JA_SPRDL1-20-R-0151_REDACTED.pdf

J&A SPRDL1-20-R-0151

(Previous J&A SPRDL1-18-R-0144 is available) source is available, AMCs 3, 4, or 5 are valid. If at least two sources exist, AMCs 1 or 2 are valid.

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 Federal Acquisition Regulation (FAR) 6.302-1 "Only One Responsible Source and no other supplies or services will satisfy requirements."

5. Reason for Authority Cited: The Voltage Regulator is a critical component of the M109A6 charging system which operates in a unique military vehicle system. The performance of the voltage regulator is specialized to maintain generator output at a set value under varying load and operating temperatures. This allows the M109A6 to operate for long periods of time in extreme conditions and does so within the constraints of a unique space-claim. The item generates the engine accessory electrical power for the M109A6. Only Honeywell’s voltage regulator passed all unique characteristics in the areas of performance, design, construction, operations in various environmental conditions and vehicle system testing. In addition, only Honeywell’s voltage regulators passed the tests that were critical to ensure the vehicles would be mission capable and operationally ready. If an untested and/or non-approved component is installed in the vehicle, the electrical system may malfunction by failure to re-start the vehicle or failure to provide electrical power at a critical time.

Endurance: The voltage regulator must comply with performance test criteria shown on drawing 12361458. It includes a 3000-hour endurance test and various performance and environmental tests. The voltage regulator is part of a complex electrical vehicle configuration requiring extensive systems level qualification and testing to be approved for use. It is connected to the 650 Amp Generator and aids in generating 650 AMPs at 28 Volt (V) and converts it to DC (has integral rectifier).

The current voltage regulator is source controlled to Honeywell. The Government does not have detailed drawings that are necessary for competitive procurement. Honeywell has developed, tested, and obtained the Government's approval for this voltage regulator for application to the M109A6 vehicle at their own costs. The Government did not fund Honeywell in any effort regarding development and qualification testing of this item or preparation of the fully detailed TDP after approval. As such, Honeywell is the sole owner of the drawings and technical data rights; and the Government does not have proprietary rights to the TDP that would be required to produce a competitive TDP.

This item is critical for the functionality of the vehicle. The cost to either reverse engineer the part or develop a new part is estimated at $2.5M; developing a TDP for this item would take three years. Based on similar projects, the cost to develop a build to print competitive package for this item through reverse engineering are estimated below:

Cost and schedule breakout

Reverse Engineering Activity Delay Costs

Reverse engineer and develop TDP 1.5 years $1.5 M Fabricate prototypes 6 months $0.25M Testing 1 year $0.75M Total 3 years $2.5 M

This delay would severely impact the availability of this item in the field. A fully functioning voltage regulator is necessary for vehicle readiness. Failure to be diligent in this effort would impose a risk as a premature failure of this item in the field and could result in an extensive loss of the equipment.

There is no guarantee that the Government will recover through subsequent competition the costs involved in either procuring the proprietary data or reverse engineering the item to create a new, fully competitive package. Even if an estimated 25% savings could be achieved by adding another supplier at the current average usage rate of 80 units per year, at the current unit cost of $ , and assuming the 25% saving achieved through competition, the $ annual savings would take about years to offset the estimated $2.5M cost of reverse engineering the item and qualifying another source. In addition, the end item, the M109A6 Paladin, is being phased out and replaced with the M109A7 over the next 5-10 years, so voltage regulator demand will be diminishing.

If the Government conducts the efforts to allow the procurement to become competitive, an unacceptable delay of at least three years would occur. This delay would adversely impact the Army's readiness rate and Operational and Support (O&S) costs. This shortage can lead to dead lined vehicles since the voltage regulators are critical to functionality of the M109A6.

Only Honeywell has demonstrated the unique and proven manufacturing capabilities to establish and maintain the processing control required to reliably supply this item. The use of incorrect material and/or improper process/quality control during manufacturing of this voltage regulator would result in malfunctioning or even a complete failure of this item for what it is designed, i.e., to recharge the vehicle batteries after the vehicle starts and to provide power for the vehicle’s electrical systems. A persistent malfunction or a failure of this voltage regulator would render the vehicle unable to perform its missions. This kind of condition would force the Army unit to deadline the vehicle.

Due to the rationale above, there are no current or planned efforts to qualify additional sources, nor will be prior to the contract award.

6. Efforts to Obtain 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 Synopsis was posted. Based on the detailed rational provided in paragraph 5 above, there are no current plans to develop or acquire a competitive TDP due to lack of funds that would be needed to acquire the data in order to support a competitive acquisition.

7. Actions to Increase Competition: As stated in section 5 above, there is no Level III / build to print TDP available to support a competitive procurement. Honeywell is the sole owner of the defining drawings and technical data rights. The Government did not buy Honeywell’s proprietary rights to produce a competitive TDP. This item is a specifically designed voltage regulator for application on the M109A6. Further, due to the costs associated with developing a competitive TDP that cannot be recovered as stated in section 5, the Government would not be able to recover the $2.5M to reverse engineer the voltage regulators within a justifiable time frame and thus not actively pursuing the development of a competitive TDP for future procurements.

This item does not appear on the Advance Procurement Planning List (APPL) dated 15 February 2019 and does not appear on Competition Advocate Shopping List (CASL) dated 15 February 2019. Contractors interested in becoming a source for this item need to meet the requirements of the Source Approval Program. This is done at the Contractor’s expense, to include vehicle level qualification testing. The TACOM Life Cycle Management Command, Competition Management Office (CMO), is the lead proponent for the Source Approval Program. While interested contractors can contact the CMO for assistance with the Source Approval Program, Engineering requires successful vehicle level qualification testing to support the approval of a new source of supply and the Government has no plans or funding to complete qualification testing at this time. To date, only one source has approached this office with questions or comments on how to become a qualified source to produce this item but has not begun the approval process and thus could not be considered for the present procurement.

8. Market Research: Market research was performed by Ground Vehicle Combat Systems (GVCS) Sustainment Engineering on 18 October 2019 to review cost and competition considerations, reviewing vendor catalogs and available product literature published by Marathon Generators and Baldor Inc. to determine if commercial items or non-developmental items are available to meet Government's needs or could be modified to meet the Government's needs. While these two sources manufacture generators and voltage regulators for heavy duty applications, they are not submersible and lack a solution with the dimensional requirements and mounting provisions needed to fit within the unique space claim of the M109A6 application, which is specifically what is required for this procurement. It is also noted that Lucas Aerospace Ltd. (prior approved source) was contacted and responded via email dated 11 September 2018 that they no longer had the capabilities to produce this item. This NSN was confirmed to only be available from Honeywell in calendar year 2020.

Sources Sought Notice has been submitted to Fed Biz Opps on 9 October 2019 Item Name: Voltage Regulator

NSN: 6110-01-327-9389

PN: 12361458, 12361458-1

End Item: M109A6 Paladin and M992A2 FAASV

Sources_Sought_Noti ce_2020-009.pdf

15. Legal Review:

Concur:

Date: 03/25/2020

Approval Authority for Acquisitions Equal to or Greater Than $13,500,000.

APPROVAL OF JUSTIFICATION

FOR OTHER THAN FULL AND OPEN COMPETITION

Based on the foregoing Justification, I hereby approve the procurement of the following:

a. Noun: Voltage Regulator

b. NSN: 6110-01-327-9389

c. Basic Minimum Quantity: 300 each

d. Basic Minimum Estimated Value:

e. Basic Maximum Quantity: 1,625 each

f. Basic Maximum Estimated Value:

This action will be awarded under other than full and open competition pursuant to the authority of 10 USC 2304(c)(1) and subject to the availability of funds. This approval is subject to the provision that the property herein described has otherwise been authorized for acquisition.

Mark A. Brown, SES Acquisition Executive

BROWN.MARK.AL

BERT.1041175032

Digitally signed by

BROWN.MARK.ALBERT.104117

Date: 2020.04.02 07:18:36 -04'00'