JA ABV-EBS_W56HZV18D0046 P00015_Redacted.pdf

CMO Control Number: 2023-102

DEPARTMENT OF THE ARMY

JUSTIFICATION AND APPROVAL FOR

OTHER THAN FULL AND OPEN COMPETITION

1. Contracting Activity: United States Army Contracting Command – Detroit Arsenal (ACC-DTA) is the contracting activity for this procurement.

2. Description of Action: This action will result in two contract modifications to contract W56HZV-18-D-0046 with Pearson Engineering LTD (PEL) of Newcastle Upon Tyne, UK. The current contract is a five-year Requirements contract, awarded 25 September 2018 with an expiration date of 24 September 2023. The first action will be a no-cost contract modification to extend the contract’s length by 12 months. The second action will be a Firm-Fixed Price (FFP) modification to create a sixth ordering year with associated pricing for the Assault Breacher Vehicle (ABV) Engineering Breaching Systems (EBS) currently on contract. The EBS is a major component of the major system, the ABV, that is provided as contractor furnished material to the Anniston Army Depot and is installed during the production of the ABV. Fiscal Year (FY) 24 Weapons and Tracked Combat Vehicles (WTCV) Army funding will be used for this acquisition after pricing is negotiated.

3. Description of Supplies/Services: PEL’s Commercial Off-The-Shelf (COTS) EBS is an integral part of the ABV. The EBS will be procured and delivered to Anniston Army Depot (ANAD), the integrator for the ABV program, for installation during the production phase of the ABV. The EBS is comprised of the following subsystems:

a. Combat Dozer Blade (CDB) – P/N PE21736

b. Full Width Mine Plow (FWMP) – P/N PE22314

c. High Lift Adapter (HLA) – P/N PE22901

d. Lane Marking System (LMS) – P/N ER9773

e. Initial Spares Package – P/N PE32016

All the subsystems include associated mounting hardware, cables, hydraulic lines, and fittings necessary to fully install and operate the subsystem. The ABV consists of an M1A1 hull with a specially designed and fabricated turret which has two Mine Clearing Line Charges (MICLIC) mounted on a Line Charge Detonating System (LCDS). The ABV also has: 1) an HLA mounted on the front of the hull which allows the FWMP and dozer blade to be rapidly interchanged by a crew of two Soldiers, 2) an LMS system, and 3) an integrated vision system allowing the crew to view 360 degrees day or night in various weather and combat environments. The ABV provides a deliberate and in-stride breaching capability of hasty and deliberate, complex explosive and non-explosive obstacle(s) to the assault elements of the Heavy Brigade Combat Team

(HBCT).

Based on an Independent Government Cost Estimate prepared by PdM Bridging on 21 July 2023, the total estimated value of this \action is $10.7M as shown in the table below:

Description Qty Extended @ 2024 Dollars

US Army: Full Width Mine Plow 8 $3,228,300

US Army:

Combat Dozer Blade

4 $827,667

US Army: Lane Marking System 12 $3,023,652

US Army: High Lift Adapter 12 $2,548,966

US Army: Spares 2 $1,071,854 Total $10,700,439

4. Authority Cited: The statutory authority permitting other than full and open competition for this effort is Title 10 United States Code (U.S.C.) 3204(a)(1), as implemented by Federal Acquisition Regulation (FAR) 6.302-1(a)(2), “Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.” Specifically, FAR 6.302-1(a)(2)(ii)(A) provides that “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: As described below, award of this action on a sole source basis is justified as an award to another source would result in substantial duplication of cost to the Government.

Duplication of Costs: The Government does not have the pertinent technical data to enable competitive re-procurement. The Government has made requests to purchase the TDP, but PEL has declined each offer. Most recently, on 17 August 2023, the Government sent an email request to enter negotiations in order for the Army to obtain a Specifically Negotiated License pursuant to the authority of Defense Federal Acquisition Regulation Supplement (DFARS) 252.227-7013(b)(4), 252.227-7014(b)(4), 252.227-7015(c), or 227.7202-3(b). Again, PEL denied the Government’s request on 18 August 2023 in an email format. Award to any source other than PEL would result in substantial duplication of costs to the Government, which would not be expected to be recovered through competition. First, because PEL owns the EBS Technical Data Package (TDP), the Government would have to conduct an extensive reverse engineering effort to develop a Government-owned TDP to replace the current EBS.

The TDP would have to be reviewed by Government personnel to ensure that it contains data suitable for competition and a Physical Configuration Audit (PCA) would be needed to verify the accuracy of the TDP. The Government would need to develop the item and fully test system performance and reliability, survivability testing with live mines, as well as perform type classification efforts due to a change in manufacturer.

The United States Marine Corps (USMC) invested seven years and $39M in Research, Development, Test & Evaluation (RDT&E) funding under its development effort. If the Government decided to reverse engineer the EBS, Government Engineering believes the cost would be an estimated $44.34M as shown in the table below. This reverse engineering estimate is based on historical data from recent Army tests and discussions within the test community.

Effort to be duplicated: Estimated cost:

Material/Design analysis, Reverse Engineering, drawing release (Inclusive of PCA) $8.5M

Procurement of Test Vehicles $18M Prototype Hardware Fabrication / Software development/ Bench testing $6M

USG Testing $10.5M Transportability $1.21M ILSC Commonality (Provisioning, Technical Manual (TM) Development) $3.63M

TOTAL Reverse Engineering Costs (est) $44.34M

Explanation of the above efforts: Material/Design analysis, Reverse Engineering, Drawings creation (Inclusive of PCA): This estimate includes the efforts needed to analyze the parts, sub-assemblies, front end equipment, and Line replaceable units (LRUs) associated with the components provided by current contractor in order to reverse engineer the aforementioned. The reverse engineering will be required because the USG does not own the TDP. The TDP creation under this estimate to include level 3 Army standard 2 Dimensional (2D) drawings and 3D models. Once a TDP is created and parts are produced, PCA to validate the drawing against the hardware will be essential. The above estimate includes the cost associated the elements in this paragraph.

Procurement of Test Vehicles: At least 2 test vehicles will need to be available for integration of the hardware to conduct fit checks, functionality checks, and to be used as test assets to verify that the parts/subsystems meet the platform requirement.

Prototype Hardware Fabrication / Software development/ Bench testing: At least 2 sets of each attachment will be required as Prototype/Test assets for First Article Testing (FAT). Additionally, cost will be needed for Firmware/Software development and embedded diagnostics tools that are required for maintenance. Bench test stands for

Final Inspection are required to ensure attachments and hardware meets the Quality Assurance (QA) specs.

USG Testing: In order to ensure the new source of supply components meet the performance specification, as required by the Operational Requirement Document (ORD) of the ABV, full system testing will be required at an Army Test Facility.

Rigorous Environment testing IAW MIL-STD-810, Electromagnetic Environmental Effect (E3) IAW MIL-STD-464 series testing and sub tests (EMI, HERO, HERF, NSL, …etc) will need to be performed. Reliability and Maintainability (RAM) testing to subject the new source parts to vibration, miles, and operational environment will be vital to ensure the new equipment offers comparable performance to meeting the current Operational Mode Summary Mission Profile (OMS/MP).

Due to the complexity of the mission of the ABV, the new source of supply Front End Equipment (FEE) will need to be subjected to obstacles reduction capabilities testing.

This requires defeating manmade obstacles (i.e. tank ditches & berms, log cribs, …etc) and clearing mechanical obstacles (i.e. Tetras, Cement Blocks, Hedgehogs). Procuring and constructing such obstacles are part of the reason for the high-test cost.

Lengthy System Survivability testing will also be conducted to ensure the Full Width Mine Plow (FWMP) structure is able to offer equivalency to the current system when subjected to the explosive threat. Live fire test will be time consuming due to the classified nature of such testing and also carry high cost and risk of damages to the vehicles and attachments. The above estimate assumes minimum damage to the vehicle and hardware and does not include cost of after-action repairs.

Logistics: Transportability includes increased pricing due to custom shipping pallets having to be designed for each specific FEE. These are currently a PEL proprietary design and will take reverse-engineering to design to the same standards. ILSC Commonality includes provision conferences, and TM development. Provisioning conferences are required to ensure all part numbers and equipment are tracked and provided. TM development, will be required and will be the main source of pricing for duplicate efforts as PEL has already developed TMs and for each FEE.

The reverse engineering estimate equates to 584% of the expected $10.7M cost of the procurement. As such, if the Government were to compete this requirement, it is highly improbable that the Government could achieve a cost savings of 584% through competition. Thus, an award to another contractor would cause an unacceptable duplication of costs.

6. Efforts to Obtain Competition:

a. Effective Competition: The Government does not anticipate effective competition and no actions to increase competition will be taken for the reasons set forth above in Paragraph 5. This action will be synopsized in accordance with FAR 5.201.

b. Subcontracting Competition: To ensure PEL competitively awards subcontracts to the maximum extent possible, the contract will include FAR clauses 52.244-5, “Competition in Subcontracting,” and 52.244-2, “Subcontracts.”

7. Actions to Increase Competition: As mentioned in paragraph 5 above, the Army has a requirement to procure 12 ABV EBSs. Due to the duplication of cost described above, the Government has no plans to increase competition to fulfill the requirement.

PEL is the developer and the original equipment manufacturer (OEM) of the EBS and the only known source with the knowledge and expertise to continue producing the EBS and its subsystems. The USMC, formerly the lead service for the ABV, invested seven years and $39M in RDT&E funding to take an already designed, produced, and fielded COTS breaching system (PEL’s Breaching System) and incorporate it into the ABV to achieve Full Rate Production authorization on 24 May 2007. The USMC did not purchase technical data for PEL’s Breaching System; hence, PEL maintains control of data relating to its product. The Government owns the TDP for some of the mounting provisions and interfaces, which are produced at ANAD; however, the Government has no rights to the main components (FWMP, CDB, LMS, HLA, the hydraulics or any of the Line Replaceable Units). As a result, the Government TDP is incomplete for the purpose of competitively procuring the required hardware products. Therefore, the Government has no plans to increase competition for this acquisition.

8. Market Research: ACC-DTA posted a sources sought notice to SAM.gov on 10 August 2023 for 7 days, notifying industry of the Government’s intent to extend the ABV EBS contract. The sources sought notice provided a description of the five subsystems which comprise the EBS and identified PEL as the developer and present manufacturer of the EBS. The sources sought notice encouraged interested vendors to submit capability statements and seek out subcontracting opportunities. No vendors submitted a response.

Additionally, Program Executive Officer, Combat Support & Combat Service Support (PEO CS&CSS) continuously conducts market research in accordance with FAR 10.002(b)(2) to determine whether other industrial capabilities can be used to fulfill its requirements and to ensure its acquisition methods obtain the best value for the Government. This market research includes PdM Bridging attendance at events such as the Association of the United States Army (AUSA), Michigan Defense Exposition (MDEX), and Ground Vehicle Systems Engineering and Technology Symposium (GVSETS) to engage with industry and weekly communication, to include weekly Integrated Product Team (IPT) telecons and email exchanges with the Ground Vehicle Systems Center (GVSC), Program Manager (PM) Abrams, and Anniston Army Depot (ANAD). PdM Bridging also performs daily internet research. These forums afford the Government the opportunity to conduct market research reviews in the form of direct discussions with related defense contractors and other Government agencies. The discussions/reviews consider the capabilities of industry and other Government agencies to accomplish the proposed acquisition. As of the most recent ABV IPT meeting, there remains no other potential source for the EBS.

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

10. Other Facts:

a. Procurement History: The ABV began as a joint USMC – U.S. Army program.

Primary Inventory Control Activity (PICA) transferred from USMC to the Army, designating the Army as lead service, in spring of 2014 and in accordance with a Memorandum of Agreement (MOA) between the two services dated February 2008.

The USMC has since divested all ABVs and the program is a U.S. Army program for all future requirements.

In August 2002 the USMC, PM Engineers, issued a full and open competitive solicitation for a COTS Breaching System for the ABV Demonstrator Vehicle. PEL and Israeli Aerospace Industries (IAI) Ramta responded and were each awarded an RDT&E, FFP contract for their Breaching Systems. During testing the IAI Ramta Breaching System was found to be unsafe for operation and that contract was allowed to expire. The PEL Breaching System proceeded to testing. After testing the PEL system, the USMC awarded PEL a contract to produce three (3) production prototypes of the Breaching System. Testing of those prototypes during the system development and demonstration phase entailed numerous design changes, predominantly involving M1 chassis integration issues concerning hydraulics and lift angles. More testing ensued, followed by Milestone C approval in May 2005, and then a contract award for production of the Breaching System to meet Marine Corps requirements. Additional production qualification tests, initial operational tests and evaluations, and live fire testing and evaluations of the ABV itself were pursued under the production contract, resulting in many more engineering revisions to the integrated system, including aspects of the PEL Breaching System, which were designed to enhance survivability during mine strikes. The Government authorized full-rate production in May 2007.

(1) On 28 May 2010, and subsequent to the full-rate decision, the Army awarded FFP Indefinite Delivery-Indefinite Quantity (IDIQ) contract W56HZV-10-D-0063 for the production of a potential 185 EBS systems at an estimated cost of $220M.

On 25 September 2018, the Army awarded FFP Requirements Contract W56HZV-18-D-0046 to PEL for the production of 105 EBS systems at an estimated cost of $35.2M.

(2) Contract W56HZV-10-D-0063 was awarded on a sole source basis.

Contract W56HZV-18-D-0046 was awarded on a sole source basis.

(3) Contract W56HZV-10-D-0063 was noncompetitively awarded under the authority of 10 U.S.C. 2304(c)(1) as implemented by FAR 6.302-1(a)(2)(ii)(A).

Contract W56HZV-18-D-0046 was noncompetitively awarded under the authority of 10 U.S.C. 2304(c)(1) as implemented by FAR 6.302-1(a)(2)(ii)(A) and (B).

(4) The sole-source justification for both contracts W56HZV-10-D-0063 and W56HZV-18-D-0046 cited the lack of sufficient TDP rights to competitively procure. The Government owns the TDP for some of the mounting provisions and interfaces, which are produced at ANAD; however, the Government has no rights to the main components (FWMP, CDB, LMS, HLA, the hydraulics or any of the Line Replaceable Units). As a result, the Government TDP was incomplete for the purpose of competitively procuring the required hardware products.

(5) There have been no changes to the ownership of the TDP or the rights sufficient to procure this requirement competitively.

(6) N/A

(7) Duplication of cost and unacceptable delay were both cited in the justification of the prior award, W56HZV-18-D-0046. This was based on the effort that it would take to reverse-engineer the product and put a new product through testing to meet the requirement. There have been no changes to the circumstances explained in this data.

The Government made several requests to purchase the TDP, but PEL declined each offer. The most recent request made prior to the award of contract W56HZV-18-D-0046 was made on 28 June 2017.

b. Other Facts. Presently, the Army has a requirement to procure a quantity of 12 EBSs for fielding expected to commence as soon as systems are available.

11/12. Technical/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:

Name: _ Date: ___2 Aug 23__________________

Title: Signature: ____

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. The contractor’s proposal will be reviewed using cost/price analysis based on the contractor’s submission of cost or pricing data and DCAA audit recommendations. Certified cost or pricing data will not be required in accordance with FAR 15.403-1(b)(3). All prices proposed by the contractor will be fully negotiated and the final agreement will consider all contractual requirements and will support a determination of fair and reasonable price for this effort.

Name: _ __________ Date: __03 Aug 2023 ________________

Title: _ _________ Signature:

14. Procuring Contracting Officer’s Certification:

I certify that this justification is accurate and complete to the best of my knowledge and belief:

Name: _ __________ Date: __03 Aug 2023 ________________

Title: _ _________ Signature: