JA_SPRDL1-17-R-0260_Redacted.pdf

Solicitation No. SPRDL1-17-R-0260

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

SOLICITATION NO. SPRDL1-17-R-0260

1. Contracting Agency: Defense Logistics Agency-Warren (DLA) Land Warren.

2. Description of Action: Procurement of automotive axle assemblies on a restricted basis from Meritor Heavy Vehicle Systems, LLC (CAGE: 78500) as the only responsible source for this assembly, and no other supplies will satisfy agency requirements.

3. Description of Supplies/Services: The proposed contract action would result in a potential 3-year long term contract for axle assemblies for the 5-Ton Family of Medium Tactical Vehicles (FMTV). The estimated unit price for these axle assemblies is each, with a minimum purchase quantity under the proposed contract of six units (or ), and a maximum purchase quantity of 71 units (or ). Army Working Capital Funds (AWCF) will be utilized for this procurement. Additional pertinent details regarding the axle assemblies are listed below:

NSN NOMENCLATURE Manufacturer P/N Acquisition Method Code

2520-01-573-2772 Axle Assembly, Automotive Driving

Meritor Heavy Vehicle Systems, LLC, P/N

RF19611NFEF10780

3B

Acquisition Method Code (AMC): 3 – Acquire, for the second or subsequent time, directly from the actual manufacturer.

Acquisition Method Suffix Code: (AMSC): 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. If one source is available, AMCs 3, 4, or 5 are valid. If at least two sources exist, AMCs 1 or 2 are valid.

4. Authority Cited: The statutory authority permitting other than full and open competition is 10 USC 2304(c) (1), as implemented by FAR 6.302-1, “Only one responsible source and no other supplies or services will satisfy agency requirements.”

5. Rationale for Authority Cited: The U.S. Government does not own or have rights to the technical data for the automotive axle assemblies; Meritor Heavy Vehicle Systems, LLC, owns the intellectual property and retains full-rights-in-data for its technical data. All qualification testing on the component was done by Meritor Heavy Vehicle Systems, LLC, at private expense.

Based on experience on similar projects, the estimated time and cost necessary to develop a competitive data package through two different approaches would be as follows:

Via Research and Development (R&D) – Such effort would involve a ‘ground-up’ design of an axle – one that does not infringe on any existing patents – that would necessitate research, generating requirements, and any associated technical drawings. This would be followed by testing, validation, and finally qualifying additional sources for the Government axle program. This action would entail a significant amount of time, facility resources, man-hours, and funding to provide a solution that is identical to what is already available through Meritor Heavy Vehicle Systems, LLC.

The estimated cost to research and develop a compatible product and qualify additional sources exceeds $6.0M, and would require at least thirty-six (36) months to complete. Required funding would include $2.5M for personnel to support research and redevelopment of an item that would perform the same task as this NSN, as well as staff to develop the CAD models and drawings that would be required for any potential vendor to utilize for manufacturing purposes.

Another $2M would be required for developmental testing and validation of the design, and the remaining $1.5M would be used for prototype tooling.

If funding for a new start research and development effort did become available, the thirty-six (36) month timeline would consist of the following: 9 months to develop and refine the requirements, 6 to 12 months in design and prototyping, 12 months to test compatibility and function, and an additional 9 months to capture changes from testing, write the technical data package, and provision the parts. The timeline below summarizes the R&D process for clarity purposes:

Requirements development 9 Months Design and prototype development 6 Months Component, safety and system level testing 12 Months Write TDP, technical bulletins and provision parts 9 Months TOTAL TIME for R&D 36 Months

Via Reverse Engineering (RE) – To reverse engineer, validate the design, procure prototypes for testing, and release a competitive data package, a significant amount of time, facility resources, man-hours, and funding would be required. Based on past development experience, the estimated cost to develop a reverse engineered competitive product is a minimum of $6.0M, with an estimated delay of no less than thirty-six (36) months. Required funding would include $0.1M to purchase 10 samples of the axle for detailed study, tear down, and part measurement. An additional $3.0M for personnel to support the reverse engineering and validation effort as well as fund staff to develop the CAD models, drawings and necessary documentation to enable fully competitive procurement of the axle would be required, as well as another $2.9M to purchase prototypes, execute testing and finalize the product to verify that the newly created item provides equivalent performance when compared against the original.

If funding for reverse engineering became available, the thirty-six (36) month process would be comprised of the following: 5 months to obtain existing parts, 5 months to tear down and understand the design, 5 months to iteratively develop drawings, prototypes and bench test, 12 months to perform system and vehicle level testing, and 9 months to write the technical data package and provision the parts. To complete the reverse engineering process successfully, the Government would have to obtain a sufficient sample size of existing parts to provide a 95% probability and 90% confidence level in the actual size of the existing item to be studied. Once a large enough sample has been collected, the Government would then tear down and understand the design, conduct prototype development and produce the final technical data package (TDP) and associated provisioning documents at a cost of $6.0M minimum. The timeline below summarizes the RE process for clarity purposes:

Obtain existing parts 5 Months Tear down and understand the design 5 Months Prototype development 5 Months Component, safety and system level testing 12 Months Write TDP, technical bulletins and provision parts 9 Months TOTAL TIME for RE 36 months

In addition to the costs/delays for either an R&D action or RE effort, Engineering estimates that it would take approximately one additional year to establish another source and procure this item on a competitive basis due to First Article Testing and on-vehicle verification. Additional market research, solicitation, evaluation and award of a contract would be estimated to take 6 months to complete; furthermore, any new source of supply would require component, safety and system level testing that is estimated to take another 6 months.

Combined, these events are estimated to take an additional 12 months after development of the item, for a total delay of at least 48 months.

To neglect qualification testing would be a high risk as premature failures of this item in the field could result in extensive loss of equipment and jeopardize safety.

The delay associated with these efforts is unacceptable in fulfilling TACOM requirements and would have a significant detrimental impact on TACOM’s ability to support the soldier in the field.

An R&D or RE effort would also require requalification of the FMTV trucks. The FMTV requalification would also be dependent on the availability of the test tracks, test personnel, and test launchers in order to conduct and support the testing.

In the end, the expenses associated with either R&D or RE could not be recouped through subsequent competitive procurement and the delay associated with these efforts is unacceptable to meet TACOM requirements and would have a significant detrimental impact on TACOM’s ability to support the soldier in the field.

Meritor Heavy Vehicle Systems, LLC, designs and manufactures this component and has passed all of the requirements of the government qualification testing.

Meritor Heavy Vehicle Systems, LLC, is the sole owner of the TDP for the axle assemblies and has the unique and proven qualities and capabilities – facilities, resources, and manufacturing and development experience – to produce and procure the item identified. The government did not buy the proprietary rights to produce a competitive TDP. No vendors other Meritor Heavy Vehicle Systems, LLC, can meet the required performance standards, and the firm has demonstrated the unique and proven manufacturing capabilities to establish and maintain the processing control required to repetitively produce this item.

6. Efforts to Obtain Competition: Interested contractors can seek qualification through the Source Approval Program with the Competition Management Office (CMO). To date, there has not been any expressed interest by any other known vendors to become qualified to produce this item.

7. Actions to Increase Competition: There are no known funding efforts in progress at this time to acquire the commercially controlled data needed to make this automotive axle assembly competitive. The Government could not recover the costs expended to make this item competitive, and the delays associated with doing so are unacceptable to meet Government requirements.

8. Market Research: The Project Engineer began by reviewing the results of in-house market research, previously conducted on similar or identical requirements. It was determined that no commercial or non-developmental items are available to meet the Government’s needs for this axle assembly.

Additionally, the Project Engineer conducted a thorough search of available on-line sources, including FedBizOpps.gov and the TACOM LCMC Competition Advocate’s CASL and APPL, etc. There were no additional sources that exist to

Approval Authority for Acquisitions Equal to or Greater Than $700,000

APPROVAL OF JUSTIFICATION

FOR OTHER THAN FULL AND OPEN COMPETITION

Based on the foregoing Justification, I hereby approve the procurement of the following:

a. Noun: Axle Assembly, Automotive Driving

b. NSN: 2520-01-573-2772

c. Maximum Quantity: 71

d. Estimated Value:

This action will be awarded under other than full and open competition pursuant to the authority of 10 USC 2304(c)(1) and subject to the availability of funds. This approval is subject to the proviso that the property herein described has otherwise been authorized for acquisition.

Name:

Title:

Signature:

Date: 12 May 2017