JA_SPRDL1-24-R-0126_Redacted.pdf

SPRDL1-24-R-0126

Previous J&A: SPRDL1-22-R-0067

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

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

2. Description of Action: DLA-WRN proposes to award a new Firm-Fixed-Price contract to Meritor Industrial Products LLC, Commercial and Government Entity (CAGE) 3D6E9, for National Stock Number (NSN) 3010-01-570-7721, Gear Assembly, Speed, using Army Working Capital Funds.

3. Description of Supplies/Services: The NSN 3010-01-570-7721, part number A86015445, Gear Assembly, Speed, is used on the Palletized Load System (PLS) A1 vehicle. Its primary function is to allow the wheels to rotate at different speeds while maintaining proportional RPMs between left and right wheels. The deliverable for this contract is for a base quantity of 6 each, with an option quantity of 6 each, making a total of 12 each. The total maximum value of this contract is $

Acquisition Method Code (AMC):

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

Acquisition Method Suffix Code (AMSC):

C - This part requires engineering source approval by the design control activity in order to maintain the quality of the part. An alternate source must qualify in accordance with the design control activity's procedures, as approved by the cognizant Government engineering activity.

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: A Gear Assembly - Speed Decreaser or commonly known as Axle Differential Assembly is a mechanical component designed to reduce the rotational speed from an input shaft to an output shaft. It typically consists of a set of gears with a fixed gear ratio. When the input shaft rotates, the gears transmit the motion to the output shaft at a lower speed. In another word, the Gear Assembly -Speed Decreaser reduces the engine’s high-speed rotation to a suitable speed for the wheels.

This Gear Assembly is made by Meritor. It was integrated and authorized by Oshkosh for use with the Palletized Load System (PLS) A1 vehicle.

Oshkosh developed the system-level requirements for the drive train system 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. Oshkosh and Meritor are the vendors who possesses the technical data and expertise to manufacture this gear assembly.

The Government does not have the pertinent technical data to enable competitive re-procurement. The Government does not own the necessary intellectual property data rights to the pertinent technical data to enable competitive re-procurement.

The axle is manufactured solely by Meritor, who owns all the data rights to the Gear Assembly – Speed Decreaser. Only Meritor has the specific technical expertise and proper facilities to manufacture the Gear Assembly. Additionally, Meritor has the history of building Gear Assemblies that allow the PLS A1 to perform its mission. Meritor has manufactured Gear Assemblies that have successfully operated in the field and have met all mobility requirements outlined in the Army Technical Purchase Description.

Unlike other commercially produced Gear Assembly, this Gear Assembly has been designed specifically for use on the PLS A1. Oshkosh and the Government conducted developmental and operational testing during the vehicle’s design and initial production phases, which justified Oshkosh’s selection of Meritor as the manufacturer of this Gear Assembly. The testing proved that Meritor could manufacture a Gear Assembly – Speed Decreaser that meets the Government’s performance and reliability, availability, and maintainability (RAM) requirements. The TDP for this Gear assembly is proprietary of Meritor and is unavailable to the Government or commercial manufacturers. If the Government were to purchase Gear assembly - Speed Decreaser that have not undergone proper verification, mission failures and potential loss of mission critical functions to the vehicle could occur. Without this proper verification, it is likely that the Gear Assembly - Speed Decreaser would not fit or function properly, Due to the lack of technical data available for the Gear Assembly - Speed Decreaser, reverse engineering is the only recourse for the Government to increase competition through development of a competitive build-to-print TDP.

Since the Government does not own any of the technical data, the Government would have to reverse engineer the Gear Assembly 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 Gear Assembly 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 Gear Assembly 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 calculated the effort that reverse engineering this PLS A1 Gear Assembly would cost an estimate minimum of $3,500,000 that would be comprised of design, development, testing, technical data development, and finding a new source to build the Gear Assembly to the fully competitive technical data package.

The reverse engineering process consists of procuring samples of the current part, tearing down the samples to understand and characterize the assembly’s components, dimensions, and materials, and designing the reverse engineered part. Several prototypes would need to be fabricated. The process to reverse engineer the part and fabricate prototypes would cost an estimated minimum of $1,000,000 with a lead time of 12 months, of which $100,000 would be used to procure samples, $700,000 would be used to characterize the part and develop the new design, and $200,000 would be used to fabricate prototypes. In addition, the prototype would have to undergo design validation and vehicle integration testing, which would cost an additional estimated minimum of $1,500,000 with an additional lead time of 24 months. The prototype testing would consist of a form, fit, and function test, a performance test, RAM testing, accelerated life testing, cold and hot environment testing, salt spray testing, and maximum load operation testing. To procure this axle competitively, a complete TDP would need to be developed, which would cost an estimated minimum of $1,000,000 with an additional lead time of six months. In total, reverse engineering, design validation, performance testing, and developing the TDP would require at least 42 months and an estimated minimum of $3,500,000. To neglect design validation and integration testing would be a high risk as premature failures of this item in the field could jeopardize the Army’s mission in a potentially adverse operational environment.

Ultimately, there is a vital need for correct approved components to be contractually obtained under this procurement to maintain readiness and avoid vehicle dead-lining due to supply problems. The Government would not be able to recover, through subsequent competition, the duplication of costs involved in reverse engineering the item to create a new and competitive TDP within a reasonable amount of time. At the current average usage rate of 6 units each year, a current unit cost of $ , and assuming 25% cost savings achieved through competition, the $ in annual savings would take over years to offset the estimated $3,500,000 cost of reverse engineering the item and developing a competitive TDP.

Action Time Cost Part R&D (design, development, production)

12 months $1,000,000.00

RAM Vehicle testing (5 vehicles at 5000 miles per vehicle)

24 months $1,500,000.00

Develop TDP 6 months $1,000,000.00 Find Additional Source 12 months - Total Development Time 54 months $3,500,000.00

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"; 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.

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

There are no contractors currently in the process of being qualified as an alternate source of supply for this item. Currently, there are no current or planned efforts to qualify additional sources since the Government does not possess a fully defined and validated TDP for this item. The source of supply, Meritor part number A86015445 Cage Code 3D6E9 owns the detailed TDP for this item. Any vendor that believes they can provide this item, while meeting the same requirements, should seek qualification as a secondary source through the Competition Management Office Source Approval Program. Reverse engineering, testing, and all other efforts to become a secondary approved source will be at their own expense.

8. Market Research:

The Ground Vehicle Systems Center (GVSC) Tactical Vehicle Sustainment Engineer performed the following internet searches on 4 April 2024 to find suitable competition for the Meritor axle assembly.

Keywords searched: axle differential assembly, military axle, HEMTT axle, heavy truck axle.

https://www.rockwellaxles.com/rockwell_axle_specs.htm https://spicerparts.com/parts?category=1 https://www.hendrickson-intl.com/search?ti=product&st=axle https://www.danaaftermarket.com/spicer-commercial-vehicle/commercial-axle/differential-carriers/part/differential-carrier/515164?cat1=0&str=515164&cp=0&catalog=PIMS_NA&partType=PART

Commercial axles offered by Rockwell, DANA/Spicer, and Hendrickson 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. For this assembly, Oshkosh purchases a commercial axle from a supplier for military use. A visual comparison of the axle from the Army technical manual to the researched alternatives was conducted, but none of the commercially available parts appear to be identical in mounting, size, or shape. Due to internal components, even a part that appeared the same externally could vary in performance, capability, or manufacturing. When, or if, the technical information for the axle assembly is made available to the Government, additional and specific market research can be conducted, and competitive procurement can be considered.

On 29 May 2024, the Contract Specialist conducted additional market research.

Specifically, they examined the Department of Defense (DOD) Commercial Item Determination Database (CID) for information related to the National Stock Number (NSN) 3010-01-570-7721. However, no records were found for this NSN in the database. It is important to note that although there is no formal commercial determination for NSN 3010-01-570-7721 in the database, there is compelling evidence suggesting the use of Federal Acquisition Regulation (FAR) Part 12 procedures in the previous procurement of the same product. This procurement took place under the contract SPRDL1-22-C-0060, which was officially awarded on 21 September 2022. As a result of the market research conducted, it was concluded that this product is of a type used, sold/leased, or offered for sale to the public and is available in the commercial marketplace with or without modifications pursuant to the definition of a commercial product at FAR 2.101. This product meets the definition of a commercial product at

FAR 2.101.

A Sources Sought was posted to The System for Award Management on 29 May 2024, and remained open for 15 days. One (1) response was received by BHPE LLC on 30 May 2024.

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

10. Other Facts: Procurement History:

Contract Number: SPRDL1-22-C-0060 Award Date: 2022 September 21 Contractor: Drive Line, Inc. (CAGE CODE 0GE52) Contract Value: $122,070.00 Competitive Status: Full and open competition after exclusion of sources

11. Technical Certification: I certify that the supporting data under my cognizance which is included in the justification is accurate and complete to the best of my knowledge and belief.

Name:

Title: Branch Chief - TWVS Signature:

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S i g n e d b y :

12. Requirement Certification: I certify that the supporting data under my cognizance which is included in the justification is accurate and complete to the best of my knowledge and belief.

Name:

Title: Branch Chief - Procurement Signature:

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S i g n e d b y : U S A

13. Fair and Reasonable Cost Determination: I hereby determine that the anticipated cost to the Government for this contract action will be fair and reasonable.

This determination will be based on the results of a detailed cost and/or price analysis.

The contractor will not be required to submit certified cost or pricing data as this item has been determined to be a commercial product.

Name: Reinbolt, Adam R CIV DLA LAND AND MARITIME (USA) Title: Contracting Officer Signature:

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X A d a m R e i n b o l t

S i g n e d b y : D L A

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

Name: Reinbolt, Adam R CIV DLA LAND AND MARITIME (USA) Title: Contracting Officer

Signature:

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X A d a m R e i n b o l t

S i g n e d b y : D L A