JA_SPRDL1-19-R-0173_REDACTED.pdf

J&A SPRDL1-19-R-0173

No previous J&A

J&A SPRDL1-19-R-0173

DEFENSE LOGISTICS AGENCY

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

1. Contracting Activity: DLA Land Warren is the responsible contracting activity for this action.

2. Description of Action: The contractor shall provide the Tilt 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 unit value is and quantity is 100 Ea with option quantity of 100 Ea. The total estimated value of this contract, with option, is .

Table 1

NSN NOMENCLATURE PART NUMBER NAME / CAGE

3040-01-102-

Tilt Cylinder Assembly

126204A1 CNH Industrial America LLC (10988)

This action is for a new contract, using AWCF type funds. The planned contract action is for the purchase of a Tilt Cylinder Assembly, NSN: 3040-01-102-4224, for the MHE M4K J.I. Case (CNH) 4,000 lb. Rough Terrain Forklift, NSN: 3930-01-076-4237.

3. Description of Supplies/Services:

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 Tilt Cylinder Assembly was part of the J.I. Case Original Equipment Manufacturer’s internal design effort. This procurement, directed by PRON EH9C0559EH, will be restricted to the source identified in Table 1 above. This is the only responsible source for this item and no other supplies will satisfy agency requirements.

J&A SPRDL1-19-R-0173

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

Acquisition Method Suffix Code (AMSC) R: The Government does not own the data or the rights to the data needed to purchase this part from additional sources. It has been determined to be uneconomical to buy the data or rights to the data. It is uneconomical to reverse engineer the part. This code is used when the Government did not initially purchase the data and/or rights. If only one source has the rights or data to manufacture this item, AMCs 3, 4, or 5 are valid. If two or more sources have the rights or data to manufacture this item, 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. Reason for Authority Cited: This item is not suitable for full and open competition as the Government does not have a TDP for the Tilt Cylinder Assembly, NSN: 3040- 01-102-4224, 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 Tilt Cylinder Assembly is limited to NSN, part number and supplier (CAGE) code and very limited dimensions as listed in FEDLOG, and in TM 10-3930-638-24P, Figure 95, item 1, and Table 1 above. The Acquisition data for the Tilt Cylinder Assembly is not fully defined. This Tilt Cylinder Assembly is used in the Army’s J.I. Case (CNH) 4,000 lb. Rough Terrain Forklift, NSN: 3930-01- 076-4237. 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 for the Government to develop and maintain a 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 toward 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. 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 subsequently the Tilt Cylinder Assembly, was ready for fielding and incorporation into the Army’s supply distribution mission.

J&A SPRDL1-19-R-0173

b. The approved source listed in Table 1 has sole access to the relevant drawings and technical data rights. The Government did not buy the proprietary rights to produce a 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 Tilt Cylinder Assembly and the end item. This knowledge assures the Government that the Tilt Cylinder Assembly will be easily incorporated into the machine reducing time for other adjustments and troubleshooting.

c. FEDLOG identifies the approved source as the qualified supplier for this Tilt Cylinder Assembly with the associated part number provided in Table 1.

Using a contractor without the unique qualifications listed throughout this document introduces risks to the Government. A Tilt Cylinder Assembly 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 Tilt Cylinder Assembly 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 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 Tilt Cylinder Assembly 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 Tilt Cylinder Assembly 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 procurements rather than procuring technical data for commercial products. We estimate 24 months would be associated with attempting to procure the required proprietary data or qualifying additional sources. This delay is unacceptable to meet Government needs as it would prevent needed Tilt Cylinder Assemblies 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.

J&A SPRDL1-19-R-0173

2. This Tilt Cylinder Assembly 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 Tilt Cylinder Assembly is already in the market and the reverse engineering process would be replicating the effort associated with the original design of the Tilt Cylinder Assembly.

The estimated cost to reverse engineer and detail this part could be as much as $500K 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 final TDP preparation. The qualification testing would be required since the failure of this part could result in a loss of equipment and down time. The estimated time delay for testing is up to 24 months at an estimated cost of $300K (FY 19 Dollars). This loss of time is unacceptable to TACOM LCMC and these costs would not be recovered by subsequent competition due to the Army’s demand for these Tilt Cylinder Assembly. 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 Tilt Cylinder Assembly are uncertain and potentially too small to justify the cost required to increase competition. Due to the fact that there is neither technical data 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 Tilt Cylinder Assembly covered by this procurement was designed and developed by the end item manufacturer and the component supplier. Procuring proprietary data is estimated to be 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 Tilt Cylinder Assembly 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 Tilt Cylinder Assembly 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 procurements rather than procuring technical data for commercial products. We estimate 24 months would be associated with attempting to procure the required proprietary data or qualifying additional sources. This delay is unacceptable to meet Government needs as it would prevent needed Tilt Cylinder Assemblies 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.

J&A SPRDL1-19-R-0173

b. This Tilt Cylinder Assembly 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 Tilt Cylinder Assembly is already in the market and the reverse engineering process would be replicating the effort associated with the original design of the Tilt Cylinder Assembly.

The estimated cost to reverse engineer and detail this part could be as much as $500K 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 final TDP preparation. 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 $300K (FY 19 Dollars). This loss of time is unacceptable to TACOM LCMC and these costs would not be recovered by subsequent competition due to the Army’s demand for these Tilt Cylinder Assembly. 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 Tilt Cylinder Assembly are uncertain and potentially too small to justify the cost required to increase competition. Due to the fact that there is neither technical data 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 Tilt Cylinder Assembly 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 Tilt Cylinder Assembly in the quantities needed. Any efforts to increase

J&A SPRDL1-19-R-0173

competition would also create unacceptable delays in filling the Government’s requirements.

8. Market Research: On February 8, 2019 market research was conducted by Engineering by collaborating with the TACOM Compeition Management Office for publicly available online searches of known Cylinder suppliers. This research included searching for published material of newly built replacement units and other product information. The results of this research did not produce any new information or product catalogs from any company that provides a direct replacement Cylinder Assembly, Tilt for the M4K 4,000 lb. Rough Terrain Forklift. Market research was performed by TARDEC Sustainment Engineering on 6 May 2019 by reviewing the Cylinder Assembly,Tilt vendor/manufacturer websites/catalogs of J.I. Case (CNH) and available product literature to determine if commercial items or non-developmental items are available to meet Government needs or could be modified to meet the Government needs. Based upon market research, it was determined that other Cylinder Assembly, Tilt vendors/manufacturers such as Oshkosh Equipment Sales, Coleman Equipment Company, Hercules Sealing Products (Case Forklifts –Rough Terrain), Best Metal Products, Aggressive Hydraulics, OMB Warehouse, Lift Truck Supply, Lift Parts Express, Betten Machinery Technology Co., LTD, Power Master Products, and C&C Hydraulics & Lubrication do not manufacture, nor currently develop, the specific function and form, size-shape-mounting provision of the J.I. Case (CNH) developed/tested Cylinder Assembly, Actuating, Linear. Therefore, there are no other commericial or non-developmental items available to meet Government needs or that could be economically modified to provide the part required.

A Sources Sought Synopsis, Notice 2019-233 was posted to FBO on 8 Feb 2019.

NSN Item Name Part Number CAGE CODE

3040-01-102-4224 Tilt Cylinder Assembly 126204A1 10988

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

MINIMUM GUARANTEED QUANTITY: 100 Ea

UNIT COST:

CONTRACT COST:

ESTIMATED TOTAL CONTRACT VALUE WITH OPTION:

SSN POSTING

CONFIRMATION (201

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. Sources Sought Notice 2019-233 was posted to Fed Biz Opps on 8 FEB 19 for the Tilt Cylinder Assembly, NSN: 3040-01-102-4224, Part Number:

126204A1.

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

a. Procurement history:

Contract: SPRDL1-18-P-0436

Contractor: J.I. Case (CNH).

Contract: SPRDL1-16-P-0137

Contract: SPRDL1-11-P-0067

b. Acquisition data availability

The Government does not have a TDP for this Tilt Cylinder Assembly, NSN: 3040-01-102-4224, 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 Tilt Cylinder Assembly is limited to NSN, part number and supplier (CAGE) code as listed in FEDLOG and in TM 10-3930-638-24P, Figure 95, 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

J&A SPRDL1-19-R-0173

Typed Name: Jamal M. Brooks Date: ____05/14/2019_____________ Title: Chief, Weapons / Soldier Branch Signature: __//JMB//_____________

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

Typed Name: Jamal M. Brooks Date: ___05/14/2019____________ Title: Chief, Weapons / Soldier Branch Signature: ___//JMB//____________

15. Legal Concurrence:

Concur: // //

Date: 05/22/2019