A02_JA for M039 ACC-RI_Redacted.pdf

CUI

Control No. 22-036

Contractor: American Ordnance Program/Item: M039, 40 lb. Cratering Charge

Est. Dollar Value:

JUSTIFICATION REVIEW DOCUMENT

FOR JUSTIFICATION AND APPROVAL FOR OTHER THAN

FULL AND OPEN COMPETITION

Supply/Service: M039, 40 pound (lb.) Cratering Charge

Authority: 10 U.S.C. 2304(c)(3)

Contracting Officer:

Megan Kirby DSN: 793-3725 Procuring Contracting Officer Email: megan.m.kirby.civ@army.mil

Controlled By: Army Controlled By: ACC-RI CUI Category: General Procurement and Acquisition Distribution/Limited Dissemination Control: FEDCON mailto:megan.m.kirby.civ@army.mil

Contractor: American Ordnance Program/Item: M039, 40lb Cratering Charge

Est. Dollar Amount:

Reviews: I have reviewed this justification and find it adequate to support other than full and open competition.

Competition Advocate: Rachel M. Phelps

Signature:

Digitally signed by

PHELPS.RACHEL.M.125831986

s Date: 2022.09.0115:46:41

DSN: 793-0281

Contractor: American Ordnance Program/Item: M039, 40 lb. Cratering Charge

Dollar Amount:

Department of Army Justification and Approval for Other than

Full and Open Competition

1. Contracting Activity: U.S. Army Contracting Command - Rock Island (ACC- RI), Rock Island Arsenal, Rock Island, IL 61299-8000.

2. Description of Action: The Joint Program Executive Office Armaments and Ammunition (JPEO A&A) and the office of the Project Manager, Close Combat Systems (PM CCS), request a five-year, firm-fixed-price, Indefinite-Delivery/ Indefinite-Quantity (IDIQ) contract covering Fiscal Years (FYs) with American Ordnance LLC (AO). The contract will be for the Load, Assemble and Pack (LAP) of the M039, 40 lb.

Cratering Charge. ACC-RI projects award in the AO is the current operating contractor of Iowa Army Ammunition Plant (IAAAP), a Government-Owned, Contractor-Operated (GOCO) facility. PM CCS anticipates that this procurement will utilize Procurement of Ammunition, Army; Procurement of Ammunition, U.S. Navy Special Operations Forces (NSOF); and U.S. Air Force (USAF) funding. 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).

The sole source IDIQ contract to AO at IAAAP is required to keep this vital facility and supplier in business in the event of a national emergency. The estimated dollar value of this action is and requires Senior Executive Service (SES) approval.

ACC-RI currently does not have a SES Senior Contracting Official and therefore, requests SES approval of this action from

3. Description of Supplies/Services: The proposed action will procure M039, 40 lb.

Cratering Charges to satisfy anticipated U.S. Army, NSOF, and USAF requirements.

Contractor: American Ordnance

Dollar Amount:

ACC-RI will negotiate pricing for the M039, 40 lb. Cratering Charge utilizing a pricing matrix with quantity ranges that it will establish for each year from on a firm-fixed-price basis. The annual budgeted requirements for the five years, in quantities and dollars are depicted in the table below and are estimated based on Army, NSOF, USAF, potential Foreign Military Sales (FMS), walk-in orders from other services' needs, and the FY22 Program Budget Decision. The total maximum dollar value for the IDIQ contract is

4. Authority Cited: 10 U.S.C. 2304(c)(3), as implemented by Federal Acquisition Regulation (FAR) 6.302-3, Industrial mobilization; engineering, developmental, or research capability, or expert services.

5. Reason for Authority Cited: As described in FAR 6.302-3(b)(1)(i), full and open competition need not be provided for when it is necessary to award the contract to a particular source or sources in order to keep vital facilities or suppliers in business or make them available in the event of a national emergency.

a. The U.S. Army, as the Single Manager for Conventional Ammunition (SMCA), is responsible for ensuring there are critical and affordable industrial capabilities within the industrial base to immediately meet current and future requirements. The SMCA is also responsible for acquiring and maintaining vital facilities and capabilities to LAP conventional ammunition. AO, who is the current operating contractor at IAAAP, is a critical ammunition producer within the industrial base. IAAAP is a vital domestic facility

Contractor: American Ordnance Program/Item: M039, 40 lb. Cratering Charge

Dollar Amount:

that has the needed resources, equipment, and facilities currently in place to successfully produce the M039, 40 lb. Cratering Charge. AO at IAAAP has been the only producer of the M039 since 1994, although it has not produced the M039 since the end of the last

b. The LAP of conventional ammunition, including items like the M039, 40 lb.

Cratering Charge, requires special skills, equipment, and facilities the SMCA must maintain in order to protect the domestic capability for production of those critical items.

i. AO, as the operating contractor of IAAAP, has the personnel in place with skills and experience in the handling, melting, pouring, and conditioning of large volumes of explosive material.

ii. The unique equipment for the M039, 40 lb. Cratering Charge includes

Specialized inspection equipment is needed to assure conformity of the explosive cast by performing required x-rays.

iii. In addition to the necessary equipment, IAAAP has an on-site test facility which will be utilized by AO to perform Ballistic Lot Acceptance Testing (BLAT) of the M039, 40 lb. Cratering Charge.

Contractor: American Ordnance

e. Restricting this procurement to AO as operating contractor of IAAAP will allow the Government to continue to benefit from the facility modernization initiatives instituted at the GOCO facility and from those investments AO has made since it retained operational control in October 2008 under the Facility Use Contract W52P1J-09-E-0001. The Facility Use Contract currently runs from

. Those modernization efforts, termed Baseline Optimization, provided for the consolidation of large caliber ammunition production capability at IAAAP through AO investment. AO completed the Baseline Optimization Initiative in December 2012, when it transitioned production items from Milan Army Ammunition Plant (MLAAP) to IAAAP.

Contractor: American Ordnance

f. 10 U.S.C. 2535 - Defense Industrial Reserve Act states that it is the intent of

Congress "to provide a comprehensive and continuous program for the future safety and for the defense of the United States by providing adequate measures whereby an essential nucleus of Government-owned industrial plants may be assured for immediate use to supply the needs of the armed forces in time of national emergency or in anticipation thereof." The Defense Industrial Reserve Act requires the Army to maintain a nucleus of Government-owned industrial plants to meet the requirements in time of national emergency. IAAAP is the sole remaining Government-owned facility for LAP of the M039, 40 lb. Cratering Charge. As such, JPEO A&A needs this GOCO facility to satisfy M039 requirements and represents an essential plant that needs to be maintained for production. Restricting this requirement to AO at IAAAP supports the intent of 10 U.S.C. 2535 - Defense Industrial Reserve Act.

g. A Government-owned Technical Data Package (TOP) will be utilized for this action and all future requirements. The TOP will be limited to Distribution "D" (Department of Defense (DoD) and U.S. DoD Contractors Only, including distribution to Canadian DoD contractors) in accordance with DoD Instruction 5230.24.

h. If the M039, 40 lb. Cratering Charge procurement is not restricted to IAAAP, . Per the market research, IAAAP has the highest production capability and can easily meet the Government's requirements,

i. The Government considered making multiple awards in for the M039, 40 lb. Cratering Charge; however, due to objectives of the SMCA to protect the capabilities to LAP conventional ammunition, JPEO A&A and PM CCS made a determination to support the vital facilities and capabilities at IAAAP with a single award to the current operator, AO.

Contractor: American Ordnance

6. Efforts to Obtain Competition: ACC-RI will publish the notices required by FAR

5.201. As this is a sole source action, effective competition is not applicable. The Government will achieve subcontracting competition by including FAR clause 52.244-5, Competition in Subcontracting, which states that the contractor shall select subcontractors on a competitive basis to the maximum practicable extent.

7. Actions to Increase Competition: JPEO A&A will evaluate requirements for the M039, 40 lb. Cratering Charge for and beyond for competition within industrial base upon conclusion of this . Factors it will consider when determining the follow-on acquisition strategy will include improvement of DoD budgets to support LAP at IAAAP and continued realization of financial cost avoidances gained from the consolidation of the operations under the IAAAP Facility contract. Additionally, the Government will consider the workload and facility condition, state of the industrial base, and any changes to M039 requirements.

8. Market Research: sources sought notices were published on the System for Award Management Contract Opportunities website for the M039, 40 lb. Cratering Charge requirements on the following dates: 07 November 2019 (W52P1J-20-R-0027), 13 April 2020 (W52P1J-20-R-0067), and 05 August 2021 (W52P1J-21-R-M039). Each notice requested interested contractors to submit its capabilities relevant to its technical and manufacturing capabilities along with favorable past performance in the explosive processing industry, specifically the melt-pouring of explosive materials as found in the M039requirements. The results of those notices are summarized below:

Contractor: American Ordnance

Contractor: American Ordnance

Contractor: American Ordnance Program/Item: M039, 40 lb. Cratering Charge

Dollar Amount:

Contractor: American Ordnance

9. Interested Sources: To date, no other sources have written to express interest in the acquisition.

10. Other Factors:

Procurement History:

Contract Number: W52P1J-09-D-0001 Contractor: AO/IAAAP and MLAAP Award Date: 02 October 2008 (Expired 31 December 2013) O&M Facility Use Contract W52P1J-09-E-0001 (

Competitive Status: Full and Open Competition - IAAAP/MLAAP Competition Current Contract Value:

Items Awarded Under the Contract: 155mm M795 Projectile IMX

155mm M795 Projectile TNT M337A2 75mm Blank Cartridge M395 105mm Blank Cartridge M107 155mm Projectile M1 105mm Cartridge IMX 101 M1 105mm Cartridge TNT M888 60mm Cartridge M112 Demolition Charge M68A2 Mine Clearing Line Charge Inert M039, 40 lb. Cratering Charge Guaranteed Subcontract Workload, 40mm High Velocity Cartridges

Contractor: American Ordnance Program/Item: M039, 40Ib Cratering Charge

Dollar Amount:

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

12. Requirements Certification: I certify that the supporting data under my cognizance which are included in the justification are accurate and complete to the best of my knowledge and belief.

13. Fair and Reasonable Cost Determination: I hereby determine that the anticipated cost or price to the Government for this contract action will be fair and reasonable. A cost proposal shall be generated by AO and will be duly evaluated by the Government staff located at IAAAP, JPEO A&A, DEVCOM and Defense Contract Audit Agency representatives for purposes of formulation of a Government negotiation position. Subsequent to cost analysis and the conduct of negotiations, the Contracting Officer will award the contract at a mutually agreeable price, supported by AO's execution of a Certificate of Current Cost or Pricing Data.

Date:09AUG22

Megan M. Kirby Contracting Officer

14. Contracting Officer Certification: I certify that this justification is accurate and complete to the best of my knowledge and belief.

Date:09AUG22

Megan M. Kirby Contracting Officer

CUI Control No. 22-036 Contractor: American Ordnance

Approval Based on the foregoing justification, I hereby approve the procurement of the M039, 40 lb. Cratering Charge in the amount of on an other than full and open competition basis pursuant to the authority of 10 U.S.C.2304(c)(3), subject to availability of funds, and provided that the services or supplies herein described have otherwise been authorized for acquisition.