JA-00534 EH2L0074EH FINAL _Redacted.pdf

JA-00534 - W56HZV-23-Q-0014

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

JA-00534 – W56HZV-23-Q-0014

1. Contracting Agency: Army Contracting Command-Detroit Arsenal.

2. Description of Action: ACC-DTA proposes to award a new three-year Firm-Fixed- Price (FFP) Requirements Long Term Contract (LTC) to AM General LLC, Commercial and Government Entity (CAGE) 34623, for National Stock Number (NSN) 2930-01-681- 6394, Radiator and Oil Cooler Assembly, using Army Working Capital Funds (AWCF).

3. Description of Supplies/Services: The supplies to be acquired under the proposed contract are the Radiator and Oil Cooler Assembly, NSN 2930-01-681-6394, Part Number 6117948 / 12637820, used on all non-armored High Mobility Multi Wheeled Vehicles (HMMWVs). The deliverables for this requirements contract are for an estimated three-year quantity of 750 each (EA). The estimated total value of this contract is $584,377.50.

4. Authority Cited: The statutory authority permitting other than full and open competition for this effort is 10 United States Code (U.S.C.) 3204(a)(1) as implemented by FAR 6.302-1(a)(2)(ii)(A), 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.

5. Reason for Authority Cited:

Background:

The Radiator and Oil Cooler Assembly eliminates heat from the engine and engine oil of the HMMWV. The Government does not have the pertinent technical data to enable competitive re-procurement. The Government does not have the system level requirements or performance specifications, Build-to-print TDP, technical data and the specific technical expertise needed for the development and manufacturing of this Radiator Assembly.

This Radiator and Oil Cooler Assembly is an item in which AM General has a history of supplying. They have the specific technical expertise and proper supply network to manufacture the Radiator and Oil Cooler Assembly. AM General has a history of supplying Radiator and Oil Cooler Assemblies that allow the HMMWV to perform its mission.

AM General has built Radiator and Oil Cooler Assemblies that have met all system level requirements and have successfully operated in the field. If the Government were to purchase Radiator and Oil Cooler Assemblies that have not undergone proper verification, mission failures and potential loss of mission critical functions to the vehicle could occur. Without this proper verification, it is possible that the Radiator and Oil Cooler Assembly would not fit or function properly, which would cause the engine to fail while in operation, which could jeopardize mission capability and fleet readiness.

AM General was contacted via email on 16 May 2023 to seek license rights for the TDP.

The email was delivered on 16 May 2023 and read on 17 May 2023. No response was received.

After receiving input from the Ground Vehicle Systems Center (GVSC) Reverse Engineering (RE) Team, it is estimated that reverse engineering this Radiator and Oil Cooler Assembly would be $3M for design, development, testing, technical data development, and finding a new source to build the Radiator to the fully competitive technical data package. (See table below for breakdown of costs).

Duplication of Cost:

Since the Government does not possess any of the technical data, the Government would have to Reverse Engineer the Radiator in order to determine all aspects of the Radiator and Oil Cooler Assembly. A reverse engineering effort would include work to clarify and define a Radiator with the same fit, form, and function as the original Radiator. Design requirements should be broken down and clarified without ambiguity.

Technical information such as understanding the parameters to include coolant flow rate, maximum system pressures, heat transfer rate, inlet and outlet flange type, as well as mounting dimensions. Developmental testing is needed to prove the prototype is functional. Component, Safety, and System Level Testing will evaluate the Radiator’s compliance with the specified requirements. Once all testing and design is complete, a TDP will need to be produced. Reliability and Operational Testing includes accelerated life testing, cold and hot environments, salt spray, and maximum load operation.

Engineering estimates the below costs associated with reverse engineering.

Reverse Engineering Activity Costs

Reverse Engineering Project Definition $ Understand Design Requirements $ Prototype Development $ Developmental Testing $ Component, Safety and System Level Testing $ Write TDP, Technical Bulletins and Provision Parts $ Reliability and Operational Testing $ Total $3M

The Government would not be able to recover, through subsequent competition, the additional costs involved in reverse engineering the item to create a new Radiator and Oil Cooler Assembly.

Assuming a 25% savings is achieved through competition from the estimated current unit cost of $779.17, that results in an annual savings of $146,094.38. The annual savings of $146,094.38 would take over 20 years to offset the estimated reverse engineering cost of $3M.

6. Efforts to Obtain Competition:

a. Effective competition: Due to the reasons cited in section 5 above, we are not pursuing competition for this item.

b. Subcontracting competition: Unless the contract is awarded to a small business, the solicitation and resulting contract will include FAR clauses 52.219-8, "Utilization of Small Business Concerns"; 52.244-5, "Competition in Subcontracting"; 52.219-16, "Liquidated Damages--Subcontracting Plan"; and “Defense Federal Acquisition Regulation Supplement (DFARS)” 252.219-7003, "Small Business Subcontracting Plan (DoD Contracts)," to maximize small business opportunities and utilization.

SOLE SOURCE: Notices required by FAR 5.201 will be posted.

7. Actions to Increase Competition: There are no plans to increase competition for future procurements due to the reasons cited above.

8. Market Research: A Sources Sought Notice was posted to beta.SAM.gov on 02 November 2022 and was open for 10 days. One response was received from AM General LLC (Cage 34623). AM General believes the Radiator and Oil Cooler Assembly, NSN: 2930-01-681-6394, to be commercially available and is of a type customarily used by the general public or by non-governmental entities for other than government purposes and has been sold, leased or licensed to the general public. AM General is an approved source for PN: 6117948 which is associated to this NSN and reports a delivery capability of 200 days after award.

In addition to the Sources Sought, the Tactical Vehicle and Watercraft Sustainment Engineer (TVWSE) also conducted a thorough internet search. The engineer performed Internet searches for suitable competition described below:

The internet sites and findings included the following:

Market Research via web search was completed by TVWSE from 17-20 October 2022.

Websites:

https://www.detroitradiatorcorp.com/ https://www.northernradiator.com/diesel https://www.superiorcooling.co/ https://www.dieselradiator.com/

Findings: Detroit Radiator Corporation has multiple radiators and oil coolers listed based on specific vehicles. Northern Radiator also has radiators for specific vehicle configurations for pickup trucks and heavy duty/semi-truck applications. Diesel Radiator