JUSTIFICATION & APPROVAL (J&A) JA-24-D-341_L3HGCi IDIQ MODIFICATION TO INCREASE CONTRACT CEILING

JUSTIFICATION REVIEW DOCUMENT FOR OTHER THAN FULL AND OPEN COMPETITION - FAR PART 6 Program/Equipment: L3Harris Global Communication, Inc. (L3Harris/L3HGCi) Radio and Communication Products, Ancillary and Spare Parts, and Related Services in support of US Army Communications - Electronics Command Security Assistance Management Directorate (CECOM SAMD). Authority: 10 United States Code (U.S.C) 3204(a)(1) as implemented in Federal Acquisition Regulation (FAR) 6.302-1(a)(2)(ii)(B) - Unacceptable delays in fulfilling the agency's requirements. Amount: $1,600,000,000 1. Contracting Activity: Army Contracting Command - Aberdeen Proving Ground Division D 6515 Integrity Court, Building 4310, Bay 3 Aberdeen Proving Ground, MD 21005 ATTN: CCAP-SCD 2. Description of Action: The Security Assistance Management Directorate (SAMD) of Integrated Logistics Support Center (ILSC) Communications-Electronics Command (CECOM) requests a modification to increase the ceiling of the current Firm Fixed Price (FFP) Indefinite Delivery Indefinite Quantity (IDIQ) contract W91CRB-21-D-5003 with L3Harris Global Communication, Inc. (L3Harris/L3HGCi) by $1,600,000,000 ($1.6B). This increase is necessary, as the combined traditional Foreign Military Sales (FMS) and Pseudo FMS funds will likely have reached the ceiling prior to the completion of the current June 2026 ordering period. This contract signed on 10 June 2021 has a $3,300,000,000 ($3.3B) ceiling, which is the combination of $1,448,000,000 ($1.448B) ceiling for traditional (country directed) FMS funds and $1,852,000,000 ($1.852B) ceiling for Pseudo-FMS funds. The requested $1.6B ceiling increase, which applies to both traditional FMS and Pseudo-FMS funds, will boost the current ceiling from $3.3B to $4,900,000,000 ($4.9B) for sole source procurements of L3HGCi radio and communication products, ancillary and spare parts, and related services in support of FMS program. CECOM SAMD projects the approval of this ceiling increase request prior to 31 December 2024. This proposed modification is for contract W91CRB-21-D-5003, which was awarded under the authority of 10 U.S. C. 3204(a)(1) as implemented in FAR 6.302-1(a)(2)(ii)(B) - Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements - Unacceptable delays in fulfilling the agency's requirements. The current contract's procurement history is addressed in paragraph 10 below. A copy of the previous Justification and Approval (J&A) is attached in paragraph 10. The requested ceiling increase will allow projected traditional FMS and Pseudo-FMS buys through the remaining ordering period, ending 9 June 2026 at which point a new IDIQ contract is anticipated to be awarded. The demand of traditional FMS and Pseudo-FMS requests is constant, but country directed orders are projected to rise significantly in the second and third quarters of 2024 and the third quarter of 2025 due to the current world conditions including those in Ukraine and Israel. Therefore, additional ceiling balance of the current contract W91CRB-21-D-5003 is needed. While the traditional FMS cases to deliver communication equipment and services are funded by the foreign governments, the Pseudo-FMS efforts will be funded by the Department of Defense (DoD) under various authorities in accordance with U.S. Code, Title 10, Chapter 39, Subchapter II - Foreign Military Sales Authorizations. These funds include DoD Operations and Maintenance funds authorized by Section 2282 and 333 of Public Law 115-31 and 115-141, and Department of State (DoS) funds authorized in accordance with Section 632(b) of the Transactions of the Foreign Assistance Act of 1961 will be used for this effort. Future Public Law updates and additions will be eligible for use under this justification. Pseudo-FMS efforts on the contract encompass the following funding types, more fully explained in Section 10 below: Counter-ISIL/Counter-ISIS Train and Equip Fund (CTEF) Sections 1203, 1206, 1207, 2282, and 333 Global Train and Equip Programs Peace Keeping Operation (PKO)/ African Peacekeeping Rapid Response Partnership (APRRP) Ukraine Security Assistance Initiative (USAI) Coalition Readiness Support Program (CRSP) Funding provided under these programs have different expirations and must be tracked separately from country-provided FMS funds. While Pseudo-FMS requirements are recurring, forecasting is difficult due to geopolitical influences and the multitude of customers and funding sources (as pointed out above) eligible under Pseudo-FMS. 3. Description of Supplies/Services: CECOM SAMD has recurring tactical radio requirements for partner nations. The FMS demands tend to fluctuate from country to country but are predominantly listed below: Hardware: Tactical High Frequency (HF) (2-30 MHz), Very High Frequency (VHF) (30-300 MHz), Ultra High Frequency (UHF) (300-3,000 MHz), multiband radios and ancillaries that are interoperable with already fielded L3HGCi radio systems, networks and other weapon systems. Hardware/Software: Citadel encryption, Sierra II Programmable Encryption, and Quicklook electronic counter-counter measures (ECCM) frequency-hopping algorithms/waveforms Installation kits, support equipment and spare parts Engineering and logistics support services*: Field service representatives, site surveys / site preparation, system installation services and maintenance support services for both Outside the Continental U.S. (OCONUS) and Continental U.S. (CONUS) locations Operation and maintenance training for both OCONUS and CONUS locations** Technical manuals and publications * Providing technical services and customer support that meet form, fit, and function requirements, and are compatible/ interoperable with various types of previously or currently deployed L3Harris radios during field visits or dispatches. Managing all on site installation, repair, maintenance, and test tasks with a complete range of hardware and software support service. Diagnosing errors or technical problems and determining proper solutions. ** A staff of dedicated professionals whose primary purpose is to develop and conduct training courses for all its customers worldwide. These trainers have backgrounds in Engineering, Manufacturing, Field Service, Quality Control, and a number are military veterans familiar with operational needs. Technical trainers and instructors have many years of on-the-job experience in their areas of expertise and are recognized subject-matter experts. All must complete stringent certification requirements in accordance with ISO 9001 Standards before qualifying as classroom instructors. CECOM SAMD utilized the historical order data of burn-rate from the previous (W91CRB-16-D-5006) and the current (W91CRB-21-D-5003) IDIQ contracts to forecast the future FMS demand trends. Since the award of contract W91CRB-21-D-5003 on 10 June 2021, approximately $1.733B of the $3.3B ceiling on the contract has been expended. It is projected the remain of $1,567,000,000 ($1.567B) from the current contract W91CRB-21-D-5003 will be exhausted by December 2024. Using both historical burn-rate and orders forecasted with 25% contingency cost as shown in the chart below, a ceiling increase of approximately $1.6B will allow the current contract W91CRB-21-D-5003 ceiling to last through the original planned ordering period of June 2026. Another approach to estimate the ceiling increase for the contract W91CRB-21-D-5003 is based on the breakout of various radio configurations (handheld, man-pack, vehicular) required by countries from three previous IDIQ contracts. The original Independent Government Estimate (IGE) was performed on 3 December 2019 for the contract W91CRB-21-D-5003. The estimated breakout of various L3HGCi radios products was approximately 16,433 handheld, 10,973 man packable, 10,973 man packable vehicular, and 5,509 vehicular handheld radio system configurations, as well as provided over 930 training and 260 Field Support Representative (FSR) services events during the five (5) year IDIQ contract Period of Performance (PoP). The IGE was also performed for this contract modification starting from 3rd to 5th year of the PoP. Correspondingly, the estimated breakout was approximately 8,755 handheld, 6,271 man packable, 4,261 man packable vehicular, and 1,906 vehicular handheld radio systems configurations, 564 training events and 177 FSRs which are detailed in the table below. Estimated average cost for each type of radio system was developed based on a typical hardware suite for each type of configuration and applied to the projected quantity requirements. The sum of the estimated costs of hardware and service support events is the average annual contract budget projections. 4. Authority Cited: 10 United States Code (U.S.C) 3204(a)(1) as implemented in Federal Acquisition Regulation (FAR) 6.302-1(a)(2)(ii)(B) - Unacceptable delays in fulfilling the agency's requirements. 5. Reason for Authority Cited: The proposed source for this acquisition is L3Harris Global Communication, Inc. (L3HGCi) located in Rochester NY. The below narratives justify L3HGCi, the Original Equipment Manufacturer (OEM), as the only source that can fulfill the recurring requirements for tactical HF, VHF, UHF, and Multiband radio systems, spares, repair, and ancillary parts. L3HGCi is the only viable source that meets the compatibility, interchangeability, and interoperability requirements with the existing tactical radio products and networks for the coalition and partner nations. The U.S. coalition and partner nations have established radio system fleets consisting of L3HGCi radios and cannot easily implement alternative radios. Due to L3HGCi's robust performance capability and security features available, as well as the established interoperability, logistics, and training program support supplied through previous FMS cases, countries require communications systems that are compatible with their existing fleets of L3HGCi radios. In other words, other radios made from a different manufacturers are incompatible with L3HGCi proprietary designs. Meeting new customer country requirements by procuring other radio systems would require these countries to endure the time and cost of replacing complete fleets of radios, spare and repair parts, and retraining personnel in the operation, maintenance, and logistic support of the new systems. In addition, over eighty (80) FMS countries have been supplied L3Harris radio systems through the FMS program (IDIQ contract numbers DAAB07-D-01-M001, W15P7T-11-D-H607, W91CRB-16-D-5006 and W91CRB-21-D-5003) and all branches of the U.S. Armed Forces through U.S. Government contracts. L3HGCi is the only OEM capable of fulfilling the full catalog of L3Harris communication products, but also provides the other requirements of the contract, beyond the primary hardware such as installation kits, support equipment, spare parts, engineering and logistics support services (field service representatives, site surveys, site preparation, system installation services, maintenance support services, and Operation and maintenance training). Furthermore, L3HGCi is the only authorized provider of certified Operator and Maintenance Training, Installation/Installation Support, Field Service Support, and Site Surveys for both OCONUS and CONUS locations. L3HGCi also provides a Maintenance, Inspection and Repair system with minimal maintenance and inspection requirements at the organizational level. L3HGCi does not certify other contractors to perform or sell services in support of L3Harris radios and ancillary equipment as in their email response to Notice ID: W91 CRB_23_SOURCES-SOUGHT L3HGCi_lDIQMODIFICATION on 20 May 2024. This acquisition is consistent with the FAR 12.101(b) policy to acquire commercial items when they are available to meet the needs of an agency. L3HGCi markets their products both to governments and commercial enterprises using a published catalog of products. Since these are considered commercial products, the U.S. Government does not possess technical data, detailed specifications or drawings that would permit other manufacturers to produce these items. In fact, L3HGCi owns the proprietary rights to manufacture their products with the unique cryptographic and frequency-hopping algorithms and waveforms, and they are not interested in selling the Data Rights for the L3Harris radios and communication equipment to the U.S. Government as mentioned in their email response to Notice ID: W91 CRB_23_SOURCES-SOUGHT L3HGCi_lDIQMODIFICATION on 20 May 2024. The U.S. Government can develop new tactical radios, but it is not a feasible approach due to extremely high cost and significantly long lead time based on the Selected Acquisition Report (SAR) - Handheld, Manpack, and Small-Form Fit Radios (HMS) dated on 24 April 2023. This HMS radio program is a materiel solution providing software defined radio systems that encompasses specific Handheld (HH) and Manpack (MP) radio requirements to support the Army, U.S. Marine Corps, Air Force, Navy and Special Operations Forces communications needs. According to this SAR, it took 17 years when the program was initiated from April 2004 (Milestone B Decision Complete) to Dec 2021 (Acquisition Program Baseline approved.) The total acquisition cost approximately is $12 billion. CECOM SAMD estimates to complete a similar program with four types of radios (HF, VHF, UHF and Multiband) would be at least 10 years and more than $4 billion for research/development based on reverse engineering of supplies, qualifying more sources, or contractor's ramping up of operations. Then, CECOM SAMD must go through extended ordering processes, testing, verification and validation of those new highly specialized radio systems and services to meet the countries requirements as described in section 3. This approach is cost-prohibitive for FMS customers who also would not have their required tactical radio assets within ten years, or causing an unacceptable delay in delivery of tactical assets since CECOM SAMD also needs to maintain the current inventory as fully operational and surplus to it over the next couple of years, as evidenced by the chart/tables above. However, when the Handheld, Manpack, and Small-Form Fit Radios program is successfully executed, it probably allows other FMS programs to leverage their HMS radios for both dismounted personnel and platforms in the future. Delays of this magnitude would clearly be unacceptable based on the Government's continuous and projected needs in FY24-26, as outlined in paragraph 3. Although there are other sources that produce commercially available radios, none of those radios are form, fit, and function compatible with L3HGCi radios that are already being used in the various FMS countries, nor interoperable with L3HGCi's proprietary encryption and ECCM waveforms. The proprietary design prohibits any other contractor from producing the L3HGCi systems without the licensing agreements. Unlike some encryption systems that are separate from the communication systems they are interfaced to; this encryption is embedded within L3HGCi radios and cannot be extracted and used as a separate capability. Since the design of the external hardware interfaces with the internal components of the radio transceiver, it cannot be exposed externally, which prevents other vendors from replicating the frequency-hopping algorithms functionality. This fact, as well as its proprietary nature, makes L3HGCi encryption and proprietary waveforms inaccessible to other manufacturers. Other manufacturers cannot incorporate L3HGCi encryption and waveforms into their radio systems and therefore cannot produce compatible radio systems. To date, L3HGCi has not licensed their proprietary waveforms and/or security algorithms to any other vendors and contractors as mentioned in their response to Notice ID: W91 CRB_23_SOURCES-SOUGHT L3HGCi_lDIQMODIFICATION on 13 February 2024. It is unfeasible for CECOM SAMD to find the alternatives such as developmental non-commercial type radios as mentioned in section 5/paragraph 5 or switch to other commercial products or Non-developmental Items (NDIs) from any other source. Such an alternative would require significantly more resources and would also cause unacceptable delays in meeting mission requirements. The possibility of using network bridging or interoperability hardware was considered. But the FMS customers must procure significantly more radio hardware, as well as devote personnel resources to operating secure areas to house and control additional radios from different networks to accomplish and secure the bridge. This approach also introduces the potential of a time-lapse between the two different radio networks, potentially impacting any communications that require time synchronization to successfully exchange information. Furthermore, adding different radio systems to the customer fleet requires the customer to accept the additional maintenance, training, and logistics support burden of operating, maintaining, and sustaining a new fleet of radio systems. The additional resources needed to execute this solution are unacceptable and unaffordable to partner nations using FMS programs to acquire tactical radio assets. This also would potentially reduce and delay partner nations abilities to provide command, control, and signal support over missions required to defend against enemy and insurgent terrorist activities. Therefore, only Harris can meet allied and partner nation requirements to acquire enhanced secured communications capabilities and will not jeopardize their ability to defend themselves against adversaries and foreign incursions. The current IDIQ contract, W91CRB-21-D-5003, as well as all preceding contracts, have facilitated the continued delivery of L3Harris products, provide training and professionalization of the United States new and old recognized partner nations in the U.S. led war on terrorism. This contract modification is to request the ceiling increase rather than award a follow-on contract because it will take eighteen (18) months to award a new contract which will go beyond the current contract term as it expires in June 2026. The current L3Harris catalog's unit prices that have been applied for the basic contract will remain the same for the contract MOD without any re-negotiation. If the new contract is awarded, it will duplicate acquisition efforts over the number of months, and likely hinder CECOM SAMD's ability to execute Task Order/Delivery Orders (TO/DOs) on behalf of its coalition partners. If this ceiling request is not approved in a timely manner, or is delayed, the Government runs a tremendous risk of not being able to fulfill the requests of the U.S. coalition and partner nations. The ability of countries who require these radios for tactical command, control, and communications to coordinate, direct, and logistically and administratively support operations against terrorists and insurgents will be severely degraded. The inability of customer countries to sustain, expand, and upgrade their existing fleets of L3Harris radios in timely fashion will require reliance on older equipment with poor levels of operational readiness and maintainability. Equipment failure rates will increase, leaving operational units with poor or no communications capability. Without the ability to tactically coordinate, direct, and support operations in the field, unit missions will fail, risking partner nation's ability to prevail in their fight against terrorist and insurgent actions. Cancellation or delays in efforts to recapitalize inventories of these radios will result in the degradation of existing radio system inventories to the point where military units will be unable to field and deploy radio systems, significantly impairing their ability to coordinate, control, or even launch operations against insurgents and terrorists. In addition, the U.S. Government requires the contractual ability to deliver no later than 210 calendar days after issuance of a delivery order. Meanwhile, L3HGCi fully supports CECOM SAMD's goal to satisfy country's tactical radio requirements in fighting against terrorism and cross-border threats as well as succeed in completing their operational missions. 6. Efforts to Obtain Competition: In accordance with Defense Federal Acquisition Regulation Supplement (DFARS) 205.205-71, DFARS 206.302-1(d), and DFARS Procedures, Guidance and Information (PGI) 206.302-1(d), the Government posted a combined Sources Sought/Request for Information (RFI) to the System for Award Management (SAM.gov) website for the period between 31 January 2024 and 23 February 2024. Though other sources were interested, the market research did not yield any additional potential sources that can meet the Government's requirements. The results are detailed below in section 8. The Contracting Officer shall publish the notices required by FAR 5.201 and any bids or proposals received shall be considered. Effective competition. As this is a sole source action, effective competition is not applicable. b. Subcontracting competition. Although there are no FAR subcontracting provisions that require competition among potential subcontractors for commercial contracts, the Government will seek to maximize subcontracting to small and small disadvantaged businesses. L3HGCi will be required to submit a subcontracting plan that will maximize subcontracting to small business and small disadvantaged businesses. Performance will be monitored using the electronic Subcontracting Reporting System (eSRS). This Internet-based tool provides access to analytical data on subcontracting performance. 7. Actions to Increase Competition: a. Conduct market research. CECOM SAMD will continue to conduct in-depth market research to identify potential new suppliers and solutions that can add value and inform the tactical radio requirements for partner nations. This will not only serve to increase competition among providers, but will also improve the requirements and ultimately, the procurement. If there are changes in the market that would enable future actions to be competed for L3HGCi's unique encryption and frequency-hopping algorithms/ waveforms. Based on this latest market research in section 8, CECOM SAMD determined that as of today, only L3HGCi can meet the U.S. Government's requirements. In general, CECOM SAMD will continue to monitor any other expressions of interest by any other firms or companies that can potentially meet the requirement(s), should they be received. b. Inform suppliers of opportunities. The CECOM SAMD will issue requests for information, promote industry outreach, and frequently communicate about upcoming needs. For example, consider industry days, frequent forecasts to industry, reverse industry days, and sending push and pull notifications to vendors regarding new opportunities. 8. Market Research: Sources Sought/ Request for Information (SAM.gov posting W91CRB_23_SOURCES-SOUGHT_L3HGCi_IDIQ-MODIFICATION, 31 January 2024 -23 February 2024 ) described the market research requirement as the identification of sources that could manufacture and deliver a family of tactical HF, VHF, UHF, and Multiband radios, ancillary equipment, installation kits, and spares that are compatible with fielded L3HGCi systems and Citadel - encryption, Sierra II Programmable Encryption, and Quicklook electronic counter-counter measures (ECCM) frequency-hopping waveforms. Requirements also included providing services such as operator and unit level maintenance training, site surveys/site preparation, system installation services, factory, and in-country maintenance support services.