.

(7) Description of Efforts Made to Ensure that Offers are Solicited from as Many Potential Sources as is Practicable.

The USCG could not publish an Acquisition Planning Forecast System (APFS) notice for this requirement, as the requirement is under $250,000.00.

USCG issued a Sources Sought Notice (# 70Z02320SSNAHH007) on 10 February 2020 via the beta.SAM.gov website to determine if responsible sources, other than the OEM, were able to supply the requested VPM-8600A part. Thus far, no company has responded to the notice.

Because of the above-noted outreach, USCG has concluded that the only interested and capable company able to supply the VPM-8600As is the OEM and its subsidiaries (i.e. Intertrade).

(8) Determination by the Contracting Officer that the Anticipated Cost to the Government will be Fair and Reasonable.

The USCG Contracting Officer determines that the anticipated price will be fair and reasonable based on Intertrade’s commercial catalog pricelist and the independent government cost estimate (or IGCE), which USCG developed utilizing information from USCG’s prior acquisition history and pricing information provided by Intertrade.

(9) Description of Market Research.

Aside from the market outreach previously noted in Section (7), the USCG Integrated Product Team (IPT) researched USCG’s acquisition history and the DHS Strategic Sourcing Vehicles (SSVs) and could not find any other company who sells the required VPM-8600As.

USCG also used the Defense Logistics Agency (DLA) Logistics Information Services (FEDLOG) and the Federal Logistics Information System Web Search (WEBFLIS) to look for potential supply sources.

USCG could not find any other sources that could potentially meet its requirements besides the OEM.

(10) Any Other Facts Supporting the Use of Other Than Full and Open Competition.

The VPM-8600As are only procurable from the Original Equipment Manufacturer (OEM), Collins Aerospace, and its subsidiaries (i.e. Intertrade). Ensuring the right parts are available is crucial to not only support USCG’s mission readiness, but to also ensure the safety of the flight crews. For these reasons, these parts must have traceability to the OEM and its subsidiaries.

The data rights to this component were not purchased with the aircraft nor are complete specifications and drawings for this component available to the USCG. The USCG does not possess technical expertise to recreate the drawings or to manufacture the parts. Because of the above, it is not feasible to foster a competitive procurement effort for the manufacture of components modelled on the Intertrade / Collins Aerospace VPM-8600A.

(11) A Listing of the Sources, if Any, That Expressed, in Writing, an Interest in the Acquisition.

The only company that has expressed, in writing, an interest in this acquisition is the OEM, Intertrade.

(12) A Statement of the Actions, if Any, the Agency May Take to Remove or Overcome Any Barriers to Competition Before Any Subsequent Acquisition for Supplies or Services Required.

In an effort to increase competition among affiliates and distributors, the USCG IPT will (1) continue to look for other distributors of the required part as an additional source and (2) discuss the potential of Intertrade selling its parts to small businesses. Presumably, the selling price for these parts to a potential competitor will be prohibitively expensive and USCG believes that these marked up prices would be non-advantageous to the USCG. However, USCG will still attempt to remove this barrier as much as is practicable for any future contracting action relative to future VPM-8600A procurements.

(13) Contracting Officer’s Certification and Approval.

I certify that the data supporting the recommended use of other than full and open competition is accurate and complete to the best of my knowledge and belief.

XXXXXXXXXXXXXX Date Contracting Officer (CG-9127-2)

(14) Technical/Requirements Personnel Certification.

I certify that this requirement meets the Government’s minimum need and that the supporting data, which forms a basis for the justification, is accurate and complete.

XXXXXXXXXXXXX Date Technical Representative (CG-9315)