Redacted JA 21-02-Ellectralloy -Rotary Forge Chuckhead A Rebuild.pdf

ACC-WVA

CONTROL No: 21-02

(1) Using a source other than Electralloy would be detrimental to the terms of the P3 Agreement between WVA and Electralloy. The requirement to rebuild Chuckhead A is an integral part of the P3 agreement in which the Parties agreed that due to its

Electralloy would assume responsibility for repair to maintain baseline in exchange for the ability mitigate any risk of downtime on its ability to meet production schedules. Under the current Agreement terms, Electralloy is responsible for the general maintenance and repair work on the equipment regardless of who uses the equipment. However, WVA, in coordination with Electralloy, has determined that to better achieve the objectives set forth in the CITE Statute for P3s, WVA needs to more equitably distribute the cost of maintaining the equipment used by both Electralloy and WVA. Although WVA is not required to pay the cost of maintenance and repair for the shared work under the current Agreement, and thus best meets a CITE Statute objective to reduce or eliminate WVA’s overall installation cost of ownership, WVA has determined that it is to the detriment to other CITE Statute objectives, especially the objective to foster cooperation between armed forces and the private sector. By paying an amount allocable to its shared use of the equipment to Electralloy to perform maintenance and repair work on the equipment, WVA still furthers the objective to reduce WVA’s overall installation cost of ownership, while also leveraging the added benefits of furthering other CITE objectives, resulting in a stronger and more enduring P3 partnership with Electralloy;

(2) Per 10 USC § 2474, and the terms of the P3 Agreement, it is appropriate and authorized for the Parties to agree to modify their obligations in relation to the rebuild of Chuckhead A, given that WVA’s use of the forge has changed materially from 2015 when the P3 was executed;

(3) WVA would have to violate the P3 Agreement, if it were to consider other sources to rebuild the forge. Most significantly it would violate the consideration under the agreement in which Electralloy has the ability and control necessary to mitigate risk to its business; and

(4) Given the more than five years of knowledge, skills, and experience Electralloy has attained since the beginning of the P3, WVA’s consideration of other sources to perform the forge rebuild would very likely result in an unreasonable and unnecessary amount of additional time and expense to attain the level of knowledge, skills and experience needed to ensure the forge is properly rebuilt, which Electralloy already possesses.

6. Efforts to Obtain Competition: At this time, no further efforts will be made to obtain competition, as it would be contrary to the P3, as explained in detail above in paragraph 5.

7. Actions to Increase Competition:

No further action will be taken at this time to increase competition, as the P3 with