JA_SPRDL120R0125_Redacted.pdf

DEFENSE LOGISTICS AGENCY

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

SPRDL1-20-R-0125

1. Contracting Activity: The Defense Logistics Agency, Warren Detachment (DLA Land Warren) is the responsible contracting activity for this action.

2. Description of Action: The proposed action is to award a new hardware contract on a sole source basis to Honeywell International Inc, Cage Code 0BFA5, for the procurement of Inertial Navigation Unit (INU) National Stock Number (NSN): 5895-01-675-0981, Part Number (P/N) HG9740BA4, in support of the Abrams Tank. The Type of funds to be used is Army Working Capital Funds (AWCF). The type of contract is Firm Fixed Price.

3. Description of Supplies/Services: This award is for the procurement of INU NSN: 5895- 01-675-0981, P/N HG9740BA4, in support of the INU of the Abrams Tank. The total estimated contract value with option is for up to a quantity of 50 each. For this Contract, the deliverables are as follows:

NOUN: INU

a. NSN: 5895-01-675-0981

b. Military P/N: 12546254

c. Manufacturing P/N: HG9740BA4

d. Quantity: 25 each

e. Option Quantity: 25 each

f. Estimated Unit Price:

g. Estimated Value:

h. Estimated Option Value:

i. Estimated Total Value:

j. Purchase Request Order Number (PRON): EH0C00444E

Acquisition Method Code (AMC): 4. Acquire, for the first 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. 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 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 agency requirements.”

5. Reason for Authority Cited: The INU, P/N HG9740BA4, determines and maintains vehicle heading information (self-calibration via gyrocompass and heading reference functions), and maintains vehicle position information after initial value has been entered. The INU is a stand-alone inertial navigation unit with gyrocompass capability. Honeywell International Inc, Cage Code 0BFA5, is the sole owner of their drawings and technical data rights. The Government does not own proprietary rights to the TDP that would be required to produce a competitive TDP. The above-identified supplier has developed, tested and obtained Government approval for this item for application to the Abrams Tank at their own cost. The Government did not fund their efforts in developing and testing this item.

Due to the limited performance and technical data available on INU, P/N HG9740BA4, Reverse Engineering is the only recourse the Government could entertain to increase competition through development of a competitive TDP. A significant amount of time and money would be necessary to reverse engineer, procure and test prototypes, and release the design. Further, there is no funding to develop and qualify additional Inertial Navigation kits manufacturers for this effort. Even if a reverse-engineering effort is successful, the Government will incur excessive costs and lead-time delay. The cost to reverse-engineer the critical components is estimated at $5M and four years minimum to complete. Reverse Engineering the TDP includes, but is not limited to the following:

Estimated cost to reverse engineer the INU: $2,500,000 Estimated time to reverse engineer the INU: 2 year Estimated cost to perform RAM vehicle testing -three vehicles at 5,000 miles per vehicle: $2,000,000 Estimated time to perform RAM vehicle testing: one to three years

(depending on whether it can be run simultaneously) Estimated cost to develop a TDP: $ 500,000 Estimated time to develop a TDP: one year

The Government does not have the funds available nor would the Government be able to recover, through subsequent competition, the additional costs involved in either procuring the proprietary data or reverse engineering the items to create a competitive package. At the current usage rate of three units per year, at the current unit cost of and assuming the 25% saving achieved through competition, the annual savings would take over years to offset the estimated $5M cost of reverse engineering the item and qualifying another source.

The consequential time delay of four years to reverse engineer, develop and test the new design and then qualify a new vendor would prohibit delivery of the INU in a time frame that would satisfy the Government's needs.

6. Efforts to Obtain Competition:

a) Effective Competition: Based on the detailedrational provided in paragraph 5 above, the Government has no plans to obtain competition for this proposed contractual action.

(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.

7. Actions to Increase Competition: As stated in section 5 above, there is currently no funding available to increase competition through the process of qualifying additional sources.

Due to the associated cost as stated in section 5, the Government is not actively pursuing additional sources for future procurements. This item, INU NSN: 5895-01- 675-0981, currently does not appear on the Competition Advocates Shopping List dated 06 January 2020.

Contractors interested in becoming a source of supply need to meet therequirements of the Source Approval Program including vehicle level qualification testing, at their own expense.

The TACOM Life Cycle Management Command, Competition Management Office (CMO), is the lead proponent for the Source Approval Program. Specific information and point of contact for the Source Approval Program is available at https://www.tacom.army.mil/cmo/sap.html .

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, there has not been any expressed interest by any known vendor(s) to become qualified source(s) to produce this item.

8. Market Research: Market research was completed by Ground Vehicle Systems Center (GVSC) Electrical Engineering in January 2020 by reviewing vendor catalogs and searching for product literature published online. There are other sources likely capable of fabricating an inertial navigation unit for our needs. Although these companies have no identifiable replacement for this hardware, they do make similar ones for the commercial and military market. Extensive analysis, prototyping, and vehicle testing as described in section 5 above would still need to be done to ensure that the Abrams tank will properly meet performance specifications with a new supplier’s hardware. The cost of such analysis, prototyping, and testing would far exceed any cost savings realized by adding another source.

9. Interested Sources: To date, no other sources have written to express an interest in qualifying as a source of supply. Sources Sought Notice 2020-091was posted to

BETA.SAM.GOV on 30 January 2020 for the INU NSN: 5895-01-675-0981, P/N HG9740BA4. Any responses received will be evaluated by the appropriate office.

BETA.SAM.GOV Posting: Sources Sought Notice 2020-

091 Item Name: INU

NSN: 5895-01-675-0981

P/N: HG9740BA4

Minimum Quantity: 25 each

Maximum Quantity:50 each End Item: M1 Abrams Tank

10. Other Facts:

a. Procurement history Reasonable efforts to retrieve the following items from computer records, contract files, competition advocate office files or other sources are expected:

(1) Contract numbers and dates of the last several awards. The DLA Contract Specialist conducted an internet search and found no records of prior procurements.

(2) Competitive status of these actions. The DLA Contract Specialist conducted an internet search and found no records of prior procurements.

(3) Authority previously used for less than full and open competition. The DLA Contract Specialist conducted an internet search and found no records of prior procurements.

(4) If a justification was prepared to support the procurement made before this one, a summary of the contents of paragraph 7 of the justification for that procurement and an explanation of the results. The DLA Contract Specialist conducted an internet search and found no records of prior procurements.

(5) If any prior award was accomplished by full and open competition, a detailed explanation of the changed circumstances. The DLA Contract specialist conducted an internet search and found no records of prior procurements.

(6) An explanation of any unusual patterns which may be revealed by the history, e.g., several consecutive, urgent buys. The DLA Contract specialist conducted an internet search and found no records of prior procurements.

(7) If a justification was prepared to support the procurement made before this one, briefly describe the circumstances justifying the buy and whether there have been any significant changes. The DLA Contract specialist conducted an internet search and found no records of prior procurement.

b. Acquisition data availability: The Government does not own proprietary rights to the TDP that would be required to produce the item. Honeywell International Inc has developed, tested and obtained Government approval for this item for application to the Abrams Tank at their own cost. The Government did not fund their efforts in developing and testing this item.

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.

Approval Authority for Acquisitions Equal to or Greater Than $700,000 But Less Than $13.5M

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: Inertial Navigation Unit

b. NSN: 5895-01-675-0981

c. Basic Quantity: 25 each

d. Basic Estimated Value:

e. Option Percent: 100%

f. Quantity with Option: 50 each

g. Estimated Value with Option:

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.

Signature: