JA_SPRDL120R0076_Redacted.pdf

J&A SPRDL1-20-R-0076

Previous J&A SPRDL1-17-D-0103 is available

NSN 2815-01-461-7078 is for the 6.5L naturally aspirated (non-turbo) internal combustion diesel engine and used in the A2 series HMMWV. While this kit is coded to the US Government, the major item inside the container is the engine, for which the Government does not have data rights. The 6.5L naturally aspirated engine described within this document is supplied to the US Army by AMG. In total this engine is used on seven different configurations of the HMMWV. This configuration of the 6.5L engine is non-turbo charged and variants are for the A2 series of the older generation of HMMWV. This engine is a direct service replacement for the HMMWV’s.

The following is a brief history of this engine. The engine used in the HMMWV was originally designed and developed by Detroit Diesel in 1982 for use in General Motors commercial products as a gasoline engine. At that time, Detroit Diesel was a subsidiary of General Motors.

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, General Motors 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 General Motors and AMG have demonstrated the capability to provide this item to the Government, based on past performance. However, AMG is currently the only source of supply capable of providing new engines since they maintain the tooling and assembly line purchased from General Motors.

This particular contract action is to supply the naturally aspirated 6.5L dressed diesel engine for use during general maintenance and rebuilding of the HMMWV as instructed in the HMMWV Technical Manual (TM) publication TM 9-2320-387-24P, as well as the National Maintenance Work Requirement publication NMWR 9-2815-274, dated April 2012, for 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 wherever 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 151 engines to be filled. These backorders have been primarily generated by Foreign Military demands.

2. Allow for the current US Military monthly demand rate of 63 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 US Military demands can be met.

3. Allow a quantity of up to six per year engines for additional requirements.

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

AMSC C: This part requires engineering source approval by the design control activity in order to maintain the quality of the part. Existing unique design capability, engineering skills, and manufacturing knowledge by the qualified source(s) require acquisition of the part from the approved source(s). The approved source(s) retain data rights, manufacturing knowledge, or technical data that are not economically available to the Government, and the data or knowledge is essential to maintaining the quality of the part. An alternate source must qualify in accordance with the design control activity's procedures, as approved by the cognizant Government engineering activity. The qualification procedures must be approved by the Government engineering activity having jurisdiction over the part in the intended application. If one source is approved, AMCs 3, 4, or 5 are valid. If at least two sources are approved or if data is adequate for an alternate source to qualify in accordance with the design control activity's procedures, 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 (a)(2), “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 ECV series HMMWV. This version of a compression ignition engine, otherwise known as a diesel engine, was originally designed and developed by General Motors subsidiary Detroit Diesel for use in the General Motors commercial vehicle line dating back to the early 1980’s. In order to speed up the development and procurement process the Government agreed to the Original Equipment Manufacturers (OEMs) 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 General Motors co-integrated this engine into the HMMWV during the development stage of the vehicle platform. AMG is the OEM of the HMMWV Family of Vehicles (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 contracting process. The Government asked for a price to procure the Armor, Heating, Ventilation and Air Conditioning (HVAC) system and all Revision 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 2815-01-461-7078 fully competitive. Consequently, there are no current plans to acquire a fully competitive TDP, because funds are not available to acquire the data necessary.

Alternatives:

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

(i) RE and Remanufacturing

The primary objective of RE is the development of unrestricted technical data, adequate for competitive procurement, through engineering evaluations of existing hardware, in this case the naturally aspirated 6.5L V-8 Diesel Engine. Advantages in this RE 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-dimensional (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 RE 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 RE 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 RE 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 RE experience, as provided by the 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 67 months. Required funding should include: $6.0M for personnel to support RE and validation of the design; $2.0M funding Computer Aided Design/Computer Aided Engineering (CAD/CAE) model development; $18-$20M to develop prototypes; funds to test and finalize the product (verify that the newly created item provides equivalent performance when compared against the original). To complete the RE process successfully, the Government will require a sufficient sample size of existing parts to provide a 95% probability and 90% 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 2815-01-461-7078 Engine Assembly, 6.5L

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)

North Atlantic Treaty Organization (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 TDP 6 Months $2,500,000

Total Development Time Approx. 67 Months

(5 ½ Years) $39,406,000 this contract we can calculate that it would take roughly years to recover our costs. Note, in previous Justification and Approval (J &A) there is typically a calculated savings of 15% 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% parts savings down to 5%. 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.

d. 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 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 (IAW) 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 2815-01-461-7078. AMG holds the technical data for 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 beta.sam.gov on 8 January 2020.

Item Name: Engine, Diesel

NSN: 2815-01-461-7078

Part Number: 57K3566 End Item: HMMWV

Sources Sought

Notice 2020-066.pdf https://beta.sam.gov/opp/a94746b45afd4fc8acafe94aac742a60/view?keywords=2020- 066&sort=-relevance&index=&is active=true&page=1

To date, no sources have responded to this request.

8. Market Research: In 2019 Engineering conducted an online search 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 for the HMMWV that is 100% 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 to accommodate competition are not funded and unable to be fielded. There is also continuous market research conducted on the HMMWV, but no additional suppliers of this specific engine configuration have been identified.

9. Interested Sources: To date, no other sources have been identified for the engine in Table 1.

Two sources have previously expressed interest in providing this engine in its turbo charged form, NSN 2815-01-439-8164:

Jasper Engines & Transmissions Raytheon IIS

Both sources would only be able to provide remanufactured engines; not the 100% new component engines required for this particular procurement. Thus, no other vendors have been identified who can manufacture new engines identified in Table 1. 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-0103 Award Date: 31 August 2017 Contractor: AMG

Value: $14,248,081.95 Competitive Status: Full and open after exclusion of sources per FAR 6.302-1 - Only one responsible source

Contract: SPRDL1-16-C-0195 Award Date: 26 May 2016 Contractor: AMG Value: $13,308,738.48 Competitive Status: Full and open after exclusion of sources per FAR 6.302-1 - Only one responsible source

b. Acquisition Data Availability: A Level III TDP for the Engine w/Container is not available. Top level Engine Drawing 12469444, Revision G does exist, but the drawing is not fully defined and only contains testing requirements to clarify the Governments expectations of performance level.

c. Unusual and Compelling Urgency: N/A

d. Subcontracting Competition: The Government will require the contractor to submit a subcontracting plan IAW FAR 19.704 during negotiations of the contract in order to achieve increased small business subcontracting opportunities throughout the life of the contract.

11. 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.

[X] $13.5M to $93M , Product Manager JPO JLTV

NAME:

TITLE: Project Engineer DATE: 28 May 2019

SIGNATURE:

NAME:

TITLE: PD-LTV Chief of Engineering DATE: 17 October 2019

SIGNATURE:

NAME:

TITLE: Product Director LTV DATE: 5 November 2019

SIGNATURE:

NAME:

TITLE: Product Manager JPO JLTV DATE: 6 November 2019

SIGNATURE:

12. 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.

NAME:

TITLE: Director, LTV PSID DATE: 5 December 2019

SIGNATURE:

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: 1/13/20

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: 1/13/20

SIGNATURE: //s// LCB

15. Legal Concurrence:

Concur:

Date: 01/21/2020

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: 6.5L Diesel Engine Assemblies with Containers

b. NSN: 2815-01-461-7078

c. Maximum Quantity: 1,620 each

d. 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: 2020.01.29 16:34:46 -05'00'