JA_SPRDL122R0099_Redacted.pdf

SPRDL122R0099 (JA-00510) –

Previous J&A SPRDL1-19-R-0131 is available.

reason that this water-cooled variant provides an improvement over previous iterations is that the cooling system was tied into the vehicle radiator / fan system which allows for greater heat rejection and prevents thermal soak of the cooling fluid. The improvements realized in this variation of the HMMWV differential have improved the vehicle reliability by lowering the operational temperatures of the differential fluid in the differential, driving axle which has a direct impact on the longevity of the component.

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) 6.302-1, Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.

5. Reason for Authority Cited:

AMG is the original equipment manufacturer (OEM) of the HMMWV and sourced Dana to produce the rear differential.Dana is the actual manufacturer of the part while the AMG part number is the Dana part with an AMG p/n 6048217 applied. The Government did not acquire any rights to the technical data to enable competition of this item. As such, AMG / Dana are the only approved sources for the rear differential. While there is a Government drawing for the rear differential, the drawing is not fully defined and does not include vendor developed components that were considered the intellectual property of the developer. As such, the Government does not have the technical data needed to consider a product by another manufacturer.

This item can only be installed on the most recent HMMWV variants, serial number 300,000 or higher and is not backward compatible with older HMMWV models. The HMMWV rear differential was originally designed and developed by Dana / AMG. The original HMMWV program acquisition strategy incorporated a combination of off-the shelf commercial parts, existing ordinance parts, and contractor-developed parts to speed up the acquisition process and allow the Government to own some portions of the HMMWV, but not the full technical data package (TDP) of the vehicle system. This strategy reduced research and development time as well as overall program cost. Thus, while the HMMWV has a TDP, it is not all inclusive of every component of the vehicle system. Further, the TDP does not include vendor-developed components that were considered the intellectual property of the developer. Since this item was developed by Dana / AMG at their expense, the technical information for this item is proprietary to both firms. A significant amount of funding, personnel, and labor hours is required to test another vendor’s part in order to verify fit, form, and function to prevent the likelihood of failure. As such, the use of such descriptions in the acquisition is essential to the Government’s requirement thereby precluding consideration of a product manufactured by another company.

There are no known funding efforts in progress at this time to acquire the commercially-owned and controlled data necessary to make NSN 2520-01-574-4828 fully competitive.

Further, because this is a major system component of the HMMWV, the time, cost and schedule impact associated with a competitive action on every single rear differential purchase would result in a full qualification test for each awarded vendor to validate form, fit and function of the rear differential. This would add unnecessary cost and schedule time to the acquisition of each rear differential of the HMMWV, which is a program that is currently in sustainment.

If the Government attempted a fully competitive procurement for the rear differential, the Government would have the three choices to obtain the necessary information to enable full competition: Research and Development of its own rear differential design; Reverse Engineering of the existing system; or simply ask the vendors, in this case Dana / AMG, for a price to purchase the full TDP and rights to use the item competitively. Currently the vendors are not interested in selling their intellectual property and rights to use the item competitively. Thus this leaves the government with pursing the first two options.

(i) Research and Development (R&D): To develop a competitive data package through an R&D effort would involve procuring proprietary data for research, generating a requirements document and any associated technical drawings. Qualification of additional sources would be next, which would entail a significant amount of time, facility resources, labor-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 million with a set-back of forty-two (42) months. Required funding would include $3.5 million for personnel to support research, and redevelopment of an item that would perform the same task as this NSN. That $3.5 million would also include funding for staff to develop the computer-aided design (CAD) models and drawings that would be required for any potential vendor for manufacturing purposes, with an additional $1.5-$2 million required 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 forty-two (42) month process would consist of the following: 12 months to develop requirements; 6 to 12 months in design and prototyping; 12 months to test compatibility and function; and an additional 12 months to write the technical data package and provision the parts. A timeline of the estimated R&D process is shown below for clarity:

LTV 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

(ii) Reverse Engineering (RE): To reverse engineer, validate the design, procure prototypes for testing and ultimately 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 exceeds $4.5 million with an estimated delay of no less than thirty-six (36) months. Required funding would include $3 million for personnel to support reverse engineering and validation of the design as well as fund staff to develop the CAD models and drawings, with an additional $1.5-$2 million to develop prototypes, test

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 2520-01-574-4828. AMG / Dana holds the technical data regarding this item.

8. Market Research: A Sources Sought Notice was posted to beta.SAM.gov on 23 May 2022 and was open for 15 days. No responses were received.

In August 2020 Ground Vehicle Systems Center (GVSC) Engineering conducted a computer-based online search of known rear differential assembly suppliers looking for published material on a new built rear differential assembly specifically for the HMMWV.

Keyword(s): Rear Differential, HMMWV, rear differential assembly.

Links used to conduct market research are listed below:

https://www.eaton.com/Eaton/ProductsbyMarket/Government/Vehicles/MilitaryVehicles/ HMMWV/index.htm https://predatorinc.com/shop/hmmwv-differential-centering-kit/ https://www.jasperengines.com/differentials http://www.g2axle.com/pages/view/core_locker https://www.axletech.com/en/products/components

Findings: The results of this search did not produce any new companies that would provide a direct replacement Rear Differential 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.

AMG/ Dana were contacted to request consideration for the U.S. Government to purchase the intellectual property. AMG/ Dana do not wish to sell the intellectual property.

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

10. Other Facts: Procurement History:

Contract Number: SPRDL121C0035 Award Date: 9/24/2021 Contractor: AM General LLC Contract Value: $131,200 Competitive Status: Restricted procurement under SAT