REACTED_JA_Switchblade_CLS_FY17-19_28JUN17_Redacted.pdf

SOURCE SELECTION INFORMATION- SEE FAR 3.104

Control No: W31P4Q-16-R-0165 Contractor: AeroVironment Inc.

Service: Switchblade

CLASS JUSTIFICATION REVIEW DOCUMENT

FAR PART 6 JUSTIFICATION AND APPROVAL FOR OTHER THAN

FULL AND OPEN COMPETITION

Program/Equipment: The Close Combat Weapon Systems (CCWS) Project Office will procure contractor logistical support services for the Switchblade Missile System.

Authority: 10 U.S.C. 2304(c)(1) as implemented by FAR Part 6.302-1(a)(2)(iii)(A)&(B) – “Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.”

Amount:

Prepared by:

Contracting Officer:

Technical:

Requirements:

Department of Army Class Justification and Approval for Other than

Full and Open Competition for Switchblade FY17-19 Contractor Logistics Support.

1. Contracting Activity: The Army Contracting Command-Redstone, CCAM-TM-T, at Redstone Arsenal, AL 35898 is the agency responsible for this acquisition.

2. Description of Action: The Close Combat Weapon Systems (CCWS) Project office is in need of a services contract to support the Switchblade missile program.

AeroVironment (AV) Inc. is currently supporting the Switchblade missile program as the sole source service provider under contract W31P4Q-12-C-0263. This contract is still active and is scheduled to expire on 31 July 2017. The procurement history shows AV is the only source available since the government does not own the intellectual property for the Switchblade missile.

CCWS has requested a new Cost Plus-Fixed Fee (CPFF) contract with an estimated value of as a base with options to provide support services for the Switchblade missile program during Fiscal Years (FY) 17 through FY19. To support this requirement for Contractor Logistics Support (CLS) services, CCWS Project Office requests the authority to contract on a sole source basis with AeroVironment (AV) Inc.

900 Innovators Way, Simi Valley, CA 93065, CAGE code 60107.

An acquisition plan is not required because this procurement does not meet the threshold at Defense Federal Acquisition Regulation Supplement 207.103(d)(i)(B).

CCWS has an urgent need for Field Support Representative (FSR) and Switchblade Repair and Maintenance. Under the current contract, FSR coverage will expire during June 2017. CCWS considers the uninterrupted continuation of FSR support to be a critical need. FSR support for remainder of FY17 should be awarded on a new contract as soon as possible. CCWS needs the remaining requirements in the statement of work to be awarded by the end of FY17 as a base with options. All requirements are subject to the availability of funds. The Government projects that the requirements will utilize any or all of the below types of funding,

3. Description of Supplies/Services: The requirements of the Switchblade CLS Statement of Work (SOW) are summarized in this paragraph.

The CLS for Switchblade weapon system maintains the operational readiness and effectiveness of the weapons user. The services included on the SOW are: FSRs, Training, Travel, Rework, Shipping, Flight Support, Repair and Maintenance, and Training Materials. A summary and estimate for each of these services are as follows:

a. FSR - CPFF contract actions for Field Service Representatives to provide support in forward deployed OCONUS locations, to be determined by CCWS. Support will include, but not limited to training, fielding, repair/maintenance of Switchblade equipment and support of systems in forward deployed locations. The estimated value for FY17-19 is utilizing any of the above mentioned funds as appropriate.

b. Shipping– CPFF contract actions for the shipment of equipment between AV facilities in support of repair and maintenance and also shipment of training equipment to and from Continental United States (CONUS) training sites. The estimated value for FY17-19 is utilizing any of the above mentioned funds as appropriate.

c. Rework – CPFF contract actions for rework of All Up Rounds as a result of a failure during Lot Acceptance Testing or any other failures. This will only be funded upon written approval from CCWS upon completion of a validated failure analysis and root cause determination In Accordance With (IAW) the contract and SOW. The estimated value for FY17-19 is utilizing any of the above mentioned funds as appropriate.

d. Flight Support – CPFF contract actions for Flight Support for any demonstrations and/or test events that may require vendor to supply personnel and equipment to support. The estimated value for FY17-19 is utilizing any of the above mentioned funds as appropriate.

e. CONUS Training – CPFF contract actions for training within the CONUS at various locations determined by CCWS. Training will be conducted in accordance with a vendor developed/CCWS approved Program of Instruction. The estimated value for FY17-19 is utilizing any of the above mentioned funds as appropriate.

f. Training Materials – CPFF contract actions for developing training materials required to conduct CONUS Training. Materials may include, but not limited to operator manuals for the Fire Control Unit, Training Simulator and Switchblade System. The estimated value for FY17-19 is utilizing any of the above mentioned funds as appropriate.

g. Repair and Maintenance – CPFF contract actions for repair and maintenance of Switchblade equipment. The repair will include, but not limited to, refurbishment of Inert Training Vehicles (ITVs) after training events, repair of any other Switchblade related equipment found to be non-mission capable. The estimated value for FY17-19 is utilizing any of the above mentioned funds as appropriate.

h. Travel –Cost Reimbursable contract actions to support Program Reviews or other meetings as directed by CCWS. The estimated value for FY17-19 is utilizing any of the above mentioned funds as appropriate.

The total estimated value of the requirements described above is . Figure 1 breaks out estimate for each requirement by year. The Switchblade program requires flexibility in contract actions so long as the scope, total value, and time period remain within the approval authority of this J&A.

Figure 1.

4. Authority Cited: The statutory authority permitting other than full and open competition is 10 United States Code (U.S.C.) 2304(c)(1), as implemented by FAR Part 6.302-1(a)(2)(iii)(A)&(B), “Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.”

5. Reason for Authority Cited: As described at FAR 6.302-1(a)(2)(iii)(A)&(B), “For DoD, NASA, and the Coast Guard, services may be deemed to be available only from the original source in the case of follow-on contracts for the continued provision of highly specialized services when it is likely that award to any other source would result in-- Substantial duplication of cost to the Government that is not expected to be recovered through competition, or Unacceptable delays in fulfilling the agency’s requirements.”

Only AV, 900 Innovators Way, Simi Valley, CA 93065, CAGE Code 60107, possesses the unique knowledge and expertise required to provide the highly specialized services, highly qualified personnel, and training necessary to meet the government’s requirements for the Switchblade Program. The Switchblade missile system, including training devices, special tooling and test equipment, has been designed, developed, and fabricated by AV to an AV performance specification. A supplier other than AV would be required to invest in substantial engineering development in order to meet the Government’s requirement for the services to be provided. See figure 3 below.

FY17 FY18 FY19 TOTAL

ESTIMATED FY17-19 SWITCHBLADE CLS REQUIREMENTS

As stated above, AV is the designer, developer, producer, and prime contractor of the Switchblade, which was refined under a United States (US) Air Force Small Business Innovation Research (SBIR) topic. AV possesses unique data rights to this technology under the SBIR program. AV owns the complete Technical Data Package (TDP) for Switchblade. Based on a legal analysis conducted by the Aviation and Missile Command (AMCOM) Legal office, the Government may have some limited data rights based on the above SBIR contracts, but they are not sufficient enough to form a TDP which the Government could utilize to compete the required procurement of the items. The cost and time that it would take, even with the limited data rights that may be owned by the Government, would cause significant delay in providing these services to the Warfighter.

If this J&A is not approved the potential for loss of life or limb would be significantly increased due to needed support to the Soldiers being eliminated. Direct support to Soldiers such as FSR support in theater, training for deploying and deployed units, and repair of mission critical equipment will cease. Soldiers will not receive required training needed to successfully operate the Switchblade system, resulting in operational missions not being executed. Switchblade provides a unique operational capability to identify and engage enemy forces in advantageous positions that other weapons do not provide.

Without this critical support Soldiers will be put in harm’s way, without this proven lifesaving capability.

On 29 April 2010, the Government received a Not To Exceed (NTE) price of (escalated to in FY16 dollars) from AV to purchase the complete TDP for this requirement shown below in Figure 2. Based upon an analysis performed by the CCWS Project Office, an additional in costs including, purchasing a TDP from AV (approx. ), qualifying a new vendor’s system and funding the government facilities required for qualification of the new system (approx. ) would be required in order to introduce competition. The latter two costs ( ) have already been spent in developing Switchblade. These costs are not affordable for the Government and cannot be recovered through the price savings of competition. Further, the Government would experience unacceptable delays in providing these services to the Warfighter if this requirement were to be competed. A breakout of these costs are shown below.

Figure 2.

Effort Projected Cost (FY16 Dollars) Purchase TDP from AV Documentation Required

Process Documents Test Instructions Manufacturing Work Instructions

Supplier Costs Technical Data Intellectual Property

Qualification of a Second Source Contractor Development and Engineering Government Testing Government SEPM/ES

Engineering Services

Total Costs to Introduce Competition

Additionally, to qualify a second source for CLS of the Switchblade Weapon System would result in unacceptable delays in fulfilling the Army’s requirements. The major steps to qualify a second source include Verifying the TDP ( Soliciting a Second Source and Qualifying the second source The total time to develop a second source is approximately . The Switchblade program would suffer mission failure if the support provided under CLS were to be halted pending the qualification of a second source.

Figure 3.

Alternatives: The alternatives to a follow on sole source award to AV are discussed above.

6. Efforts to Obtain Competition:

a. Effective competition. Due to the circumstances set forth in paragraph 5, it has been determined that AV is the only contractor from whom it is feasible to solicit this requirement. Sources Sought Notice (SSN) was issued on 21 July 2016 under the solicitation number W31P4Q-16-R-0165 and two responses were received.

See paragraph 9 for the Government’s analysis of the respondent’s capability.

This procurement was entered into AMCOM Competition Advocate’s Shopping List information database, part of the electronic bulletin board, on the initial entry date of 24 June 2016 and revised date of 04 January 2017, see paragraph 8 below for further discussion.

Because this is a sole source action, effective competition is not anticipated or available at this time. A synopsis describing the government’s intent to solicit only one source for this requirement will be posted to the government wide point of entry after the approval of this justification and a DD2579.

b. Subcontracting competition. The Government will ensure that the contractor obtains competition in subcontracting to the greatest extent possible by publishing the notices required by FAR 5.201, FedBizOpps, and by inclusion of the clause(s) FAR 52.244-5, entitled, “Competition in Subcontracting”, FAR 52.244-6, “Subcontracts for Commercial Items”, and Defense Federal Acquisition Regulations (DFARS) 252.244-7000, “Subcontracts for Commercial Items and Commercial Components (DoD Contracts)” in the solicitation and resultant contract. AV is a small business and a subcontracting plan is not required due to the exception prescribed in FAR 19.702(b)(1).

7. Actions to Increase Competition: The Switchblade Program will be acquired pursuant to a government performance specification and/or government/AV part number.

The Government does not own the TDP. Therefore, the Government’s ability to increase competition for services concerning the Switchblade system is contingent on AV Inc. 900 Enchanted Way, Simi Valley, CA 93065 CAGE Code 60107, agreeing to sell the technical information to the Government. As reflected in paragraph 5, a total estimated value of is projected to obtain competition for this requirement, to purchase the TDP alone. There is not sufficient funds budgeted for the Switchblade Weapon System in order to fund this venture. According to the Business Case Analysis (BCA), conducted by the CCWS Cost and Plans Division on 11 January 2017, there were no cost savings identified associated with competing this requirement. As a result, no action to increase competition is planned at this time.

8. Market Research: In accordance with FAR Part 10, market research for this requirement was performed by the inclusion of the requirement in the AMCOM Competition Advocate Shopping List (CASL) database with an initial entry date of 24 June 2016, with no response being received to date. This market research also included contact with knowledgeable persons in the Government regarding the nature of this requirement. Those individuals include the Product Director, CCWS Project Office, and the Deputy Product Director, CCWS Project Office. Both individuals were contacted in reference to this market research in April 2016. An internet search for potential sources was conducted on 21 June 2016. The research failed to establish that this effort could be provided commercially because of the military unique requirements of this product.

Results of market research indicate that this requirement contains no commercial or non-developmental items. Therefore, FAR Part 12 policies will not be utilized for this acquisition. No other source can fulfill this requirement at this time.

In accordance with DFARS 205.205-71, DFARS 206.302-1(d), and DFARS Procedures, Guidance and Information 206.302-1(d), a request for sources sought was posted to FedBizOpps on 21 July 2016 for 15 days and there were two responses (AeroVironment and Systems Dynamics International (SDI)). See paragraph 6 above and 9 below.

This procurement was entered into AMCOM Competition Advocate’s Shopping List information database, part of the electronic bulletin board, on the initial entry date of 24 June 2016 and revised date of 4 January 2017 see paragraph 8 below for further discussion.

9. Interested Sources: To date, two sources have written to express interest in the acquisition. In accordance with FAR 5.202(a)(2), this requirement was published in FedBizOpps on 21 July 2016 and there were two responses. See paragraph 6 for synopsis information. All sources expressing an interest will be given due consideration as required by law. AV is the only source with the unique system of knowledge and expertise capable of successfully performing this requirement.

AeroVironment, 900 Innovators Way, Simi Valley, CA 93065 has shown interest and was found capable due to the fact they are the incumbent contractor on the current W31P4Q- 12-C-0623 Switchblade Contract. They have been performing the services described above since 2012 and have been awarded two contracts during that time. No issues have been identified with their performance of those services. Also, only AV owns the complete Technical Data Package (TDP) necessary for the Switchblade system.

SDI Inc. 560 Discovery Drive Huntsville, Alabama 35806 also expressed interest in the requirement. SDI will be unable to fulfill the requirement due to the lack of technical expertise and certifications required to meet the training, maintenance and FSR requirements for this contract. While SDI stated in their submittal they have personnel trained on Puma and Raven, those systems differ in operation from the Switchblade system requiring Switchblade specific training. SDI also stated many of their instructors were qualified on the Switchblade system in their response to the SSN, posted on 21 July 2016. However, AeroVironment has since developed a new increment of Switchblade, Switchblade Block 10C, which the Government has begun procuring and the SDI instructors lack the training on this new increment. These personnel do not have access to the current training materials or any specialized training equipment to keep their skill current. In addition, the company does not have the proper facilities and tooling/test equipment to perform the repair and maintenance on the equipment. The Government would be required to purchase the TDP at the cost mentioned in paragraph 5 in order to qualify SDI on the Switchblade Weapon System.

10. Other Facts:

a. Procurement history. The Switchblade technology was developed under a U.S. Air Force Small Business Innovation Research (SBIR) Program topic entitled “Miniature Unmanned Aerial Vehicle” which is an Aviation and Missile Command, Aviation Missile Research, Development and Engineering Center joined effort. These SBIR awards were made on a competitive basis. The Army Contracting Command (ACC) awarded contract W31PQ-11-C-0258 as a sole source requirement to AV under the authority of FAR 6.302-2, “Unusual and Compelling Urgency.” Subsequently, ACC awarded W31P4Q-12- C-0263 was a sole source award to AV under the authority of FAR 6.302-1(a)(2)(ii) and (iii)(A) & (B), “Only one responsible source and no other supplies or services will satisfy agency requirements.” The J&A f authority under contract W31P4Q-12-C-0263 breakout the costs to create competition would not be recovered through cost savings realized by competition resulting in delays that would adversely affect the program. This contract expires on 31 July 2017. AV is still the only capable contractor which possess the in-depth knowledge, facilities, test equipment and expertise necessary to build the system and meet the Government requirement in the required timeframe. The Government elects not to qualify additional sources through competition, see paragraph 5 (Reason for Authority Cited) cannot be economically justified. There have been no changes in the circumstances which would affect the sole source nature of this requirement. The historical contract actions of the Switchblade program are summarized as follows;

(1) Contract W31P4Q-12-C-0263/PZ0073 was awarded sole source to AeroVironment, Inc. on 29 July 2016 in the amount of - Authority Cited: 10 U.S.C.

2304(c)(1), FAR 6.302-1.

(2) Contract W31P4Q-12-C-0263/P00042 was awarded sole source to AeroVironment, Inc. on 25 September 2014 in the amount of - Authority Cited: 10 U.S.C.

2304(c)(1), FAR 6.302-1.

(3) Contract W31P4Q-12-C-0263/P00015 was awarded sole source to AeroVironment, Inc. on 5 September 2013 in the amount of - Authority Cited: 10 U.S.C.

2304(c)(1), FAR 6.302-1.

(4) Contract W31P4Q-12-C-0263 was awarded sole source to AeroVironment on 30 August 12 under the authority of FAR 6.302-1(a)(2)(ii) and (iii)(A) & (B) with an NTE amount of .

(5) Contract W31P4Q-11-C-0258 was awarded sole source to AeroVironment, Inc. on 29 June 11 under the authority of FAR 6.302-1(a)(2)(ii) and (iii)(A) & (B) with an NTE amount of

(6) Contract W911W6-08-D-004/Task Order 0005 awarded in 09 November 08 under the authority of FAR 13.106 as a Phase III SBIR CPFF effort – Contract Value is

(7) Contract W911W6-08-D-0004 was awarded on 19 June 08 under the authority of FAR 13.106 as a Phase III SBIR CPFF effort – Contract Value is

(8) Contract FA9453-06-C-0202 was awarded on 18 October 06 under the authority of FAR 13.106 as a Phase II SBIR CPFF effort – Total Contract value to Date is

(9) Contract H92222-06-P-0020 was awarded as a Phase 1 SBIR CPFF effort – Total Contract Value under the authority of FAR 13.106.

Approval Based on the foregoing justification, I hereby approve the procurement of Cost Plus Fixed Fee (CPFF) base with option contract during fiscal years 2017, 2018, and 2019 for Contractor Logistics Support (CLS) for the Switchblade Missile System to AeroVironment (AV) Inc. 900 Innovators Way, Simi Valley, CA 93065, CAGE code 60107, on an other than full and open competition basis pursuant to the authority of Title 10, United States Code 2304(c)(1), as implemented by Federal Acquisition Regulation Part 6.302-1(a)(2)(iii)(A)&(B), subject to availability of funds, and provided that the services or supplies herein described have otherwise been authorized for acquisition.

The total estimated valued for this class of requirements is

Date: ________________ Signature: __________________________________ Rebecca E. Weirick Principle Assistant Responsible for Contracting

WEIRICK.REBECC

A.E.1148886063

Digitally signed by

WEIRICK.REBECCA.E.1148886063

DN: c=US, o=U.S. Government, ou=DoD, ou=PKI, ou=USA, cn=WEIRICK.REBECCA.E.1148886063 Date: 2017.06.30 15:20:08 -05'00'