JA_SPRDL123R0080_Redacted.pdf

JA-00620 - SPRDL1-23-R-0080

Previous J&A: SPRDL1-18-R-0498 is available

Equipment Manufacturer’s (OEM) internal design effort. There is no Technical Data Package (TDP) for the ATLAS II forklift or the diesel engine assembly. This procurement, directed by Purchase Request Order Number (PRON) EH3C0140EH, will be restricted to JLG (CAGE 1YHH8) who is the end item manufacturer, and an authorized distributor for John Deere, the diesel engine manufacturer. JLG, as the responsible source, receives Engines from John Deere and makes final modifications that are solely for the ATLAS II.

The diesel engine assembly covered by this procurement is designed and developed by the diesel engine assembly manufacturer, John Deere, in coordination with the ATLAS II OEM, JLG Industries Incorporated. JLG owns the TDP for the ATLAS II forklift which contains the diesel engine assembly, and John Deere owns the TDP for the diesel engine assembly. Procuring proprietary technical data is estimated to be in the millions of dollars as the typical business case for a product like this includes the expectation of a revenue stream for the manufacturer. Such a revenue stream includes worldwide sales of diesel engine assemblies and their corresponding spare parts for many years.

Demand for ATLAS II forklift spare parts, which include the diesel engine assembly, is expected to diminish as the forklift is phased out of the Army inventory over the next 10 years. The cost of procuring proprietary information for the diesel engine assembly is expensive and would not likely be recovered through subsequent competition. This estimate is based on a general knowledge of the Material Handling Equipment (MHE) industry.

There are no known funding efforts in progress at this time to acquire the commercially controlled data needed to make the diesel engine assemblies competitive. It would also take additional time, up to 12 months, to produce the new diesel engine assemblies in the quantities needed by the Government. This is due to the potential that a new contractor will not be familiar with the new diesel engine design requirements or have the correct tooling for their manufacture. As a result, any efforts to increase competition would create unacceptable delays in filling the Government’s requirements.

Procurement by other than full and open competition is necessary because the Government does not have the rights to the TDP to enable competitive re-procurement.

This diesel engine assembly is not a feasible candidate for Reverse Engineering (RE) as it has already been designed by an established commercial manufacturer. RE is therefore estimated as a costly and high-risk proposition as it would be replicating the effort associated with the original design of the diesel engine assembly. The Powertrain & Mobility Technology Ground Vehicle Power (PMTGVP) stated in an email from 30 January 2023, it would never be a good idea to reverse engineer an engine unless for special application where no other alternateives exist.There is likely an alternative engine that would fit and work which can be acquired commercially. Commerical Off The Shelf (COTS) engines in this size and power rating from Caterpillar, Cummins, and Kubota are available alternatives. All of these companies compete against each other in this market, so similar engines will have a similar cost with little savings. The negative side of swapping engines is that you now have to re-engineer the integration of the alternative engine to the legacy vehicle. Cooling lines, engine mounts, radiator

Scarce Army resources are better directed to hardware procurement rather than procuring technical data for commercial products. It is also estimated that 12 to 18 months would be required to procure the required proprietary data, and then also qualify additional sources after procuring the proprietary data. This delay is unacceptable to meet the Government’s needs as it would prevent needed replacements of diesel engine assemblies from being delivered to ATLAS II field users in a timely manner. The ATLAS II forklift is a vital part of the Army’s supply distribution mission, and delays of diesel engine assembly spares would severely impact the ATLAS II forklift user’s mission, resulting in machines becoming .

Other Delays: 36 months of delays, as indicated in the preceding paragraph due to an engineering effort and manual revisions would be unacceptable because it would further delay soldiers from having access to a replacement diesel engine assembly in the field, which would severely impact readiness of the ATLAS II forklift. This includes any delays resulting from the above manual revisions, which could likely add another 12 months of delays onto the 24 months figure for the engineering effort. However, some of the manual revisions could likely be done concurrently with the engineering effort which could reduce the 12-month period. The procurement of the current diesel engine assembly will not be subject to those costs or delays in the program schedule.

6. Efforts to Obtain Competition:

a. Effective competition: Due to the reasons cited in section 5 above, the Government is not pursuing competition for this item.

b. Subcontracting competition: Unless the contract is awarded to a small business, the solicitation and resulting contract will include FAR clauses 52.219-8, "Utilization of Small Business Concerns"; 52.244-5, "Competition in Subcontracting"; 52.219-16, "Liquidated Damages--Subcontracting Plan";" and Defense Federal Acquisition Regulation Supplement (DFARS) 252.219-7003, "Small Business Subcontracting Plan (DoD Contracts)," to maximize small business opportunities and utilization.

SOLE SOURCE: Notices required by FAR 5.201 will be posted.

7. Actions to Increase Competition: There are no plans to increase competition for future procurements due to the reasons cited above.

There are no known actions in progress at this time to acquire the commercially controlled TDP needed to make the diesel engine assemblies competitive for this complex item. The substantial time and money required to purchase the TDP and then use it to increase competition would not be recouped by the Government primarily due to the complexity of the diesel engine assembly design, and the time and schedule delays that any new manufacturers would require to produce the diesel engine assembly in the quantities needed. Any efforts to increase competition would create unacceptable delays in filling the Government’s requirements, resulting in a decrease of mission readiness for the ATLAS II forklift.

There has not been any expressed interest by any known vendor to become a qualified source to produce this item. 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 known vendor(s) to become a qualified source to produce this item.

8. Market Research: A Sources Sought Notice was posted to SAM.gov on 2 February 2023 and was open for 15 days. No responses received.

The Contract Specialist posted a Sources Sought Synopsis for this item, diesel engine assembly, NSN 2815-01-577-1838, on 22 February 2023, on SAM.gov. The posting closed 3 March 2023 and will be valid for 12 months from the posting date. At this time, the Government is not aware of any other contractors expressing interest in this item, or that have responded to the posting. Offerors are always encouraged to seek qualification through TACOM’s Source Approval Program (SAP) with the CMO, and any proposals received shall be considered. To comply with FAR Part 10.002.b.2.vii, internet-based market research for the ATLAS II diesel engine assembly was completed by the GVSC CE/MHE Team System Engineer on 15 March 2023 and is attached for further review below.

Market research was performed by the GVSC CE/MHE engineer on 15 March 2023 by reviewing the below three engine manufacturer websites and catalogs. Part number 2000328 and NSN 2815-01-577-1838 were used as key word terms in the search field for all of the below websites and catalogs:

1. Cummins Inc. – A search on https://www.cummins.com using the above part number and NSN yielded no results.

2. Kubota Engines – A search on https://www.kubotaengine.com using the above part number and NSN yielded no results.

3. Caterpillar – A search on the Caterpillar website, Cat® Parts Store (parts.cat.com) using the above part number and NSN yielded no results.

The research revealed no new sources that manufacture a product that can be used as a replacement for the ATLAS II forklift diesel engine assembly.

The GVSC CE/MHE Team System Engineer also completed an additional search using the Google search engine with the part number and NSN which yielded no additional sources for the ATLAS II diesel engine assembly. As discussed previously, if the Government secured a new source, extensive and costly analyses, prototyping, and system testing would still be required to ensure that the end item forklift still meets its military unique performance specifications.

Engineering spoke with the contractor to request consideration for the U.S. Government