JA_SPRDL120R0239_Redacted.pdf

J&A SPRDL1-20-R-0239 (JA-00259)

Previous J&A: Not available

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

SPRDL1-20-R-0239

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

2. Description of Action: DLA-WRN proposes to award a new, firm-fixed-price, one-time buy contract with option for the Dressed Engine Assembly with Container, National Stock Number (NSN) 2815-01-438-3060. This item is defined by the Government-owned TACOM drawing number 57K00095 (Commercial And Government Entity (CAGE) 19207). The top-level drawing does not fully define the remanufactured engine called out on this drawing (Daimler Trucks, CAGE 64678, Part Number R23526353J).

This action will be funded using Army Working Capital Funds (AWCF).

3. Description of Supplies/Services: The NSN 2815-01-438-3060, part number 57K00095, Dressed Engine Assembly with Container, is used on the M917A1 Dump Truck.

The deliverables for this contract are as follows:

Base Quantity: 17 each Option Quantity: 17 each Total Quantity: 34 each

The estimated unit price is each. The total maximum estimated value of this contract is .

Acquisition Method Code (AMC):

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

Acquisition Method Suffix Code (AMSC):

R - The Government does not own the data or the rights to the data needed to purchase this part from additional sources. It has been determined to be uneconomical to buy the data or rights to the data. It is uneconomical to reverse engineer the part.

This code is used when the Government did not initially purchase the data and/or rights. If only one source has the rights or data to manufacture this item, AMCs 3, 4, or 5 are valid. If two or more sources have the rights or data to manufacture this item, 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 (U.S.C.) 2304(c)(1) as implemented by the Federal Acquisition Regulation (FAR) 6.302-

5. Reason for Authority Cited: This engine is used on the M917A1 Dump Truck. The diesel engine, a fundamental component of this vehicle, generates power, which is then transferred through the transmission and differential units, ultimately spinning the axle and propelling the vehicle. This particular engine is a Detroit Diesel Series 60 engine.

The Series 60 engine is heavy-duty diesel engine with fully integrated electronic control, the first of its kind at the time of development. It is a 12.7-liter 6-cylinder engine, but the electronic control is the most specialized component of the engine. The engine control is performed by the Detroit Diesel Electronic Control (DDEC) system, proprietary to Detroit Diesel. Detroit Diesel is now a subsidiary of Daimler Trucks North America.

Specifically, this engine is DDEC Level III. An engine with DDEC Level III utilizes electronic signals and offers enhanced engine control than an engine with a lower DDEC level (I or II), thus improving capability and performance of the engine. Engines with different DDEC levels are not directly compatible and would have different components and testing procedures. No vendor other than Detroit Diesel possesses the necessary technical data to program Electronic Control Modules (ECMs) to the correct DDEC level specifications. Production of the 12.7L version of the Series 60 engine was discontinued by Detroit Diesel in 2007. Since then, new engines have been unavailable, so remanufactured engines became the only way to procure the exact engine that was initially tested and qualified on the M917A1. The Tank-automotive and Armaments Command (TACOM) Maintenance Team has decided that remanufactured engines are acceptable for this procurement, due to the reasoning provided above and the operational need for engines to be supplied. This solution is preferable to modifying a different engine that is still in production to perform and mount in an identical manner as the currently-approved engine.

The Government does not have rights to the Technical Data Package (TDP) or specifications. This item is defined by the Government-owned TACOM drawing number 57K00095, which is a kit that consists of two items: the dressed engine shown on drawing 12466361 and the shipping container shown on drawing 12389942. The remanufactured engine called out on this drawing (Daimler Trucks, CAGE 64678, Part Number R23526353J) represents more than 50% of the total cost of the kit. The Government-owned top-level kit drawing 57K00095 does not fully define the engine, which is why this item cannot be procured competitively.

The Original Equipment Manufacturer (OEM) for the M917A1 is Freightliner, which is now also owned by Daimler Trucks North America. During initial production of this vehicle, this engine was manufactured by Detroit Diesel, and was designed, configured, and integrated for this specific vehicle. Although the engine is no longer manufactured, it can still be procured commercially as a rebuilt engine, by a vendor in possession of the technical data and having both the expertise and engine components necessary to provide a product that will meet the performance specifications of the original engine, using OEM parts. Only the approved source is familiar with the specific configuration required for this vehicle. The risk associated with using an improper engine is too great, so this procurement must be procured sole source to Detroit Diesel, a subsidiary of Daimler Trucks North America.

The Ground Vehicle Systems Center (GVSC) Heavy Tactical Vehicle Sustainment

Vehicle Power and Mobility (GVPM) Subject Matter Experts (SMEs), has estimated that a complete reverse engineering effort, to include research, development, comprehensive component/system integration testing, developing a TDP, and establishing a new source of supply for the M917A1 Engine would cost an estimated minimum of nearly $40,000,000, with a lead time of no less than 72 months. A detailed breakdown of cost and schedule impacts is shown below.

Action Time Cost Reverse-Engineer Engine

Part Research & Development (R&D) (design, development, production)

24 months $25,000,000

RAM Vehicle Testing (five vehicles at 5000 miles per vehicle)

12 months $3,000,000

North Atlantic Treaty Organization (NATO) 400 Hour Test (three vehicles)

8 months $750,000

Full Load Cooling Test (three vehicles)

4 months $850,000

Cold Test (three vehicles) 6 months $7,250,000 Develop TDP 6 months $2,500,000 Find Additional Source 12 months - Total 72 months $39,350,000

The efforts involved on the contract of the sole source components does not justify the development and production tooling costs for a company to qualify as a second source.

To neglect qualification testing would be a high risk as premature failures of this item in the field could re potentially adverse operational environment. Funds are not available at this time for either procuring the proprietary data or reverse engineering the item to create a competitive TDP or qualification testing for a new source. Ultimately, there is a vital need for correct approved components to be contractually obtained under this Purchase Request Order Number (PRON) to maintain readiness and avoid vehicle dead-lining due to supply problems.

The Government would not be able to recover, through subsequent competition, the duplication of costs involved in reverse engineering the item to create a competitive TDP. At the current average usage rate of 5.04 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

$39,350,000 cost of reverse engineering the item and qualifying another source.

The current M917A1 Engine Stock on Hand (SOH) is zero, with 11 backorders waiting fulfillment (six with high priority), and the Average Monthly Demand (AMD) is 0.42. The

72 months it would take to reverse engineer this item would create a deficiency of 30 engines. Given that four vehicles are already in Non-Mission Capable Supply (NMCS) status, the conclusion of the reverse engineering process would result in 34 vehicles being deadlined. The delay associated with reverse engineering is unacceptable in ability to sustain the M917A1 fleet.

6. Efforts to Obtain Competition:

a. Effective competition: Due to the reasons cited in section 5 above, the Government is not pursuing competition for this item.

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 contractors currently in the process of being qualified as an alternate source of supply for 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 this item. The source of supply, Daimler Trucks, owns the detailed technical data regarding this item.

8. Market Research: A Sources Sought Notice was posted to beta.SAM.gov on 18 December 2020 and was open for 21 days. Five responses were received, and an assessment of the responses is below:

One response offering repair services and four responses offering P/N R23526353J (CAGE 64678) or requesting additional details on the requirement were received.

Responses for the remanufactured engine were submitted by: Melton Sales & Services, MTP Drivetrain Services, United Industries Group, and Seahorse Defense Supply. The repair services response from Glass Elephant Trades would require Government assets, which are unavailable, so that response is unacceptable. None of the responses identified an interest in qualifying an alternate part number as a replacement for P/N

R23526353J (CAGE 64678).

In response to the eventual solicitation, vendors offering remanufactured engines will be required to submit an Other Than New Material (OTNM) worksheet, which will, in part, be used to verify that the proposing vendor has the necessary technical data and ability to remanufacture the Detroit Diesel engine R23526353J. Engineering will be consulted to review the OTNM worksheets and supporting documents to determine the proposing

Computer-based market research was conducted by the GVSC Project Engineer during May of 2020 and January of 2021. Heavy-duty truck diesel engines offered by Detroit Diesel, Caterpillar, and Cummins were evaluated. In summary, no engines available on the commercial market can match both the performance specifications and configuration of the sole-source part. The lack of a complete TDP and performance specifications for the sole-source part makes it difficult to ensure the validity of alternatives, but enough information is available to come to the conclusion that a drop-in replacement is non-existent, and significant modifications would have to be made to the vehicle if a different engine was selected for this procurement. As described in section 5, and further explained below, TACOM and GVSC believe the best solution is to procure remanufactured engines of the same model and configuration that were initially tested and integrated on this vehicle.

Although several manufacturers make products that appear to be similar to the engine used on the M917A1, the lack of a TDP or detailed drawings for the M917A1 engine prohibit the engineer from knowing the exact specifications that must be met by a potential alternative. Similar features that other engines offer include: engine size, comparable power/torque characteristics, materials, compression ratio, etc. However, the exterior features, including location of components, mounting patterns, and other critical features are specific to the sole-source component. Although other engines may perform similarly, aftermarket modifications would be necessary before installation on a M917A1 truck. The current engine was selected by the OEM specifically to fit onto this vehicle, and integration/verification testing was conducted for this reason. Selecting a potential alternative that was not specifically designed for this vehicle and was not properly tested results in a higher risk of issues once fielded.

Many heavy duty diesel engines that are similar in performance to the Detroit Diesel Series 60 have, like the Series 60, not been manufactured for several years. These models include the Caterpillar 3406E, the Mack E7, and the Cummins NTC 400. Detroit performance, but more importantly, configuration, were performed. Similarly, the Caterpillar C15, the Mack MP7, and the Cummins N14, are all configured differently.

For example, the approved engine (Detroit Diesel Series 60) has a displacement of 12.7L, offering 455 horsepower (hp), but the Caterpillar C15 (displacement: 15.2L, power: 580 hp), Mack MP7 (11.0L, 425 hp), and Cummins N14 (14.0L, 525 hp), the most similar models that are currently manufactured, have different characteristics.

Additionally, the engines mentioned above vastly differ from the Detroit Diesel Series 60 in terms of physical dimensions, exemplified by mounted components being in different locations on each engine. This is evident from posted dimensions on engine spec sheets and by viewing images of the engines. The M917A1 Truck was designed with the Series 60 Engine, and only enough space was provided for that specific configuration of the engine unit. Ultimately, the modifications that would be required in order to install any engine other than the Detroit Diesel Series 60 would be significant, potentially impacting surrounding systems. It is believed that the effort required for this modification would result in undue risk, leading to an increased risk of premature failure and decreased field reliability.

As a result of a previous M915 Series Truck harvest program, following divestiture of a group of vehicles, the potential arose to convert M916A2 engines for use on the M917A1, but TACOM decided to pursue a procurement of the M917A1 engine, even though it would be procured remanufactured. The advantages of procuring the same product that was initially tested, integrated, and provided during production of this vehicle led to this determination to procure remanufactured engines in lieu of a new engine, which would require a much more extensive engineering effort. GVSC is in agreement with TACOM.

When, and if, the technical information for the M917A1 engine is made available, additional, specific market research can be conducted and competitive procurement can be considered. It has been verified that the sole-source vendor can supply the engine for this procurement.

Links used to conduct market research are below:

https://demanddetroit.com/engines/legacy-engines/series-60/ https://www.cat.com/en_US/products/new/power-systems/industrial/industrial-diesel-engines.html?page=2 https://www.cummins.com/product-finder?f[0]=product_type:engine&f[1]=markets:12 https://www.macktrucks.com/powertrain-and-suspensions/engines/

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

10. Other Facts: Procurement History:

Contract Number: W56HZV-06-D-0075 Award Date: 23 February 2006 Contractor: Sigma Industries LLC (CAGE 3H8L1) Contract Value: $1,189,080 Competitive Status: FAR 6.302-1 only on responsible source

Contract Number: DAAE07-03-C-S107 Award Date: 20 August 2003 Contractor: Williams Detroit Diesel Allison (CAGE 1B318) Contract Value: $3,709,896.40 Competitive Status: FAR 6.302-1 only one responsible source

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.