Redacted_-_JA_PAA_v3_unique_components_SEPv3.pdf

CMO Control Number: 2016-113

DEPARTMENT OF THE ARMY

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

1. Contracting Activity: Army Contracting Command-Warren (ACC-WRN), Warren, Michigan 48397-5000 is the contracting activity responsible for this action.

2. Description of Action: ACC-WRN proposes to award a new contract for the procurement of up to 45 sets of M1A2 System Enhancement Program (SEP) Version 3 (v3) unique material to support the M1A2 SEPv3 program. The contract will be Firm Fixed Price (FFP). The proposed award will be made on a sole source basis to General Dynamics Land Systems (GDLS) in Sterling Heights, MI using Fiscal Year 2016 (FY16) Procurement Appropriation Army (PAA) funding.

3. Description of Supplies/Services: This action is for the procurement of up to 45 sets of “v3” unique parts, material, and key components consisting of redesigned Line Replaceable Units (LRUs), new Line Replacement Modules (LRMs) and improved network capabilities, inclusive of software. The contractor will acquire, stock, and store up to 45 sets of SEPv3 Unique Components to meet the v3 planning schedule as well as, the Integrated Product Support (IPS) requirements of the M1A2 SEPv3 program. IPS spares and repair parts will support the M1A2 SEPv3 program. This procurement of “v3” unique material will be installed into the M1A2 SEPv2, resulting in an M1A2 SEPv3 configured vehicle. This effort is a follow-on to the M1A2 SEPv3 Pilot Program purchase of six vehicles. The Pilot Program vehicles converted M1A2 SEPv2 to M1A2 SEPv3 tanks by incorporating technologies developed under Engineering Change Proposal 1a (ECP 1a). The Government will reserve final acceptance for the services provided herein until the reassembly of the M1A2 SEPv3 tanks and successful completion of all First Article requirements and the Final Inspection Record.

GDLS will be required to meet a schedule for component deliveries by May 2017 in order to meet an installation schedule beginning in 3rd Quarter of 2017. This aligns with the final acceptance of the vehicles at the Joint Systems Manufacturing Center in Lima, Ohio (JSMC-L) and the fielding requirements of the M1A2 SEPv3 beginning in 2018. The contract will be FFP for the procurement of up to 45 sets of “v3” unique material. The total estimated dollar value for this effort is $92.1M.

4. Authority Cited: The statutory authority permitting other than full and open competition for this action is Title 10 United States Code (U.S.C.) 2304(c)(1), as implemented by Federal Acquisition Regulation (FAR) 6.302-1(a)(2)(ii)(B), “Only one responsible source and no other supplies or services will satisfy agency requirements.” Pursuant to FAR 6.302-1(a)(2)(ii)(B), 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.

5. Reason for Authority Cited:

a. GDLS has been the sole-source contractor for Abrams tanks since taking ownership from the original equipment manufacturer (OEM) Chrysler Defense in 1982. Since that time, GDLS has been an integral part of the tanks’ development and upgrades having developed numerous modifications, which have aided in increasing the tanks’ capability, reliability, and survivability. One relevant example is GDLS’s experience on Abrams Integrated Module (AIM) Program which resulted in component kits applied to vehicles. AIM was an overhaul effort to recapitalize Abrams tanks and was a precursor to purchasing component kits and performing technology insertion at JSMC-L. GDLS is the only source with the engineering expertise (gained from over 30 years of Abrams development, production, and field support) to develop timely and accurate responses to issues that arise during manufacturing of these complex electronic software systems and intensive subsystems comprising the heart of the M1A2 SEPv3 Abrams tank. GDLS is the only organization possessing the experienced personnel and capability of managing the application of the armor package, weapons, and communications systems associated with the tank.

b. An award to a source other than GDLS will result in an unacceptable delay in meeting Army requirements. Listed in paragraph c. below are the tasks and timeframes associated with the three years required to select and qualify another source to provide the M1A2 SEPv3 unique hardware and software consisting of redesigned LRUs, new LRMs, and improved network capabilities for the SEPv3 program described in paragraph 3 above. Since this effort is a follow-on to the Pilot Program, the impact of absorbing a three year delay would result in a break in the continuous application of v3 unique hardware and software and final assembly at JSMC-L and is similar to a break in production.

c. The schedule duplication resulting from using a competitive approach to acquire the services from a contractor other than GDLS is described immediately below:

Ref. Tasks Time

5.c.(i)

Requirement Development, RFP, Source Selection Evaluation and Award

12 months

5.c.(ii) Qualification of New Supplier (Prime Contractor)

7 months

5.c.(iii)

Development of Technical Drawings and Logistics Data

18 months

5.c.(iv) Validation/Verification of Technical Documents

6 months*

5.c.(v) Validation/Verification of Software 6 months*

5.c.(vi)

New Platform Unique Specialized Equipment, Tooling and Fixtures

6 months*

5.c.(vi) Test Equipment 6 months* 5.c.(vii) Establish Supply Chain 12 months* 5.c.(viii) Establish Receiving/Inspection Site 12 months* TOTAL ~3 Years**

*Occurs concurrently with previous listed tasks

**NOTE: The time estimates outlined above and explained below are based on actual durations incurred and experience in the recapitalization of the SEPv2 vehicle along with the time it took for the development times of the technical data, and validation and verification of technical documents and software under the ECP 1a program. It also ignores the fact that the Government lacks a complete technical data package sufficient for competition of this effort (see paragraph 5e below). That said, some of the activities listed can be accomplished concurrently except for the source selection, qualification of the new supplier, development of tech/log data, and validation/verification of technical documents. As such, only the activities not marked with an asterisk were used to calculate the total.

(i) Requirements Development, Request for Proposal (RFP), Source Selection Evaluation (SSE) and Award (12 months): For new platform scope development for this modernization program (2 months) and customary RFP development and issuance (90 days), proposal receipt (30-45 days), and SSE board (6 months) planning timelines.

(ii) Qualification of a New Prime Contractor (7 months): During the proposal evaluation phase of a new competition, the Government would perform a pre-award survey to assess whether the new contractor could meet contractual requirements (7 days) including manufacturing processes (for example: machining, fabrication, weld, paint, outsource processes) (4-6 months assuming 2 weeks for each of the eight processes), qualification of the new contractor’s quality systems (International Standards Organization (ISO) 9001:2008 (Quality Management Systems) compliance)(2 weeks), as well as, be familiar with Government Production Quality Deficiency Reports (1 week).

(iii) Technical Drawings and Logistics Data (18 months): Development and delivery of technical drawings and logistics data for this new platform by a new contractor would require approximately 18 months including all performance requirements and drawings necessary to produce a conforming tank variant.

(iv) Validation and Verification of technical data (6 months): It would take approximately 6 months for a new contractor to validate and verify its Technical Data Package (TDP) and logistics documentation against the new tank variant.

production capabilities based on the acquisition path for the Abrams M1A2 SEPv3 Vehicle Program which included the reclaim and refurbishment of SEPv2 legacy components, SEPv3 unique components, and installation effort. The Market Survey included questions related to production of tracked ground combat vehicles, production of LRMs capabilities to describe supply chain management system and experience in parts procurement for ground combat tracked vehicles. The Market Survey closed 12 February 2016 and no responses were received.

9. Interested Sources: This action will be synopsized in FedBizOpps. To date, no other sources have written to express an interest. However, the Government will administer all notices required by FAR 5.201 for this action, as appropriate, and will consider any proposals it receives.

10. Other Facts:

a. Procurement History: There are no prior contracts that exclusively support the procurement of “v3” unique material for the M1A2 SEPv3 program. However, Undefinitized Contract Action (UCA) W56HZV-16-C-0010 was awarded on 11 December 2015 for the procurement of six M1A2 SEPv3 pilot vehicles, the initial SEPv3 Program buy, at a Not-To-Exceed price of $92M. The scheduled definitization date of the UCA was subsequently extended from 16 May 2016 to 24 August 2016.

(1) A list of previous contracts for the M1A2 SEPv2 vehicle configuration are as follows:

Contract W56HZV-14-C-0054/Modification PZ0005 Awarded 17 September 2015

Contract W56HZV-14-C-0054 Awarded on 22 September 2014

Contract W56HZV-12-C-0198 Awarded on 19 April 2012

Contract W56HZV-06-G-0006, Delivery Order 0011 Awarded on 11 January 2008

(2) All previous procurements for Abrams vehicles were awarded on a sole-source basis to GDLS.

(3) All previous procurements cited authority 10 U.S.C. 2304(c)(1) and FAR 6.302-1.

(4) The two previous Justification and Approvals (J&As) to support contract W56HZV-14-C-0054 (separate J&A for the procurement of 12 SEPv2s and one for the procurement of 6 SEPv2s) stated in paragraph 7, that due to low volume and no future requirements, there would be no further action taken to increase competition for the M1A2 SEPv2 configuration. However it did state that the Army is currently modernizing the tank into a new configuration (SEPv3) under a development contract and once this is complete, the Army plans to increase competition of the

SEPv3 configuration hardware. As of today, this development contract W56HZV- 12-C-0322 is still ongoing.

(5) No prior award for the Abrams tank was accomplished by full and open competition.

(6) No unusual patterns have been revealed by a review of the procurement history.

(7) The justification for previous Abrams production buy of 18 M1A2 SEPv2 on contract W56HZV-14-C-0054, was based on only one source pursuant to FAR 6.302-1 and there have been no significant changes to this circumstance.

b. Other Facts: N/A

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.

CONSTANCE M. TUCKER Date: 10 May 2016 Deputy Project Director, Main Battle Tank Systems Signature: //signed//

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.

CONSTANCE M. TUCKER Date: 10 May 2016 Deputy Project Director, Main Battle Tank Systems Signature: //signed//

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. Certified Cost or Pricing Data, which will be subjected to DCAA audit, will be required and will form the basis for negotiating a fair and reasonable price.

JOSEPH A. NEUMANN Date: 02 June 2016 Procuring Contracting Officer Signature: //Signed//

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

JOSEPH A. NEUMANN Date: 02 June 2016 Procuring Contracting Officer Signature: //Signed//

APPROVAL

Based on the foregoing justification, and as Principal Assistant Responsible for Contracting (PARC) pursuant to Army Materiel Command (AMC) Head of the Contracting Activity (HCA) Delegation of Authority (DOA) #15-19, I hereby approve the procurement of up to 45 sets of “v3” unique material in support of the M1A2 SEPv3 Program on an other than full and open competition basis pursuant to the authority of 10 U.S.C 2304(c)(1), as implemented by FAR 6.302-1(a)(2)(ii)(B), “Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.” The approval is subject to the availability of funds, and provided that the services and property herein described have otherwise been authorized for acquisition. The total estimated value for this acquisition is $92.1M.

17 June 2016

DATE: ________________ SIGNATURE: _______________________________

KRISTAN A. MENDOZA

Principal Assistant Responsible for Contracting