Redacted_JA_W56HZV16C0191_CMO_2018-110.pdf

CMO Control Number: 2018-110

FOR OFFICIAL USE ONLY

DEPARTMENT OF THE ARMY

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

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

2. Description of Action: ACC-WRN proposes to modify Contract W56HZV-16- C-0191, a Cost No Fee contract with Honeywell International Incorporated (Honeywell) of Phoenix, AZ. The current contract is for maintenance of Government-owned production equipment and repair of Government Furnished Property located at Anniston Army Depot (ANAD), Anniston, AL., which is a Government Owned and Operated (GOCO) facility. The intent of the proposed modification is to expand the scope of the effort by requiring the contractor to perform the same scope at the contractor-owned Tucson, AZ, plant. The modification will not change the period of performance as the five year contract will continue through 2021. In addition, modifications issued against the contract to fund maintenance and repair efforts will utilize Fiscal Year (FY) 2018-2021 Procurement Appropriations Army (PAA), Army Working Capital Funds (AWCF), and Operation and Maintenance, Army (OMA) funds.

3. Description of Supplies/Services: The services to be acquired from Honeywell support its production of the: a) Abrams Digital Electronic Control Unit (DECU), which is produced at Tucson, AZ, plant, and b) Recuperator Plate Pairs, which are produced at ANAD. The contractor currently performs these services at the ANAD location; however, the proposed modification, if issued, will authorize the contractor to perform the same services at the Tucson location.

To be specific, the services to be performed consist of maintenance and the repair of GFP when the estimated amount to repair is $5,000 or more. The equipment for which these services apply are industrial plant equipment, other plant equipment, special tooling, and special test equipment. Authorization to issue a Company Work Order (CWO) on all repairs at the stated contractual threshold must be given by the Government prior to the start of work. The Government anticipates authorizing multiple CWOs throughout the life of the contract.

The proposed modification will change the estimated value of the contract from $2M to $19.68M based on an Independent Government Cost Estimate (IGCE) prepared by Product Manager Main Battle Tank Systems (PM MBTS) on 18 May 2018. $5.65M of the increase is attributable to the addition of services being performed on the DECU equipment, while $12.03M is attributable to an increase in the amount of maintenance and repair efforts needed to sustain the Recuperator Plate equipment.

4. Authority Cited: The statutory authority permitting this procurement on

FOR OFFICIAL USE ONLY

6. Efforts to Obtain Competition:

a. Effective competition: The Government will not pursue competition for this requirement for the reasons stated in paragraph 5 above.

b. Subcontracting competition: Honeywell is a large business. The current contract includes FAR clauses 52.219-8, Utilization of Small Business Concerns; 52.219-9, Small Business Subcontracting Plan; 52.219-16, Liquidated Damages-Subcontracting Plan; 52.219-28, Post-Award Small Business Program Representation; and DFARS clause 252.219-7003, Small Business Subcontracting Plan (DoD Contracts), to maximize small business opportunities and utilization.

7. Action to Increase Competition: Competing subsequent procurements will be assessed on an individual basis. Market research will be performed and a Sources Sought Notice will be published in order to assess whether or not competition is a viable option.

8. Market Research: A Market Survey to determine if another source could be utilized for the TIGER and DECU Facilities contract was posted to Fed Biz Opps on 19 April 2018 and closed on 04 May 2018. The market survey asked questions in relation to a company’s experience with the production and design of engine controllers and recuperated turbine engines, licensing and access to schematics or engineer drawings, onsite preventative maintenance in accordance with the Original Equipment Manufacturer (OEM), and experience with modifying production or test equipment to produce and test digital electronic control unit assemblies that control recuperated turbine engines in combat engines. No responses were received in response to the market survey.

Additional market research was conducted on 10 July 2018 to determine if another source could be utilized for the TIGER and DECU Facilities contract.

Honeywell was found to be the only company that has the experience to manage the maintenance of all the machines for the programs while also coordinating the complex preventive maintenance and repair schedules to maintain the essential monthly production volumes to support Army readiness, as discussed in Section 5.

9. Interested Sources: To date, no other sources have written to express an interest. The notices required by FAR 5.201 will be published, and any proposals received will be considered.

FOR OFFICIAL USE ONLY

10. Other Facts:

a. Procurement History:

(1) Facility Maintenance (different services than those required for this action) and DECU Production/Repair:

Facility Maintenance:

Contract Award Date Competitive Status W56HZV-16-C-0191 22 Aug 2016 Sole Source W56HZV-08-E-0001 29 Feb 2008 Sole Source

DECU Production/Repair:

Contract Award Date Competitive Status W56HZV-17-D-0084 14 Jul 2017 Sole Source W56HZV-14-C-0054 31 Jan 2014 Sole Source

(2) The Government procured the previous procurements non-competitively from Honeywell.

(3) The previous authority cited for the current contract, W56HZV- 16-C-0191, was FAR 6.302-1(a)(2)(iii)(B), “Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.”

(4) The Government will assess competing subsequent procurements on an individual basis as stated in paragraph 7 of the previous J&A.

(5) All previous procurements were sole source.

(6) Prior to this contract, there was a three year gap without contract coverage.

(7) The previous J&A was prepared to support a $2M contract value. This J&A increases the total value by $17.68M to support the estimated maintenance and repair of equipment supporting both the DECU STE and Recuperator plate facilities.

b. Other Facts: The estimated value of the contract is being increased due to the amplified use of the equipment resulting from production of Abrams tanks increase. PM Abrams production requirements have grown steadily and significantly over the last year.

FOR OFFICIAL USE ONLY

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.”

EDWARD O. LEWIS DATE: 24 Jul 2018 Deputy Project Director, SIGNATURE: //s//EOL Main Battle Tank Systems

KEITH ROSENAU DATE: 19JUL2018

Director, Industrial Base Health Directorate SIGNATURE: ///KWR///

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.”

EDWARD O. LEWIS DATE: 24 Jul 2018 Deputy Project Director, SIGNATURE: //s//EOL Main Battle Tank Systems

KEITH ROSENAU DATE: 19JUL2018

Director, Industrial Base Health Directorate SIGNATURE: ///KWR///

FOR OFFICIAL USE ONLY

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 Government will use economic analysis, cost data (including certified cost and pricing data when applicable), price history, and technical recommendations, to negotiate fair and reasonable contract amounts. The Contracting Officer will request that engineers or personnel familiar with the end item review labor types to ensure what’s proposed is fair and reasonable. Defense Contract Management Agency (DCMA) expertise will be requested for input as needed. The recommendations received from DCMA and/or engineering technical report(s) will be used to develop a recommended negotiating position. Each CWO will be evaluated and negotiated prior to award.

The results of negotiations and the detailed Fair and Reasonable Price Determination from the Contracting Officer will be documented.

ROXANNA M. GENOVA-LASECKI DATE: 19JUL2018

Procuring Contracting Officer SIGNATURE: //s//RMGL

14. Procuring Contracting Officer Certification:

I certify that this justification is accurate and complete to the best of my knowledge and belief.

ROXANNA M. GENOVA-LASECKI DATE: 19JUL2018

Procuring Contracting Officer SIGNATURE: //s//RMGL

APPROVAL