J&A_SPRDL1-19-R-0033_Redacted.pdf

J&A SPRDL1‐19‐R‐0033

No Previous J&A

J&A SPRDL1‐XX‐X‐XXXX

DEFENSE LOGISTICS AGENCY

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

SPRDL1-19-R-0033

1. Contracting Activity: The Defense Logistics Agency – Warren (DLA – WRN).

2. Description of Action: This action is for a new contract using AWCF funding. The planned contract action is for the purchase of a Cylinder Assembly, Actuating, Linear (Steering Cylinder Assembly), NSN 3040-01-101-7460, for the MHE M4K J.I. Case (CNH) 4,000 lb. Rough Terrain Forklift, NSN 3930-01-076-4237.

This four wheel drive rough terrain diesel powered forklift is employed by engineer battalions, artillery units, transportation support battalion and other ground combat service support units. This forklift will be used for loading and unloading palletized cargo from containers, loading and unloading combat vehicles with supplies, and general material handling.

The Government does not have a Technical Data Package (TDP) for the M4K J.I.

Case (CNH) 4,000 lb. Rough Terrain Forklift, NSN 3930-01-076-4237. This vehicle was procured by the Government through a performance specification and the Cylinder Assembly, Actuating, Linear (Steering Cylinder Assembly) was part of the J.I.

Case Original Equipment Manufacturer’s internal design effort. This procurement, directed by PRON EH8E1528EH, will be restricted to the source identified in Table 1 below. This is the only responsible source for this item and no other suppliers will satisfy agency requirements.

3. Description of Supplies/Services:

The contractor shall provide the Cylinder Assembly, Actuating, Linear (Steering Cylinder Assembly) for the M4K J.I. Case (CNH) 4,000 lb. Rough Terrain Forklift, NSN 3930-01-076-4237 per the part number listed in Table 1. The estimated unit price is with a base quantity of 106 Ea and an option quantity of 106 Ea.

The total estimated value of the contract, with option quantity, has a total estimated value of .

Table 1 – part numbers NSN NOMENCLATURE Part Number 3040-01-101-7460 Cylinder Assembly, Actuating, Linear

G103727 (CAGE:

10988)

Acquisition Method Code (AMC): 3, ACQUIRE DIRECTLY FROM THE ACTUAL

MANUFACTURER, WHETHER OR NOT THE PRIME CONTRACTOR IS THE

ACTUAL MANUFACTURER.

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Acquisition Method Suffix Code: (AMSC): H, THE GOVERNMENT PHYSICALLY

DOES NOT HAVE IN ITS POSSESSION SUFFICIENT, ACCURATE, OR LEGIBLE

DATA TO PURCHASE THIS PART FROM OTHER THAN CURRENT SOURCE(S).

(NOTE: THIS CODE IS APPLICABLE ONLY TO PARTS UNDER IMMEDIATE BUY

REQUIREMENTS AND ONLY AS LONG AS THE DEFICIENCY IS UNDER REVIEW

FOR RESOLUTION AND APPROPRIATE RECODING).

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. Reason for Authority Cited: This item is not suitable for full and open completion because the Government does not have a TDP for this Cylinder Assembly, Actuating, Linear (Steering Cylinder Assembly), NSN 3040-01-101-7460, nor the vehicle system that uses it. Ownership and control of the TDP remains with the vehicle original manufacturer. The Government’s data for the Cylinder Assembly is limited to NSN, part number and supplier (CAGE) code and very limited dimensions as listed in FEDLOG, in extremely general terms in TM 10-3930-638-24P (Figure 22, item 1), and Table 1 above. The Acquisition data for the Cylinder Assembly is not fully defined.

This Cylinder Assembly is used in the Army’s J.I. Case (CNH) 4,000LB ROUGH TERRAIN FORK LIFT, NSN 3930-01-076-4237. This is because the end item was procured by the Government through a performance specification. The selection of the subcomponents that make up the end item is left to the end item manufacturer as part of their internal design effort. This is the main reason TDPs are not procured for materials handling equipment and why there is no TDP for the end item or its subcomponents. It is not cost effective to develop and maintain a Government competitive TDP for such a low density item. The equipment density is so small that a large portion of the funds allocated for production would go towards the TDP rather than hardware.

Demonstration of Approved Contractor's Unique Qualifications:

a. J.I. Case (CNH) is the supplier of the M4K 4,000 lb. capacity Rough Terrain Forklift. The contractor passed the unique testing of the Production Qualification and Verification tests for these vehicles. The tests included reliability demonstrations, operating in cold and other environmental conditions, and performance suitability in an operational scenario. These tests were important and critical in that they demonstrated to the Army that the M4K, and therefore the Cylinder Assembly, Actuating, Linear (Steering Cylinder Assembly) was ready for fielding and incorporation into the Army’s supply distribution mission. Failure to conduct this testing could result in fielding issues or vehicle deadlining due to improper components.

b. The approved source listed in Table 1 has sole access to the relevant drawings and technical data rights. The Government did not buy their proprietary rights to produce a

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competitive TDP. The approved source has demonstrated the ability to establish and maintain the manufacturing processes required to successfully produce a finished and properly functioning item. The approved source has produced and qualified parts of this nature in the past for the Government. The contractor has other capabilities in that they have full knowledge and understanding of the critical relationships between the Cylinder Assembly, Actuating, Linear and the end item. This knowledge assures the Government that the Cylinder Assembly, Actuating, Linear will be easily incorporated into the machine reducing time for other adjustments and troubleshooting.

c. Using a contractor without the unique qualification listed here introduces risks to the Government. A Cylinder Assembly, Actuating, Linear not ready to perform would prevent the end item from returning to full mission capable status. This would seriously impact the Army’s capability to move pallets in and out of shipping containers and other loads as part of its supply distribution mission. Associated with this lack of capability would be a shortage of supplies like food, water, and spare parts that are to be delivered to soldiers deployed in the field.

Estimate of Cost and Schedule delay if award of contract is delayed:

1. The Cylinder Assembly, Actuating, Linear covered by this procurement was designed and developed by the end item manufacturer and the component supplier.

Procuring proprietary data is estimated to be in the many hundreds of thousands of dollars as the typical business case for a product like this includes the expectation of a revenue stream for the manufacturer that includes worldwide sales of complete Cylinder Assembly, Actuating, Linears and other vehicle spare parts for many years.

Qualifying additional sources is viewed as more of a schedule delay issue for this type product and will be addressed below. The cost of procuring proprietary information is not expected to be recovered through subsequent competition because TACOM LCMC demands for these Cylinder Assembly, Actuating, Linear are driven by field demands and can be in varying quantities depending on field usage and expected remaining service life. This estimate is based on a general knowledge of the materials handling industry. There are funding constraints in that scarce resources are better directed to hardware procurement rather than procuring technical data for commercial products. It is estimated 24 months would be associated with attempting to procure the required proprietary data or qualifying additional sources. This delay is unacceptable to meet the Government’s needs as it would prevent needed Cylinder Assembly, Actuating, Linears to be delivered to field users, and RESET Programs, and would impact the mission as machines would be non-mission capable. The end item is a vital part of the Army’s supply distribution mission.

2. This Cylinder Assembly, Actuating, Linear is not a feasible candidate for reverse engineering and qualifying another source is not feasible. It is an assembly designed by an established commercial vendor. It is estimated as a high risk proposition since the Cylinder Assembly, Actuating, Linear is already in the market and the reverse engineering process would be replicating the effort associated with the original design

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of the Cylinder Assembly, Actuating, Linear. The estimated cost to reverse engineer and detail this part could be as much as $300,000.00 and would result in an estimated delay of at least 24 months. Added to these costs and delays would be the risk, cost and time to procure, test, validate and qualify another source and to prepare the final TDP. The qualification testing would be required since the failure of this part could result in a loss of equipment and down time of the equipment. The estimated time delay for testing is up to 24 months at an estimated cost of $300,000 (FY 18 Dollars).

This loss of time is unacceptable to TACOM LCMC. These costs would not be recovered by subsequent competition as the Army’s demand for these Cylinder Assembly, Actuating, Linear is variable. The demand can be affected by location and usage of the vehicles, and the rate at which the replacement vehicle is funded and fielded. The risk for the Government is high as there are limited resources to commit to this type effort. For a contractor, there is high risk in that a long detailed effort is required without the assurance that there would be enough demand for the final product.

3. The quantity requirements for the Cylinder Assembly, Actuating, Linear are uncertain and potentially too small to justify the cost required to increase competition.

Due to the fact that there is neither technical data available, nor funding available, and TACOM LCMC cannot afford the lost time while the material handling equipment sits non-mission capable, there are no current or planned efforts to qualify additional sources.

6. Efforts to Obtain Competition:

a. The Cylinder Assembly, Actuating, Linear covered by this procurement was designed and developed by the end item manufacturer and the component supplier.

Procuring proprietary data is estimated cost in the hundreds of thousands of dollars as the typical business case for a product like this includes the expectation of a revenue stream for the manufacturer that includes worldwide sales of complete Cylinder Assembly, Actuating, Linears and other vehicle spare parts for many years. Qualifying additional sources is viewed as more of a schedule delay issue for this type product.

The cost of procuring proprietary information is not expected to be recovered through subsequent competition because TACOM LCMC demands for these Cylinder Assembly, Actuating, Linears are driven by field demands, and can be in varying quantities depending on field usage and expected remaining service life. This estimate is based on a general knowledge of the materials handling industry. There are funding constraints in that scarce resources are better directed to hardware procurement rather than procuring technical data for commercial products. It is estimated that at least 24 months would be associated with attempting to procure the required proprietary data or qualifying additional sources. This delay is unacceptable to meet the Government’s needs as it would prevent needed Cylinder Assembly, Actuating, Linears to be delivered to field users, and RESET Programs, and would impact the mission as machines would be non-mission capable. The end item is a vital part of the Army’s supply distribution mission.

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b. This Cylinder Assembly, Actuating, Linear is not a feasible candidate for reverse engineering and qualifying another source is not feasible. It is an assembly designed by an established commercial vendor. It is estimated as a high risk proposition since the Cylinder Assembly, Actuating, Linear is already in the market and the reverse engineering process would be replicating the effort associated with the original design of the Cylinder Assembly, Actuating, Linear. The estimated cost to reverse engineer and detail this part could be as much as $300,000 and would result an estimated delay of at least 24 months. Added to these cost and delays would be the risk, cost and time to procure, test, validate and qualify another source and to prepare the final TDP. The qualification testing would be required since the failure of this part could result in a loss of equipment and down time of the equipment. The estimated time delay for testing is up to 24 months at an estimated cost of $300,000 (FY 18 Dollars).

This loss of time is unacceptable to TACOM LCMC. These costs would not be recovered by subsequent competition as the Army’s demand for these Cylinder Assembly, Actuating, Linears is variable. The demand can be affected by location and usage of the vehicles, and the rate at which the replacement vehicle is funded and fielded. The risk for the Government is high as there are limited resources to commit to this type effort. For a contractor, there is high risk in that a long detailed effort is required without the assurance that there would be enough demand for the final product.

c. The quantity requirements for the Cylinder Assembly, Actuating, Linear are uncertain and potentially too small to justify the cost required to increase competition.

Due to the fact that there is neither technical data available, nor funding available, and TACOM LCMC cannot afford the lost time while the material handling equipment sits non-mission capable, there are no current or planned efforts to qualify additional sources.

7. Actions to Increase Competition:

This end item was procured by the Government through a performance specification.

Items procured through a non-developmental approach, which maximize the use of off-the shelf technologies, rely on commercial sources for spare parts. The selection of the subcomponents that make up the end item is left to the end item manufacturer as part of their internal design effort. This is the main reason TDPs are not procured for materials handling equipment and why there is no TDP for the end item or its subcomponents. It is not cost effective to develop and maintain a competitive TDP for the Government for such a low density item. The equipment density is so small that a large portion of the funds allocated for production would go towards the TDP rather than hardware.

There are no known funding efforts in progress at this time to acquire the commercially controlled data needed to make the Cylinder Assembly, Actuating, J&A SPRDL1‐XX‐X‐XXXX

Linear competitive. The time and money required to increase competition would not be recouped by the Government due to the complexity of the design and the time it would take to produce the Cylinder Assembly, Actuating, Linear in the quantities needed. Any efforts to increase competition would also create unacceptable delays in filling the Government’s requirements.

8. Market Research:

In the preparation of this document, market research was conducted by the assigned engineering group. Market research confirmed that there were no commercial or non-developmental items available that meet the Government needs, or could be modified to meet the Government needs. Market research indicated the Government exclusively requires CNH Industrial America LLC Cylinder Assembly, Actuating, Linears for its purposes. It was also determined that customary practices regarding customizing, modifying, or tailoring of items similar to CNH Industrial America LLC Cylinder Assembly, Actuating, Linears would not be able to meet the need of the Government.

Sources Sought Synopsis (Notice 2018-687) has been posted to Fed Biz Opps on August 3, 2018

Item Name: Cylinder Assembly, Actuating, Linear (Steering Cylinder Assembly).

NSN: 3040-01-101-7460

Part Number: G103727, Cage: 10988

End Item: Entwistle 4,000 lb. Rough Terrain Forklift NSN 3930-01-076-4237

MINIMUM GUARANTEED QUANTITY: 106

UNIT COST:

Contract cost:

Contract option estimated total value is

2018-687.pdf

9. Interested Sources: To date, no additional sources have replied to the Sources Sought Notice above, or expressed interest in this item or the ability to provide an alternate product.

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The size and status of potential sources and whether their distribution and logistical capabilities could support the supplying of Cylinder Assembly, Actuating, Linears could not be determined because no sources were identified during the market research; therefore, item cost estimates and times of delivery were not available.

10. Other Facts: Discuss any other facts supporting the use of other than full and open competition, such as the following:

a. Procurement history: The following procurements were made sole source to CNH Industrial AME using other than full and open competition, justified pursuant to FAR 6.302-1 “Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements” and 41 U.S.C. 253(c), as implemented by citing FAR 6.302-1:

(1) Contract: SPRDL1-18-P-0385 Contractor: CNH INDUSTRIAL AME Award Date:24 MAY 2018 Competitive Status: Sole Source Authority: FAR 6.302-1, Only One Responsible Source

(2) Contract: SPRDL1-15-P-0240 Contractor: CNH INDUSTRIAL AME Award Date: 01 SEP 2015

(3) Contract: SPRDL1-13-P-0102

Award Date: 17 SEP 2013

(4) Contract: SPRDL1-13-P-0099 Contractor: CNH INDUSTIRAL AME Award Date: 14 June 2013

(5) Contract: SPRDL1-11-P-0036

Award Date: 22 Dec 2010

(6) Contract: SPRDL1-09-P-0145

Award Date:18 Sep 2009

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Competitive Status: Sole Source Authority: FAR 6.302-1, Only One Responsible Source

b. Acquisition data availability

The Government does not have a TDP for this Cylinder Assembly, Actuating, Linear (Steering Cylinder Assembly), NSN 3040-01-101-7460, nor the vehicle system that uses it. Ownership and control of the TDP remains with the vehicle original manufacturer or the component suppliers.

The Government’s identification data for the Cylinder Assembly, Actuating, Linear (Steering Cylinder Assembly) is limited to NSN, part number and supplier (CAGE) code as listed in FEDLOG , in TM 10-3930-638-24P (Figure 82, item 1), and Table 1 above. The Acquisition data is not fully defined.

This end item was procured by the Government through a performance specification. Items procured through a non-developmental approach, which maximize the use of off-the shelf technologies, rely on commercial sources for spare parts. The selection of the subcomponents that make up the end item is left to the end item manufacturer as part of their internal design effort. This is the main reason TDPs are not procured for materials handling equipment and why there is no TDP for the end item or its subcomponents. It is not cost effective to develop and maintain a competitive TDP for the Government for such a low density item. The equipment density is so small that a large portion of the funds allocated for production would go towards the TDP rather than hardware.

c. Unusual and compelling urgency: N/A

d. Subcontracting competition: Subcontracting Competition. FAR clause 52.244-5 Competition in Subcontracting will be included in the resultant contract to assure CNH Industrial AME selects subcontractors (including suppliers) on a competitive basis to the maximum extent practical.

11. Technical Certification:

The point of contact for this action is 282-7487.

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.

Team Leader, CE/MHE Team TARDEC Force Projection Technology

12. Requirements Certification:

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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.

Typed Name:

Date: _19-Sept-2018__________________ Title: Item Manager Signature: ______________

Typed Name:

Date: 10 Oct 2018 Title:Requirements Officer DE PSID Signature:

13. Contracting Officer Certification:

The Contracting Officer hereby determines that the anticipated price for this contract action will be fair and reasonable based on the prices of contracts awarded in the past.

Certified cost and pricing data will not be required to justify price reasonableness due to the estimated dollar value of this procurement; however, if the price cannot be determined to be fair and reasonable, then “other than” certified cost and pricing data will be requested. The appropriate forms of price analysis will be utilized and negotiations will be conducted if necessary. I certify that this justification is accurate and complete to the best of my knowledge and belief.

Name: Jamal M. Brooks Title: Chief, Weapons/Soldier Branch Date: November 26, 2018 Signature: //s//

14. Legal Concurrence:

Concur:

Date: 11/29/18