JA JSMC-L Facilities 1 year extension (REDACTION) 2020 (1)_Redacted Final.pdf

DEPARTMENT OF THE ARMY

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

1. Contracting Activity: Army Contracting Command-Warren (ACC-WRN), Warren, Michigan 48397-5000, is the contracting activity responsible for this action.

2. Description of Action: ACC-WRN proposes to award a modification to contract W56HZV-13-C-0319 with General Dynamics Land Systems (GDLS) to extend the period of performance adding 12 months and increasing the contract value by This is a cost reimbursement (no fee) facility contract. The modification will provide continuation of services to manage, maintain, and operate the real property (buildings, structures, and property) as well as to maintain, repair, replace, or acquire Government-owned industrial and other plant equipment to support production work efforts located at the Joint Systems Manufacturing Center-Lima (JSMC-L). Funding for this modification is planned to be Fiscal Year 2020 (FY20) Operations and Maintenance, Army (OMA) and Procurement Appropriation, Army (PAA).

3. Description of Supplies/Services: The services to be acquired over the next 12 months include the management, maintenance, and operation of the JSMC-L facility, a Government-owned, contractor-operated (GOCO) industrial plant located in Lima, Ohio.

Management, maintenance, and operation of JSMC-L includes providing new contractor-acquired Industrial and Other Plant Equipment, the use of Real Property and Installed Systems, New and Minor Military Construction, Replacement and Rehabilitation, Upgrade, Preservation, Installation, Use, Maintenance and Repair, Preservation, Protection and Surveillance, Accountability, and Disposition of the Government-Owned assets within the JSMC-L facility. It is the current facility for upgrade of the existing Abrams fleet to its newest variants, double V hulls for the Stryker Family of Vehicles (FOV), the Stryker Dragoon modification program, the Short Range Air Defense (SHORAD) program, the Mobile Protected Firepower (MPF) prototypes, MK46 turret for the U.S. Navy, hull fabrication for the Namer, an Israeli Armored Personnel Carrier (APC), and varying Abrams vehicle configurations for Foreign Material Sales (FMS) customers. GDLS is the contractor operator for the GOCO as well as the contractor for these production and development contracts.

This modification will extend the contract period of performance from September 2019 to September 2020 and increase the contract, by

This contract extension allows work on a follow-on sole source contract.

GDLS will continue to use a fully defined and priced Company Work Order (CWO) process to procure actual services executed through individual modifications to the contract.

4. Authority Cited: The statutory authority permitting other than full and open competition for this action is Title 10 United States Code (U.S.C.) 2304(c)(1), as implemented by Federal Acquisition Regulation (FAR) 6.302-1, “Only One Responsible

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Source and No Other Supplies or Services Will Satisfy Agency Requirements.”

Pursuant to FAR 6.302-1(a)(2)(iii)(B), “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 unacceptable delays in fulfilling the agency’s requirements.”

5. Reason for Authority Cited:

Background/History: As described in FAR 6.302-1(a)(2), use of other than full and open competition is necessary due to the unique production-oriented nature of the services that GDLS is currently providing to the Government. GDLS, as the contractor operator of JSMC-L, is the only source that could provide seamless support to JSMC-L due to the integral link between facility operations, maintenance, and production. There is no way to decouple facility operations and maintenance from production without incurring a break in management, maintenance, and operation services, as well as production delays with the upgrade of the existing Abrams fleet to its newest variants, double V hulls for the Stryker FOV, the Stryker Dragoon modification program, MK46 turret for the U.S. Navy, the Short Range Air Defense (SHORAD) program, the Mobile Protected Firepower (MPF) prototypes, hulls for the Namer, and various Abrams vehicle configurations provided to FMS customers. GDLS has maintained the Government property and real property at JSMC-L since 1978 and is the only known source having the unique capabilities, engineering, and manufacturing knowledge necessary to manage, maintain, and operate the JSMC-L facility and maintain the production equipment required for the Heavy Combat Vehicles production referenced in section 3 of this J&A. GDLS is also the only organization possessing the proper Nuclear Regulatory Commission (NRC) licenses to support certain activities such as the maintenance of the x-ray equipment.

GDLS has established maintenance processes and procedures to ensure the production equipment is properly maintained and repaired in an efficient manner. GDLS has an established support network for materials and specialized on-site labor necessary for the maintenance/repair of Government Furnished Equipment (GFE). The established processes, procedures, and support network are integral to the operations of JSMC-L facilities and the timely completion of maintenance work on Government property, resulting in efficient production of the Heavy Combat Vehicles referenced in section 3 of this J&A. The contractor operator management services are of a diverse and unique characteristic, involving production equipment, which requires close management, coordination, and knowledge by GDLS for cost-effective production and facility operation. The continuation of support from GDLS is critical to the production of Abrams tanks, Stryker FOVs, MK46 turrets, and FMS customer requirements.

Approved for Public Release. Distribution Unlimited. Distribution A. PEO Ground Combat Systems December 2, 2019

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Approved for Public Release. Distribution Unlimited. Distribution A. PEO Ground Combat Systems December 2, 2019 impacts on each of the programs listed in Section 3 above. GDLS’ technical expertise and detailed knowledge of its own devised and implemented production processes is vital to the continued operation and maintenance of the JSMC-L facility in a manner that is responsive to production demands, to prevent the disruption of maintenance processes leading to production line stoppage.

If the Government were to award management of JSMC-L to a contractor other than GDLS, the Government would become the coordinator and arbitrator between the facility operator and the production prime. In addition, the US Government would incur costs for increased Government oversight. Risks of delays in coordinating repairs and downtimes with GDLS in the performance of the Heavy Combat Vehicle production contracts would increase and could result in a Request for Equitable Adjustment (REA) for Government caused delay, which would result in increased costs to the Government.

The schedule delay to acquire the management, maintenance, and operation services, in addition to maintaining the production equipment, from a contractor other than GDLS will result in a minimum of 18-24 months unacceptable delay. Described in the table below is the time frame to transfer the corporate knowledge and experience to another contractor:

Ref. Capabilities Time

5.a.(i) Qualification of New Contractor Operator of the GOCO 6-12 months

5.a.(ii) Establish management, maintenance, and operation processes and procedures for production equipment and maintenance work on Government property

6 months*

5.a.(iii) Develop an operational plan and establish processes and procedures for facility friction points

12 months*

TOTAL 18-24 Months *Can occur concurrently

(i) Qualification of New Contractor Operator of the GOCO (6-12 months): A new contractor would have to work with GDLS to understand the current layout and production processes to develop its own proactive production equipment repair/maintenance plan. The new contractor would also have to prove out the maintenance plan during the transition of responsibilities between GDLS and the new contractor.

In addition, some of the production equipment maintenance responsibilities would remain with GDLS, because the processes are the intellectual property owned by

GDLS.

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(ii) Establish management, maintenance, and operation processes and procedures for production equipment and maintenance work on Government property at JSMC-L (6 months): Development of a management plan would be required along with the development of maintenance and operation processes and procedures. All would be required to ensure the timely and efficient maintenance and repair of production equipment and real property and to ensure timely completion of maintenance work on Government property so there is no interference with production schedules.

(iii) Develop an operational plan and establish processes and procedures for facility friction points (12 months): The friction points are the maintenance and/or service actions that could impact production. The contractor will need to develop an operational plan to address non-interference between the management, maintenance, and operation of the building and production equipment and the production activities and schedules at JSMC-L. The processes and procedures will need to include some of the main friction points for electrical distribution maintenance, water distribution system maintenance, heat distribution system maintenance, environment management systems, hazardous waste management, sanitary system maintenance, CWO process, real property, and government furnished property reports. Even if ACC-WRN were to solicit this effort under a competitive procurement, there is no reason to believe that a new contractor could perform this effort.

6. Efforts to Obtain Competition:

a. Effective competition: For the reasons stated in paragraph 5 above, this action will not be competed. GDLS as the contractor operator and the prime manufacturer of the systems described in section 5 above is the logical source to provide the services needed to support the production lines. GDLS manages and operates the production processes they utilize to meet the Governments’ delivery schedules. The US Government plans no further action to increase competition for this procurement since separating GDLS’ integral contractor operator functions from production efforts would disrupt maintenance processes and lead to production line stoppage, resulting in an impact to fielding, technology insertion, and ultimately Army readiness.

b. Subcontract competition: The current contract contains the following clauses: FAR 52.219-8, “Utilization of Small Business Concerns,” FAR 51.219-9, “Small Business Subcontracting Plan,” and DFARS 252.219-7003 “Small Business Subcontracting Plan (DoD Contracts).” The solicitation requested that the contractors propose positive goals for each of the socioeconomic categories of small businesses and the U.S. Army Tank-automotive and Armaments Command (TACOM) Life Cycle Management Command (LCMC) Office of Small Business Programs reviewed the subcontracting plan. The contract also incorporates the contractor’s negotiated subcontracting goals.

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*Awarded as an E facilities contract under FAR 45.302-2, “Facilities contracts.” This has since been rescinded from the FAR and replaced with a new regulation.

(2) All previous procurements were awarded on a sole-source basis to GDLS.

(3) Authority cited for the previous contract was 10 U.S.C. 2304(c)(1) and FAR 6.302-1, “Only One Responsible Source.”

(4) Previous procurement’s justification stated that based on agency requirements closely interrelated to production and the attendant facilities, an award to any contractor other than GDLS is not practical because no other source has the engineering and manufacturing background knowledge necessary or the unique capabilities to manage, operate, and maintain the production equipment for the Abrams platform. GDLS is the only contractor that could manage the complexity of coordinating the operation and management of JSMC-L while Abrams production contracts are active.

(5) No prior award for the JSMC-L facility was accomplished by full and open competition.

(6) No unusual patterns have been revealed by a review of the procurement history.

(7) The justification for the previous procurements were also based on the same circumstances; the use of other than full and open competition necessary due to the unique production-oriented nature of the services GDLS is currently providing to the Government. No other source possesses the current engineering and manufacturing background knowledge necessary to manage the production equipment for the Abrams platform or the unique capabilities to manage, operate, and maintain these GOCO facilities within JSMC-L at this current time.

b. Other Facts: N/A

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11/12. Technical and 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.

EDWARD O. LEWIS Date: 5/6/2019_______________________

Deputy Project Director, Main Battle Tank Systems Signature: //s// EOL____________________

13. Fair and Reasonable Cost Determination: I hereby determine that the anticipated cost to the Government for this contract action will be fair and reasonable. This determination will be based on results from a technical review and Cost or Price Analyst.

JOSEPH A. NEUMANN Date: 08 May 2019

Procuring Contracting Officer Signature: //Signed//

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

JOSEPH A. NEUMANN Date: ___08 May 2019 ______________

Procuring Contracting Officer Signature: //Signed//

Approved for Public Release. Distribution Unlimited. Distribution A. PEO Ground Combat Systems December 2, 2019

Approved for Public Release. Distribution Unlimited. Distribution A. PEO Ground Combat Systems December 2, 2019