JA_SPRDL120R0158_Redacted.pdf

Solicitation No. SPRDL1-20-R-0158 Previous J&A SPRDL1-14-R-0202 is available

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

SPRDL1-20-R-0158

JA-00153

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

2. Description of Action: The proposed action is to award a new firm-fixed-price, five-year long-term indefinite delivery indefinite quantity (IDIQ) contract to AM General, LLC (AMG), CAGE 34623, for National Stock Number (NSN) 2530-01-203-5746, hub assembly, vehicular.

NSN 2530-01-203-5746, hub assembly, vehicular (Geared Hub Assembly), is used on the High Mobility Multi-Purpose Wheeled Vehicle (HMMWV).

Army Working Capital Funds (AWCF) will be utilized for this procurement.

3. Description of Supplies/Services: AM General, LLC (CAGE: 34623) will provide: hub, assembly, vehicular, NSN: 2530-01-203-5746.

Manufacturer Part Number:

5598767 (CAGE: 34623)

Government Part Number:

12338284-2 (CAGE: 19207)

The item is the geared hub assembly used on the Basic and A1 High Mobility Multi- Purpose Wheeled Vehicle (HMMWV). A hub assembly is the mechanical device that keeps the wheel attached to the vehicle while allowing the wheel to freely turn. The HMMWV utilizes a geared hub assembly which provides a means for changing gear ratios on the drivetrain and adding ground clearance.

The unit price is estimated at each. The guaranteed minimum quantity of the contract is 120 each and the maximum quantity is 3,000 each, for an estimated minimum value of and a maximum value of .

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. 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 for this effort 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 Can Satisfy Agency Requirements.

5. Reason for Authority Cited: The geared hub assembly is part of the portal axle. Portal axles (or portal gear lifts) are an off-road vehicle suspension and drive technology where the axle tube or the half-shaft is off-set from – usually above – the center of the wheel hub and where driving power is transferred to each wheel via a simple gearbox, built onto each hub. This gives two advantages: First, ground clearance is increased, particularly beneath the low-slung differential housing of the main axles — and second, any hub reduction gearing allows the axle halfshafts to drive the same power but at reduced torque (by using higher shaft speed). This reduces load on the axle crownwheel and differential.

Compared to normal layout, portal axles enable the vehicle to gain a higher ground clearance, as both the axle tube and differential casing are tucked up higher under the vehicle.

Due to the gear reduction at the wheel which lessens the torque on all the other drivetrain components, the size of the differential casing can be reduced to gain even more ground clearance. Additionally, all drivetrain elements, in particular the transfer gearbox and driveshafts, can be built lighter. This can be of use in lowering the center of gravity for a given ground clearance. Where a vehicle also requires a reduced top speed, in at least one gear, the gear ratio can be chosen to reduce this. This specific geared hub assembly is unique to the HMMWV that is used on aggressive terrain.

AMG developed the technical data for this geared hub assembly and obtained the Government’s approval for its use in the HMMWV at its own expense. The Government did not fund AMG to provide the Government a fully detailed TDP after approval. As such, AMG is the sole owner of the drawing and technical data rights and the Government does not own proprietary rights to the TDP.

This geared hub assembly was specifically designed, configured, and integrated for this vehicle, and the risk associated with using an improper geared hub assembly would be high, so this procurement must be issued on a sole-source basis.

There are no known funding efforts in progress at this time to acquire the commercially controlled data needed to make NSN 2530-01-203-5746 fully competitive.

Alternatives:

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

(i) Reverse Engineering (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 geared hub assembly. Advantages in this RE solution include minimized vehicle integration costs, as the reverse engineered product would be a direct replacement for the original geared hub assembly. The Government would own the resultant technical data including any 3-D models and drawings. The disadvantages of this process are its relatively high cost and long lead times.

To reverse engineer, procure prototypes and release a competitive data package will 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 $3.0M, with an estimated delay of not less than 28 months. If funding for RE became available, the 28 month process would consist of the following:

two months to obtain existing parts, two months to teardown and understand design, eight months to develop prototypes, 12 months to test, and four months to write the TDP and provision the parts.

(ii) Research and Development (R&D)

To develop a competitive data package through an 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 the estimated cost to research and develop a compatible product and qualify additional sources exceeds $3.0M with a setback considerably longer than 28 months. If funding for qualifying additional sources became available, the 28 month process would consist of the following: two months to review approval package, six months to develop test plan, 12 months to test, and eight months to write the TDP and provision the parts. In terms of procuring proprietary data, the Government would not likely be able to afford such costs as contractors usually set unaffordable prices for their TDP.

Unacceptable Delay:

If the procurement of the HMMWV geared hub assembly 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 two years in fulfilling this requirement. The two 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 U.S./Coalition efforts, as without the geared hub assembly 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 Justification and Approval (J&A). The contractor developed the geared hub assembly 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.

The Government would not be able to recover, through subsequent competition, the additional costs involved in RE the item to create a new and competitive TDP. At the current average usage rate of 600 units each year, a current unit cost of , and assuming 25% cost savings achieved through competition, the in annual savings would take over years to offset the estimated $3,000,000.00 cost of RE the item and qualifying another source.

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.

Notices required by FAR 5.201 will be posted.

b. Subcontracting competition: Unless the contract is awarded to a small business, 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: There are no plans to increase competition for future procurements due to the reasons cited above. 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 2530-01-203-5746. AMG holds the technical data regarding this item.

8. Market Research: Market Research efforts included:

A Sources Sought/Request for Information was posted on the Beta.Sam website on 2/26/2020.

Notice Id: 2020JM001 Noun: HUB ASSEMBLY, VEHICULAR

NSN: 2520-01-203-5746

Part Number: 5598767 (AMG, CAGE: 34623) or 12338284-2 (U.S. Government, CAGE: 19207)

Estimated Quantity: 3,000 each End Item: Basic and A1 High Mobility Multi-Purpose Wheeled Vehicle (HMMWV)

To date, no responses to the Sources Sought/Request for Information have been received.

Internet searches for suitable competition were performed as described below:

In February 2020 Ground Vehicle Systems Center (GVSC) Engineering conducted a computer-based online search of known geared hub assembly suppliers looking for published material on a new built geared hub assembly.

Keyword(s): geared hub, portal axle, geared hub assembly.

Links used to conduct market research are listed below:

https://www.allpar.com/mopar/suspensions/portal-axles.html https://emeraldwest.com/motorsports/products/crawl-king-60-front-rear-portal-axles-set/ http://global.dana.com/commercial-vehicles/products/driveline/drive-axles#searchRootId=1cc6c5e8-d343-4928-8f69-4078e55a8865/facets= http://www.g2axle.com/ https://www.axletech.com/en/products/suspensions-modules/portal-wheel-end

Findings: The results of this search did not produce any new companies that would provide a direct replacement geared hub assembly 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. The HMMWV is in sustainment at this time so massive vehicle system changes to accommodate competition are not funded and are unable to be fielded.

Summary: As a result of the Market Research, it was concluded that the Government does not have enough detailed information consider similar parts for this specific application on the HMMWV. This geared hub assembly cannot be identified as a Commercial Off The Shelf item.

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

10. Other Facts: Procurement History (several contracts):

Contract Number: SPRDL1-16-D-0007 Award Date: 1 December 2015 Contractor: AM General, LLC Contract Value: $2,295,338.94 (Estimated) Competitive Status: FAR 6.302-1 - Only One Responsible Source

Contract Number: W56HZV-04-D-0255