JA-Add_3-All-FBO.pdf

Bret Griffin, ZCA February 28, 2019

DEFENSE LOGISTICS AGENCY

DLA LAND and MARITIME

POST OFFICE BOX 3990

COLUMBUS, OH 43218–3990

In addition to those NSNs specified in the Section B spreadsheet, the scope of this acquisition is for supplies and logistical support for NSNs that support the following General Dynamics Land Systems (GDLS) vehicles 1) Abrams Main Battle Tank, 2) Stryker Family of Vehicles, 3) Light Armored Vehicle Family of Vehicles,

4) Cougar, 5) Buffalo, and 6) RG-31, where GDLS is a source of supply. NSNs within the scope may be added to the contract at a later date in accordance with DLAD clause 52.216-9006, "Addition/Deletion of Items", at the discretion of the Government.

LAND AND MARITIME

P.O. BOX 3990

COLUMBUS, OHIO 43218-3990

Bret Griffin, ZCA April 11, 2018

DLA LAND and MARITIME

POST OFFICE BOX 3990

COLUMBUS, OH 43218–3990

HEADQUARTERS

8725 JOHN J. KINGMAN HIGHWAY

FT. BELVOIR, VIRGINIA 22060-6221

SOURCE SELECTION INFORMATION – SEE FAR 2.101 AND 3.104

FOR OFFICIAL USE ONLY

MEMORANDUM FOR RECORD

SUBJECT: Justification and Approval for Other than Full and Open Competition;

Add 3 to Contract SPE7MX-16-D-0100

Solicitation SPE7MX-14-R-0106

1. Contracting Agency – Defense Logistics Agency DLA Land and Maritime 3990 E. Broad St Columbus, OH 43218-3990

2. Summary/Introduction (10 U.S.C. 2304(c)(1)): The Government intends to add 16 National Stock Number (NSN) items, hereinafter referred to as the Add 3 NSNs, to Contract SPE7MX-16-D-0100 (16D0100) by bilateral modification. As part of the modification, the Government intends to add an industrial preparedness investment under the Warstopper Program to ensure successful production of the Add 3 NSNs.

Contract 16D0100 was originally awarded by DLA Land and Maritime to General Dynamics Land Systems (GDLS) on 12 August 2016 for five years, with a three-year base period and two, one-year option periods. The contract is a multiyear arrangement designed to sustain and improve readiness for the six vehicular platforms produced by GDLS: 1) Abrams Main Battle Tank; 2) Stryker Family of Vehicles; 3) Light Armored Vehicle Family of Vehicles; 4) Cougar; 5) Buffalo; and 6) RG-31. The contract also provides for improved Obsolescence and Configuration Change Management and improves DLA’s visibility of the supply chain through enhanced communication with GDLS for items the Government has identified as critical parts. This element of the program is supported through a Supply Chain Risk Assessment report (SCRA).

The SCRA is not separately priced and will be presented by GDLS in three formats.

Additionally, there will be a biannual meeting between the Government and GDLS to review the status of resolution activities, answer questions arising from the SCRA submitted since the last meeting, secure feedback on recommended courses of action and discuss any issues or concerns highlighted in the biannual report.

The contract supports production lead time (PLT) reductions through three “Inventory Programs” that provide the Government the opportunity to reduce inventories while responding to customer demands in a timely manner. Contract 16D0100 supports standard stock deliveries through delivery orders issued with the “Lead Time Away” (LTA) Inventory Program. The contract contains two additional, innovative Inventory Programs designed to support the program goals of PLT reduction and obsolescence management. The additional Inventory Programs are the Planned Production Program (PPP) and the Prepositioning Program (PRE). Under the PPP, the Government receives monthly deliveries of a set number of each NSN in the program over the course of each contract year. Under the PRE, the

Justification and Approval SPE7MX-16-D-0100 – Add 3 Page | 2

SOURCE SELECTION INFORMATION – SEE FAR 2.101 AND 3.104

FOR OFFICIAL USE ONLY

Government receives 30-day delivery for NSNs in the program. The 30-day delivery is accomplished by GDLS prepositioning completed end-items or long lead-time sub-components. While all contract NSNs are not in the PPP and PRE, all are eligible for the PPP and PRE programs. Contract NSNs may enter or exit the PPP and PRE by mutual agreement of the Government and GDLS through the yearly NSN inventory program assessment process.

During the first year of performance of Contract 16D0100, PLT was significantly reduced.

The Government received 30-day delivery for items that historically had PLTs ranging from 167 to 244 days. Under the PPP, the Government was able to receive monthly deliveries of high demand items reducing lead times to between 23 and 79 days. GDLS has also averaged a 22% lead time reduction for delivery orders for stock issued under the LTA program. The Government expects similar benefits for the 16 NSNs to be added to the contract through this action. The Government also anticipates PLT reductions through the potential Warstopper investment both for the Add 3 NSNs.

Current Contract Values:

NSN COUNT: 72

ESTIMATED YEARLY VALUE:

ESTIMATED 5 YEAR VALUE (BASE + OPTIONS): $

MAXIMUM CONTRACT VALUE: $

Estimated Value of the Add 3 NSNs and Warstopper Program Investment:

NSN COUNT: 16

ESTIMATED YEARLY VALUE:

ESTIMATED 3 YEAR VALUE (BASE + OPTIONS):

POTENTIAL ADDITION TO THE CONTRACT MAXIMUM VALUE:

WARSTOPPER INVESTMENT:

* - The total estimated potential value for the Add 3 project was based on 3 contract years as the Add 3 NSNs are estimated for award in the September 2018 timeframe which would place the NSNs on the contract with approximately all of contract years 3 through 5 remaining.

The potential contract maximum addition for the Add 3 NSNs was based on the following rationale: The estimated 3 year value of the Add 3 NSNs was multiplied by

1.5 to cover unexpected spikes in demand.

** - The Warstopper Program investment estimate was based on the Add 1 – Phase 3 project. Add 1 – Phase 3 is currently in the negotiation stage, its estimated yearly value is and its Warstopper Program investment is , which is of the estimated yearly value. The Contracting Officer used this ratio to estimate the potential Warstopper Program investment for the Add 3 Project. The estimated yearly value of the Add 3 project is multiplied by

The actual Warstopper Program investment will be based on negotiation with GDLS and subsequent approval of the Warstopper Program investment by DLA’s Industrial Support Office. Please note, it is anticipated that the

Justification and Approval SPE7MX-16-D-0100 – Add 3 Page | 3

FOR OFFICIAL USE ONLY

Add 3 NSNs will be added in phases and the Warstopper Program investments may be approved in phases as NSNs from the Add 3 population are added to the contract.

The final addition to the contract maximum will be based on the number of Add 3 NSNs added to the contract.

Additionally, there are several additional add projects underway that could increase the contract maximum to as much as . All current add projects and their current project status are listed below. The approval of this J&A will authorize the contract maximum of contract 16D0100 to be increased to should all of the add projects listed below be awarded in their entirety.

PROJECT # OF

NSNs

ESTIMATED

YEARLY

VALUE

TOTAL

ESTIMATED

PROJECT

VALUE

POTENTIAL

MAXIMUM

CONTRACT

VALUE

WARSTOPPER

INVESTMENT -

CURRENT STATUS

Add 3 16 Solicitation Documents Under Review

Additional Add Projects Currently Underway

Add 1 - Phase 3 6 Negotiations Opened

January 2018

Add 1 - Phase 4 0 NSNs Moved To Add 2

Add 1 - Phase 5 22 Awaiting Pricing From

GDLS

Add - NSN 9340016649369 1 Pricing Under DCAA

Review

Add 2 260 Solicitation Documents Under Review

Current Contract Values

SPE7MX16D0100 72

Potential Contract Maximum

Totals 377

* - The Add 1 – Phase 3 Project contains a Warstopper investment currently estimated at Additionally, the NSN 9340016649369 Project contains a Warstopper investment currently estimated at and the Add 3 Project contains a Warstopper investment currently estimated at The Warstopper Investment for these projects

Justification and Approval SPE7MX-16-D-0100 – Add 3 Page | 4

FOR OFFICIAL USE ONLY

are subject to change following negotiation with GDLS. Investment values will be finalized prior to addition to Contract 16D0100.

3. Description of Agency’s Need (10 U.S.C. 2304(f)(3)(A)): The Government intends to add the Add 3 NSNs to Contract 16D0100 by bilateral modification. The Contracting Officer determined this an Unrestricted action. A DD2579 was coordinated with the DLA Land and Maritime Small Business Office and the Small Business Administration, and their signatures indicated concurrence with the Contracting Officer’s determination. As part of the modification, the Government intends to add an industrial preparedness investment under the Warstopper Program. This Justification is necessary to support the intended modification because the addition of the Add 3 NSNs and the Warstopper Program investment could potentially increase the contract maximum to .

The Add 3 NSNs include various spare parts in support of the Abrams Main Battle Tank.

GDLS is the sole source of supply for all of the Add 3 NSNs proposed for addition.

4. Authority for Other than Full and Open Competition (10 U.S.C. 2304(c)(1)): The modification to Contract 16D0100 described in this document will be conducted via Other than Full and Open Competition authority for supplies or services available from only one source (GDLS), 10 U.S.C. 2304(c)(1), as implemented by FAR 6.302-1.

GDLS is the sole approved source for all 16 NSNs because it is the only known source that has adequate and sufficient data, data rights, and manufacturing knowledge necessary to manufacture the items to meet the needs of the military. Technical reviews conducted by the Tank-automotive and Armaments Command (TACOM) Product Specialists for the Add 3 NSNs have certified the technical information relied upon in this document as complete and accurate as of the time of the reviews in January 2018 (Attachment 1).1 All Add 3 NSNs are managed by TACOM. The Contracting Office relied upon the TACOM Product Specialist technical review and certification rather than Acquisition Methods Codes (AMC) / Acquisition Method Suffix Codes (AMSC) to conclude that GDLS is the sole source of supply for these items and the Government does not possess the technical data necessary to facilitate a solicitation under full and open competitive procedures. The level of data the Government possesses is listed in Attachment 1. TACOM has certified that GDLS is the sole source of supply for these items.

Please note, NSNs 5895015236218 and 1290016004747 are coded with AMSC H. Per DFARS 217.7506, NSNs 5895015236218 and 1290016004747 are subject to annual screening and will be removed from this contract if the annual screening and review does not result in assignment of a permanent AMSC code within one year of the date the J&A is approved.

The Government will also add a Warstopper Program investment. The Warstopper Program investment may be for as much will consist of sub-components of Add 3 project NSNs listed in Attachment 1. GDLS is the only source able to use the

1 Please note the attached Technical Information and Certification discusses 21 NSNs; however, the Contracting Officer determined not to include 5 of those NSNs as part of the Add 3 population.

Justification and Approval SPE7MX-16-D-0100 – Add 3 Page | 5

FOR OFFICIAL USE ONLY

Warstopper Program investment as required by the military to reduce PLT and ensure continued availability of these NSNs for the support of the Abrams Main Battle Tank.

5. Price/Cost Considerations (10 U.S.C. 2304(f)(3)(C)): The anticipated cost to the Government will be fair and reasonable. The basis for the Government’s fair and reasonable price determination will be the analysis of certified cost or pricing data. In addition, price analysis will be conducted to ensure the awarded pricing is in line with previous procurements.

The Government anticipates the receipt of certified cost and pricing data from GDLS for all Add 3 NSNs. The Government anticipates the Defense Contract Audit Agency (DCAA) conducting an audit of GDLS’s cost and pricing data, and the DLA Land and Maritime Pricing Office will review the DCAA’s findings and provide recommendations to the Contracting Officer regarding appropriate target pricing. If fair and reasonable pricing cannot be negotiated, the NSN or NSNs will not be awarded.

6. Market Research/Efforts to Obtain Competition (10 U.S.C. 2304(f)(3)(D) and 10 U.S.C.

2304(f)(3)(E)): The Government’s market research efforts for this action have consisted of Government review of the NSNs to ensure they meet the criteria of “Readiness Drivers” that significantly affect vehicle readiness, contacting GDLS to ensure GDLS agrees with the addition of these NSNs to the contract, synopsizing the Government’s intent to add these items to the contract, and posting a sources sought notice.

Significant review of the NSNs proposed for addition has been conducted by Government personnel including TACOM, DLA Warren, the Program Manager, SAPD analysts, and Weapons System Support Managers to ensure they are appropriate for Contract 16D0100.

GDLS has agreed that these NSNs are appropriate for addition to this action and indicated interest in this project.

The Government synopsized its intent to add the Add 3 NSNs to Contract 16D0100 to FedBizOpps (FBO) on January 12, 2018. No response has been received as of this date.

A Sources Sought Notice was posted to FBO on January 12, 2018. The notice did not make mention of contract 16D0100 and simply requested sources interested in participating in a program designed to sustain/improve readiness for the contract’s covered vehicles. Mentions of contract 16D0100 were removed from the notice so that potentially interested parties would not be discouraged from expressing interest due to the belief the Government’s intention to add these NSNs to contract 16D0100 is predetermined. Two responses were received to the Sources Sought Notice from Parts Life, Inc. (Parts Life) and Hitek Inc (Hitek).

Parts Life requested technical data for the Add 3 NSNs. As there is no technical data available for these NSNs, the Government notified Parts Life the Government does not possess the technical data for the Add 3 NSNs. Upon this notification, Parts Life expressed no further interest in this project. Hiteck stated it would like to be part of the program and also requested technical data for the Add 3 NSNs. Hiteck was notified that technical data for

Justification and Approval SPE7MX-16-D-0100 – Add 3 Page | 6

FOR OFFICIAL USE ONLY

the Add 3 NSNs was not available. In addition, the Government requested additional data from Hiteck regarding its ability to perform the obsolescence management portion of the program. Following notification that the technical data for the Add 3 NSNs was not available, Hiteck expressed no further interest in the project and did not provide the requested obsolescence management capability information. Additionally, Hiteck stated the following regarding its interest in supplying an unsolicited proposal to upgrade the Starter/Generator system of the Abrams tank. Hiteck stated the following: “Of far greater interest to us is the fact that the Abrams Tank is powered by a gas turbine engine fitted with a 400AMP Starter/Generator powered by a bank of batteries during Start. We offer a proprietary system that will result in much faster, cooler starts which translates to reduced mission response times and reduced maintenance costs. We hope that you pass this info on to the right people.” As Hiteck’s interest is for the replacement/redesign of an Abrams system and not a specific part covered by the Add 3 project, Hiteck’s request to provide an unsolicited proposal was forwarded to the TACOM Competition Advocate for appropriate action. Hiteck was provided the TACOM Competition Advocate’s contact information and directed to contact the TACOM Competition Advocate regarding the status of its unsolicited proposal inquiry.

Additionally, the previous contract history was reviewed by the Contracting Officer. The previous contract history (Attachment 4) reveals awards to companies other than GDLS for supply only contracts. However as noted in this document, this procurement is for more than just stock support and the Government’s market research establishes that GDLS is the only source interested in or capable of supplying this action’s items under the IPS program.

7. Action Being Taken to Overcome Barriers to Competition (10 U.S.C. 2304(f)(3)(F)): A Sources Sought Notice was posted from January 12, 2018 through January 22, 2018 for the Add 3 NSNs. The proposed contract action was synopsized in January 2018 indicating the Government’s intent to add the Add 3 NSNs to Contract 16D0100.

All NSNs other than those listed below did not require J&As as part of prior acquisitions as the previous purchases of these items were under the Simplified Acquisition Threshold.

The previous J&As are found in Attachment 5.

Past contract history is found in Attachment 4.

Justification and Approval SPE7MX-16-D-0100 – Add 3 Page | 7

FOR OFFICIAL USE ONLY

NSN CONTRACT NUMBER J&A Status 6110014512013 SPRDL116C0038 See Attachment 5 5998014657017 W52H0907G0001 J&A Unavailable 6110015651117 SPRDL116C0273 See Attachment 5 5998015840897 SPRDL116C0179 See Attachment 5 5895015236218 SPRDL116C0294 See Attachment 5 5895016271740 SPRDL116C0197 See Attachment 5 1220016479395 SPRDL117C0144 See Attachment 5 6120015355573 SPRDL114C0046 See Attachment 5 7025016199491 SPRDL116C0308 See Attachment 5 1290016004747 SPRDL115C0008 See Attachment 5 7025014830251 DAAE2002G0009 J&A Unavailable 1290015775948 SPRDL117C0075 See Attachment 5

The J&As noted as unavailable in the above chart were in conjunction with contracts that were not issued by DLA Land and Maritime. For that reason, attempts to locate the J&As were unsuccessful.

8. A List of Sources that expressed, in writing, an interest in the acquisition: GDLS, Hiteck, and Parts Life.

Justification and Approval SPE7MX-16-D-0100 – Add 3 Page | 8

FOR OFFICIAL USE ONLY

APPROVAL

CONTRACTING OFFICER CERTIFICATION

Based on the foregoing justification, I hereby approve the addition of the NSNs listed in Attachment 2 and an industrial preparedness investment through the Warstopper Program to Contract 16D0100 on an other than full and open competition basis pursuant to the authority of 10 USC 2304(c)(1) at FAR 6.302-1, only one or a limited number of sources. I hereby certify that the information contained in this justification is accurate and complete to the best of my knowledge and belief.

Date Lori A. Archibald, Contracting Officer

For requirements with a value greater than $93,000,000, this justification has been reviewed and recommended for approval by:

DLA Counsel- Land and Maritime Date

DLA L&M Competition Advocate Date

Head of the Contracting Activity (HCA) Date

COORDINATION:

DLA Competition Advocate Date

DLA Office of General Counsel Date

ARCHIBALD.LORI.A.1

230193190

Digitally signed by

ARCHIBALD.LORI.A.1230193190

Date: 2018.04.25 12:13:59 -04'00'

Date: 2018.04.27 15:39:42 -04'00'

COUTURE.MARY.

E.1230253613

Digitally signed by

COUTURE.MARY.E.1230253613

Date: 2018.05.01 13:46:54 -04'00'

BROWN.MARK.AL

BERT.1041175032

Digitally signed by

BROWN.MARK.ALBERT.1041175032

Date: 2018.05.03 12:08:12 -04'00'

Date: 2018.05.07 08:59:25 -04'00'

BANKS.ROXANNE.JA

RAMILLO.1156004908

Digitally signed by

BANKS.ROXANNE.JARAMILLO.1

156004908 Date: 2018.05.16 13:16:17 -04'00'

Justification and Approval SPE7MX-16-D-0100 – Add 3 Page | 9

FOR OFFICIAL USE ONLY

I hereby approve this Justification and Approval document.

MATTHEW R. BEEBE Date Senior Procurement Executive

Attachments:

1 – Technical Certification 2 – NSN Listing 3 – Approved Source Listing 4 – Acquisition History 5 – Previous J&As

BEEBE.MATTHEW.R

ICHARD.1012725473

Digitally signed by

BEEBE.MATTHEW.RICHARD.10

12725473 Date: 2018.05.17 17:46:01 -04'00'

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NSN NIIN Sourcing Add Project Number Vehicle CAGE PRT NUM COMPANY NAME

6110014512013 014512013 SOLE SOURCE Add 3 Abrams 0HGX3 12388870 GENERAL DYNAMICS LAND SYSTEMS INC.

5998014637161 014637161 SOLE SOURCE Add 3 Abrams 0HGX3 12388844-2 GENERAL DYNAMICS LAND SYSTEMS INC.

5998014657017 014657017 SOLE SOURCE Add 3 Abrams 0HGX3 12388840-3 GENERAL DYNAMICS LAND SYSTEMS INC.

6110015651117 015651117 SOLE SOURCE Add 3 Abrams 0HGX3 1238880-5 GENERAL DYNAMICS LAND SYSTEMS INC.

5998015840897 015840897 SOLE SOURCE Add 3 Abrams 0HGX3 12388841-3 GENERAL DYNAMICS LAND SYSTEMS INC.

5895015236218 015236218 SOLE SOURCE Add 3 Abrams 0HGX3 12467495 GENERAL DYNAMICS LAND SYSTEMS INC.

5895016271740 016271740 SOLE SOURCE Add 3 Abrams 0HGX3 12546088 GENERAL DYNAMICS LAND SYSTEMS INC.

1220016479395 016479395 SOLE SOURCE Add 3 Abrams 0HGX3 57K7282 GENERAL DYNAMICS LAND SYSTEMS INC.

5980016207296 016207296 SOLE SOURCE Add 3 Abrams 0HGX3 12467479 GENERAL DYNAMICS LAND SYSTEMS INC.

6120015355573 015355573 SOLE SOURCE Add 3 Abrams 0HGX3 12467385-2 GENERAL DYNAMICS LAND SYSTEMS INC.

7025016199491 016199491 SOLE SOURCE Add 3 Abrams 0HGX3 12473058-4 GENERAL DYNAMICS LAND SYSTEMS INC.

1290016004747 016004747 SOLE SOURCE Add 3 Abrams 7W356 12473978-2 GENERAL DYNAMICS LAND SYSTEMS INC.

1290015775948 015775948 SOLE SOURCE Add 3 Abrams 0HGX3 12467508 GENERAL DYNAMICS LAND SYSTEMS INC.

7025014830251 014830251 SOLE SOURCE Add 3 Abrams 0HGX3 12388639 GENERAL DYNAMICS LAND SYSTEMS INC.

5998014654319 014654319 SOLE SOURCE Add 3 Abrams 0HGX3 12388907 GENERAL DYNAMICS LAND SYSTEMS INC.

1220016582650 016582650 SOLE SOURCE Add 3 Abrams 0HGX3 12388558 GENERAL DYNAMICS LAND SYSTEMS INC.

Page 1 of 1 SPE7MX14R0106 / SPE7MX16D0100 – Add 3 Attachment 3