JA-00535 EH2L0077EH FINAL _Redacted.pdf

CMO Control Number: 2023-084

JA-00535 - W56HZV-23-R-0015

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

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- 6412, 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 2930-01-681-6412, Part Number 6118072 / 12637821, used on the up-armored High Mobility Multi Wheeled Vehicles (HMMWVs). The deliverables for this requirements contract are for an estimated three-year quantity of 7,386 each (EA). The estimated total value of this contract is $5,754,949.62.

4. Authority Cited: The statutory authority permitting other than full and open competition for this effort is 10 USC 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:

The Radiator and Oil Cooler Assembly part eliminates heat from the engine and engine oil of the HMMWV. The Government does not possess the necessary technical data and associated intellectual property rights to enable competitive re-procurement. The Government does not have the system level requirements 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 to the Government for the HMMWV. They have the specific technical expertise and proper supply network to manufacture the Radiator and Oil Cooler Assembly.

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 may cause the engine to fail stakeholders and engineers so that the design requirements are understood and agreed upon.

c. Prototype Development:

In order to properly develop a prototype, several radiators must be purchased from the OEM. These will be used in the reverse engineering and prototyping effort. Key measurements will be taken, identify locations of input and output connections for coolant and oil cooler lines, size, location and type of radiator cap as well as detailing overall dimensions. Resources will be needed to produce several functional radiator and oil cooler assemblies. Raw materials, welding materials, skilled welders and jigs to hold the prototypes in place during development.

d. Developmental Testing:

During the development of this radiator and oil cooler assembly, testing on the unit will need to be performed.

e. Component, Safety and System Level Testing:

Safety testing will need to be performed on each component of the radiator and oil cooler assembly since this assembly will be pressurized with extremely hot coolant.

System level testing will ensure that the radiator and oil cooler assembly will work with the other components of the vehicle as a complete unit.

f. Write TDP, Technical Bulletins and Provision Parts:

A full TDP will need to be developed for this radiator and oil cooler assembly. The TDP will need extensive man hours to create drawings and supplemental technical documents that will cover items such as materials, welding techniques, Quality Assurance Provisions documentation, as well as any post manufacturing processing.

g. Reliability and Operational Testing:

In order to determine that the radiator and oil cooler assembly is reliable and functional in an operational environment, extensive testing is needed. This portion of the reverse engineering effort requires significant man hours for the creation of test scenarios, coordination of test vehicles and testing grounds.

Since this radiator and oil cooler assembly is meant for up-armored

HMMWVs, the testing will be performed on up-armored HMMWVs.

Once all the Reverse Engineering Activities have been completed, the Government will have a complete TDP and a fully functioning radiator and oil cooler assembly. The total estimated cost for these efforts is $3 million.

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 $404,389.23. The annual savings of $404,389.23 would take over 7 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. Notices required by FAR 5.201 will be posted.

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.

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/Request for Information (RFI) was issued by the ACC-DTA Contract Specialist seeking companies capable of producing the Radiator and Oil Cooler Assembly. The Sources Sought Notice was posted to SAM.gov on 25 October 2022. The notice was open for 14 days with responses due on 08 November 2022. As a result of the posting, one response was received by AM General LLC, on 07 November 2022. AM General LLC owns the TDP.

In addition to the Sources Sought, the Tactical Vehicle and Watercraft Sustainment Engineer (TVWSE) 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/