JA_M109_Storage_at_MMA_-_12_Month_Extension_Approved_REDACTED.pdf

JUSTIFICATION AND APPROVAL (J&A) FOR OTHER

THAN FULL AND OPEN COMPETITION

M109 Storage Contract Extension

1. Contracting Activity: Army Contracting Command, Warren (ACC-WRN), MI 48397-

5000 is the responsible contracting agency.

2. Description of Action: ACC-WRN proposes to award a 12-month extension to the existing Firm Fixed Price contract to Maine Military Authority (MMA) for the continued storage of M109A5 Howitzers. ACC-WRN projects an award in the first quarter of FY16 utilizing Army Working Capital Funds. The current contract W56HZV-14-C-0056 expires on 18 December 2015. ACC-WRN plans to award the extension using the authority set forth in Clause FAR 52.217-9, Option to Extend the Term of the Contract.

3. Description of Supplies/Services: The proposed action supports the Army’s requirement to disassemble selected M109A5 Series Self-propelled Howitzers (NSN: 2350-01-281-1719), remove and store cannons and selected assemblies to fill future Army requirements, create accountable records for those cannons and assemblies, and build cannon shipping containers for storage of the disassembled cannons. The current quantity of Howitzers at MMA is 188. The estimated storage costs for the extension is $25 per vehicle, per month, for a total of $56,400. The Army’s end-goal is to transport the vehicles to Sierra Army Depot in Herlong, CA for long-term storage because the dry environment is conducive for the preservation of the vehicles and its components. Currently, no funding is available to move the vehicles from MMA to Sierra Army Depot.

4. Authority Cited: 10 USC 2304(c) (1), Only One responsible Source and No Other Suppliers or Services will Satisfy Agency Requirements as authorized by FAR 6.302-1.

5. Reason for Authority Cited: ACC-WRN requires award of this action on a sole source basis to MMA because the cost of shipping the Howitzers from MMA in Limestone, ME to Sierra Army Depot far outweighs the cost savings that the Government may realize by competition. The estimated cost to ship the Howitzers with dimensions L: 361" x W: 124" x H: 129.12", and weight of 52,000 lbs. each from MMA to Sierra Army Depot is approximately $1.3M.

The U.S. Army no longer uses the M109A5 series vehicles. The vehicles are stored at MMA and offered for sale to eligible Foreign Military Sales (FMS) customers.

Since August 2010, the number of Howitzers has reduced by 82 from 270 to 188.

The requiring activity expects the sales of Howitzers to continue and thus the quantity in storage will continue to decrease.

Justification and Approval M109 Storage

ACC-WRN currently has Firm Fixed Price Contract W56HZV-14-C-0056 in place with MMA with a Period of Performance through 18 December 2015. This J&A supports a proposed 12-month extension to this contract. Upon completion of the contract, ACC-WRN proposes to award a follow-on contract to include the same storage services. Use of the current contractor and place of performance will enable ACC-WRN to avoid paying duplicative costs to move the vehicles to another facility.

ACC-WRN does not expect to recover the duplicative cost through competition.

6. Efforts to Obtain Competition: ACC-WRN will synopsize this procurement action in FedBizOpps as required by FAR 5.201(c).

7. Actions to Increase Competition: ACC-WRN has not taken any actions to increase competition because the shipping costs from MMA to Sierra Army Depot exceed the total estimated cost of this proposed contract.

8. Market Research/Procurement History:

a. MMA is the incumbent and current service provider for the storage of M109A5 Howitzers. ACC-WRN issued the following contracts to MMA for M109A5 storage over the last six years on an other than full and open competition basis:

1) W52H09-09-C-0045

2) W56HZV-10-C-0414

3) W56HZV-14-C-0056

b. The estimated cost for the proposed 12-month extension is $56,400 based on the historical price paid on W56HZV-14-C-0056 of $20.69 per month, per vehicle.

For purposes of this estimation, the Contract Specialist used a rate of $25 per vehicle to account for potential price escalation. Therefore, the total estimated cost for continued storage is as follows:

$25 per M109A5 x 12 months x 188 ea. M109A5's = $56,400

c. The Contract Specialist performed market research on the cost to recompete the storage effort. A comprehensive description of the market research performed is attached to this J&A document and a summary of the findings is stated below:

i. In October 2015, the Contract Specialist conducted various internet and telephone inquiries to find a secure, low-cost storage facility that could provide storage services for the 188 each M109A5 Howitzers. The purpose of this research was to verify the reasonableness of the historical price paid to MMA for storage of the M109A5 Howitzers. The market research examined storage facilities in the state of Maine that offered outside, fenced-in storage. The research determined that no other contractor could perform the effort since none possessed the required square footage to store all 188 vehicles, none of the facilities had experience protecting or maintaining combat vehicles, and the estimated storage cost was at least double (or much more in some cases) than that of MMA.

ii. In November 2015, the Contract Specialist looked at various trucking and rail carriers with ability to transport the M109A5s from MMA to Sierra Army Depot. An internet search provided very little insight as all of the quote request forms were limited in the size and weight of what items it shipped and the M109A5 Howitzer far exceed those limitations. The Contract Specialist then called the individual freight companies to speak with sales representatives in hopes of attaining quotes. Of the four companies contacted, only one responded (Landstar) and as of this writing, the Contract Specialist has yet to receive the promised quote. It was at this point the Contract Specialist took another approach and performed an independent analysis using empirical data sourced from the Department of Transportation historical database on the average freight per ton-mile for Class 1 rail shipments. Utilizing an average rate of $0.0405 per ton-mile, (the most recent data from 2013), the Contract Specialist calculated the shipping cost from MMA to Sierra Army Depot as follows: $0.0405 x 52 tons x 3,189 miles x 188 ea. M109A5s = $1,262,614.39. This estimate does not include the cost to load and unload the vehicles at origin and destination. The estimated cost to load the vehicles is $170 each based on the historical price paid by ACC-WRN on 13 January 2015 via Modification P00001 to contract W56HZV-14-C-0056 for loading and shipment preparation of 4 M109A5s to fulfill an FMS requirement. The Contract Specialist estimates the cost to unload the vehicles at Sierra Army Depot to be the same.

Total Estimated Cost to move 188 Howitzers from Limestone, ME to Herlong, CA:

$1,262,614.39 + ($170 x 2 x 188) = $1,326,534.39

iii. In addition, to the high-anticipated cost to move the M109A5s, it should be noted that MMA is authorized and capable of handling and storing radioactive fire control assemblies that may be present within the vehicles.

This capability is limited within other facilities.

iv. Lastly, MMA is an approved disposal and demilitarization site for the Defense Reutilization and Marketing Office and is capable of performing demilitarization efforts pursuant to the Demilitarization Manual, DoD 4160.21-M-1, and properly dispose of the vehicles. This is important to consider since MMA can demilitarize any unsold vehicles on site without the need to ship them to another location.

d. Based on the high cost to transport the vehicles, the unique capabilities that MMA has, and the ability to demilitarize vehicles should the need arise, award to MMA is in the best interest of the Government.

9. Interested Sources: To date, no other sources have expressed an interest in performing this requirement. ACC-WRN will publish the notice required by FAR 5.201 and any proposals received shall be considered for future requirements.

10. Technical 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: Joshua Smrt Date: 23 Nov 15

Title: Contracting Officer Representative Signature:

Via email on 23 Nov 15. Email is in

PCF

11. 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: Steve Natole Date: 23 Nov 15

Title: Group Leader, Self-Propelled Artillery

Fires & Infantry Support PSID Signature:

//Via email on 23 Nov 15. Email filed in PCF//

12. Fair and Reasonable Cost Determination: I hereby determine that the anticipated cost to the Government for this contract action will be fair and reasonable. Price Analysis will be used to discern whether the costs proposed are current and justifiable.

I will request Data other than Certified Cost or Pricing Data and it will form the basis for negotiating a fair and reasonable price.

Typed Name: Raena R. Swanson_ Date: 23 Nov 15

Title: Contracting Officer Signature:

//Via email on 23 Nov 15. Email filed in PCF//

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

Typed Name: Raena R. Swanson_ Date: 30 Nov 15