J&A_SPRDL1-18-R-0160.pdf

DEFENSE LOGISTICS AGENCY J&A: SPRDL1-18-R-0160

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 this action is 10 U.S.C.

2304(c)(1) as implemented by Federal Acquisition Regulation (FAR) 6.302-1 , “Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.”

5. Reason for Authority Cited:

a. Background:

As stated in paragraph 3, the Government will purchase this Axle Assembly from Cadillac Gage Textron Inc. for use on the M1117 ASV. Cadillac Gage Textron Inc. is the only manufacturer of this item. This axle design was designed and developed by Cadillac Gage Textron Inc. for use in the ASV application. The Government does not own a Technical Data Package (TDP) or any data rights for this item because it is property of the manufacturer. The manufacturer developed and tested this item at their own expense. The Axle Assembly is unique in that it requires manufacturing by a contractor with specialized skills and knowledge, and for that reason the Government imposed the source control restriction. The design rights for this replenishment spare part are not owned by the Government and are proprietary. The non-availability of technical data requires that this item be procured on a non-competitive basis from the approved source.

b. Costs:

There are no known funding efforts in progress at this time to acquire the commercially controlled data needed to make NSN 2520-01-472-8056 fully competitive. Further, because this is a major system component of the M1117 ASV, the time, cost and schedule impact associated with a competitive action on every single axle assembly purchase would result in a full qualification test for each awarded vendor to validate Form, Fit and Function of the axle assembly to assure that the items to be delivered remain the same each time a contract is awarded. This would add unnecessary cost and schedule to the acquisition of each axle assembly contract award. In addition, the Axle Assemblies are repairable, thus a very limited quantity of new axle assemblies are expected to be procured over the remaining service life of the M1117 ASV. It would be difficult to justify any investment costs associated with making this item competitively procurable due to the low quantity of axle assemblies expected to be procured in the future.

If the Government insisted on fully competitive procurement for the Axle Assembly, the Government would have three choices to obtain the necessary information to enable full competition: Research and Development of our own Axle Assembly design, Reverse Engineering of the existing system and the final option is to simply ask the vendor, in this case Cadillac Gage Textron Inc., for a price to purchase the full Technical Data and rights to use the item competitively.

Since sale of M1117 ASV repair parts is a core part of Cadillac Gage Textron’s business, the TDP for the Axle Assembly is likely not for sale, and if it were, the purchase price would be extremely cost prohibitive. Without the option to purchase the TDP, the Government has 2 remaining methods to acquire the data required and execute a competitive axle assembly purchase. They are as follows:

(i) Research and Development (R&D): To develop a competitive data package through a Research and Development (R&D) effort would involve a ground up design of an axle that doesn’t infringe on any existing patents which would include research, generating requirements and any associated technical drawings. This would be followed by testing and 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 we have already. Based on past experience with similar efforts the estimated cost to research and develop a compatible product and qualify additional sources exceeds $6.0M with a setback of thirty-six (36) months.

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. That $2.5M would also include funding for staff to develop the CAD models and drawings that would be required for any potential vendor to manufacture from. 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 became available, the minimum thirty-six (36) month process 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 finally provision the parts. A timeline of the estimated R&D process is shown for clarity.

Engineering estimates the following minimum timeline for R&D:

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

Estimated Minimum Time to research and develop 36 Months

(ii) Reverse Engineering (RE): To reverse engineer, validate the design, procure prototypes for testing and release a competitive data package would entail a significant amount of time, facility resources, man-hours, and funding. Based on past development experience the estimated cost to develop a reverse engineered competitive product is $6.0M minimum, with an estimated delay of no less than thirty-six (36) months. Required funding would include $100k to purchase 10 samples of the axle for detailed study and tear down and part measurement. $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. Add another $2.9 M 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 consist 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 TDP and associated provisioning documents at a cost of $6.0M minimum. A timeline of the estimated R&D process is shown for clarity.

Engineering estimates the following minimum timeline for RE:

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

Estimated Minimum Time to Reverse Engineer 36 months

In addition to the cost and delay for 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. Specific events would include additional market research, solicitation, evaluation and awarding a contract. Finally, any new source of supply would require component, safety and system level testing that is estimated to take 6 months. These estimates are based on similar Government projects. These events combined are estimated to take an additional 12 months after development of the item (grand total is now 48 months minimum).

Considering the M1117 ASV is out of production and future demand for additional ASV’s is unlikely, the costs cited above appear to far exceed any potential savings to be realized through any future competitive procurement process for spare axle assemblies.

Assuming that we spend $6M dollars to obtain our own version of the item and realize a savings of 5%, the new cost of the Government owned axle would be a savings of $1,357 between the Cadillac Gage Textron Inc. owned and the Government owned versions. Dividing $6M by $560 results in 4420 axle assemblies required to recover the development cost which is likely more than 100 times the number of spare axles that will be procured during the service life of the vehicles.

c. Unacceptable Delay:

If the procurement of the axle assembly is delayed until a competitive TDP is developed and released by the Government, the Government would experience an unacceptable delay of a minimum of four years in fulfilling this requirement. The minimum four year delay is a result of the time required to develop items of equivalent performance and qualify the manufacturer of the product. Cadillac Gage Textron Inc.is currently the only source that can meet the requirements without substantial duplication of cost and without unacceptable delay against this action. The approved source has the requisite technical and engineering expertise to perform all efforts required to provide the NSN identified in this Justification and Approval (J&A).

6. Efforts to Obtain Competition: The Government does not have the complete TDP required to manufacture the axle or use for competitive procurement and there are no known funding programs active at this time for qualification of additional sources. No other axle manufacturers have a drop in replacement that mounts into the M1117 ASV.

Any other supplier that believes they offer a product that requires no modification and costs less can submit their offer to the Government Competition Management Office (CMO). Interested vendors can seek qualification through the Source Approval Program with the CMO at their own expense. Testing and validation of any claims would need to be realized before any approval is granted. At this time, we do not know of any contractors seeking approval through the CMO. Therefore only Cadillac Gage Textron Inc. will be solicited for this effort. This effort will be synopsized in accordance with FAR Part 5.201(c).

7. Actions to Increase Competition: There are no vendors in the process of being qualified for this NSN at this time and none prior to contract award. At this time, there are no current or planned efforts to qualify additional sources due to the fact that the Government does not possess a fully defined and validated TDP for NSN 2520-01-472- 8056. Cadillac Gage Textron Inc. holds the technical data regarding this item. Any vendor that believes they can provide this NSN for a lower cost while meeting the same requirements as the existing item should seek qualification as a secondary source through the Competition Management Office Source Approval Program at their own expense.

8. Market Research: On January 30th, 2018, Engineering conducted an online search of known axle suppliers looking for published material on new built replacement unit.

The results of this search did not produce any new leads on a company that provides a direct replacement axle for the M1117 ASV. There are no commercial or non-developmental items available that could meet the Government’s need for this part.

Although components of the Shaft, Axle, Automotive would could probably be produced or obtained, some parts are specifically unique to the ASV and would require extensive reverse engineering and testing and is not justifiable. This item does not appear on the Advanced Procurement Planning List (APPL) or the Competition Advocate’s List (CASL) dated 16 JAN 2018. Vendors interested in pursuing source approval on this item are instructed to contact the Source Approval Officer in the Competition Management Office.

9. Interested Sources: A Sources Sought Synopsis for this NSN was posted on Fed Biz Opps on 02 FEB 2018 to see if there is any interest from perspective Offerors at this time. To date, no other sources have written to express an interest, nor has the Government identified any other source possessing an interest in being an alternate source for this NSN.

A Sources Sought Synopsis has been posted to Fed Biz Opps on 02 FEB 2018 Component: Shaft, Axle, Automotive

NSN: 2520-01-472-8056

Part number: 135190-4 End item: Armored Security Vehicle (ASV)

2018-262.pdf

DATE: 20 March 2017 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 based on FAR 15.404-1(b)(2)(vi) and/or 15.404-1(b)(2)(vii). Normal acquisition procedures will be followed to determine that the contract price is fair and reasonable.

Based on the estimated dollar value, Certified Cost and Pricing Data will not be required to justify price reasonableness. However, Other Than Certified Cost and Pricing Data may be required in order to establish price reasonableness. The appropriate forms of cost and/or price analysis will be utilized, and negotiations will be conducted if necessary.

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

Name: Morris Belleville Title: Contracting Officer Date: 02/20/2018 Signature: Morris A. Belleville /S/

15. Legal Concurrence:

Concur: // // Date: 02/25/2018