JA_SPRDL124D0010_REDACTED.pdf

SPRDL1-22-R-0132 (JA-00551)

Previous J&A: SPRDL1-18-R-0498 capacity forklift used to primarily stuff and un-stuff palletized loads into International Organization for Standardization (ISO) containers. The transmission assemblies being procured by this action are a major powertrain component of the ATLAS II forklift. The ATLAS II forklift, NSN 3930-01-553-6676, was procured by the Government through a performance specification, and the automotive transmission assemblies were part of the vehicle Original Equipment Manufacturers (OEM)s internal design effort. There is no Technical Data Package (TDP) for the ATLAS II forklift or the automotive transmission assembly. This procurement, directed by Purchase Request Order Number (PRON) EH2L0133EH, will be restricted to JLG (CAGE 1YHH8) who is the end item manufacturer, and an authorized distributor for Funk, the item manufacturer. Both JLG and Funk are the only responsible sources for this item, and no other supplies will satisfy agency requirements.

The automotive transmission assembly covered by this procurement is designed and developed by the automotive transmission assembly manufacturer, Funk, in coordination with the ATLAS II OEM, JLG Industries Incorporated. JLG owns the TDP for the ATLAS II forklift which contains the automotive transmission assembly, and Funk owns the TDP for the automotive transmission assembly. Procuring proprietary technical data is estimated to be in the millions of dollars as the typical business case for a product like this includes the expectation of a revenue stream for the manufacturer.

Such a revenue stream includes worldwide sales of automotive transmission assemblies and their corresponding spare parts for many years. Demand for ATLAS II forklift spare parts, which include the automotive transmission assembly, are expected to diminish as the forklift is phased out of the Army inventory over the next 10 years.

The cost of procuring proprietary information, such as for the automotive transmission assembly, is expensive and would likely not likely be recovered through subsequent competition. The cost of procuring proprietary information is expensive and would likely not be recovered through subsequent competition. This estimate is based on a general knowledge of the Material Handling Equipment (MHE) industry.

There are no known funding efforts in progress at this time to acquire the commercially controlled data needed to make the automotive transmission assemblies competitive. It would also take additional time, perhaps as much as 12 months, to produce the new automotive transmission assemblies in the quantities needed by the Government. This is due to the potential that a new contractor will not be familiar with the new transmission design requirements or have the correct tooling for their manufacture. As a result, any efforts to increase competition would create unacceptable delays in filling the Government’s requirements.

The Government does not have rights to the TDP or specifications.

Procurement by other than full and open competition is necessary because the Government does not own any technical data on this automotive transmission assembly. The Government’s acquisition data for this automotive transmission assembly is limited solely to NSN, part numbers, and the manufacturer and supplier CAGE codes. The end item (i.e., ATLAS II forklift) was procured by the Government through a performance specification where the selection of its subcomponents, proposed contract due to resulting prohibitive high costs and schedule delays, as described below:

Costs: Increasing competition would require a RE effort which would take approximately 45 months, at a minimum cost of $5,816,800. This schedule and cost data is based on information provided by the Ground Vehicle Powertrain Mobility (GVPM) team, on 12 August 2022, which indicated that an RE design effort for the automotive transmission assembly would require approximately 40,360 labor hours at a cost of $130 per hour (see attached email and spreadsheet from GVPM). The GVPM estimate did not include the cost time associated with revising TMs as a result of a new RE transmission ($2.2 million and 12 months). The total cost and time estimate for reverse engineering is $8,016,800 and 45 to 57 months.

Scarce Army resources are better directed to hardware procurement rather than procuring technical data for commercial products. It is also estimated that 12 to 18 months would be required to procure the required proprietary data, and then also qualify additional sources after procuring the proprietary data. This delay is unacceptable to meet the Government’s needs as it would prevent needed replacements of automotive transmission assemblies from being delivered to ATLAS II field users in a timely manner. The ATLAS II forklift is a vital part of the Army’s supply distribution mission, and delays of automotive transmission assembly spares would severely impact the ATLAS II forklift user’s mission, resulting in machines becoming non-mission capable.

Other Delays: Between 45 and 57 months of delays, as indicated in the preceding paragraph due to an RE effort and manual revisions would be unacceptable because it would further delay soldiers from having access to a replacement automotive transmission assembly in the field, which would severely impact readiness of the ATLAS II forklift. This includes any delays resulting from the above manual revisions, which could likely add another 12 months of delays onto the 45 to 57 months RE figure.

However, some of the manual revisions could likely be done concurrently with the transmission RE which could reduce the 12-month period. The procurement of the current Funk automotive transmission assembly will not be subject to those costs or delays in the program schedule.

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.

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 known actions in progress at this time to acquire the commercially controlled TDP needed to make the automotive transmission assemblies competitive for this complex item. The substantial time and money required to purchase the TDP and then use it to increase competition would not be recouped by the Government. This is primarily due to the complexity of the automotive transmission assembly design, and the time and schedule delays that any new manufacturers would require to produce the automotive transmission assembly in the quantities needed. Any efforts to increase competition would create unacceptable delays in filling the Government’s requirements, resulting in a decrease of mission readiness for the ATLAS II forklift.

There has not been any expressed interest by any known vendor to become a qualified source to produce this item. Interested contractors can seek qualification through the Source Approval Program with the Competition Management Office (CMO). To date, there has not been any expressed interest by any known vendor(s) to become a qualified source to produce this item.

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

The Contract Specialist posted a Sources Sought Synopsis for this item, automotive transmission assembly, NSN 2520-01-577-1841, on 16 August 2022, on SAM.gov. The posting had a closing date of 31 August 2022 and will be valid for 12 months from the posting date. At this time, the government are not aware of any other contractors expressing interest in this item, or that have responded to the posting. Offerors are always encouraged to seek qualification through TACOM’s Source Approval Program (SAP) with the CMO, and any proposals received shall be considered. To comply with FAR Part 10.002.b.2.vii, internet-based market research for the ATLAS II automotive transmission assembly was completed by the GVSC CE/MHE Team System Engineer on 2 August 2022 and is attached for further review below.

The keywords, findings, and each of the websites accessed are provided in the contract file. The research revealed no new sources that manufacture a product that can be used as a replacement for the ATLAS II forklift automotive transmission assembly.

These additional sources are likely capable of developing similar transmission components, although they have never provided a transmission for the unique ATLAS II forklift which has undergone lengthy performance testing with the current Funk transmission assembly.

The GVSC CE/MHE Team System Engineer also completed an additional search using the Google search engine with both the JLG and Funk part numbers which yielded no additional sources for the ATLAS II automotive transmission assembly. The Google search did identify Funk as the current source for the ATLAS II automotive assembly.

Funk was acquired by John Deere in 1989. As discussed previously, if the Government secured a new source, extensive and costly analyses, prototyping, and system testing would still be required to ensure that the end item forklift still meets its military unique performance specifications.

The GVSC CE/MHE Team System Engineer contacted the contractor to request consideration for the Government to purchase the intellectual property. The request was denied.

Contract Specialist, , performed market research on 19 August 2022.

See details below:

Contract Specialist contacted sole source manufacturer, JLG Industries, to verify the part number, current Production Lead Time (PLT) and commerciality. JLG confirmed the part number, confirmed item as commercial and gave current PLT of 264 days 11/months thereafter.

Contract Specialist also performed a WEBFLIS query and is filed under market research. No additional information was found on WEBFLIS.

Market Research Techniques - FAR 10.002(b)(2)

(i) Contacted knowledgeable individuals in Government and industry regarding market capabilities to meet requirements.

(ii) Reviewed the results of recent market research undertaken to meet similar or identical requirements.

(iv) Queried the Governmentwide database of contracts and other procurement instruments intended for use by multiple agencies available at https://www.contractdirectory. gov/contractdirectory/ and other Government and commercial databases that provide information relevant to agency acquisitions

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

10. Other Facts: Procurement History:

Contract Number: SPRDL1-19-D-0020

Award Date: 01 February 2019

Contractor: JLG Industries, Inc.

Contract Value: $7,572,265.16

Competitive Status: FAR 6.302-1 only one responsible source

11. Technical Certification: I certify that the supporting data under my cognizance which is included in the justification is accurate and complete to the best of my

CUI

CUI

APPROVAL OF JUSTIFICATION FOR

OTHER THAN FULL AND OPEN COMPETITION

Approval Authority for Acquisitions Equal to or Greater Than $750,000

But less than $15M

Based on the foregoing Justification, I hereby approve the procurement of the following:

a. Noun: Transmission

b. NSN: 2520-01-577-1841

c. Guaranteed Minimum Quantity: 7 each

d. Estimated Value of Guaranteed Minimum Quantity:

e. Maximum Long Term IDIQ Quantity: 240 each

f. Maximum Estimated Total Value:

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.

X_____________________ Competition Advocate

DAPO.DOUGLA

S.A.1230220014

Digitally signed by

DAPO.DOUGLAS.A.1230220014

Date: 2022.11.11 12:47:16 -05'00'