ASA(ALT)_Approved_IBCS_EMD_J&A_27_Feb_18_-_Redacted.pdf

KirbyNB Typewritten Text 20 Dec 2017

CONTROL No. PANRSA 17-P-0000 059451

CLASS JUSTIFICATION AND APPROVAL (J&A) FOR

OTHER THAN FULL AND OPEN COMPETITION FOR

INTEGRATED AIR AND MISSILE DEFENSE (IAMD) BATTLE COMMAND SYSTEM

(IBCS) ENGINEERING, MANUFACTURING, AND DEVELOPMENT (EMD) PHASE

EXTENSION

1. Contracting Activity: Army Contracting Command-Redstone (ACC-RSA), CCAM-SM-A, Redstone Arsenal, Alabama 35898-5280.

2. Description of Action: As a result of Fiscal Year (FY) 2016 Limited User Test

(LUT) issues, the Office of the Assistant Secretary of the Army, Acquisition, Logistics, and Technology (ASA(ALT)) has restructured the IAMD Program to add an additional

LUT in FY 2020 with production representative hardware and software (SW) capable of integrating Patriot Post Deployment Build 8 (PDB 8.05) sensors and weapons.

Accordingly, the IAMD Project Office requests approval for a class of two contract modifications to the IBCS Development Contract, W31P4Q-08-C-0418, with Northrop

Grumman (NG) Systems Corporation, Missile Defense & Protective Systems Division, 213 Wynn Drive, Huntsville, AL 35805, Commercial and Government Entity (CAGE)

Code 9F909, to add additional period of performance (PoP) and to increase the contract ceiling value associated with the IBCS EMD extension effort under the terms and conditions in the original contract. The estimated PoP for these actions is 1 March

2018 through 31 March 2021. The estimated award date for the first contract modification is 1 March 2018 and the second is 1 August 2018. These contract modifications will use fixed price incentive fee Contract Line Item Numbers (CLINs), with the exception of one cost plus incentive fee CLIN to support Enhanced Plug and

Fight Unit development and delivery. The CLINs will be incrementally funded using FY

2018-2021 Research, Development, Test and Evaluation (RDT&E), Army funds, and will align the IAMD Program with a FY 2020 Milestone C (MS C) date. The contract has a current expiration date of 26 October 2018; however, only EMD hardware procurement continues beyond 28 February 2018. This J&A supports all EMD activities, to include software development, beyond 28 February 2018. The current value of the

IBCS Development Contract is $1,191,057,744, which includes options for Low Rate

Initial Production (LRIP) that are unexercised.

3. Description of Supplies/Services: The IBCS major supplies and services to be acquired with this modification are the engineering, logistics, integration, test and evaluation, and program management activities to provide: additional IAMD weapon and or sensor component interface requirements; EMD and LUT changes into the IBCS

Major End Items (MEIs) in support of pre-MS C Developmental Test and or Operational

Test (DT and OT); procurement of additional RDT&E MEIs; engineering changes to

IBCS MEIs; Plug and Fight Processing Unit replacement and obsolescence; SW development and fixes; IBCS modeling and simulation updates; Information Assurance

Vulnerability Alert (IAVA) updates to the IBCS SW; System Integration Laboratory (SIL) updates; new equipment training for EMD test and evaluation efforts; Contractor

Logistics Support (CLS) (including spares, repair & replace activities, field service representatives, and supply support); IBCS system integration and check out; and, IAMD

Integration, Test and Evaluation support. The component interface capabilities include the incorporation into IBCS of Patriot Weapon System capability updates, as well as incorporation of IBCS functionality into Indirect Fire Protection Capability units, Air

Defense Airspace Management Cells, Air Defense Artillery Brigade Headquarters, and

Army Air and Missile Defense Command Headquarters. These will be interfacing with

Missile Defense Agency managed Command and Control, Battle Management, Communications, Theater High Altitude Air Defense units, and other Joint Command and Control Systems. The IBCS MEIs consist of the IBCS Engagement Operations

Centers (EOCs), Plug and Fight B- Kits, and Integrated Fire Control Network (IFCN)

Relays.

These requirements will be implemented on a class basis as follows:

Contract Modification #1: Refurbishment of up to four IBCS S-280 based EOCs;

rehosting four Command Post Platform EOCs; purchase of lead time materials supporting the manufacture and refurbishment of IBCS RDT&E MEIs; provide IBCS

RDT&E MEIs by manufacturing eight (8) new S-280 EOCs and refurbishing 12 IFCN relays; IBCS MEI changes; SW Version (V) 4.5 releases; IBCS Product Baseline updates; SW test-fix- test (including IAVA patches and updates); SW license renewals;

logistics/training product updates for SW V 4.5 and MEI changes; SW V 5.0 requirements; SIL updates; IBCS system integration and check out; CLS; and IAMD

Integration, Training, Test, and Evaluation support. The estimated value of Modification

#1 is . The estimated PoP of Modification #1 is 1 March 2018 through 31

December 2019.

Contract Modification #2: Conduct engineering, logistics, integration, test, and management to implement the IBCS EMD extension effort to include: SW V 5.0 releases; IBCS Product Baseline updates; SW test-fix-test (including IAVA patches/updates); SW license renewals; logistics and training product updates for SW V

5.0 and MEI changes; SW V 5.1 requirements; SIL updates; IBCS system integration and check out; CLS; and IAMD integration, training, test, and evaluation support. The estimated value of Modification #2 is $143,180,159. The estimated PoP of Modification

#2 is 1 August 2018 through 31 March 2021.

The total estimated value of the IBCS EMD extension effort is $354,062,628 with an estimated PoP of 1 March 2018 through 31 March 2021. A breakout of the cost by FY per contract modification is shown below:

FY 18 FY 19 FY 20 FY 21

Estimated

Period of

Performance

1 Mar 18 -

31 Mar 21

4. Authority Cited: The statutory authority permitting Other Than Full and Open

Competition is Title 10 United States Code, Section 2304(c)(1), as implemented by

FAR 6.302-1(a)(2)(ii)(A) and (B) and (iii)(A) and (B), "Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.”

5. Reason for Authority Cited: Pursuant to FAR 6.302-1(a)(2)(ii)(A) and (B) and

(iii)(A) and (B), this requirement is available only from NG Systems Corporation, Missile Defense & Protective Systems Division, 213 Wynn Drive, Huntsville, AL

35805-1958, CAGE Code 9F909, for the supplies and services described above. NG is the only existing source, and award to any other source would result in unacceptable schedule delays and substantial duplication of costs in fulfilling the

IBCS EMD extension effort that are not expected to be recovered through competition.

a. NG is the Original Equipment Manufacturer (OEM) and sole-developer for the

IBCS. IBCS is still in EMD, as such, NG maintains the knowledge, skilled labor force, and detailed technical data concerning the manufacturing processes, system operations, and detailed hardware and SW designs necessary to perform the critical engineering and integration activities associated with the IBCS hardware and SW.

NG will not deliver the IBCS Technical Data Package (TDP) until it is verified through the completion of a functional configuration audit in FY 2020. This would not support a timely competition. No other contractor has the essential qualifications to meet the

Government’s requirement and the specified delivery date.

b. The IBCS effort is one constituent part of the overall IAMD System of Systems

(SoS) Program that is integrated with the weapon and sensor component and platform end item systems for the PATRIOT System, the Sentinel Sensor Systems, and the overarching IAMD Independent Test and Evaluation laboratory and test range assets.

NG is currently involved in time critical and technically complex IAMD integration and test activities that could not be reasonably assumed by an alternate source without unacceptable cost and schedule impacts.

c. To establish a source to continue the remaining IBCS Development and IAMD

Integration and Test support activities through competitive means would add at least 20 months of schedule slip to IAMD Integration, Test, and Evaluation efforts and result in an estimated cost impact of . This estimate is based on the following: 1) the current IBCS Development effort is limited to SW Version 4.0.2 test fix test activities, updates to the TDP (including SW Version 4.5 requirements) will not be completed, obtain IBCS RDT&E Major End Item (MEI) units from a second source, conduct initial IAMD Developmental Test (DT) to include IBCS Equipment Qualification testing using IBCS SW version 4.0.2; 2) the source selected from competition could reuse the IBCS current SW and hardware designs without redevelopment and reuse current IBCS labs, Government Furnished Equipment, and existing Government purchased material; 3) a delay of 14 months to award a competitive contract and delays in obtaining TDP updates from ongoing engineering changes associated with obsolescence, fixes, and IBCS SW version 4.5 requirements; 4) 15 additional months of continued support for IAMD SoS requirements beyond the IBCS effort, to include

SW version 4.0.2 test, Information Assurance Vulnerability Alerts, and IAMD support while a competitive contract is solicited; and 5) six additional months to ramp up the selected source, incorporate/update CSILs, and restart suspended IBCS SW version

4.5 to incorporate required capabilities.

The calculation of the cost impact, due to these delays, is based upon historical expenditures in the IBCS Contract, the IAMD Plug & Fight A-Kit Design Implementation contract, and IAMD integration and test efforts. The ramp up of a new source is based on the use of historical data in the IBCS contract. The combined delays of the aforementioned activities, some overlapping in time, and result in an estimated overall schedule slip to the IAMD Program of at least 20 months. The cost impact of to the IAMD Program consists of the following additional costs:

(1) IAMD Project Office critical skills and Government test facilities is estimated to be ;

(2) SoS requirements beyond IBCS efforts during competition and interface with a new IBCS contractor is estimated to be ; and

(3) Updated TDP (including SW version 4.5 requirements), obtain IBCS

RDT&E MEI Units from a second source, and conduct initial IAMD DT to include IBCS Qualification testing using IBCS SW Version 4.0.2 is estimated to be .

6. Efforts to Obtain Competition:

a. Effective Competition. This requirement was posted in the United States (U.S.)

Army Aviation and Missile Command’s (AMCOM) Competition Advocates Shopping List (CASL) on 3 August 2017, and revised on 18 August 2017.

Per FAR 5.201, a Sources Sought (SS) was published in Federal Business

Opportunities (FBO) from 13-21 April 2017 to solicit information in order to determine if sources exist that have the capability to perform the IBCS EMD extension effort. As a result of the SS issuance, responses were received from Lockheed Martin and

Raytheon Integrated Defense Systems (IDS). Lockheed Martin and Raytheon IDS submitted SS responses but failed to meet the requirement, timelines, capabilities, and specialized experience necessary to complete the IBCS EMD extension effort. These contractors would require additional scope, extended scheduled timelines, and increased costs associated with meeting the criteria outlined in the SS. In addition, a contractor other than NG would require a significant ramp up of time associated with providing critical IBCS EMD support to meet the FY 2020 MS C schedule. Due to these facts, effective competition is not applicable.

b. Subcontracting Competition. This contract includes all required clauses related to competition in subcontracting, to include: Utilization of Small Business Concerns (FAR

52.219-8), Small Business Subcontracting Plan (FAR 52.219-9), and Competition in

Subcontracting (FAR 52.244-5). These clauses will remain in effect throughout the life of the contract. NG is a large business and will be required to submit a small business subcontracting plan for this effort. To date, the contractor has identified and is currently on track to meet small business goals, to include goals for Small Disadvantaged

Businesses, Women-Owned Small Businesses, HUBZone Small Business, Historically

Black Colleges and Universities and Minority Institutions, Service-Disabled Veteran-

Owned Small Businesses, and Alaskan Native Corporations and Indian Tribes. The contractor continually reviews business opportunities to identify subcontract opportunities with small business concerns in pursuit of the stated small business goals.

7. Actions to Increase Competition: The Government intends to continue to secure all requisite data rights for the newly developed or modified IBCS. The IBCS

Development Contract currently requires a full set of data rights assertions as described in Defense Federal Acquisition Regulation Supplement (DFARS) clauses

252.227-7017 or 252.227-7013(e)(3) and 252.227-7014(e)(3) pertaining to rights in non-commercial items, as well as non-commercial SW and SW documentation for which the Government requires delivery. Using the data developed under the IBCS

Development Contract, the Government intends, where possible, to develop potential additional sources for IBCS MEIs or subsystems for full-rate production. This approach has not changed from the previously approved J&A.

8. Market Research: In accordance with (IAW) FAR 10.002(b)(2), market research was conducted for this acquisition during the period December 2016 to the present.

The following subparagraphs identify the market research techniques used and the associated results:

(a) Knowledgeable persons in the Government were interviewed during the June

2017 timeframe regarding the commercial nature and industry practices for this type of hardware and services. The individuals are: IAMD Deputy Project Manager and IAMD

Program Operations Director. Information gathered from the interviews resulted in the determination that the Government requirement cannot be met using commercial items or commercial items with customary or minor modifications.

(b) Internet searches were conducted in the March 2017 timeframe using key words to search reports of businesses that would have the capability to support the supplies and services for this requirement. The results from the searches concluded these requirements cannot be met by commercial items, commercial items with customary or minor modifications, or non-developmental items. Further, a reevaluation has been made IAW FAR 10.002(b), and the Government requirement cannot be modified in a way that will allow a commercial item to meet the need. This is a military unique item.

(c) Review of recent market research results was also conducted during February

2016 – February 2017 from the Redstone Scientific Information Center Technical and

Unified Research and Engineering databases. The research did not identify any sources capable of satisfying the requirements nor did it identify any single commercial entity that can fulfill the requirement. IAMD concluded these requirements cannot be met by commercial items, commercial items with customary or minor modifications, or non-development items.

(d) The requirement was posted in the AMCOM Competition Advocates Shopping

List (CASL) on 3 August 2017 and revised on 18 August 2017.

(e) IAW DFARS 205.205-71, DFARS 206.302-1(d), and DFARS Procedures, Guidance and Information (PGI) 206.302-1(d), a SS was posted to FBO from 13-21

April 2017. As mentioned herein, Lockheed Martin and Raytheon IDS responded to the SS issuance.

(f) FAR Part 12 will not be utilized for this effort. A Market Research Report and

Commerciality Determination that details the approach and incorporates the results of the market research was concurred by the AMCOM Competition Advocate on 18

August 2017.

Market research did not reveal an additional source capable of providing this requirement. NG is the only known source.

9. Interested Sources: A SS was released to industry from 13-21 April 2017 to solicit information in order to determine if there were sources having the technical capabilities, knowledge, and experience required for performance of this effort.

Lockheed Martin and Raytheon IDS were the only respondent(s) to the SS. The

Government evaluated each response and determined that neither Lockheed Martin nor Raytheon IDS provided an executable approach without significant breaches to cost and schedule constraints. To date, no other sources have expressed interest in this effort. The notices required by FAR 5.201 shall be published upon approval of the

J&A and any bids or proposals received shall be considered.

10. Other Facts: Other factors supporting the use of other than full and open competition are as follows:

a. Procurement History.

(1) The IBCS Development Contract was developed, maintained, and supported under the following contracts:

CONTRACTOR

EFFORT

CONTRACT

NUMBER

CONTRACT

AWARD

DATE

DOLLAR

VALUE

Northrop Grumman

IBCS

Phases

I, II, and

Ill

W31P4Q-08-C-0418 23 September

Raytheon

Company

IBCS

Phase I

Only

W31P4Q-08-C-0419 23 September

Previous modifications to extend Contract W31P4Q-08-C-0418 beyond the original PoP of 30 September 2014 are as follows:

Modification Description PoP

PZ0101

(P00085)

APB Program Restructure and SW Replan

22 May 2013 –

30 September 2015

P00118 APB Schedule Restructure and SW Replan

30 September 2015 – 30 November 2016

P00132 Exercised option to procure

LRIP Long-Lead Items

6 May 2016 –

6 June 2017

P00138 and

P00141

EMD SW Baseline Identification 30 November 2016 –

31 March 2017

P00145 and P00152

EMD SW Baseline Implementation

3 April 2017 –

28 February 2018

P00153 EMD Hardware 31 October 2017 – 26 October 2018

(2) Contract W31P4Q-08-C-0419 was awarded to Raytheon Company and

W31P4Q-08-C-0418 was awarded to NG for the preliminary design Phase I using full and open competition on both contracts. Immediately following the MS B Decision on

30 December 2009, NG was selected as the successful offeror for Phase II and III using other than full and open competition for the down-select to Contract W31P4Q-

08-C-0418. The authority for other than full and open competition previously used for the above contracts was 10 USC 2304(c)(1), as implemented by FAR 6.302-

1(a)(2)(iii)(A) and (B), “Only one responsible source and no other supplies or services will satisfy agency requirements.”

(3) The IAMD Program continues efforts for the acquisition of technical data suitable for competition. Upon contract completion, the Government will receive unlimited rights in technical data and SW developed and delivered under this contract; however, these items have not yet been fully developed, and will not be delivered to the Government in time to support this acquisition. The Government anticipates that it will receive unlimited rights in technical data and SW in the 3rd Quarter FY 2020 timeframe.

There has been no full and open competition since the competitive down-select to NG for Phase II and III on 30 December 2009. Since then, NG has been the OEM and sole-developer of the IBCS. Due to the IBCS still being in development, there is no verified

TDP available for the qualification of a second source for IBCS.

(4) No unusual patterns have been revealed by history.

(5) A J&A was prepared and approved for the IAMD IBCS Contract W31P4Q-08-C-

0418 Phase II EMD Extension under the statutory authority of 10 U.S.C 2304(c)(1), as implemented by FAR 6.302-1(a)(2)(ii)(A) and (B), “Only one responsible source and no other supplies or services will satisfy agency requirements.” This was based on NG’s unique technical capability to provide the required services and supplies. The circumstances justifying the other than full and open competition action for the IBCS

EMD hardware effort are similar to this instance and there have been no significant changes.

b. Other facts. This Class J&A will cover all future actions for the supplies and services described herein under Paragraph 3, Contract Modification #1 and Contract

Modification #2. Each action will be supported by a memorandum for record in the contract file stating that the action is within the scope of the Class J&A.