ESM Kit Production JA_Redacted.pdf

CMO Control Number: 2020-062

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DEPARTMENT OF THE ARMY JUSTIFICATION AND

APPROVAL FOR OTHER THAN FULL AND OPEN

COMPETITION

1. Contracting Activity: Army Contracting Command, Detroit Arsenal (ACC- DTA), is the contracting activity responsible for this action.

2. Description of Action: ACC-DTA proposes to award a new Firm Fixed Price (FFP) contract to Canadian Commercial Corporation (CCC). The contract will be subcontracted to General Dynamics Land Systems – Canada (GDLS-C) to provide material for the Family of Light Armored Vehicles (FoLAV). This acquisition plans to utilize United States Marine Corps (USMC) Procurement funding.

3. Description of Services: The purpose of this acquisition is to obtain the hardware associated with approximately 690 each, Electrical System Modification Kits (ESM) comprised of a 550 Amp Alternator, Power Cables, Master Power Switch and Isolator Relay, and Hi-Power Distribution Module (HPDM). In addition to the ESM Kits, 30 each Ground Hop Stands are being procured to support the installation effort of this program.

The Period of Performance for this three year Firm Fixed Price Requirements Contract is August 2020 through July 2023. Based on the USMC Independent Government Cost Estimates (IGCE) dated 26 March 2020, the total estimated cost for this procurement is $31.9M.

4. Authority Cited: The statutory authority permitting Other Than Full and Open Competition is Title 10 United States Code (U.S.C.) 2304(c)(1), as implemented by Federal Acquisition Regulation (FAR) 6.302-1(a)(2)(ii)(A) and (B), "Only one responsible source and no other supplies or services will satisfy agency requirements".

Specifically, “Supplies may be deemed to be available only from the original source in the case of a follow-on contract for the continued development or production of a major system or highly specialized equipment, including major components thereof, when it is likely that award to any other source would result in- (A) Substantial duplication of cost to the Government that is not expected to be recovered through competition; or

(B) Unacceptable delays in fulfilling the agency’s requirements.

5. Reason for Authority Cited: Award of this action on a sole source basis is justified because the material required cannot be procured from sources other than the FoLAV Original Equipment Manufacturer (OEM), GDLS-C. An inordinate amount of time and money would be required for the ESM Engineering Change Proposal (ECP) effort to be duplicated and the vehicle TDP to be reverse engineered, built and tested in order to integrate the ESM ECP design solution onto the FoLAV.

Background: The USMC LAV fleet was initially acquired in 1982 and has been continuously sustained with upgrades and modifications to improve reliability, performance, survivability and to manage obsolescence.

3 | Page design criteria and performance models, and $4,000, or 40% for the development of Computer-Aided Design (CAD) models. The estimated total cost of $75M reflects the $10,000 estimate for the reverse engineering of 7,500 drawings that comprise the LAV

TDP.

(ii) Duplication of Current Efforts: The Government anticipates receiving (in a forthcoming delivery of technical data and computer software) unlimited rights to ESM TDP with the exception of the HPDM TDP and computer software package. The Government anticipates receiving only limited rights to the later TDP and restricted rights to the computer software package because the HPDM was developed by GDLS Tallahassee using IRAD funding. The HPDM has both hardware and software. The HPDM is a critical component of the ESM ECP since it controls where power is distributed within the vehicle. If a new contractor were to be responsible for the development and integration of the ESM Kits, even with possession of the portions of the ESM Kit TDP, that the contractor would be required to reproduce many of the ESM Kit drawings, as well as design a new HPDM at an approximate cost of $2,000,000.

(iii) Building Test Vehicles: A new contractor would be required to build four prototype vehicles in order to validate and verify a newly developed TDP and computer software package, as well as support follow-on testing efforts. The estimated cost required to build four new vehicles, including the development of manufacturing and production processes is approximately $6M per vehicle, or $24M total. This estimate is based on the last known price of a new build LAV of $2.8M, rounded to $3M to account for inflation. This cost was then stepped up by a factor of two to account for the fact that these test vehicles will need to be built in a bay in lieu of a production line. This factor of two also includes estimated cost for production tooling and manufacturing set up.

(iv) Production Qualification Testing (PQT): A new contractor would be required to perform PQT as it is required to verify new designs and manufacturing processes. PQT includes Reliability, Availability, and Maintainability (RAM) testing as well as Performance testing. Two vehicles are required for each of the two tests. The estimated cost required to complete testing is $42M. This estimate is based on 15 man-years of PM

Support for PQT ($4.2M), contractor test support ($5.5M), additional hardware and spares ($6.7M), and testing/test center support ($25.6M).

b. Unacceptable Delay: In order for another contractor, other than GDLS-C, to design and integrate a comparable ESM Kit, the contractor would be required to have the engineering capability to reproduce the existing LAV TDP, validate the new TDP by building a test set of vehicles, and successfully accomplish PQT, before finally designing a compatible ESM Kit according to the Government performance requirements. The below chart shows the Government’s estimates of the time it would take a contractor, other than the OEM, to accomplish all of the tasks necessary to produce and integrate a comparable ESM Kit.

5 | Page value tradeoff procedures is estimated to take between four and eight months to award. It will also depend on how many bids are generated and the extent of discussions required. Considering the complexity of finding a contractor who would be required to both reverse engineer a vehicle TDP, as well as design a new EPDM to work with the ESM Kit built from the technical data provided by the Government, a six month best value source selection would be a conservative estimate.

6. Efforts to Obtain Competition:

a. Effective Competition: The Government will not compete this effort for the reasons stated above in section 5. The Government will post all notices required by FAR

5.201 for this action, and will evaluate any responses received.

b. Subcontracting Competition: The solicitation and contract will contain the following clauses: FAR 52.219-8 "Utilization of Small Business Concerns," FAR 51.219-9 "Small Business Subcontracting Plan," and Defense Federal Acquisition Regulation Supplement 252.219-7003 "Small Business Subcontracting Plan (DoD Contracts).”

To maximize competition at the subcontracting/vendor level, the Government will also include FAR 52.244-5 "Competition in Subcontracting.” The solicitation will request that the contractor propose positive goals for each of the socioeconomic categories of small businesses and the TACOM Life Cycle Management Command (LCMC) Office of Small Business Programs will review the subcontracting plan.

ACC-DTA will incorporate the contractor's negotiated subcontracting goals into the contract.

7. Action to Increase Competition: The Government is taking no further action to increase competition at this time. Only GDLS-C has the knowledge and expertise necessary to satisfy these requirements. Although no further action to increase competition is contemplated at this time, the Government will continue to survey the marketplace and review our acquisition strategy should additional information be received. Any information received will be considered to determine if a competitive acquisition should be conducted or to determine potential future requirements.

8. Market Research: ACC-DTA and PM LAV issued a Sources Sought notice to beta.SAM.gov from 27 January 2020 through 07 February 2020, in accordance with FAR 10.002(b)(2). The Sources Sought notice requested that any interested vendor provide an electrical system module design with substantiating artifacts that demonstrate that it meets vehicle performance requirements. Additional questions contained on the notice pertained to the interested vendor’s experience and past performance with designing and producing similar components. GDLS-C, the OEM of the LAV FoV was the only vendor to respond to the Sources Sought notice. GDLS-C is the experienced OEM for the LAVs, Related Hardware and Ancillary Services. GDLS-C also previously provided the Production and STS. GDLS-C addressed every question in the sources sought questionnaire, and no deficiencies were noted. GDLS-C has provided Related Hardware and Ancillary Services to the US Government for more than 15 years. The contractor is not willing to sell the technical data package as of 15 Apr 2019.

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Additionally, PM LAV continuously engages in collaborative interactions with industry, organic research and development staff, PM-LAV, Saudi Arabian Management Office (SAMO) in on-going efforts to glean competitive resources.

Summary of Market Research:

Only GDLS-C has the experience and resources necessary to provide the services under this proposed justification.

9. Interested Sources: To date, no other sources except as described in Section 8 above have expressed an interest in this acquisition.

10. Other Facts:

Procurement History:

1) Contract: W56HZV-17-C-0044

Contractor: GDLS-C, Inc.

Award Amount: $1,209,130.19 Date of Award: 30 November 2016 Requirement: The procurement of STS services in support of USMC and SANG FoLAV. The design of the ESM Kits was accomplished under a work directive of this contract.

Competitive Status: Sole-Source basis Authority: 10 USC 2304 (c)(1), FAR 6.302-1(a)(2)(ii) and (iii), “Only One Responsible Source.”

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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.

Typed Name: Stuart L. Meyer Date: 30 Mar 2020

Title: Modification Team Lead Signature: //signed//SLM//

13. Fair and Reasonable Determination: I hereby determine that the anticipated cost for this contract action will be fair and reasonable. An Independent Government Cost Estimate (IGCE) has been prepared for the proposed contract. Confirmation and endorsement will be performed by the Canadian Commercial Corporation in accordance with DFARS 225.870-3(a)(2), and Appendix T-210 of the MOU with Canada, whereby CCC is responsible for conducting audits, verifying costs, and certifying these prices to the U.S. Government.

Typed Name: Michael R DePeal Date: 30 Mar 2020

Title: Supervisory Contract Specialist, LAV

Signature://signed//mrd//

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

Typed Name: Michael R DePeal Date: 30 Mar 2020

Title: Supervisory Contract Specialist, LAV

Signature: //signed//mrd//

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Approval

Based on the foregoing justification, and as Senior Contracting Official pursuant to Army Material Command Head of the Contracting Activity Delegation of Authority #18-52, I hereby approve the procurement of up to 681 each ESM Kits (). This procurement will be awarded on an other than full and open competition basis pursuant to the authority of 10 USC 2304(c)(1), as implemented by FAR 6.302-1, “Only one responsible source and no other supplies or services will satisfy agency requirements.” It has an estimated cumulative value of $31.9M, and is approved subject to the availability of funds, and provided the material herein described have otherwise been authorized for acquisition.

4/7/2020

X Daniel J. Gallagher

Daniel J. Gallagher

Senior Contracting Official ACC-DTA

Signed by: GALLAGHER.DANIEL.JOSEPH.1034297360