JA_SPRDL1-23-R-0109_Redacted.pdf

SPRDL1-23-R-0109 (JA-00665)

Previous J&A: SPRDL1-19-R-0243

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 for this effort is 10 United States Code (U.S.C.) 3204(a)(1) as implemented by Federal Acquisition Regulation (FAR) 6.302-1, only one responsible source and no other supplies or services can satisfy agency requirements.

5. Reason for Authority Cited: The replacement Cylinder Assemblies required for this procurement are not suitable for full and open competition, because the Government does not own any technical data on these Cylinder Assemblies. Ownership and control of the technical data package (TDP) remain with original vehicle manufacturer. The Government’s identification data for these Cylinder Assemblies is limited to the national stock number (NSN), part number, and supplier (CAGE) code. The acquisition data for these Cylinder Assemblies is not fully defined. The Government procured the RTCH 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 material handling equipment, and why there is no TDP for the end item or, in this case, these Cylinder Assemblies.

The approved contractor IRTC is the original equipment manufacturer (OEM) of the RTCH vehicle. The contractor passed the unique testing of the Production Qualification and Verification tests for the RTCH, including the demonstration of supplying Cylinder Assemblies that fully met the RTCH performance requirements. 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 Cylinder Assembly components were ready for fielding and incorporation into the Army’s supply distribution mission.

The contractor has other capabilities in that they have full knowledge and understanding of the critical relationships between the Cylinder Assemblies and the end item. The RTCH components, like these Cylinder Assemblies, have interfaces with the machine structure providing the needed safety factors that ensure mission effectiveness and protect the safety of the Soldier. This knowledge assures the Government that replacement Cylinder Assemblies would be incorporated into the machine, reducing time for other adjustments and troubleshooting. Using a contractor without the unique qualification listed here introduces risks to the Government. A 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 shipping containers 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.

The Cylinder Assemblies covered by this procurement are designed and developed by their manufacturer. Procuring proprietary data is estimated to be millions 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 components and spare parts for many years. The cost of procuring proprietary information is not expected to be recovered through subsequent competition, as TACOM LCMC demands for these Cylinder Assemblies are in small quantities and are driven by field demands.

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.

Qualifying additional sources is viewed as more of a schedule delay issue for this type of product and will be addressed below. It is estimated 18 to 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 replacement Cylinder Assemblies to be delivered to users in the field.

These Cylinder Assemblies are not feasible candidates for reverse engineering. They are Cylinder Assemblies designed by an established commercial vendor. It is estimated as a high-risk proposition, since the Cylinder Assemblies are already in the market and the reverse engineering process would be replicating the effort associated with the original design of the cylinders. The reverse engineering effort would take approximately 12 months or more at a cost of $1M per cylinder. In addition, the reverse engineered cylinder assembly would have to establish reliability comparable to the already existing design. This evaluation process would need another 12 months and an estimated additional $500K per component. These costs would not be recovered by subsequent competition, as the Army’s demand for these Cylinder Assemblies is small and variable.

The risk for the Government is high as there are limited resources to commit to this type of effort. For a contractor, there is high risk in that a long and detailed effort is required without the assurance that there would be enough demand for the final product. The following chart shows a typical breakdown of reverse engineering activities.

Reverse Engineering Activity Cost Design and Build $450K Form, Fit, Function, Installation Analysis $350K Component Qualification Testing $500K Documentation $200K Total $1.5M

As an example, GVSC engineering recently undertook a project to reverse engineer three Electronic Component items for the RTCH. The engineering cost to reverse engineer those components was $1.2M dollars, with an additional $300K dollars needed for component verification at Aberdeen Test Center.

These costs would not be recovered by subsequent competition within a reasonable period of time. The quantity requirements for the Cylinder Assemblies are too small to justify the cost required to increase competition. This current procurement action is to establish a contract for replacement (spares) components, and developing a competitive effort, procuring proprietary technical data, or reverse engineering are not cost-effective options.

For example, for the Cylinder Assembly with an NSN of 3040-01-665-7501, at the current average usage rate of 1.92 units each year (per the Item Manager), a current unit cost of and assuming the 25% savings achieved through competition, the in annual savings would take over to offset the estimated $1.5M dollar cost of reverse engineering the item and qualifying another source.

6. Efforts to Obtain Competition:

Effective competition: Due to the reasons cited in section 5 above, the Government is not pursuing competition for these items.

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

7. Actions to Increase Competition: There are no known funding efforts in progress at this time to develop the competitive technical data required to make the Cylinder Assembly items fully competitive. No contractors are in the process of being qualified at this time, nor will be prior to the contract award due to funding constraints.

8. Market Research: A Sources Sought Notice was posted to SAM.gov on 19 Apr 2023, and was open for 15 days. No responses were received from the posting.

The GVSC CE-MHE project engineer performed internet searches on 02 March 2023 for publicly available sources of Cylinder Assemblies. This research included searching for published material of newly built replacement units and other product information.

The website consulted was WB Parts (https://www.wbparts.com/rfq/3040-01-298- 2938.html , https://www.wbparts.com/rfq/3040-01-257-9988.html , https://www.wbparts.com/rfq/3040-01-306-0326.html, and https://www.wbparts.com/rfq/3040-01-085-7501.html .

The results of this search did not produce any new information or product catalogs from any company that provides a direct replacement for Cylinder Assembly part number MP-0002713G and NSN 3040-01-657-2938, part number MP-0002717G and NSN 3040-01-658-4960, part number MP-0002718G and NSN 3040-01-660-0327, and part number MP-0002721G and NSN 3040-01-665-7501. Therefore, there are no other commercial or non-developmental items available to meet Government needs, or that could be economically modified to provide the parts required.

9. Interested Sources: To date no additional sources have expressed interest in this item. No responses were received from the Sources Sought Notice posted on the SAM.gov website.

10. Other Facts: Procurement History:

(1) Procurement History (most recent for each NSN)

Item: Cylinder Assembly, NSN of 3040-01-658-4960 Contract Number: SPRDL1-20-D-0048, Delivery Order SPRDL1-23-F-0005 Award Date: 22 Jan 2020 Contractor: Independent Rough Terrain Center (CAGE 1NWY2) Contract Value: $125,987.48 Competitive Status: FAR 6.302-1, Only One Responsible Source

Item: Cylinder Assembly, NSN of 3040-01-657-2938 Contract Number: SPRDL1-20-D-0048, Delivery Order SPRDL1-20-F-0280 Award Date: 04 Aug 2020 Contractor: Independent Rough Terrain Center (CAGE 1NWY2) Contract Value: $55,573.70 Competitive Status: FAR 6.302-1, Only One Responsible Source

Item: Cylinder Assembly, NSN of 3040-01-660-0327 Contract Number: SPRDL1-20-D-0048, Delivery Order SPRDL1-20-F-0350 Award Date: 05 Sep 2020 Contractor: Independent Rough Terrain Center (CAGE 1NWY2) Contract Value: $341,590.02 Competitive Status: FAR 6.302-1, Only One Responsible Source

Item: Cylinder Assembly, NSN of 3040-01-665-7501 Contract Number: SPRDL1-20-D-0048, Delivery Order SPRDL1-23-F-0350 Award Date: 05 Sep 2020 Contractor: Independent Rough Terrain Center (CAGE 1NWY2) Contract Value: $38,975.09 Competitive Status: FAR 6.302-1, Only One Responsible Source

(2) The above buys were solicited and awarded under Other Than Full and Open Competition.

11. Technical Certification: I certify that the supporting data under my cognizance