Joint Strike Fighter Low Rate Initial Production Lot VII Propulsion Systems

Pratt & Whitney is the original designer, developer, and manufacturer of the F135 propulsion system and is the only source with the requisite knowledge, experience, and technical expertise to produce the F135 propulsion system at the required ramp rate and within the required delivery schedule. P&W is the only source with the facilities and capabilities required to provide the F135 propulsion system and associated sustainment support for the LRIP Lot 7 requirements. All prior F135 propulsion system contracts for use in the F-35 Air System have been awarded to P&W on a sole-source basis, pursuant to the F-35 Lightning II JSF Acquisition Strategy, approved on 5 December 2008 by the Under Secretary of Defense (Acquisition, Technology & Logistics), which designated P&W as the sole source to provide the F135 Propulsion System for use in the F-35 Air System. Pursuant to the F-35 Lightning II JSF Acquisition Strategy, the Government did explore the possibility of two interchangeable propulsion systems, the P&W F135 propulsion system and the GE Rolls-Royce Fighter Engine Team (FET) F136 propulsion system. The FET was awarded a F136 Systems Development and Demonstration (SDD) contract in 2005. However, in Fiscal Year (FY) 2007 through FY 2011, the FET F136 propulsion system was not included in the Department of Defense Budget. Congress nevertheless provided funding in FY 2007 through FY 2010 for development of the FET F136 propulsion system. The Department of Defense and Full-Year Continuing Appropriations Act, 2011 (Public Law 112-10) enacted on 15 April 2011 did not provide funds for the continued development of the FET F136 propulsion system. On 25 April 2011, the FET F136 SDD contract was terminated for the convenience of the Government. At this point in FY 2012, which is the long-lead advance procurement year for LRIP Lot 7, the FET is not a viable source for LRIP Lot 7 propulsion requirements. For the reasons cited above, P&W is the only source currently capable of producing and sustaining propulsion systems for LRIP Lot 7. As a result of the FET F136 SDD contract termination, the competition opportunities envisioned in the F-35 Lightning II JSF Acquisition Strategy are not available. The F-35 Lightning II JSF Acquisition Strategy to promote competition was to explore the possibility of two interchangeable propulsion systems, and therefore did not require the purchase of technical data packages for both or either of the F135 propulsion system or F136 propulsion system. As a result, the Government does not have technical data packages suitable for full and open competition of propulsion system efforts for LRIP Lot 7. The contract type is fixed price incentive (firm target) for the install F135 propulsion systems, of which long lead-time materials were purchased under the Advance Acquisition Contract. Per FAR 16.403(b), a FPI (firm target) contract type is suitable for these efforts because the nature of the supplies or services being acquired and other circumstances of the acquisition are such that the contractor's assumption of a degree of cost responsibility will provide a positive profit incentive for effective cost control and performance.