JA-FBO.pdf

DEFENSE LOGISTICS AGENCY

HEADQUARTERS

8725 JOHN J. KINGMAN HIGHWAY

FT. BELVOIR, VIRGINIA 22060-6221

MEMORANDUM FOR RECORD

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

Add – Monochrome Glass (MG) 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 National Stock Number (NSN) 9340016649369 WINDOW, OBSERVATION 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 NSN 9340016649369.

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-MG Page | 2

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 lead time reduction for delivery orders for stock issued under the LTA program. The Government expects similar benefits for NSN 9340016649369 when it is added to the contract. The Government anticipates additional PLT reductions through the Warstopper investment both for NSN 9340016649369 and the NSNs it supports which are listed in Chart 1.

Current Contract Values:

NSN COUNT: 54

ESTIMATED YEARLY VALUE:

ESTIMATED 5 YEAR VALUE (BASE + OPTIONS):

MAXIMUM CONTRACT VALUE:

Estimated Value of NSN 9340016649369 and Warstopper Program Investment:

NSN COUNT: 1

ESTIMATED YEARLY VALUE:

ESTIMATED 3.5 YEAR VALUE (BASE + OPTIONS):

POTENTIAL ADDITION TO THE CONTRACT MAXIMUM VALUE:

WARSTOPPER INVESTMENT:

* - The total estimated potential value for NSN 9340016649369 was based on 3.5 contract years as NSN 9340016649369 is estimated for award in the February 2018 timeframe which would place the NSN on the contract with approximately .5 of contract year 2 remaining and all of contract years 3 through 5.

The potential contract maximum addition for NSN 9340016649369 was based on the following rationale: The estimated 3.5 year value of NSN 9340016649369 was multiplied by 1.5 to cover unexpected spikes in demand.

** - The Warstopper Investment is based on the estimated unit cost . The Warstopper Investment value may change following negotiation with GDLS. Investment value will be finalized prior to its addition to Contract 16D0100.

Final Updated Potential Contract Values Based on the Addition of NSN 9340016649369 and Warstopper Program Investment - ***:

NSN COUNT: 55

ESTIMATED YEARLY VALUE:

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

ESTIMATED 5 YEAR VALUE (BASE + OPTIONS):

POTENTIAL MAXIMUM CONTRACT VALUE:

WARSTOPPER INVESTMENT:

*** - Final updated estimated contract values will be based on the final negotiated pricing with GDLS for NSN 9340016649369; the addition to the contract maximum as a result of this action will not exceed

Additionally, there are 28 NSNs in the Add 1 – Phase 2 population and 6 NSNs in the Add 1 – Phase 3 population that may be added to the contract prior to the addition of NSN 9340016649369; the process to add these projects is underway for these populations which have a combined maximum value of .

Should all of the Add 1 – Phase 2 NSNs, all Add 1 – Phase 3 NSNs, and NSN 9340016649369 be added to the contract, the updated contract maximum could be as much as The Acquisition Plan and J&A for the Add 1 – Phase 2 NSNs were signed by the Head of the Contracting Activity (HCA) on March 1, 2017 and September 5, 2017, respectively. DLA is currently in negotiations with GDLS for the Add 1 – Phase 2 NSNs and expect the addition to be completed in November/December 2017. The Acquisition Plan and J&A for the Add 1 – Phase 3 NSNs are currently under review. The Acquisition Plan must be approved by the HCA and the J&A will require the approval of DLA’s Senior Procurement Executive (SPE). The necessary approvals for the Add 1 – Phase 3 project is anticipated prior to the approvals necessary for this action and the Government believes it is possible for the Add 1 – Phase 3 project to be completed prior to the addition of NSN 9340016649369.

Final Updated Potential Contract Values Based on the Addition of the Add 1 – Phase 2 NSNs, the Add 1 – Phase 3 NSNs, NSN 9340016649369, and Warstopper Program Investment:

NSN COUNT: 89

ESTIMATED YEARLY VALUE:

ESTIMATED 5 YEAR VALUE (BASE + OPTIONS):

POTENTIAL MAXIMUM CONTRACT VALUE:

WARSTOPPER INVESTMENT:

**** - The Add 1 – Phase 3 Project also contains a Warstopper Investment currently estimated at The Warstopper Investment value may change following negotiation with GDLS. Investment value will be finalized prior to its addition to Contract 16D0100.

3. Description of Agency’s Need (10 U.S.C. 2304(f)(3)(A)): The Government intends to add NSN 9340016649369 to Contract 16D0100 by bilateral modification. As part of the modification, the Government intends to add an industrial preparedness investment under the Warstopper Program to provide a key raw material for NSN 9340016649369, Active Matrix Liquid Crystal Displays (AMLCD). This Justification is necessary to support the intended modification because the addition of NSN 9340016649369 and the Warstopper Program investment could potentially increase the contract maximum to and include terms and conditions not within the original scope of competition.

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

NSN 9340016649369 supports the Abrams Main Battle Tank, Stryker and KSA vehicles.

DLA Land and Maritime’s Warstopper investment is estimated to be approximately The total Warstopper Investment value will be based on the negotiated supply conditions.

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.

Competition is restricted to a single source GDLS (CAGE 7W356) for the following two reasons:

(A) NSN 9340016649369 is restricted to two approved sources: GDLS and American Panel.

(B) The Government intends to negotiate with only the awardee of Contract 16D0100, GDLS (CAGE 7W356) for this action. The Government’s determination to negotiate with only GDLS for the award of NSN 9340016649369 is based on:

(1) The Government’s market research establishes GDLS is the only source interested in supplying NSN 9340016649369.

(2) GDLS is the only source that can use the Government’s Warstopper Investment as needed by the Government.

GDLS and American Panel are the only approved sources of supply for NSN 9340016649369.

GDLS and American Panel are the only known sources that have the data, data rights, and manufacturing knowledge necessary to manufacture the items to meet the needs of the military.

Technical reviews conducted by the appropriate Product Specialists have certified the technical information relied upon in this document as complete and accurate as of the time of the reviews in October 2017. NSN 9340016649369 is managed by the Tank-automotive and Armaments Command (TACOM). The Contracting Office relied upon the TACOM Product Specialist technical review and certification to conclude that GDLS and American Panel are the only approved sources of supply for NSN 9340016649369 and neither the Government nor any other

Justification and Approval SPE7MX-16-D-0100 – Add-MG Page | 5 known entity possesses the technical data necessary to facilitate a solicitation under full and open competitive procedures, as described below.

NSN 9340016649369 - WINDOW, OBSERVATION:

AMSC Code: B:

This part must be acquired from a manufacturing source(s) specified on a source control or selected item drawing as defined by the current version of DoD-STD-

100. Suitable technical data, Government data rights, or manufacturing knowledge are not available to permit acquisition from other sources, nor qualification testing of another part, nor use of a second source part in the intended application. Although, by DoD-STD-100 definition, altered and selected items shall have an adequate technical data package, data review discloses that required data or data rights are not in Government possession and cannot be economically obtained.

The unique military grade WINDOW, OBSERVATION is a vital part of the several DLR items used in the M1A2 Abrams Tank.

The Government has limited data rights for this item and the Technical Data Package (TDP) acquisition production specification data is not fully defined and not suitable for full and open competition.

Thus, the Government does not own a competitive TDP for this item, and contractors other than GDLS and American Panel cannot viably provide this item to be used on the M1A2 Abrams Tank.

As described below, the Government’s market research has established GDLS is the only source willing to contract with the Government to supply this NSN. Although American Panel is a known source for this NSN, it will not negotiate and contract with the Government.

The Government will also add a Warstopper Program investment as part of this modification. As stated above, the investment is estimated to be $10 million. The AMLCD is a critical subcomponent of NSN 9340016649369. As such, GDLS is the only source able to use the Warstopper program investment as required by the military to supply the NSN 9340016649369.

5. Price/Cost Considerations (10 U.S.C. 2304(f)(3)(C)): The anticipated cost to the Government will be fair and reasonable. The Government anticipates the receipt of certified cost or pricing data from GDLS for NSN 9340016649369. The Defense Contract Audit Agency (DCAA) and the DLA Land and Maritime Pricing Office may be involved in the review of GDLS’s cost data as determined necessary by the Contracting Officer. Pricing targets will be based on the Government’s analysis of GDLS’s cost or pricing data. If fair and reasonable pricing cannot be negotiated, NSN 9340016649369 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)): A synopsis of the Government’s intent to add NSN 9340016649369 to

Justification and Approval SPE7MX-16-D-0100 – Add-MG Page | 6 contract 16D0100 was posted September 13, 2017. There were no responses received from potential sources other than GDLS indicating interest in supplying an offer for NSN 9340016649369.

The buyer contacted GDLS in October 2017 to determine its interest in adding NSN 9340016649369 to Contract 16D0100. GDLS expressed interest in supplying NSN 9340016649369. GDLS agreed with the Government’s finding that NSN 9340016649369 is an appropriate candidate for Contract 16D0100.

The Government issued a Sources Sought Notice on August 31, 2017. 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. No responses were received to this notice.

American Panel has been contacted regarding its interest in participating in this procurement.

American Panel has indicated it would not act as a prime contractor for this action without GDLS’s explicit approval due to the considerable investments made by GDLS into the NSN 9340-01-664-9369 product/program over many years.

GDLS was contacted about approving American Panel to act as the prime contractor for this action and was unwilling to provide such approval. As a result, GDLS is the sole source of supply for this item to the Government.

As shown in Attachment 3, there are no known previous procurements of NSN 9340016649369 as an individual item. In the past, NSN 9340016649369 has been procured as a component of several Depot Level Repairable (DLR) items. This item has only recently been assigned an NSN as the Government seeks to solve the above described issues with AMLCD production by purchasing this item independently.

The AMLCD was purchased from GDLS in 2007.

7. Action Being Taken to Overcome Barriers to Competition (10 U.S.C. 2304(f)(3)(F)): A Sources Sought Notice was posted in August 31, 2017 through September 8, 2017. The proposed contract action was synopsized indicating the Government’s intent to add NSN 9340016649369 to Contract 16D0100 in September 2017.

The J&A for NSN 9340016649369’s previous purchase was not available as this will be the first time this item is purchased individually.

The previous J&A for Contract 16D0100 is found in Attachment 4.

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

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

APPROVAL

CONTRACTING OFFICER CERTIFICATION

Based on the foregoing justification, I hereby approve the addition of the NSN 9340016649369 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 U.S.C.

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.LO

RI.A.1230193190

Digitally signed by

ARCHIBALD.LORI.A.1230193190

Date: 2017.12.04 09:58:18 -05'00'

HOPSON.LILLI.

A.1230127324

Digitally signed by

HOPSON.LILLI.A.1230127324

Date: 2017.12.08 11:12:51 -05'00'

Date: 2017.12.12 14:55:17 -05'00'

BANKS.ROXANNE.JA

RAMILLO.1156004908

Digitally signed by

BANKS.ROXANNE.JARAMILLO.1

156004908 Date: 2017.12.22 11:01:02 -05'00'

MCKEE.JUANIT

A.A.1231119104

Digitally signed by

MCKEE.JUANITA.A.1231119104

Date: 2018.01.23 10:36:26 -05'00'

Date: 2018.01.08 12:12:15 -05'00'

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

I hereby approve this Justification and Approval document.

MATTHEW R. BEEBE Date Senior Procurement Executive

Attachments:

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

BEEBE.MATTHEW.

RICHARD.10127254

Digitally signed by

BEEBE.MATTHEW.RICHARD.101

2725473 Date: 2018.01.25 16:30:19 -05'00'

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