JA_SPRDL124R0053_Redacted.pdf

SPRDL1-24-R-0053 (JA-00751)

Previous J&A: J&A: SPRDL1-20-R-0138

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

SPRDL1-24-R-0053

1. Contracting Agency: Defense Logistics Agency - DLA Land Warren (DLA-WRN).

2. Description of Action: DLA-WRN proposes to award a new Firm-Fixed-Price (FFP) contract to Oshkosh Defense LLC, Commercial and Government Entity (CAGE) 75Q65, for National Stock Number (NSN) 3010-01-604-7889, Carrier, Gear Assembly, Purchase Request Order Number EH4L0103EH, using Army Working Capital Funds.

3. Description of Supplies: The NSN 3010-01-604-7889, part number 3626749, Carrier, Gear Assembly, is used on the A4 Heavy Expanded Mobility Tactical Trucks (HEMTT). The Carrier Gear Assembly is a device designed to support and position one or serval gear assemblies that function as a unit and possibly contain similar items as bearings, shifts, or pins. This item does not have a nuclear hardened feature or any other critical feature such as tolerance, fit restriction, or application. Data is not available in the Hazardous Materials Information Resource System and the federal supply class of this NSN is not generally suspected of containing hazardous or precious metals. The deliverable for this FFP Indefinite Delivery Indefinite Quantity Long Term Contract is a guaranteed minimum quantity of two each, maximum quantity of 50 each, estimated total contract value of $ .

Acquisition Method Code (AMC):

3 - Acquire, for the second or subsequent time, directly from the actual manufacturer.

Acquisition Method Suffix Code (AMSC):

D - The data needed to acquire this part competitively is not physically available, it cannot be obtained economically, nor is it possible to draft adequate specifications or any other adequate, economical description of the material for a competitive solicitation. AMCs 3, 4, or 5 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 the 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: The manufacturer of the differential carrier is Dana Inc. Oshkosh buys the differential carrier and “dresses” the part by adding hardware to make it compatible with the vehicle. The HEMMT A4 was designed and tested by Oshkosh who owns the intellectual property for the truck. Oshkosh developed the system level requirements for the drivetrain and possesses details regarding the design intent of this component. The performance characteristics, mounting details, materials, components, specifications, and certifications of this component are unknown. Dana, Inc., and

Oshkosh are the only two vendors who possess the technical data and expertise to manufacture this differential carrier. Dana manufactures the asset for Oshkosh, but only Oshkosh sells it to the Government.

The Government does not have rights to the Technical Data Package (TDP) or specifications. The lack of technical data for this component results in little knowledge of the design details being known to the Government. There are many different types of differential carriers that are manufactured for a variety of reasons. Open, locked, and limited slip differentials all have different benefits and tradeoffs. Each come with different gear ratio designs that result in a different amount of power being transferred to the wheels. Additional manufacturing details, such as tolerances and materials, would be difficult to determine.

Using an alternative part would introduce technical risk to the performance of the drivetrain because the alternative would not have undergone rigorous developmental and operational testing on the production configuration of the platform. Oshkosh and the Government conducted developmental and operational testing during the vehicle’s design and initial production phases, which justified Oshkosh’s selection of Dana as the manufacturer of this differential carrier. The testing proved Dana can manufacture a differential carrier that meets the Government’s performance and reliability, availability, and maintainability (RAM) requirements. The TDP for this differential carrier is proprietary to Oshkosh and Dana and is unavailable to the Government or commercial manufacturers.

Since the Government does not own any of the technical data, the Government would have to reverse engineer the differential carrier to identify all aspects of the part.

Reverse engineering is the only recourse for the Government to increase competition through development of a competitive build-to-print TDP. A reverse engineering effort would include procuring samples of the current part to utilize in defining a differential carrier with the same fit, form, and function as the original by determining material types, dimensions, and internal workings of the part. Then, several prototypes of the new differential carrier would need to be designed and developed. Next, RAM testing would have to be completed. The test plan would include accelerated lifecycle, environmental durability, and maximum load operation testing. To neglect testing would be high risk as premature failures of this item in the field could result in a mobility failure which could jeopardize the Army’s mission in a potentially adverse operational environment. After the qualification, the TDP would have to be developed so the part could be sourced competitively, and a source would have to be found.

The Ground Vehicle Systems Center (GVSC) Heavy Tactical Vehicle Sustainment Team has estimated that the cost required to reverse engineer this differential carrier, based on conversations with Subject Matter Experts in Reverse Engineering (RE), Test & Evaluation, and Quality Engineering for similar components, would be an estimated minimum of $3,250,000.00 for:

- Procuring samples;

- RE, including part qualification and design, development, and prototype;

- RAM testing, design validation and vehicle integration testing; and

- TDP development to procure competitively.

A detailed breakdown of cost impacts is shown below.

Action Cost Delay Sample Procurement $50,000 2 months Part RE $1,500,000 7 months RAM Vehicle Testing $950,000 10 months Develop TDP $750,000 8 months Total $3,250,000 27 months

The Government would not be able to recover, through subsequent competition, the duplication of costs involved in either procuring the proprietary data or reverse engineering the item to create a competitive build to print TDP within a reasonable time frame. At the current average usage rate of 11 units each year, a current unit cost of

, and assuming 25% savings achieved through competition, the in annual savings would take over years to offset the estimated $3,250,000 cost of reverse engineering the item and qualifying another source.

. Currently, . The 27 months required to reverse engineer this part would result in . The delay associated with reverse engineering this differential carrier is unacceptable in fulfilling the Army’s requirements and would have a significant impact on the Army’s ability to sustain the HEMTT A4 fleet.

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.

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

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" and 52.244-5, "Competition in Subcontracting" to maximize small business opportunities and utilization.

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

8. Market Research: A Sources Sought Notice was posted to SAM.gov on 24 January 2024 and was open for 15 days. No responses were received.

The GVSC Heavy Tactical Vehicle Sustainment Engineer performed the following internet searches on 18 December 2023 to find suitable competition for the Oshkosh differential carrier.

The Dana part number, 515164, indicates that the differential carrier is compatible with the DS480P axle model. Dana’s specification sheet includes part characteristics like differential gear ratio, ring gear type, and outside diameter. No information is available about the specific configuration used in the HEMTT A4 application. The configuration details, which are inaccessible to the Government, outline the difference between the 515164 and the final part that is assembled by Oshkosh. The part configuration details include information about mounting locations on the vehicle and tolerances. The specification sheet does not include materials, dimensions, or performance requirements for internal components, or mounting details for the assembly on the vehicle chassis. Due to the lack of a TDP, or in-depth technical specifications of the sole-source part, the validity of the researched differential carrier is difficult to evaluate.

Differential carriers offered by Eaton, Meritor, and Mack were reviewed. There is not enough information to determine if these options will fit on the vehicle and operate in the same manner as the sole-source part. A visual comparison of the differential carrier from the Army technical manual to the researched alternatives was conducted, but none of the commercially available parts appeared to be identical in mounting locations, size, or shape. Due to the internal components, even a part that looked the same may vary in performance, capability, or manufacturing.

When, or if, the technical information for the differential carrier is made available to the Government, additional and specific market research can be conducted, and competitive procurement can be considered.

The Contracting Officer determined the Carrier, Gear Assembly, to be a commercial item based on procurement history. The prior award was made using FAR Part 12 procedures and the award is precedent setting in accordance with Defense Federal Acquisition Regulations (DFARS) 212.102(a)(ii)(A).

9. Interested Sources: To date no additional sources have expressed interest in this item.

10. Other Facts: Procurement History:

(1) Contract: SPRDL1-20-D-0102 Award Date: 20 June 2020 Contractor: Oshkosh Defense, LLC. (CAGE 75Q65) Value: $502,476.57 Competitive Status: Sole Source Authority: FAR 6.302-1, Only One Responsible Source

(2) Contract: SPRDL1-20-C-0033 Award Date: 18 November 2019 Contractor: Oshkosh Defense, LLC. (CAGE 75Q65) Value: $324,077.40