JA_SPRDL122R0133_Redacted.pdf

CUI

JA-00550 - SPRDL1-22-R-0133

Previous J&A W56HZV-13-R-0355 is available

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

1. Contracting Agency: Defense Logistics Agency - DLA Land Warren.

2. Description of Action: DLA-WRN proposes to award a new Firm-Fixed-Price contract to Northrup Grumman, Commercial and Government Entity (CAGE) 8K4J7, for National Stock Number (NSN) 1005-01-386-2769, Receiver, Cartridge, using Army Working Capital Funds (AWCF).

3. Description of Supplies/Services: The NSN 1005-01-386-2769, part number 387- 3601-3, Receiver, Cartridge, is used on the M230 30mm Automatic Gun for the AH-64D and AH-64E Apache Attack Helicopters. The deliverable for this contract is for a base quantity of 16 each, with an option quantity of 16 each, making a total quantity of 32 each. The total maximum value of this contract is . The Purchase Request Order Number (PRON) is EH2C0544EH.

This item is the M230 30MM Chain Gun Receiver for the AH-64 Apache Attack Helicopter. The receiver is a machined aluminum casting that provides attachment points and support for all M230 Gun components.

Acquisition Method Code (AMC):

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

Acquisition Method Suffix Code (AMSC):

D - The data needed to acquire this part competitively is not physically available, it cannot be obtained economically, nor is it possible to draft adequate specifications or any other adequate, economical description of the material for a competitive solicitation. AMSC 3, 4, or 5 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) 6.302-1, Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.

5. Reason for Authority Cited: Northrup Grumman (NG) is the Original Equipment Manufacturer (OEM) for the M230 Gun and the Receiver, Cartridge. It is the only known source having the technical information, engineering expertise, manufacturing experience, and system oversight required to ensure the delivery of operational and safe M230 Gun receivers to the Government. NG is the only entity capable of meeting the Government’s requirements without a substantial duplication of costs to the Government that is not expected to be recovered through competition or without an unacceptable delay in fulfilling the Army's requirements. Controlled By: U.S. Army TACOM

Controlled By: DLA Land Warren CUI Category: PROCURE Distribution/Dissemination Control: FED ONLY POC: Donald.merkle@dla.mil

Both the M230 Gun and its receiver underwent extensive development, post-production design refinement and live fire qualification to satisfy the Army's strenuous performance and reliability requirements. Acquiring M230 receivers that have not undergone this rigorous qualification process risks accepting components that cannot survive the harsh aircraft armament operational environment, achieve the mandatory 50,000 fired round minimum life requirement or maintain complete component interchangeability with the 100+ piece parts that interface with this receiver.

All past inquiries to the OEM to determine their interest in selling or licensing their proprietary technical data package to the USG were declined. The OEM indicated they are not willing to sell this data to the Government, as it is inconsistent with their strategic priorities. Given that consistent OEM position, the most practical action to increase competition is reverse engineering the M230 receiver. The DEVCOM Armaments Center project engineer estimated it would take a minimum of $6.76 million and 64 months to reverse engineer the M230 Gun Receiver and develop a TDP suitable for competitive acquisition. The time and cost estimates are based on previous aircraft armament redesign projects adjusted to account for the receiver's performance requirements and design complexity. As further explained below, the $6.76 million is comprised of:

Task Est. Cost Est. Duration Product Material and Research Development $1,661 K 24-36 months Live Fire Testing $4,830 K 24-30 months TDP Quality Assurance Procedure Development $196 K 12 months US Government Review & Logistics Actions $70 K 4 months Reverse Engineering Total: $6.757 M 64-82 Months

Product Material and Research Development: Based on the estimating engineer’s 30 years of experience supporting this particular system, this effort would require at least $1.661 million for product and material research and development. This expenditure is due in part to the anticipated difficulty of duplicating and documenting the complex receiver geometry, determining adequate feature dimensions and tolerances that will enable proper weapon operation and component interchangeability. The primary subtasks and estimated costs are tabulated below:

-Replicate receiver physical geometry $ 84K

- Analyze physical geometry of 100 each interfacing piece parts $ 112K

- Fabricate prototypes $ 336K -Developmental testing/live fire $ 420K

- Create special fixtures, materials, spare parts $ 630K

- 30mmx113mm Ammunition for developmental live fire testing $ 23K

- Component interchangeability testing $ 56K Product Material and Research Development Task Total $ 1,661K

Live Fire Testing: An additional significant expenditure is the live fire testing required to qualify the reverse engineered design, estimated at $4.83 million. This cost includes firing a minimum of 100,000 rounds, at $23/round. This ammunition is required to fire 50,000 rounds through two separate gun receivers to confirm robustness of the reverse engineering process, with 150,000 rounds being a more probable ammunition estimate to account for test/fail/redesign/retest. Other key elements of the $4.83 million testing cost are parts consumption equivalent to 2 complete M230 guns due to live fire testing, and aviation maintenance associated with the airframe and firing test stand maintenance during testing. The M230 Gun’s prescribed firing duty cycle limits the number of rounds that may be fired before the Gun must be rested to cool. Additionally, the M230 Gun required mandatory, periodic inspections after a specific amount of ammunition is fired. A 24-month Live Fire Test period is considered “best case” and is a significant element of schedule and cost risk, as any premature fail will require redesign, prototyping and re-qualification firing. The primary sub tasks and estimated costs are tabulated below:

-Two Reverse-Engineered Receivers $ 50 K -Two M230 guns $ 180 K -150,000 rounds of ammunition $ 3,450 K

- Firing Fixture/Test Stand $ 500 K -Test Item Maintenance/Replacement Parts $ 250 K -Test Labor $ 400 K Live Fire Testing Total: $ 4.83 M

TDP Quality Assurance Procedure Development: The TDP and quality assurance procedure development is estimated at $196,000. The primary subtasks and estimated costs are tabulated below:

-Create & Release new receiver drawings $ 98K -Create & Release quality assurance provisions $ 70K -Create & Release special packaging instructions $ 28K TDP/QAP Development Total: $ 196K

US Government Review & Logistic Actions: The reverse engineered receiver drawings will require US Government review and acceptance. Additional US Government effort will be necessary to incorporate the new part number into the Provisioning Bill of Materials (PBOM). The primary subtasks and estimated costs are tabulated below:

-Review technical data $ 30K -Generate engineering change proposal and engineering release record $ 35K -Add new part number to PBOM $ 5K USG Review & Logistic Actions Total $ 70K

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 build-to-print technical data package within a reasonable time frame. At the current average usage rate of each year, a current unit cost of , and assuming 25% savings achieved through competition, the in annual savings would take over years to offset the estimated $6,757,000 cost of reverse engineering the item and qualifying another source.

The estimated minimum 64 months lead time to develop a competitive technical data package would create an unacceptable delay. The Army currently has only 1 each receiver on hand. Waiting for a reverse engineered solution would stop M230 depot repairs for approximately 6 years. With an average monthly demand of 1 each per month, this delay would render a minimum of 64 Apache Attack Helicopters to "Not Mission Capable" status, which is approximately 10% of the Army's current operational fleet.

6. Efforts to Obtain Competition:

a. Effective competition: Due to the reasons cited in section 5 above we are not pursuing competition for this item.

b. Subcontracting competition:

SOLE SOURCE: Notices required by FAR 5.201 will be posted.

7. Actions to Increase Competition: There are no plans to increase competition for future procurements due to the reasons cited above.

There are no current plans to increase competition because NG will not sell or license its rights to its proprietary technologies, and funding in not available for reverse engineering and testing. The Government will continue to monitor both NG's willingness sell/license its data rights and if funding is or is not available for a future reverse engineering effort.

8. Market Research: A Sources Sought Notice was posted to beta.SAM.gov on 16 August 2022 and was open for 15 days. No responses were received.

Northrup Grumman completed a Market Survey on 16 August 2022 for this M230 Gun Receiver Assembly part number 387-3601-3. On the Market Survey, Northrup Grumman stated this item is non-commercial and that they would bid directly on a solicitation for this requirement.

The Project Engineer performed market research during 9-10 August 2022. Using searches of on-line resources and keywords "M230 receiver" and "387-3601-3", there were no meaningful findings of any websites related to this component. Ancillary search responses returned M230 30mm Automatic Gun information and were universally associated with the OEM. This market research confirmed that no commercial or non-developmental items are available to meet the Government's requirements, and the only responsible source is the OEM.