Justification and Approval Redaction JLTV W56HZV-15-C-0095 P00307.pdf

Class Justification Review Document for Other than Full and Open Competition

Program/Equipment: Joint Light Tactical Vehicle (JLTV) Family of Vehicles (FoV)

Authority: Title 10 United States Code Section 2304(c)(1), as implemented by FAR 6.302-1(a)(2)(ii)(B) and FAR 6.302-1(a)(2)(iii)(B)

Amount: $2.27B

Prepared by:

Typed Name: Ryan Ridderikhoff

Title: Procurement Analyst Date: 29 September 2020

Contracting Officer:

Typed Name: Christopher A. Valevich

Date Reviewed: 29 September 2020

Technical Representative:

Typed Name: MICHAEL D. SPRANG

Title: Project Manager, JPO JLTV Date Reviewed: 29 September 2020

Requirements Representative:

Typed Name: MICHAEL D. SPRANG

Title: Project Manager, JPO JLTV Date Reviewed: 29 September 2020

Reviews: I have reviewed this class justification and find it adequate to support other than full and open competition.

Project Manager

Typed Name: MICHAEL D. SPRANG Title: Project Manager, JPO JLTV

See Hardcopy Signature Signature Date

Program Executive Office

Typed Name: TIMOTHY G. GODDETTE Title: Program Executive Officer, Combat Support and Combat Service Support

See Hardcopy Signature Signature Date

Legal Counsel

Typed Name: LAURA K. ANDERSON See Hardcopy Signature

Signature Date

Command Advocate for Competition

Typed Name: LARUTH SHEPHERD See Hardcopy Signature

Signature Date

Senior Contracting Official (SCO)

Typed Name: DANIEL J. GALLAGHER See Hardcopy Signature

Signature Date:

DEPARTMENT OF THE ARMY

CLASS JUSTIFICATION AND APPROVAL FOR

OTHER THAN FULL AND OPEN COMPETITION

1. Contracting Agency: The U.S. Army Contracting Command – Detroit Arsenal (ACC-DTA) is the contracting activity responsible for this action.

2. Description of Action: The proposed contract actions are to increase available option quantities under the current Joint Light Tactical Vehicle (JLTV) contract W56HZV-15-C-0095 with Oshkosh Defense, LLC (Oshkosh). This contract covers the procurement of JLTV vehicles, packaged and installed kits, and Total Package Fielding (TPF) quantities listed in paragraph 3 (Description of Supplies/Services) and thereby increases the option quantity ceiling for each separate option (as detailed in paragraph 3 below). The current JLTV Low Rate Initial Production (LRIP) and Full Rate Production (FRP) contract (W56HZV-15-C-0095) is a multiple-year, options contract that consists of three years of LRIP production (base year and two option years) and five option years of FRP. The Government anticipates reaching the Vehicle option quantity ceiling of 16,901 in Quarter 1 Fiscal Year 2021 (Q1FY21) (end of option year 5 and beginning of option year 6), approximately three years prior to the end of the final contract ordering period (option year 8). ACC-DTA intends to execute the increase of available options under two contract actions. The first action will increase available options for FY21 requirements and the second action will increase available options for FY22, FY23 and FY24 requirements. In order to optimize the range pricing and unit cost annual increase ( ) from option year 5 to option year 6, the first contract award needs to be executed by November 2020 to allow for the first J&A quantities (1,129) to be executed concurrently with the remainder of the 16,901 vehicles (1,571) in FY21. Combining these actions will take advantage of economies of scale due to range pricing and result in a cost avoidance for the Government. If the FY21 procurement is executed as a split buy between option year 5 and option year 6, it still takes advantage of the range prices if awarded within the 60 day top-up period within the existing contract, and the Government would realize a cost avoidance of Option year 5 is 01 Dec 2019 - 30 Nov 2020, Option year 6 is 01 Dec 2020 - 30 Nov 2021, Option year 7 is 01 Dec 2021 - 30 Nov 2022 and Option Period 8 is 01 Dec 2022 - 30 Nov 2023. Kits and TPF are ancillary items that will be included proportionately to each vehicle. The vehicles and kits included in this action will be procured on a Firm-Fixed-Price (FFP) basis, the TPF services will be procured on a Cost-Plus Fixed Fee (CPFF) basis utilizing FY20-FY21 Other Procurement, Army (OPA), U.S. Marine Corps (USMC) (PMC), U.S. Navy Procurement (PROC) funds, U.S. Air Force (USAF) Procurement (PROC) funds, and Foreign Military Sales (FMS) funds.

3. Description of Supplies/Services: Increase hardware and service requirements (separate available options) for JLTV Vehicles, Kits, and TPF under the current contract. The subject contract includes an option quantity ceiling for Vehicles, Kits and TPF (all defined within the below chart). The Government will reach the Vehicle ceiling

4. Authority Cited: The statutory authority permitting Other Than Full and Open Competition for this class J&A is Title 10 United States Code Section 2304(c)(1), as implemented by FAR 6.302-1 “Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.” Specifically, FAR 6.302-1(a)(2)(ii)(B) provides that “supplies may be deemed to be available only from the original source in the case of a follow-on contract for the continued development or production of a major system or highly specialized equipment, including major components thereof, when it is likely that award to any other source would result in –Unacceptable delays in fulfilling the agency's requirements.” And FAR 6.302-1(a)(2)(iii)(B) provides that “For DoD, NASA, and the Coast Guard, services may be deemed to be available only from the original source in the case of follow-on contracts for the continued provision of highly specialized services when it is likely that award to any other source would result in - Unacceptable delays in fulfilling the agency's requirements.”

5. Reason for Author it y Cited: As authorized by FAR 6.302-1, procurement by other than full and open competition is necessary because the JLTV design is the only design currently available that meets the performance requirements as defined in section 5 of the JLTV FoV Capability Production Document (CPD). The CPD, approved 21 Nov 2014, contains JLTV’s Key Performance Parameters (KPP), Key Systems Attributes (KSA), and Additional Performance Attributes. There are no commercial alternatives available in the marketplace.

a. Background: The current contract (W56HZV-15-C-0095), awarded to Oshkosh on 25 August 2015 for Vehicles, Kits and Total Package Fielding, also included an option for the Technical Data Package (TDP) for the JLTV FoV. Oshkosh has completed the delivery of the TDP as of December 2019. The Government is in the process of validating the TDP which is anticipated to be completed in Q1FY21. In June 2019, JPO JLTV was made aware that the current commercial based JLTV A1 engine (MY2020 L5P) would end production in Q3FY22. The JPO initiated a System Technical Support (STS) Work Directive (WD) to replace the existing engine with a new “A2” engine. The WD will fund the development, integration, and updated TDP drawings that represent the new JLTV (A2) engine. Replacing the engine via a WD is intended to resolve the impending engine obsolescence prior to the competitive follow-on procurement. The A2 engine TDP is anticipated to be developed and ready for release with the third draft Request for Proposal (RFP) for the JLTV FoV follow-on contract competition at the end of Q4FY21.

Market survey responses received Q4FY19 indicate that three potential vendors, require between 15 and 33 months to review the JLTV FoV TDP in order to provide a competitive proposal. One additional potential vendor, non-incumbent, requested 12- 14 weeks to determine how much time with the TDP is needed and did not fully respond to the survey. The Government has invested significant resources to procure the TDP and will use the TDP to enable full and open competitions in the future. In order to fully leverage this investment and provide maximum competition for the JLTV FoV follow-on contract, the Government will allow potential vendors time with the TDP to submit an informed competitive proposal. A representative JLTV FoV TDP was made available to qualifying interested parties with the Market Survey on 29 July 2019.

The initial full TDP release was done in Q3FY20 and additional releases with ECP updates are targeted with draft RFPs in Q2FY21, Q4FY21, and final RFP release Q2FY22. To ensure optimal TDP readiness the JPO will provide the new JLTV A2 engine TDP with the third draft RFP release (Q4FY21), 6 months prior to the final RFP release. This TDP release schedule is aligned with market survey responses. It provides potential vendors 9 months with the A2 engine TDP, 27 months in total with the JLTV FoV TDP prior to proposal submission.

As stated above, the Government will reach the Vehicle ceiling of in Q1FY21;

approximately three years prior to the projected 8 year option period ending in Q1FY24. The Government accelerated quantity orders by utilizing a “buy-to-budget” strategy as directed by the Defense Acquisition Executive, leveraging an Average Production Unit Cost (APUC) approximately 18.1% less than the IGCE developed prior to award, and maximizing range pricing.

b. Unacceptable delay: An award to another source for these contract actions, other than Oshkosh for the JLTV FoV, would result in an unacceptable delay.

Based on aligning the JLTV FoV competitive follow-on schedule and TDP availability with market survey responses, the competitive follow-on contract award is projected for Q4FY22. The vehicle option ceiling on the current contract will be reached in Q1FY21, approximately 21 months prior to the follow-on contract award. This Class Justification and Approval (J&A) for Other Than Full and Open Competition is required to prevent a fielding gap from FY23 through FY25 and allow JLTV capability to continue to support requirements. Specifically, the Army, USMC, Navy, and USAF have requirements for JLTV FoV production deliveries from FY23 through FY25. The current contractual limit of 16,901 does not meet the Headquarters, Department of the Army (HQDA) informed fielding strategy beyond FY22. Production deliveries from the follow-on contract will not be available in the required quantities until Q4FY25 as detailed in the graph and table below.

This J&A is required to prevent a fielding gap and allow JLTV capability to continue to support mission readiness and increase survivability of the warfighter. It is critical to meet the intent of the Army’s Modernization Strategy to have continuous and consistent fieldings to deployable units. This J&A will enable the DoD to meet its intended fielding goals while developing a full and open competition for the next ten years of production.

Subcontracting”. Oshkosh will also be required to submit an amendment to their subcontracting plan prior to award for review and approval supporting this action.

7. Actions to increase competition: Oshkosh has completed delivery of the TDP as of December 2019. The Government is in the process of validating the TDP which is anticipated to be completed in Q1FY21. In accordance with DFARS 252.227-7013 (Rights in Technical Data, Non-Commercial Items) and 252.227-7014 (Rights in Non- Commercial Computer Software and Non-Commercial Computer Software Documentation), the Government is expecting to receive at a minimum Government Purpose Rights (through a specially negotiated license) in all noncommercial software and technical data for noncommercial items, components and processes developed partially or exclusively at Government expense. This includes form, fit and function technical data, and Operations, Maintenance, Installation, and Training (OMIT) other than detailed manufacturing or process data. In June 2019, JPO JLTV was made aware the current commercial based JLTV A1 engine (MY2020 L5P) would end production in Q3FY22. The JPO initiated an STS WD to develop, integrate, and obtain updated TDP drawings that will represent the new JLTV A2 engine. The new A2 engine TDP is intended to mitigate an impending engine obsolescence and the risk of negotiating a new engine through sole source immediately after competition. The A2 engine TDP is anticipated to be developed and ready for release with the third draft RFP for the follow-on competition at the end of Q4FY21.

8. Market Research: Pursuant to FAR 10.002(b)(2)(i) and (ii), ACC-DTA issued a formal Request for Information (RFI) containing a Market Survey on the FedBizOpps website on 29 July 2019, to determine potential vendors capability to produce the JLTV FoV, including associated packaged and installed kits, and TPF. The survey closed on 27 September 2019.

The Government conducted a review of all the responses below and concluded Oshkosh is the only company that possess the capabilities to provide the JLTV Vehicles and associated kits in the required timeframes to support fielding requirements.

A summary of the Market Research is captured below:

W56HZV-15-C-0095 - Oshkosh Corporation, Oshkosh, WI

2. The competitive status of the above actions were awarded under both full and open competition as well as limited competition.

3. The J&A for contract W56HZV-15-C-0095 is pursuant to Title 10 U.S.C Section 2304(c)(1), as implemented by FAR 6.302-1(a)(2), “Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.”

4. The aforementioned JLTV TD and EMD contracts were awarded via full and open competition. The J&A supporting the current contract award provided the Government the ability to limit competition for the LRIP and FRP efforts to the three EMD contractors. In addition, the contract contained language sufficient to allow the Government to convert to a multiyear contract for the FRP effort, in accordance with FAR Part 17.

5. No unusual patterns were revealed by the procurement history.

6. The previous J&A for contract W56HZV-15-C-0095 was issued under the authority of FAR 6.302-1(a)(2)(ii)(A) and (B). The justification stated that it was cost prohibitive at that time to qualify a new contractor, as it would duplicate efforts that had already been performed under the JLTV EMD contracts and would result in both substantial duplication of cost and unacceptable delays in fulfilling the agency’s requirements. There have been no significant changes to those circumstances.