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Control Number: W91 lW6-12-R-0014

JUSTTFTCATTON AND APPROVAL (J&A)

FOR OTHER THAN T'ULL AND OPEN COMPETITION

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1. Contracting Activity: Army Contracting Command-Redstone, Aviation Applied Technology Contracting Division (AATD Contracting), CCAM-RDT,Fort Eustis, Virginia, 23604-5577.

2. Description of ActÍon: The nature of the contractual action will be a new cost-plus-fixed-fee (CPFF), indefinite delivery, indefinite quantity (IDIQ) contract to support the Army'slClp.

Eft'orts under this contract will be funded with research, development, test, and engineering (RDT&E) appropriations from rnultþle f,rscal years.

3. Description of Suppties/Services: The proposed contract is for nonrecuning engineering, prototype development, and testing to support continuons improvement ofthef Engine, the power plant for theJaircraft for the past 50 years. The engineering services and technical efforts will supportlclP obìectives, including: increase safety-of-flight, reduce opelational maintenanoe and overhaul costs, extend engine and component life, increase time between overhaul, and improve performance to support increased load capabilities of the- The contract will have aminimum value of $100,000 and a maximum of $85,400,000, with a five year ordering period. Orders will be issued on CPFF basis. The estimated maximum ordedng value is based upon the following progr¿rm:

Item/Service to be Acquired Prosram Budeet Engineering Services

Test Support Service.s

Prototype Hardware

Total $8s,4M

4. Authorify Cited: 10 U.S.C. 2304(cXl), as implemented by Federal Acquisition Regulation (FAR) 6.302-l(a)(2xiiÐ, "Only one responsible source and no other supplies or sen'ices will satisff agenoy requirements."

5. Reason for Authority Cited: This contract supports a program to make improvements and correct operational deficiencies to thelturboshaft engine, the por.ver plant for the past 50 years for thef aircraft, the Anny' entering service u'ith the Army inl962,th-has used IP seeks to improve the performance of the engine to support conti power for thf aircraft, reduce life cycle costs, and maintain the relevance for thelin support of U,S. Army operations. Based upon such improvements generated from thelCIP, including an increase in the shaft horse po\Mer rating fronffor the originallto overlfo1¡lhe latest!

variant, th-performance is significantly superiorto the originalJof 1962.

Control Number: W91 1W6-12-R-0014

The proposed source for the CIP is:

Honeywell Intemational, Inc.

111 South 34th Sheet Phoenix, Arizona 85034 CAGE Code: 99193

Each!CIP effort targets improved engine perfbrmance or addresses resolution of operational deficiencies. Research and design to achieve desired outcomes requires access to the original design data bases, experienced design personnel, and manufacturing capability. AVCO Lycoming was the original developer of thefengine. 'fextron Corp, purchased Lycoming Turbine Engine Division in 1986, with Textron subsequently selling Lycoming Turbine Engines to AlliedSignal Aerospace in 1994. Between 1995 and 1998, AlliedSignal moved production of theffrom the Stratford Army Engine Plant to the cuffent production facility in Phoenix, Arizona. In 1999, Honeywell Inc. acquired AlliedSignal, with the new corporate entity being named "Honeywell International." As part of these acquisitions, Honeywell International is the o'u/ner of the technical data base for the S0-plus year development history of thelas well as current manufacturer and is the only source capable of supporting the!CIP.

The technical data, development history, manufacturing capabilities, technical expertise and familiarity for thelengine all reside r.vithin Honeywell Intemational. As such, it would require significant funding and tirne for another soruce to be capable of supporting a!

component improvement program. In order lbr another source to be able to support aI engine component improvement, the contractor would have to completely understand the cunent design of the engine along with the design history. This knowledge spans approximately 50 years of design and design changes. Assuming that a complete set of historical data was provided (unlikely), it is estimated that it would take approximately f andlyears for a contractor a¡rd its resources to study, interpret, rccogtttzcd and accept all aspects of the engine design and performance, Once the appropriate level of knowledge about the engine is acquired, the contractor would have to upgrarte or procure equipmenlfacilities in order to support the necessffy efforts covered by a component improvement prograrn. Equipment and facilities may range from testing facilities and equipment, to manufhctuting space in order to build/modify engines and components for the effort. Assuming that the new contractor would already have similar capabilities (engine experience/facilities/equipment), it is estimated that it would take approximately f,to provide the necessary upgrades specific for thelengine. All outsourced capabilities would either need to be transfefied from the original contractor, or ne\¡/ sources would need to be sourced and qualified, Assuming that all the sources could be transferted and that no new qualification of second sources was necess¿il¡ the new contractor r¡'ould still incur an estimated [to conduct all of the intemal processes necessary to manage the new sowces. The new contractor would also have to procure sufficient tooling and supplies in orcler to be capable of building the engine, and making any associated modifications to the engine as part of the component improvement program. 'Ihis would include manufacturing and assembly iooling, ìigs, stãnds, etc. It is estimated that another $lwould be necessary for the contractor to acquire the necessary tooling and supplies to support a component improvement program. Once the new contractor had all of the lesources in place, the Govemment would require that the contractor provide sufficient testing and acceptance data for equipment, manufacturing processes, and overall engine capability" This testing would entail expensive and

Control Number: W91 1W6-12-R-0014 timely efforts on the order of f or more. The efforts necessary fbr a new contractor to be able to support thelengine Component improvement program total approximately f and could take anywhere fromlyears to complete. Based on these estimates, no other source at this time would be able to provide the capability to support the efforts defined by this effort.

Without Honeywell's cooperation and willingness to sei[, it would be impossible for the Govermnent to provide data without reverse engineering the engine, an effort which could (ifì doable) cost as much or more than developing a new centerline engine. For example, estimates todevélop,test,andbuildabrandnew"ngi''ãareupward.off,TheGovernmentis not staffed and does not have resources to reverse engineer or deveiop such engine. Honeyweli's knowledge of thelengine and existinglspecific facilities and ongoing efforts preclude any other source from satisfying this requirement. Honeywell has a proprietary interest in the lengines ancl the sole capability to pertbrm this improvement effort. In addition, th"I while not economically obsolete, are no longer fielded state of the art in terms of weight, fuel consumption and reliabiiity. Scarce Army RDTE dollars should be devoted to improving this cun'ent technology where economically justified as opposed to inventing new items at a much higher cost.

The Army has plans to continue production oflthe

-thtoughlwith operational service continuing a decade or more beyond. Continued use of the basic system, developed at Honeywell privale expense, and Honeywell private investment, precludes use of other soul'ces without substantially duplicating costs and would impose delays that would result in unacceptable risk and potentially devastating harm to U.S. forces engaged in overseas contingency operations.

6. Efforts to Obtain Competition: This requirement was included in the Aviation Missile Command's (AMCON{) Competition Advocate's Shopping List (CASL) on22 December 201l, In addition, it was posted to Fecleral Business Opportunities (FBO) on 22 December 2011.

However, the Government, during the operational life of thefengine, has not obtained a complete technical data package (TDP) that would support additional competitive sourcing.

Even if such a TDP existed, use of another source would require this soutce to develop the necessary manufacturing expertise and have to qualifu its variant of the engine, a significant duplication of cost and schedule that would be unlikely to be recouped through competition.

After synopsizìng the previous contract, contract number DAAH10-01-D-0002, no requests for a solicitation were received,

7. Äctions to Increase Competition: There are no pians to competitively procure the efforts associatecl with thef CIP for the reasons stated in paragraph 6, above, Effort conducted under the CIP does provide for added competition for spare parts procurement by developing new sources forf parts and components and requiring Honeywell to screen cornponents for breakout to support competitive acquisition of components.

8. Market Research: Program office personnel, (Project Manager's Office (PMO), Cargo

Helicopters (Sustainment-Engines) (PMO Cargo)) have conducted on-going market research into sources for support of theJCIP frorn June 2011 to January 2012. These have included discussion with knowledgeable Government employees in the Aviation Missile Research, J

Control Number; W91 I W6-12-R-0014

Development, and Engineering Center (AMRDEC) to include lEngineer, Camber Corporation, AMRDEC ; Team Lead Logistics Management

Landing Craft, Air CushionSpecialist, Cargo Sustainment Engines; and Management Technical Specialist, Naval Surface Warfare Center-Carderock Division. In addition, a review of Government and/or commercial clatabases, source lists for identical or simila¡ items, and catalogs and/or other generally available product literature were utilized, This action was also included in the AMCOM CASL on22 December 201 1. As a result, the PMO Cargo staff s conclusion is Honeywell International is the only source in possession of the necessary expertise, technical data, and supporting facilities that can supportfClP objectives.

Market research concludes that this effort is not suitable for use of commercial items procedures as clescribed in FAR Part I 2 as due to program objectives and uncertainties ofresearch and development effofs, use of commerciai terms is not suitable.

9. Interested Sources: The notice required by F.AR 5.201 was posted to F-IIO on 22 December 20ll. To date, no other sotrrces have written to express an interest. Any bids or proposals the Government receives i,vill be considered.

10. Other Facts: Discuss any other facts supporting the use of other than fulì and open competition, such as the following:

a. Proctuement history. Contract DAAH10-01-D-0002, an IDIQ contract, was awarded to Honeywell International on a noncompetitive basis (10 U.S.C. 2304(c)(I), as implemented by FAR 6,302-1(aX2XiiÐ, "Only one responsible source and no other supplies or services will satis$r agency requirements") wifh an estimated value of $50,000,000 in support of thelctP.

The Government, to date, has issued 13 task orders under this IDIQ contract. From l99l-2000, Army awarded a series of noncompetitive contracts on an annual basis to AlliedSignal Engines, now Honeywell Intemational as discussed in paragraph 5, in support of thelCIP. The total amount of each conftact was in an approximate range from $1 million to $2.4 million. All previous justifrcations cited the same authoriry-, 10 U.S,C 230a(cXl) and FAR 6.302-1(a)(2xiii), "Only one responsible source and no other supplies or services will satisfy agency requirements" and no significant changes have been made for the requiremcnt sinee thal. tirnc. As wiLh this requirement, no actions to increase competition were made under previous justifications for the reasons discussed in paragraph 5.

b. Acquisition data availability. Technical data adequate for full and open competition has not been developed and is not available to foster competition. Only Honeywell Intematíonal, Inc. possesses detailed knowledge of thelengines. Honeywell has the proprietary data rights to theJengine design. Thefengine problem areas requiring resolution are unique and require designerþrime contractor/manufacturer assistance to determine exact cause and necessary corrective measures. There are no plans to acquire a TDP or requirements to qualifi, an alternate designer or prime contractor/manufacturer of thef series engines. As stated, qualifîcation of an alternate designer or acquisition of all proprietary data would be both cost and time prohibitive. Honeywell's knowledge of thelengines and their rights to proprietary data would preclude any other firm from being competitive on this acquisition.

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Control Number: W91 lW6-12-R-0014

11. Technical Certilication¡ I certify that the supporting data under my cognizance which are included in the justifrcation are accurate and complete to the best of my knowledge and belief.

NAME -II-I! OArg ?3 S'l L

TITLE Proiect F.n SIGNATURE

12. Requiremcnts Certification: I certifr that the supporting data under my cogïxzance which a¡e included in the justification are àccurate and complete to the best of my knowledge and belief.

NAME DATE

TITLE PlopulsìonDivisionChief SIGNATURE

13. X'air and Reasonable Cost Determination: I hereby determine that the anticipated cost for this contract action will be fair and reasonable. The techniques to be used to determine fair and reasonable price include cost analysis, price analysis, audit, and independent govemment estimates. Certified cost or pricing data will be required.

14, Contracting OffTccr Certification: I certify that this justification is accutate ancl complete to the best of my knowledge and belief.

NAMEfl ,, narn

TITLE Contracting Ofñcer SICÀIATURE

CONCURRENCE:

Counsel

Control Number: W9l lW6-12-R-0014

Approval

Based on the foregoing justification, I hereby approve the procurement of nonrecurring engineering, prototype development, and testing to support continuous improvement of thefEngine. The engineering services and technical efforts will supportlClp objectives, including: increase safety-of-flight, reduce operational maintenance and overhaul costs, extend engine and component life, increase time between overhaul, and improve performance to support increased load capabilities of theJ These services will be procured from Honeywell lnternational on an other than full and open competition basis pursuant to the authority of 10 U.S.C. $ 2304(c)(1), as implemented by FAR 6.302-1(aX2Xi¡i), subject to availability of funds, and provided that the services and property herein described have otherwise been authorized for acquisition.

Date:

l- U

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Principa ble for Contracting