JA_SPRDL1-23-C-0057_Redacted.pdf

SPRDL1-20-R-0224 (JA-00172)

Previous J&A: SPRDL1-15-R-0063

DEFENSE LOGISTICS AGENCY

LAND AND MARITIME

P.O. BOX 3990

COLUMBUS, OHIO 43218-3990

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

SPRDL1-20-R-0224

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

WRN).

2. Description of Action: The proposed action is to award a new firm-fixed price (FFP) one time buy contract on a sole source basis to HDT Tactical Systems Inc., Commercial And Government Entity (CAGE) 92878 for National Stock Number (NSN) 2540-01-396-2826, which is a “HEATER, VEHICULAR COMPARTMENT” using Army Working Capital Funds (AWCF). This item is used on the M113 Family of Vehicles (FOV), M88, Armored Multi-Purpose Vehicle (AMPV), Abrams, Joint Assault Bridge (JAB), Bradley, Paladin, Field Artillery Ammunition Support Vehicle (FAASV), Assault Breacher Vehicle (ABV), Armored Vehicle Launched Bridge (AVLB), and Panther systems.

3. Description of Supplies/Services: HDT Tactical Systems Inc. will provide the HEATER, VEHICULAR COMPARTMENT, NSN 2540-01-396-2826, which corresponds with manufacturer part number (P/N) 5000-30178 and Government P/N 12474864. A 200% option will allow for the development of new potential sources and mitigate the possibility of a subsequent sole source action against future requirements for this item.

This item is a passenger compartment heater that is used to create hot air for the sustainment of the passengers while in the vehicle.

Noun: HEATER, VEHICULAR COMPARTMENT

a. NSN: 2540-01-396-2826

b. P/N: 5000-30178 / 12474864

c. BASE QUANTITY: 1,890 EACH

d. OPTION QUANTITY: 200%

e. UNIT PRICE:

f. ESTIMATED TOTAL VALUE:

g. PURCHASE REQUEST ORDER NUMBER (PRON): EH0C0335EH

Acquisition Method Code (AMC): 3 - Acquire, for the second or subsequent time, directly from the actual manufacturer.

Acquisition Method Suffix Code (AMSC): B - This part must be acquired from a manufacturing source(s) specified on a source control or selected item drawing as defined by the current version of DoD-STD-100. Suitable technical data, Government data rights, or manufacturing knowledge are not available to permit acquisition from other sources, nor qualification testing of another part, nor use of a second source part in the intended application. Although, by DoD-STD-100 definition, altered and selected items shall have an adequate Technical Data Package (TDP), data review discloses that required data or data rights are not in Government possession and cannot be economically obtained.

4. Authority Cited: The statutory authority permitting other than full and open competition for this effort is 10 United States Code (U.S.C.) 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 agency requirements.”

5. Reason for Authority Cited: A main component of the M113 FOV (as-well-as additional vehicle platforms) heating system is the Compartment Heater, P/N 12474864.

It is used to warm and regulate the crew compartment at a safe operating environment to prevent extreme temperature exposure due to adverse battlefield demands and conditions.

HDT is the sole owner of their drawings and technical data rights needed to fabricate this hardware. The Government does not own proprietary rights to the TDP that would be required to produce a competitive TDP. The only available Government controlled drawing is the top level Compartment Heater drawing 12474864 and Product Function Specification MIL-PRF-62550, which is insufficient to reproduce the assembly.

HDT is the only qualified manufacturer of this particular heater, which was designed for this particular application. Having a heater made by an unqualified source would run the risk of having the heater ventilate deadly gas into the compartment which would be harmful if not fatal to the operators. HDT has designed, built, and successfully completed testing of the heater to meet the requirements of Product Function Specification MIL-PRF-62550. HDT’s heater has also been integrated in and validated for usage within the M113, Paladin, Bradley, M88, FAASV, ABV, and AVLB platforms.

Due to the limited performance and technical data available on the Compartment Heater, Reverse Engineering is the only recourse the Government could entertain to increase competition through development of a competitive build to print TDP. A significant amount of time and money would be necessary to reverse engineer, procure and test prototypes, and release the design. The cost to reverse-engineer the critical components is estimated at $4.3M and four years to complete. Reverse Engineering the TDP includes, but is not limited to the following:

Estimated cost to reverse engineer the Compartment Heater: $2M Estimated time to reverse engineer the Compartment Heater: Two years Estimated cost to perform Reliability, Availability and Maintainability (RAM) vehicle testing: Three vehicles at 5,000 miles per vehicle: $1,800,000 Estimated time to perform RAM vehicle testing: One to three years Estimated cost to develop a TDP: $500,000 Estimated time to develop a TDP: One year

The consequential time delay to reverse engineer, develop and test the new design and then qualify a new vendor prohibit delivery of the Compartment Heater in a time frame that would satisfy the Government’s needs, given the Item Manager has identified a Stock Out Date of 3 March 2020. As well as the fact that there are currently 1,436 backorders and 16 vehicles listed as non-mission capable status. The Government cannot wait the four years to Reverse Engineer this critical component due to the current field impacts.

At this time, the Government does not have the pertinent technical data to enable competitive procurement; nor does the Government own the necessary intellectual property rights to the affected TDP neither on hard copy or electronic data to allow it to be competitive procurement either.

6. Efforts to Obtain Competition:

a. Effective competition efforts: Due to the reasons cited in Section 5 above, the Government is not pursuing competition for this item.

SOLE SOURCE: Notices required by FAR 5.201 will be posted.

b. Subcontracting competition: HDT Tactical is a Large business concern. 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: The Government does not own a build to print TDP and HDT is the only vendor currently qualified to make the heater to specification MIL-PRF-62550 for application in the current platforms. An effort between Ground Vehicle Systems Center (GVSC) and Program Executive Office Ground Combat Systems has been initiated to develop a new heater that meets the performance requirements and interfaces. The estimated time for the new heater design project to be done is four years in total; it would take one year to complete the development process, one year of testing, one year for provisioning, and one year for procurement. The results of these efforts will be considered in support of competition for future procurements.

8. Market Research: The original Sources Sought was posted on the beta.SAM.gov website on 7 July 2019 with two responses, but then subsequently expired (past 12 months old). Due to the original sources sought expiring, another sources sought was posted on 16 July 2020 to canvass for any further interest, but no responses were received. The following is an assessment of the responses from the original sources sought:

A response from Island City Engineering (CAGE 50L93) was deemed ineligible.

Even though they matched and exceeded the heat flow requirement for NSN 2540-

01-396-2826, the product they offer is belt driven, which would be ineligible due to the cramped engine compartment of the M113 vehicle. Another source was Active Gear, however their heaters did not match the technical criterion of being compatible with the current TDP, and in not providing a normal heating requirement of 30,000 British Thermal Units/Hour. Over the course of the month of February 2020;

specifically (10 February 2020), a general internet search using the keywords “HEATER+COMPARTMENT+CLASS 8” on the Bing search engine. A similar search was conducted on the IHS Haystack website using the keywords “VEHICLE+COMPARTMENT+HEATER” which yielded numerous results reviewed under the 19207 CAGE. However, the fact that this heater is used on 20 separate Army platforms, the other similar heater variants would not be considered feasible for the current applications that the HDT Tactical heater currently supports.

Additional internet-based market research for suitable competition included a general internet search using the keywords “HEATER+COMPARTMENT+CLASS 8” which yielded several varieties of space heaters, exterior heaters, and winterization kit heaters. All products were determined to be not applicable for this specific TDP. For example, one website searched conducted on 10 February 2020 yielded Thermal King [link here: https://thermokingmichigan.com/products/echo-heaters-2/] on to which the only result was two different space heaters that, by a very significant margin, do not provide enough of a heat rate; with the best that Thermal king could offer in their T-1090 & T-1090 MAX series heaters could only provide a maximum amount of 20,000 British thermal units/hour compared to HDT Tactical’s heater which makes a nominal amount of heat at 30,000 British thermal units/hour. In conclusion, the vendors found in the current market do not have a suitable replacement heaters for the HDT heater with reference to the current configuration as well as thermal unit flow rate that matches the current heater. The evaluated vendors are not suitable to provide a direct drop-in replacement within the multiple weapon system applications that the heater is required to function in.

Additional Market Research efforts:

Investigation of other vendors who make products for the Government traced back to HDT Tactical, and no other potential vendors who cater to the military in this application.

9. Interested Sources: To date, no additional sources have expressed interest in this item.

10. Other Facts:

a. Procurement History: The last award for Heater, Vehicular Compartment was made to HDT Tactical Systems (CAGE 92878) on contract SPRDL1-16-C-0236 on a sole source basis for a total quantity of 3,275 each. The Procuring Contracting Officer verified all 3,275 each of SPRDL1-16-C-0236 have been shipped complete.

Previous J&A SPRDL1-16-C-0236 is separately attached.

b. Acquisition data availability: The Government does not own proprietary rights to the TDP that would be required to produce a competitive TDP. HDT Tactical has

Name: Tucker, Eric E CIV DLA LAND AND MARITIME (USA) Title: Contracting Officer Email: Tucker, Eric E CIV DLA LAND AND MARITIME (USA) Signature:

12/15/2020

X Eric Tucker

Signed by: TUCKER.ERIC.E.1272789408

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

Name: Tucker, Eric E CIV DLA LAND AND MARITIME (USA) Title: Contracting Officer Email: Tucker, Eric E CIV DLA LAND AND MARITIME (USA) Signature:

12/15/2020

X Eric Tucker

Signed by: TUCKER.ERIC.E.1272789408