JA_SPRDL1-20-R-0138_Redacted.pdf

Previous J&A Available: SPRDL1-19-R-0275

DEFENSE LOGISTICS AGENCY

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

SPRDL1-20-R-0138

1. Contracting Agency: Defense Logistics Agency Land Warren (DLA-WRN)

2. Description of Action: The proposed contract action is to award a new hardware contract to Oshkosh Defense, LLC (CAGE: 75Q65) for the new Gear Assembly (Differential) Carrier (NSN: 3010-01-604-7889). The differential is used on the HEMTT A4. This is for a Firm Fixed Price Three-Year Indefinite Delivery Indefinite Quantity (IDIQ) Long-Term Contract (LTC). The type of funds are Army Working Capital Funds (AWCF).

3. Description of Supplies/Services: The hardware to be acquired under the proposed Three-Year IDIQ LTC is the new Gear Assembly (Differential) Carrier (NSN: 3010-01- 604-7889), M/PN 515164 (Spicer Heavy Axle & Brake, Inc., Cage 1MVZ1) OR M/PN 3626749 (Oshkosh Defense, Cage 75Q65). The differential is used on the HEMTT A4 to split the torque between the two wheels on the same axle so they can spin at different speeds.

The unit value is The minimum quantity of the contract is 3ea and maximum quantity is 54ea. The minimum estimated dollar value of the contract is and the maximum estimated dollar value is

PRON: EH0L0100EH

AMC 3. Acquire, for the second or subsequent time, directly from the manufacturer.

AMSC R. The Government does not own the data or the rights to the data needed to purchase this part from additional sources. It has been determined to be uneconomical to buy the data or rights to the data. It is uneconomical to reverse engineer the part.

4. Authority Cited: The statutory authority permitting other than full and open competition is Title 10 United States Code (U.S.C.) Section 2304(c)(1), as implemented by FAR 6.302-1 “Only one responsible source and no other supplies or services will satisfy agency requirements.”

5. Reason for Authority Cited: The U.S. Government does not own or have rights to any of the detailed technical data for NSN: 3010-01-604-7889. No top-level drawing with requirements is available for this differential which is used on the HEMTT A4, and essential to the mobility function of the truck. The differential is especially designed for the HEMTT A4 due to the integration of it into the vehicle. The part is manufactured by Spicer Heavy Axle & Brake and distributed to the Government by Oshkosh Defense.

Spicer does not sell directly to the Government.

The following research shows justification for the need to go sole source based on cost and lead time of reverse engineering or development of a new differential, which will directly affect the readiness of the HEMTT A4.

(i) Reverse Engineering (RE) and Remanufacturing Costs

The Ground Vehicle Systems Center (GVSC) Sustainment Engineering Team has received input from the GVSC Ground Vehicle Power and Mobility (GVPM) differential subject matter experts, and it was estimated that reverse engineering the HEMTT differential would cost an estimated $3.2M with a lead time of no less than 48 months for design, development, testing, and technical data development. A breakdown of the recommended development and testing is below.

Action Time Costs Reverse-Engineer

Differential 18 Months $2,000,000.00

Qualification Testing 12 Months $1,000,000.00

Develop Technical Data Package (TDP) 6 Months $200,000.00

Find Additional Source 12 Months -

Total Development Time Approx. 48 Months $3,200,000.00

In addition to the cost and delay for an R&D action or RE effort, GVSC estimates that it would take approximately one additional year to establish another source to procure the part on a competitive basis.

The Government would not be able to recover, through subsequent competition, the additional costs involved in reverse engineering the item to create a new and competitive TDP. At the current average usage rate of 14.04 units each year (12 month demand provided by the Integrated Logistics Support Center (ILSC)), a current unit cost of and assuming the 25% savings achieved through competition, the in annual savings would take over years to offset the estimated $3,200,000.00 cost of reverse engineering the item and qualifying another source.

Based on the above findings, GVSC engineering does not recommended the Reverse Engineering course of action for the HEMTT A4 differential. Even if this was feasible, TACOM ILSC would be faced with the same issues of logistics, sustainment, and future main supply route (MSR) levels required to retain differential capabilities for any differential replacement.

(ii) Unacceptable Delay:

If the procurement of the HEMTT A4 differential is delayed until the TDP is developed by the Government, there would be an unacceptable delay of a minimum of four years in fulfilling this requirement. The four year delay is a result of the time required to develop items of equivalent performance explained previously in this document. Further delay in providing this differential will negatively impact our force readiness and capability to actively support mission efforts for the HEMTT A4. Oshkosh is currently the only source that can meet the requirements without substantial duplication of cost and without unacceptable delay against this action. The approved source has the requisite technical and engineering expertise to perform all efforts required to provide the NSN identified in this Justification and Approval (J&A). The contractor developed the differential identified on this document without assistance from the Government. Furthermore, if a project to make this item competitive was rushed through without proper testing and validation, there would be an increased risk of a premature failure of this item in the field which could result in mobility failure or an extensive loss of the equipment through destroyed differentials or mating components.

6. Efforts to Obtain Competition:

a. Effective Competition: Per section 7, potential vendors can submit requests to become a source through the Source Approval Process at any time. Per section 9, a Sources Sought notice was posted. Based on the detailed rational provided in paragraph 5 above, the Government has no plans to obtain competition for this proposed contractual action.

b. Subcontracting Competition: FAR clause 52.244-5, Competition in Subcontracting, will be included in the contract to encourage a prime contractor to obtain as much competition as possible in its subcontracting.

7. Actions to Increase Competition: As stated in section 5, the Government does not own the complete build to print TDP to support a competitive procurement. There are no plans to obtain a competitive TDP to increase competition for future procurements due to the reasons cited in section 5.

8. Market Research: The Government has no funding to qualify additional sources, and thus any qualification would be done at contractor’s expense. Additional contractors can seek qualification through the Source Approval Program with the Competition Management Office. Given that no detailed technical data is available for the HEMTT A4 Differential (NSN: 3010-01-604-7889), market research results are very limited.

Computer-based/internet market research was conducted by the TVWS Project Engineer in January 2020. List of websites visited for the purpose of comparing heavy truck differentials are listed below:

https://www.eaton.com/Eaton/ProductsServices/Vehicle/markets/performance-aftermarket/Differentials/index.htm http://www.dana.com/commercial-vehicles/products/driveline/drive-axles#searchRootId=1cc6c5e8-d343-4928-8f69-4078e55a8865/facets= https://www.mercedes-benz.com/en/vehicles/aggregates/powertrain-trucks-rear-axle-systems/

Many internet searches showed that this Gear Assembly (Differential) Carrier is proprietary with no technical data available. The only information found concerning this differential is a brief and generalized description of a differential with no specifics on the functionality or technical characteristics. The Project Engineer viewed differentials from both Mercedes-Benz and Eaton but found it was not possible to perform a comprehensive comparison with differentials from other manufactures due to the lack of available technical characteristics for NSN 3010-01-604-7889. Based on the rationale, this dressed differential and container kit cannot be viewed as a COTS item.

If the technical information for the HEMTT A4 Differential (NSN: 3010-01-604-7889) is eventually made available, additional, specific market research could then be conducted.

Spicer has confirmed the validity of the part and Oshkosh Defense (CAGE: 75Q65) has confirmed that they are still able to distribute NSN 3010-01-604-7889 to the government.

9. Interested Sources: A Sources Sought Synopsis was posted by the Contract Specialist on 2/26/20. On 3/02/20, the Contract Specialist received an e-mail from contractor GIGA, Inc (cage code 8S706) expressing interest in proposing this item. The Contract Specialist reached out to the Engineering and ILSC teams to further discuss this response. The Engineer reviewed the information provided by GIGA Inc. and searched their website www.gigainc.com to determine their capabilities. Based on the information provided by their website, GIGA Inc. appears to be a middleman for the sale of OEM parts, and not a manufacturer. Their website lists no manufacturing capabilities, and only lists OEM names that they work with as a supplier. GIGA Inc. should only be considered if the manufacturers listed on the J&A can no longer provide the part, and GIGA Inc. has new units in stock that can be verified as the approved part numbers (from the approved vendors) per the J&A document.

The link and pdf for the Sources Sought Notice are below:

https://beta.sam.gov/opp/350b492f9a2c461bb8ba76520bcb456c/review

Sources Sought Notice for Gear Asse

Name: Date: 2/11/2020 Title: HTV Secondary Supply Lead Signature:

Name: Date: 11 Feb 20 Title: Chief, Trailers & Heavy Tactical Vehicles Signature:

13. Fair and Reasonable Cost Determination: I hereby determine that the anticipated cost for this contract action will be fair and reasonable. This determination will be based on appropriate forms of cost and/or price analysis. Negotiations will be conducted as necessary. The Contractor will not be required to submit certified cost and pricing data as this has been determined to be a commercial item.

Name: Leah Bourdeau Title: Contracting Officer Signature: //s// LCB Date: 3/9/20

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

Name: Leah Bourdeau Title: Contracting Officer Signature: //s// LCB Date: 3/9/20

15. Legal Concurrence:

Concur:

Date: 03/12/2020