JA_SPRDL120R0087_redacted.pdf

J&A SPRDL1-20-R-0087

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

SPRDL1-20-R-0087

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

2. Description of Action: The proposed action is to award a new firm fixed price, three-year Requirements Type Contract (RTC) on a limited source basis to Allison Transmission, Inc., CAGE code 73342, or an authorized distributor for hydraulic transmissions National Stock Number (NSN) 2520-01-675-9565. The type of funds to be used are Army Working Capital Funds (AWCF).

3. Description of Supplies/Services:

Noun: Transmission, Hydraulic, Vehicular

NSN: 2520-01-675-9565

Government Part Number: 12601790 Manufacturer’s Part Number: E020812

Estimated three-year Quantity: 153 each Unit Price:

Total Contract Value:

Vehicle System: Joint Light Tactical Vehicles (JLTV) Family of Vehicles (FOV)

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 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. If one source is available, AMCs 3, 4, or 5 are valid. If at least two sources exist, AMCs 1 or 2 are valid.

NSN 2520-01-675-9565 is the transmission used in the JLTV FOV. The JLTV FOV is a materiel solution intended to provide ground transport to mounted Infantry, Combat Arms, and Combat Service Support forces. The intent of the JLTV program is to provide a mobile, lightweight tactical vehicle that fills capability gaps, regains transportability, and restores balance in the "iron triangle" of protection, payload, and performance. The JLTV provides protected, sustained, networked light tactical mobility to enhance the effectiveness of ground combat and supporting forces. It is also capable of moving over long distances within a theater of operations using a variety of lift assets, including sealift, amphibious ships and airlift capabilities both fixed and rotary wing. The Government purchased the data rights to the TDP from Oshkosh Defense, thereby providing Government purpose rights (as noted on the lower left of the drawing) for this system. Oshkosh Defense is the Original Equipment Manufacturer (OEM) of the JLTV. This transmission is common to the

JLTV FOV.

The transmission is a commercially-available Allison 2500 SP 6-speed automatic, with a TC-221 torque converter, designed to handle extreme conditions. The shift calibration is tailored to match the power output of the JLTV engine (Banks 866T Diesel Engine based on the General Motors (GM) Duramax 6.6L engine) making full power available with minimal delay. The unit is a wide-ratio transmission with six forward speeds and one reverse. This wide-ration approach, compared to close-ratio, provides rapid acceleration and maximum speed on grade. The system has two overdrive gears to enhance fuel economy at high-speed, low-load conditions.

The TC-221 torque converter adds an additional 1.73 ratio for first and second gear ranges. When in the first and second gear ranges (and not in converter lockup), the transmission uses the full torque from the engine and multiplies it with the 1.73 ratio torque converter. When the overall lower drive train ratios are factored in, the driveline provides capability to smoothly negotiate steep grades and pull heavy loads. The torque converter also provides a dampening effect that reduces shock and strain on all driveline components. This smooth shifting performance extends the life of downstream driveline components, while providing accelerations that exceed threshold requirements with more than 20% margin. In gears three through six, the transmission switches to full lock-up power transfer, to improve efficiency and lower converter heat generation. This design, combined with the low range of our lower drive train, allows the lower transmission gear ratios to provide optimal performance at slower speeds, while higher gears deliver cruising capability to 75 mph (120 kph). The transmission’s shift schedule has been developed to take full advantage of these faster speeds, allowing for proper gear selection over rough terrain.

The transmission uses fifth-generation Allison controls for enhanced shift stabilization, improved grade braking, and the opportunity for enhanced fuel economy calibrations. The transmission control module constantly learns and adapts the shift parameters to reduce shifting harshness based on vehicle load and driving patterns.

The transmission comes equipped with prognostics that monitor fluid level, fluid life, filter life, and overall transmission health. The prognostics are calibrated to the JLTV operating requirements and eliminate unnecessary fluid and filter changes, while providing maximum protection of transmission components. Allison Transmission, Inc., also has a well-established worldwide dealership and support network for proven parts availability and support infrastructure.

The JLTV lower drive train delivers power from the Allison transmission to the vehicle’s four wheels through a combination of composite drive shafts, a power-splitting rear differential assembly (transaxle), a lightweight front differential assembly, steel half shafts, and bevel-gear wheel drives. The system ratios are tuned to meet the JLTV mission profile, and match the power and torque available from the Banks 866T Diesel Engine based on GM Duramax engine/Allison transmission combination. To date the JLTV FOV completed 132,000 miles of Government RAM testing on the test courses at ATC, YTC, and Cold Regions Test Center (CRTC) with no failures of the Allison transmission.

This particular contract action is to supply the transmission for use during general maintenance of the JLTV as instructed in the JLTV Technical Manual publications

ARMY TM 9-2320-452-23&P, AIR FORCE TO 36A12-1C-2900-2-CD-1, MARINE

CORPS TM 2320-23&P/1, as well as the Integrated Engine Technical Manual (IETM) used onboard the JLTV. Rebuild sites are also being established to rebuild this item by following the published National Maintenance Work Requirement (NMWR 9-2320-452-2). Both levels of repair keep new replacement costs down by reusing parts where ever possible.

4. Authority Cited: The statutory authority permitting other than full and open competition is 10 United States Code (USC) 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: The Government does not own technical data rights to the Transmission Assembly and the Government’s component part number (12601790) for the transmission is not fully competitive, but source controlled to the Allison manufacturer part number. No technical data exists that would define production specifications for the transmission and since the item was developed and tested at private expense by Allison Transmission, Inc., such data are considered proprietary to the supplier. Allison Transmission, Inc., is the sole owner of technical data and manufacturer of the transmission. The non-availability of technical data requires that this item be procured on a non-competitive basis from Allison

Transmission, Inc., for the replenishment of spare parts.

As stated under section 3 above, the Government purchased the data rights to the TDP from Oshkosh Defense thereby giving providing Government purpose rights (as noted on the lower left of the drawing) for this system. The transmission is part of the powertrain system for the JLTV and is considered a critical component to the mobility of the vehicle and thereby .

There are no known funding efforts in progress at this time to acquire the commercially controlled data needed to make NSN 2520-01-675-9565 fully competitive. Consequently there are no current plans to acquire a fully competitive TDP because funds are not available to acquire the data necessary.

Technically there are three choices for the Government to pursue and obtain the data to this item. The three choices are: Research and Development of a Government-owned design, Reverse Engineering if the Government is unable to procure the item and the final option is to simply ask the vendor, in this case Allison Transmission Inc, for a price to purchase the Technical Data and rights to use the item competitively. This office has tried to obtain pricing for the TDP however Allison Transmission Inc’s., response was “Not for Sale.” This leaves the Government with two remaining options to acquire the data. They are as follows:

(1) Research and Development (R&D): To develop a competitive data package through a Research and Development (R&D) effort, procuring proprietary data and qualifying additional sources will entail a significant amount of time, facility resources, man-hours, and funding. Based on past experience with similar efforts the estimated cost to research and develop a compatible product and qualify additional sources exceeds $5.0M with a setback of 42 months. Required funding would include $3.5M for personnel to support research, and redevelopment of an item that would perform the same task as this NSN. That $3.5M would also include funding for staff to develop the Computer Aided Design (CAD) models and drawings that would be required for any potential vendor to manufacture from. Add in another $1.5M-$2.0M to develop prototypes to test and validate the Government design that functions identically to the original. If funding for a new start research and development effort became available, the 42 month process would consist of the following:

12 months to develop requirements, six to 12 months in design and prototyping, 12 months to test compatibility and function, and an additional 12 months to write the TDP and provision the parts. A timeline of the estimated R&D process is shown for clarity.

JLTV Engineering estimates the following timeline for R&D:

Requirements development 12 Months

Design and prototype development 6 Months Component, safety and system level testing 12 Months Write TDP, technical bulletins and provision parts 12 Months

Estimated Time to research and develop 42 Months

(2) Reverse Engineering (RE): To reverse engineer, validate the design, procure prototypes for testing and release a competitive data package would entail a significant amount of time, facility resources, man-hours, and funding. Based on past development experience the estimated cost to develop a reverse engineered competitive product is $4.0M, with an estimated delay of no less than 36 months. Required funding would include $3.0M for personnel to support reverse engineering and validation of the design as well as fund staff to develop the CAD models and drawings. Add another $1.0M to develop prototypes, test and finalize the product to verify that the newly created item provides equivalent performance when compared against the original. If funding for reverse engineering became available, 36 month process would consist of the following: three months to obtain existing parts, three months to tear down and understand the design, six months to iteratively develop drawings, prototypes and bench test, 12 months to perform system and vehicle level testing, and 12 months to write the TDP and provision the parts. To complete the reverse engineering process successfully, the Government would have to obtain 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. Once a large enough sample has been collected, the Government would then tear down and understand the design, conduct prototype development and produce the final TDP and associated provisioning documents at a cost of $4.0M. A timeline of the estimated R&D process is shown for clarity.

JLTV Engineering estimates the following timeline for RE:

Obtain existing parts 3 Months Tear down and understand the design 3 Months Prototype development 6 Months Component, safety and system level testing 12 Months Write TDP, technical bulletins and provision parts 12 Months

Estimated Time to Reverse Engineer 36 months

In addition to the cost and delay for an R&D action or RE effort, Joint Project Office (JPO) JLTV estimates that it would take approximately one additional year to establish another source and procure these kits on a competitive basis. Specific events would include additional market research, solicitation, evaluation and awarding a contract. Finally, any new source of supply would require component, safety and system level testing that is estimated to take six months. These estimates are based on similar Government projects.

These events combined are estimated to take an additional 12 months after development of the item.

Considering rebuild sites are also being established to rebuild this item the costs cited above appear to exceed any potential savings to be realized through a future competitive procurement process. Assuming the Government spent $4M to obtain a military version of the item and realize a savings of 25%, the new cost of the Government owned transmission would be per unit. That is a savings of less than between the Allison Transmission, Inc., owned and the Government-owned versions. Dividing $4M by results in almost transmissions required for purchase in order to recover the cost of generating a competitive TDP. Using the 51 units per year values from the monthly demand forecast it would take over years to recover invested costs.

If the procurement of the JLTV transmission is delayed until the TDP is bought by the Government and made suitable for a competitive procurement the Government would experience an unacceptable delay of a minimum of two and one half years in fulfilling this requirement. The two and one-half 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 force readiness and capability to actively support the field, as without the transmission the JLTV would be unable to perform any of its missions. Allison Transmissions Inc is 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 items identified without assistance from the Government. Furthermore, if a project to make this item competitive was rushed through the procurement 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:

a. Effective Competition: Based on the detailed rational provided in paragraph 5 above, the Government has no plans to obtain competition for this proposed contractual action. This effort will be synopsized in accordance with Federal Acquisition Regulation (FAR) 5.201(c).

b. Subcontracting Competition: FAR clause 52.244-5, Competition in Subcontracting, will be included in the contract to assure that the prime contractor obtains as much competition as possible in its subcontracting. The Government will require the awarded contractor to submit a subcontracting plan, which will include the efforts to subcontract to small business in accordance with FAR19.704.

7. Actions to Increase Competition:

As stated in section 5 above, a complete TDP and manufacturing knowledge are unavailable to support a competitive procurement. A TDP and the manufacturability details in theory could be developed, however, due to the costs associated with developing a competitive TDP and methodology that cannot be recovered also stated in section 5, the Government is not actively pursuing the development of a competitive TDP for future procurements. The Government would not be able to recover the investment to reverse engineer and qualify the item within a justifiable time frame.

To date, no other sources have approached this office with questions or comments on how to become a qualified source to produce this item.

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 2520-01-675-9565. Allison Transmission Inc. 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 Competition Management Office Source Approval Program at their own expense.

8. Market Research:

Given that no technical data is available for the Transmission, Hydraulic, NSN 2520- 01-675-9565, market research results are very limited. This is mainly based on the fact that some type of information is required prior to conducting market research.

For example, market research can be conducted on the Transmission, Hydraulic, but without having any technical specifications, the range of information on this component will be vast, thus not useful. Hence, it is imperative that some technical information be available in order to conduct meaningful market research.

The project engineer did perform online market research with regards to the Transmission, Hydraulic. A search by NSN provided little more than websites offering information already populated in Government databases such as WebFLIS and i2Log.

Online market research was also conducted using “JLTV Transmission” in the search field. Again, the results were limited in scope, centering on reviews and other generic media observations.

A search of “Hydraulic Transmission” returned much information on the operation and design of transmissions. However, the information found was too generic to be applicable. The research did not yield any alternative sources of supply.

After performing this strategic market research, engineering has arrived at the conclusion that no other vendor can meet the Government’s requirement for this item without an entire replacement of the JLTV powertrain and without substantial requalification and testing to ensure the safety of the crew.

9. Interested Sources: To date, no other sources have written to express an interest in qualifying as a source of supply. Sources Sought Notice 2020-027 was posted to Fed Biz Opps on 28 October 2019 for the Transmission, Hydraulic, Vehicular NSN 2520-01-675-9565, Part Number 12601790, as required by FAR 5.201. Any responses received will be evaluated by the appropriate office.

End Item: Joint Light Tactical Vehicles (JLTV) FOV Link: https://www.fbo.gov/notices/a15a128fa313bfebf214267b48dcfc8d

10. Other Facts: Discuss any other facts supporting the use of other than full and open competition, such as the following:

a. Procurement history: None

b. Acquisition Data Availability: The Government does not own or have rights to the detailed technical data for the Transmission, Hydraulic, Vehicular (NSN 2520-01- 675-9565).

c. Unusual and compelling urgency: N/A

d. Subcontracting Competition: FAR clause 52.244-5, Competition in

Subcontracting, will be included in the contract to assure that the prime contractor obtains as much competition as possible in its subcontracting. The Government will require the awarded contractor to submit a subcontracting plan, which will include the efforts to subcontract to small business IAW FAR19.704.

11. Technical Certification: I hereby 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.

[ ] $250K to $700K , PdM VS Engineering Branch Chief [X] $700K to $13.5M , Product Manager Vehicle Systems [ ] $13.5M to $93M , Project Manager, JPO JLTV

[ ] >$93 , PEO CS & CSS