JA_SPRDL125R0061_Redacted Applied_Final.pdf

SPRDL1-25-R-0061 (JA-00949)

Previous J&A Is Not Available

Acquisition Method Code (AMC):

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

Acquisition Method Suffix Code (AMSC):

R - The data or the rights to use the data needed to purchase this part from additional sources are not owned by the Government and it has been determined that it is uneconomical to purchase them.

4. Authority Cited: The statutory authority permitting other than full and open competition for this effort is 10 United States Code (U.S.C.) 3204(a)(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: The parts included in this procurement action are the front and rear axles used in the All-Terrain Lifter Army System II (ATLAS II) forklift. The axles propel the forklift over various terrains with the necessary mobility to complete its mission.

The Government does not have the pertinent technical data to enable competitive re-procurement. The Government does not have rights to the Technical Data Package (TDP) or specifications for the axle assemblies. The ATLAS II forklift was procured using a performance purchase description that outlined the performance requirements of the end-item. This is the preferred acquisition strategy for Army material handling equipment because limited production dollars are used to procure hardware rather than a complete TDP.

The utilization of other than full and open competition is justified due to the unique qualifications of the source of supply. JLG has the requisite knowledge and specialized technical expertise required for successful performance, making them uniquely qualified to meet the Government’s specific requirement for this procurement. JLG is the original equipment manufacturer of the ATLAS II. The Axle Assemblies in this procurement are the only items qualified and approved for the ATLAS II. JLG has delivered these items to the Army without known issues or concerns for many years. This performance is based on an understanding of the requirements of the axles item for supporting the ATLAS II performance, including power and mobility characteristics. The contractor passed the unique testing of the Production Qualification and Verification tests for the ATLAS II, including the demonstration of supplying axle assemblies that fully met the ATLAS II performance requirements. The tests included reliability demonstrations, operating in cold and other environmental conditions, and performance suitability in an operational scenario. These tests were important and critical in that they demonstrated to the Army that the ATLAS II and therefore the axle assemblies were ready for fielding and incorporation into the Army’s supply distribution mission. The contractor has other capabilities in that they have full knowledge and understanding of the critical relationships between the axle assemblies and the end item. The ATLAS II axle

The Government would not be expected to recover, through subsequent competition, the additional costs involved in either procuring the proprietary data or reverse engineering the item to create a competitive build to print TDP within a reasonable time frame. For NSN 2520-01-577-1840, 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 years to offset the estimated cost of reverse engineering the item and qualifying another source. For NSN 2520-01-577-1837, at the current average usage rate of units 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 $1.950M cost of reverse engineering the item and qualifying another source.

Scarce Army resources are better directed toward hardware procurement rather than procuring technical data for these commercial products. It is estimated that months is required to procure and qualify additional sources for the proprietary data.

This delay is unacceptable to meet the Government’s needs as it would prevent needed replacements of front and rear axle assemblies from being delivered to the Warfighter in a timely manner. The ATLAS II forklift is a vital part of the Army’s supply distribution mission, and delays of front and rear axle assembly spares would severely impact the Warfighter’s mission, resulting in ATLAS II forklift becoming non-mission capable.

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. 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.

a. The axle assemblies covered by this procurement are designed and developed by the part manufacturer. Procuring proprietary data is estimated to be in the many millions of dollars as the typical business case for a product like this includes the expectation of a revenue stream for the manufacturer that includes worldwide sales of complete axle assemblies and spare parts for many years.

Qualifying additional sources is viewed as more of a schedule delay issue for this type of product and will be addressed below. The cost of procuring proprietary information is not expected to be recovered through subsequent competition because Tank-Automotive and Armaments Command Life Cycle Management Command demands for these axle assemblies are in small quantities and are driven by field demands. This estimate is based on a general knowledge of the materials handling industry. There are funding constraints in that scarce resources are better directed to hardware procurement rather than procuring technical data for commercial products. We estimate would be associated with attempting to procure the required proprietary data or qualifying additional sources. This delay is unacceptable to meet the Government’s needs as it would prevent needed replacement axle assemblies to be delivered to field users and would impact the mission as machines would be non-mission capable. The end item is a vital part of the Army’s supply distribution mission.

b. These axle assemblies are not feasible candidates for reverse engineering currently. It is an assembly designed by an established commercial vendor. It is estimated as a high-risk proposition since the axle assemblies are already in the market and the reverse engineering process would be replicating the effort associated with the original design of the axle assemblies. The reverse engineering effort would take approximately or more at a cost of

. In addition, the reverse engineered axle assemblies would have to establish reliability comparable to the already existing design. This evaluation process would need another and an estimated additional .

These costs would not be recovered by subsequent competition as the Army’s demand for these axle assemblies is small and variable. The risk for the Government is high as there are limited resources to commit to this type of effort.

For a contractor, there is high risk in that a long-detailed effort is required without the assurance that there would be enough demand for the final product.

c. The quantity requirements for these axle assemblies are too small to justify the cost required to increase competition. This requirement is for replacement (spares) axle assemblies, so developing a competitive effort, procuring proprietary technical data, or reverse engineering are not cost-effective options.

8. Market Research: A Sources Sought Notice was posted to SAM.gov on 8 August 2024 and was open for 15 days. Three responses were received, with the assessment of the responses below:

BHPE LLC (CAGE 9SWS7) responded on 27 November 2024 expressing interest in becoming a source for this requirement. V2X (CAGE 1D510) expressed interest on 3 December 2024 and Drive Line (CAGE 0GE52) on 6 December 2024. The contract specialist informed BHPE LLC, V2X and Drive Line that they could contact the Competition Management Office to apply to become an additional source through the Source Approval Program (SAP). The contract specialist provided the point of contact for the SAP to the vendors.

The Ground Vehicle Support Center project engineer performed internet searches on 8 November 2024 searching for axle assemblies that could meet the ATLAS II specifications.

1. Keyword used “Part number 1001096670” Website location: https://onlineexpress.jlg.com/parts/driveline/driving-axles/p/1001096670 Findings: The keyword used for this search was the part number featured in this procurement. The result was the actual axle that is approved for the ATLAS II application.

2. Keyword used: “Axle assembly for Rough Terrain” Website location: https://www.extremeterrain.com/tacoma-front-cv-axle-shafts-hub-assembly-set-csa64083.html?msockid=1c871bed7e39682d11810edc7fba69f8 Findings: This market search resulted in selection of axle assemblies for off-road applications for sale. There was a variety of makes and models. These axles are not a candidate for the ATLAS II because they are not the correct size and not specified for the ATLAS II application.

3. Keyword used: “Rough Terrain forklift axle assembly” Website location: https://mycnhreman.com/products/reman-front-axle- 51506536?msclkid=dc1cc7b3dd321e1f7cb4a09dbc4248dd Findings: This search resulted in a listing of remanufactured Case/New Holland axles for sale. These axles are for wheeled loaders and not applicable for the Army ATLAS II forklift.

9. Interested Sources: To date additional sources have expressed interest as listed above in Section 8.

10. Other Facts: Procurement History:

NSN: 2520-01-577-1837, Rear Axle Assembly

1. Contract Number: SPRDL1-10-C-0072; CLIN 0002AA Award Date: 14 May 2010; 43 each Contractor: JLG Industries, Inc.; part # 1001096670 Contract Value: Unit Price $11,683.50;

Total Price $502,390.50 Competitive Status: FAR 6.302-1 only one responsible source

2. Contract Number: SPRDL1-10-C-0072; CLIN 0004AA Award Date: 18 November 2010; 20 each Contractor: JLG Industries, Inc.; part # 1001096670 Contract Value: Unit Price $11,683.50; Total Price $233,670 Competitive Status: FAR 6.302-1 only one responsible source