JA_SPRDL120R0022_Redacted.pdf

2815-01-439-8164 Engine Assembly, 6.5 Liter, Turbocharged- Basic (noun: engine, with container)

Military Part Number (MPN):

57K6185

(Engine Assembly Part Number:

12469446, Rev G)

The Government does not have data rights to this engine/container assembly.

The 6.5L turbo engine described within this document is supplied to the U.S. Army by AM General, LLC (AMG). In total this engine is used on 7 different configurations of the HMMWV;

these variants are for the newer generation of HMMWV. The configuration of the 6.5L engine is turbocharged and represents the most up to date configuration of engine power available on the HMMWV FoV. This engine is a direct service replacement for the heavier HMMWV’s during rebuilding.

The engine used in the HMMWV was originally designed and developed by Detroit Diesel in 1982 for use in General Motors (GM) commercial products as a gasoline engine. At that time, Detroit Diesel was a subsidiary of GM. For reasons unknown, this engine was converted from gasoline to diesel and then offered to the Government in the HMMWV. It was originally introduced into the HMMWV fleet as a 6.2L naturally aspirated (non-turbocharged) power plant and incorporated into the first HMMWV production run. Upgrades followed. In 1992, a 6.5L non-turbo version was developed as an improvement over the 6.2L in terms of engine performance and power. In 1995, the turbocharged 6.5L variant of the engine was introduced to further increase performance and power output to meet the needs of the HMMWV’s ever increasing weight. This engine’s basic block has been used in the HMMWV for the past 34 years. Finally, on or around calendar year 2000, GM sold the tooling and production rights for the 6.5L engine to AMG and withdrew from the 6.5L business almost entirely. Since that transition, AMG has been building and supplying engines to HMMWV production and fulfilling sustainment requirements. Both GM and AMG have demonstrated the capability to provide this item to the Government, based on past performance but GM no longer manufactures the item.

However, AMG is currently the only source of supply capable of providing new engines since they maintain the tooling and assembly line purchased from GM.

This particular contract action is to supply the Turbo charged 6.5L dressed Diesel Engine for use during general maintenance and rebuilding of the HMMWV as instructed in the HMMWV Technical Manual publication, TM 9-2320-387-24P and National Maintenance Work Requirement publication, NMWR 9-2815-274, dated April 2012, for the 6.5L engine overhaul procedures used at Red River Army Depot. All levels of repair keep support costs down by reusing parts or rebuilding complete assemblies when possible. However, given the age of some of these parts, full replacement is sometimes required.

This procurement is intended to address the following:

(1) Allow current backorder for about 1000 engines to be filled. These backorders have been primarily generated by Foreign Military demands.

(2) Allow for the current U.S. Military monthly demand rate for 101 engines to be met. With current engine overhaul quantities being limited, the new engines being purchased will allow overhaul program quantities to be supplemented so that U.S. Military demands can be met.

(3) Allow for a sale quantity of additional engines for Foreign Military Customers.

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

Acquisition Method Suffix Code (AMSC): B – The 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, and manufacturing knowledge are not available to permit acquisition from other sources; nor qualification testing of another part or 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. Data review discloses that required data or data rights are not in Government possession and cannot be economically obtained. If one 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 this action is 10 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. Background:

As stated under paragraph 3 above, the Government purchases the engine from AMG for the HMMWV FoV. This version of a compression ignition engine, otherwise known as a diesel engine, was originally designed and developed by GM subsidiary Detroit Diesel for use in the GM commercial vehicle line dating back to the early 1980’s. In order to speed up the development and procurement process the Government agreed for the Original Equipment Manufacturer (OEM) request to retain the data rights to the commercial engine itself. The Government does own the rights to the accessory drive and hang on items, often referred to as the engine dress, but that is exterior of the engine and does not provide the necessary information for full and open competition. AMG and GM co-integrated this engine into the HMMWV during the development stage of the vehicle platform. AMG is the OEM of the HMMWV FoV and GM is the originator of the engine.

In 2010, the Government attempted to obtain pricing for the technical data package (TDP) during the contract rebid. The Government asked for costing on the armor, heating, ventilation and air conditioning (HVAC) system and all Rev B components of the HMMWV.

AMG’s response at that time was that it was Not for Sale. During the 2014 M997A3 HMMWV Ambulance program contract negotiations, the Government tried a second time to obtain the full HMMWV TDP from AMG, including the HMMWV chassis. Again, AMG was unwilling to sell it to the Government. AMG’s position on the TDP remains unchanged.

b. Costs:

There are no known funding efforts in progress at this time to acquire the commercially controlled data needed to make NSN 2815-01-439-8164 fully competitive. Consequently there are no current plans to acquire a fully competitive TDP, because funds are not available to acquire the data necessary.

c. Alternatives:

There are two options for Government investigation in order to obtain the technical data for this item: (i) Reverse Engineer the existing engine (if we are no longer able to procure the item) or (ii) Research and Development of replacement Army engine design.

(i) Reverse Engineering and Remanufacturing

The primary objective of reverse engineering (RE) is the development of unrestricted technical data, adequate for competitive procurement, through engineering evaluations of existing hardware, in this case the 6.5L V-8 turbocharged diesel engine. Advantages in this reverse engineering solution include minimized vehicle integration costs, as the reverse engineered product would be a direct replacement for the original 6.5L engine.

The Army would own the resultant technical data including any 3-D models and drawings.

This technique could also be applied to any component of the 6.5L, enabling competitive pricing. The disadvantages of this process are its relatively high cost and long lead times.

Costs and schedules were estimated for the 6.5L engine reverse engineering effort.

Primary components included the engine block, head casting, crankshaft, connecting rod, pistons, flywheel and the flywheel housing, etc. Envelope drawings can also be used in certain scenarios that allow for alternate substitute parts. Using an envelope drawing that includes all the connections of the alternate part to the engine could lower the cost versus creating a full TDP. Further investigation will be needed on a part by part basis.

The reverse engineered components must be subjected to the same test rigors (both component and system level) as the original AMG 6.5L engine. As these parts would be identical and therefore backwards compatible with OEM parts, the ramifications on existing OEM warranty agreements must also be considered before embarking on any reverse engineering course of action.

The competitive TDP will include all the documentation necessary to describe the design configuration, manufacturing, quality assurance, testing, and packaging requirements of the equipment. The TDP for a reverse engineering candidate may include restricted or inadequate end-item documentation and drawings which must be developed through engineering analyses of existing hardware.

Based on similar past reverse engineering experience, as provided by Ground Vehicle Program Manager - Ground Vehicle Service Center (GVPM-GVSC), the estimated cost to develop a reverse engineered competitive product is approximately $40M, with an estimated delay of no less than sixty seven (67) months. Required funding would include:

$6.0M for personnel to support reverse engineering and validation of the design; $2.0M funding Computer Aided Design and Computer Aided Engineering (CAD/CAE) model development; $18-$20M to develop prototypes; and funds to test and finalize the product (verify that the newly created item provides equivalent performance when compared against the original). To complete the reverse engineering process successfully, the Government will require a sufficient sample size of existing parts to provide a 95 percent probability and 90 percent confidence level in the actual size of the existing item to be studied.

The chart below describes the major tasks, associated time and estimated costs required for reverse-engineering and testing:

Action Time Costs

Reverse-Engineer NSN 2815-01- 439-8164 Engine Assembly, 6.5

Liter, Turbocharged, 36 Months $28,000,000

RAM Vehicle testing

(5 vehicles at 5000 miles per vehicle)

24 Months

(included in 36 months above)

$3,000,000

(included in $28 M above)

NATO 400 Hour Test

(3 engines) 8 Months $750,000

Full Load Cooling Test

(3 vehicles) 5 Months $846,000

Cold Test

(3 vehicles) 6 Months $7,250,000

White Sands Missile Range Test

(3 vehicles) 6 Months $60,000

Develop Technical Data Package 6 Months $2,500,000

Total Development Time Approx. 67 Months (5- 1/2 Years)

$39,406,000

In addition to the cost and delay for a Research & Development action or RE effort, the Government estimates that it would take approximately one additional year to establish another source and procure these kits on a competitive basis.

Based on the above findings, GVSC engineering does not recommended the Reverse Engineering course of action for the 6.5L Turbocharged Diesel Engine. Even if this was feasible, the Government would be faced with the same issues of logistics, sustainment, and future main supply route (MSR) levels required to retain engine capabilities for any engine replacement.

(ii) Research and Development:

Before embarking on the research and development of a new Army proprietary engine to replace the current AMG 6.5L turbocharged diesel engine, a comprehensive set of HMMWV requirements reflective of the latest vehicle configurations would need to be generated (estimate 4 months). A marketing survey and production sourcing studies would also need to be completed (estimate 2 months). CAD drawings (or laser scans) of the original engine, transmission, intake and exhaust systems would need to be acquired/made (estimate 4-6 months) for purposes of configuration management and to minimize vehicle integration efforts. Total time required to complete preparation tasks is estimated to be 10- 12 months.

These requirements would then need to be written into a competitive request for proposal / request for quote with 12-18 months required to write the proposal, solicit bids, and receive proposals, complete evaluations and award.

Based on the development time and costs associated with experience gained from the Army’s Advanced Combat Engine (ACE) program, the expected maturation of a clean sheet engine design from TRL1 to TRL 9 (low rate production) could take as long as 6-8 years, with a cost approaching $120-$150M. Purchase price of a new engine is largely dependent upon the amortized costs associated with capital tooling and facilities investment cost required to produce a specified quantity of engines ordered. Because of the low volume production expected for a vehicle configuration that is out of production (with future demands dwindling), the costs cited above will result in a substantial per unit price increase (estimate 10-20X increase).

Therefore, GVSC engineering does not recommend Research and Development into a new HMMWV engine effort to address the HMMWV 6.5L engine need.

d. GVSC Engineering Justification Example:

Considering this vehicle configuration is out of production and future vehicle demand is dwindling, the costs cited above appear to exceed any potential savings to be realized through a future competitive procurement process. As an example, assuming that we spend $40M to reverse engineer our own version of the engine and realize a savings of 5 percent per unit, the new cost of the Government-owned engine would be . That is a savings of between the AMG-owned and the Government-owned versions.

Dividing $40M by results in engines required to recover the reverse engineering costs. Using the 780 engines per year requested in this contract we can calculate that it would take roughly years to recover our costs. Note, in previous Justification and

Approvals (J&A’s) there is typically a calculated savings of 15 percent for Government-owned parts version. However, for the engine there are large capital tooling costs that need to be accounted for which reduce the associated savings. Due to this, there is an assumed reduction of the 15 percent parts savings down to 5 percent. The costs include hard tooling for items like the engine block casting die and cylinder head casting die, a manufacturing facility and a source of iron/steel/aluminum from which these parts would be made. All of these capital expenses will reduce the total savings percentage from what would normally be expected to be realized.

e. Unacceptable Delay:

If the procurement of the HMMWV engine is delayed until the TDP is developed by the Government and made suitable for a competitive procurement the Government would experience an unacceptable delay of a minimum of five years in fulfilling this requirement.

The five 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 NSN will negatively impact our force readiness and capability to actively support U.S./Coalition efforts, as without the engine the HMMWV would be unable to perform all of its missions.

AMG 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 J&A. The contractor developed the engine 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 an extensive loss of the equipment through destroyed engines.

6. Efforts to Obtain Competition: The Government does not have a complete TDP required to manufacture the engine or use for competitive procurement and there are no known funding programs active at this time for qualification of additional sources. Interested contractors can seek qualification through the Source Approval Program (SAP) with the Competition Management Office (CMO). This effort will be synopsized in accordance with FAR Part 5.201(c).

7. Actions to Increase Competition: There are no vendors in the process of being qualified for this NSN at this time and none prior to contract award. At this time, there are no current or planned efforts to qualify additional sources due to the fact that the Government does not possess a fully defined and validated TDP for NSN 2815-01-439-8164. AMG holds the technical data regarding this item. Any vendor that believes they can provide this NSN for a lower cost while meeting the same requirements as the existing item should seek qualification as a secondary source through the CMO SAP at their own expense.

A Sources Sought Synopsis was posted to FedBizOps on 4 February 2019, as follows:

Item Name: Engine w/Container

NSN: 2815-01-439-8164

Part Number: 57K6185 or 12469446, rev G End Item: HMMWV

Sources_Sought_N otice_2019-222.pdf https://www.fbo.gov/index?s=opportunity&mode=form&id=d8f5d799999bb14e379d461971968 f53&tab=core&_cview=0

See section 9 below for the results of the Source Sought Synopsis.

8. Market Research: On 4 February 2019, Engineering conducted online market research of known engine suppliers looking for published material on a new built replacement unit. The results of this search did not produce any new companies that would provide a direct replacement engine w/container assembly for the HMMWV that meets our requirement of being 100 percent new and not rebuilt that could be installed in the HMMWV without considerable time and effort to adapt the new components. Remember that the HMMWV is in sustainment at this time so massive vehicle system changes are not funded and unable to be fielded.

9. Interested Sources: To date, two sources have expressed interest in providing the required engine w/container assembly:

Jasper Engines & Transmissions; and Raytheon IIS.

However, both sources would only be able to provide remanufactured engines, and not 100 percent new component engines.

No other sources have expressed an interest in providing the engine w/container assembly.

However, offerors are always encouraged to seek qualification through TACOM’s SAP with the CMO. The notices required by FAR 5.201 will be published and any proposals received shall be considered.

10. Other Facts:

a. Recent Procurement History:

Contract: SPRDL1-17-D-0086 Award Date: 8 June 2017 Contractor: AMG Value: $29,593,677.35 Competitive Status: Full and open after exclusion of sources per FAR 6.302-1 - Only one responsible source

Contract: W56HZV-07-C-0719 Award Date: 9 September 2007 Contractor: AMG Value: $31,573,266.60 Competitive Status: Full and open after exclusion of sources per FAR 6.302-1 - Only one responsible source

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. 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 because this has been previously established as a commercial item.

NAME: Leah C. Bourdeau TITLE: Contracting Officer

DATE: 10/23/19

SIGNATURE: //s// LCB

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

NAME: Leah C. Bourdeau TITLE: Contracting Officer

DATE: 10/23/19

SIGNATURE: //s// LCB

15. Legal Concurrence:

Concur:

Date: 10/30/2019

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: 6.5L Turbo Diesel Engine Assemblies with Containers

b. NSN: 2815-01-439-8164

c. Estimated Quantity: 2,340

d. Estimated Contract 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: 2019.11.08 13:52:00 -05'00'