M249 SAW JA Redacted.pdf

FOR OFFICIAL USE ONLY

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

Justification and Approval for Other than

Full and Open Competition

1. Contracting Activity: U.S. Army Contracting Command – New Jersey

2. Description of Action: Project Manager Soldier Weapons requests a new five year Indefinite Delivery/Indefinite Quantity (IDIQ) contract with Firm Fixed Price delivery orders. It is anticipated that Fiscal Years (FY) 2019 through 2024 will be used to satisfy requirements.

3. Description of Supplies/Services: The requirement is for the M249 Squad Automatic Weapon (SAW), as delineated in the table below. The M249 SAW is a gas operated, magazine or metallic link-belt fed, individually portable machine gun capable of delivering a large volume of effective fire to support infantry squad operations. The weapon can be fired from the shoulder, bipod or tripod mounted machine gun positions.

The M249 engages point targets out to 800 meters, firing the improved North Atlantic Treaty Organization standard 5.56mm cartridge. The SAW forms the basis of firepower for the fire team and the gunner has the option of using 30-round M16 magazines or linked ammunition from pre-loaded 200-round plastic magazines. The resulting IDIQ will contain five one-year ordering periods that will cross fiscal years FY2019 – FY2024.

The maximum ceiling amount for the contract is for the five year period.

The anticipated award date is .

The anticipated total requirement is as follows:

Quantity Cost Ordering Period 1 First Article Ordering Period 1 Remaining Requirements Ordering Period 1 Ordering Period 2 Ordering Period 3 Ordering Period 4 Ordering Period 5

Total

There are currently remaining in the requirement queue as delineated in the table above. There are also an additional going through overhaul at Anniston to support last year’s FMS requirements.

4. Authority Cited: Title 10 United States Code (U.S.C.) Section 2304(c)(1), as implemented by Federal Acquisition Regulation (FAR) 6.302-1(a)(2)(ii)(A) Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.

5. Reason for Authority Cited: As described at FAR 6.302-1(a)(2)(ii)(A), 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 substantial duplication of cost to the Government that is not expected to be recovered through competition.

The M249 SAW is commonly used by the United States Government’s (USG’s) foreign military allies and partners because it provides essential performance characteristics that uniquely meet their specified needs.

FN America, LLC (FN America) is the only responsible source available to provide the M249 SAWs for this procurement action. FN America is the American subsidiary of Fabrique Nationale, Herstal, Belgium (FNH), and was formed by the merger of FN's two previous American subsidiaries: FN Manufacturing, LLC (FNM LLC) and FNH USA. FNM LLC, located in Columbia, SC, was the manufacturing branch of FNH in the US, producing firearms such as the M249 and M240 machine guns and the M16 rifle, among others. FN America (and its predecessor companies mentioned above) have been producing the M249 SAW for the USG for the past 35 years. During this time they have made a significant corporate investment in both financial and engineering efforts to improve their manufacturing process

These enhanced processes serve to ensure production of quality weapons and improve efficiency, saving the Government substantial time and money.

Unacceptable duplication of costs that are not expected to be recovered through competition would occur if award were made to other than FN America.

Based on this contract, it is estimated that approximately in duplication costs would be incurred if an award was made to a contractor other than FN America.

A breakout of these costs is as follows:

First Article Test (FAT) undergone by a new contractor

Production Qualification Test

Comparative Production Test (CPT) (i.e., interchangeability, durability)

Increased Engineering Support in Production (ESIP) (i.e., quality surveillance)

Total

In order for the Government to avoid in duplication costs which are not expected to be regained by competition, a new manufacturer’s price would need to be at least per unit less than the Independent Government Estimate (IGE) of approximately . As the Government has not received delivery of the M249 SAW under contract since this estimate is based on historical cost Inflation calculations were made using US Inflation Calculator to bring labor and material costs to the .

. A new contractor would have to demonstrate reliability of their weapon through a minimum of of testing which is the minimum cited in the weapon specification. The current M249 SAW manufactured by FN America exhibits a

. A new contractor would also have to establish a process for surface finishing.

Since FN Herstal and its subsidiary, FN America, LLC have been the only manufacturers to produce M249 SAWs in the last 35 years, it is not expected that the USG would obtain effective competition that would result in any savings.

6. Efforts to Obtain Competition:

a. Effective Competition: Since this is a sole source action, effective competition is not applicable. The notices required by FAR 5.201 shall be published and any bids or proposals received shall be considered.

b. Subcontracting Competition: The contract will include FAR clause 52.244-5 “Competition in Subcontracting,” and FAR 52.219-9 “Small Business Subcontracting Plan”. Publicizing subcontracting opportunities will be performed by the prime contractor as appropriate in accordance with FAR 5.206.

7. Actions to Increase Competition:

The current circumstances do not create a viable competitive environment due to the duplication costs that the USG would incur, coupled with the cost and time it would take a new contractor to ramp up to speed. Duplication of costs would be negated for future M249 SAW efforts if the USG has a firm requirement to purchase a significant quantity of units that would incentivize a company to invest in facilitization, startup and required testing costs.

8. Market Research: In accordance with Defense Federal Acquisition Regulation Supplement (DFARS) 205.205-71, DFARS 206.302-1(d), and DFARS Procedures, Guidance and Information (PGI) 206.302-1(d), Sources Sought Notice W15QKN-18-X- 01EL was posted to the Federal Business Opportunities (FBO) on 31 January 2018 with a closing date of 16 February 2018. The request focused on such areas as production capacity/capability; production lead time; Government contracting experience;

production sustainability rate; and quality assurance.

Due to the requirement to provide a Sources Sought Notice issued within 12 months of releasing a solicitation, a second Sources Sought Notice, W15QKN-19-X-06HY, was posted to the FBO on 16 May 2019 with a closing date of 24 May 2019.

Additionally, Government personnel have surveyed the market for potential sources beginning October 2018 and ending on 16 April 2019 as follows:

a. Review of recent contract awards for similar requirements.

b. Review of trade journals. Technical personnel reviewed Small Arms Defense

Journal, Armed Forces Journal, and National Defense Magazine looking for any similar weapons. No items were found which could emulate the performance of the

M249 SAW.

c. Technical personnel conducted internet searches looking for similar guns. These searches found the following:

d. Contact with experienced individuals with broad based knowledge of the small arms industry. Several technical personnel attended the Shooting, Hunting, and Outdoor Trade (SHOT) Show in January 2019. The SHOT Show is sponsored by the trade association for the firearms, ammunition, hunting and shooting sports industry and is the largest trade show of its kind in the world. The attending technical personnel spent several days canvassing the various small arms vendors and manufacturers.

No items were found, other than those offered by which could emulate the M249 SAW.

Based on this market research, no other sources other than FN America, LLC were identified with the current capabilities required to manufacturer the M249 SAW without extensive facilitization. Additionally, since the M249’s adoption by the US Army in 1984, either has been the only contractor to be awarded a contract to produce the M249.

9. Interested Sources: To date, no other sources have written to express an interest.

10. Other Facts:

a. Procurement History:

b. Other facts: Not applicable.

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

12. Requirements Certification: I certify that the supporting data under my cognizance which are included in the justification are accurate and complete to the best of my knowledge and belief.

13. Fair and Reasonable Cost Determination: I hereby determine that the anticipated cost to the Government for this contract action will be fair and reasonable. The basis for this determination will be a cost analysis, Independent Government Estimate and comparison to historical pricing. As part of this analysis, certified cost or pricing data will be required.

14. Contracting Officer Certification: I certify that this justification is accurate and complete to the best of my knowledge and belief.

APPROVAL

Based on the foregoing justification, I hereby approve the procurement of the M249 Squad Automatic Weapon on an other than full and open competition basis pursuant to the authority of Title 10 United States Code (U.S.C.) Section 2304(c)(1), as implemented by Federal Acquisition Regulation (FAR) 6.302-1, Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.

. Approval is subject to availability of funds, and provided that the services or property herein described have otherwise been authorized for acquisition.