M1020RedactedJ A.pdf

Program/Item: M1020 120mm Mortar Ignition Cartridge Ammunition Estimated Amount: $49.9M Control No.: CAO-10-0143

J&A CONCURRENCE SHEET

Program/Item: M1020 120mm Mortar Ignition Cartridge

Authority: 10 U.S.C. 2304(c)(3) as implemented by FAR 6.302-3(a)(2)(i), Industrial Mobilization; Engineering, Developmental, or Research Capability; or Expert Services.

Prepared by:

Amy Kirzow DSN: 880-4032 Contract Specialist Date: 12/13/10

Procuring Contracting Officer:

Lisa Formoso DSN: 880-7858 Contracting Officer Date: 12/13/10

Technical:

Martin Moratz DSN: 880-2245 Division Chief Date: 12/15/10 Conventional Ammunition Division

Requirements:

Martin Moratz DSN: 880-2245 Division Chief Date: 12/15/10 Conventional Ammunition Division

CONCURRENCE:

Sheela R. Lopez Center Director CCJM-CA //Signed Sheela R. Lopez// 13 December 2010 Signature Date

Lawrence M. Brady Legal Counsel RDAR-GCB //Signed Larry Brady// . 20 December 2010

Lawrence A. Visconti Associate Director, JM&L Contracting Center

CCJM /s// Lawrence A. Visconti, Jr. 17 Dec. 2010

Rebecca E. Wisser Competition Advocate ./s/ Rebecca E. Wisser 18 Jan. 2011 CCJM-CM Signature Date

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

1. Contracting Activity: U.S. Army Contracting Command, Joint Munitions & Lethality (JM&L) Contracting Center, Picatinny Arsenal, NJ 07806-5000.

2. Description of Action:

a. This Justification and Approval (J&A) is for the purchase of M1020 120mm Mortar Ignition Cartridges to include the Load, Assemble, and Pack (LAP) of the Ignition Cartridges, inclusive of Black Powder, Propellant WC (R) 816 and Nitrocellulose, which are components of the Cartridges. The proposed acquisition strategy for the cartridges and the above components will be on an other than full and open competition basis, with competition restricted to the National Technology and Industrial Base (NTIB).

b. The Government Plans on awarding multiple firm-fixed price Indefinite Delivery Indefinite Quantity (IDIQ) contracts that contain a Base of five (5) years and will include an option to extend the period of performance for additional two (2) years and will utilize Procurement of Ammunition, Army (PAA) funding. Each delivery order issued will be competed among the base contract awardees. A projected award date is third quarter FY11. The total contract period will not exceed 7 years. The minimum guarantee of the contract will be a process map with approximate value of $3,000.

c. Pursuant to DFARS 207.103, an acquisition plan is required for the M1020 120mm Mortar Ignition Cartridges and is currently being staffed for Program Executive Officer Ammunition (PEO Ammo) approval.

d. The program is designated as an Acquisition Category (ACAT) III.

3. Description of Supplies/Services:

a. This action will procure M1020 120mm Mortar Ignition Cartridges, inclusive of Black Powder, Propellant WC (R) 816 and Nitrocellulose, which are components of the Cartridges, which is used in production of the following 120mm Mortar Cartridges:

M934A1 HE, M934E1 HE IM, M929 Smoke WP (MOF), XM929 Smoke WP (PD), M930 VL Illum, M983 IR Illum, and M931 FRPC. M1020 ignition cartridges are loaded with Black Powder, Propellant WC (R) 816 and Nitrocellulose, (a sub-ingredient of Ball Powder). The M1020 120mm Mortar Ignition Cartridge is inserted and secured into the hollow portion of the fin assembly. The ignition cartridge is the mechanism by which the propelling charges are initiated and when dropped into the firing tube, the ignition cartridge strikes the firing pin to initiate the primer. The ignition train travels up the ignition cartridge and flashes through holes in the fin assembly to ignite the propelling charge. The M1020 ignition cartridges are part of the final assembly of 120mm HE, HE IM, smoke, illuminating, and full range practice cartridges.

b. National Stock Number is 1315014655969.

c. The total estimated dollar value for this action is $49.9(M). The first year quantity is estimated to be for 250,600 M1020 Ignition Cartridges. The total estimated quantity for the five year IDIQ contract is for 1,329,552 M1020 ignition cartridges. If the additional two year option is awarded, the total estimated quantity for the entire seven (7) year contract is 1,996,600 M1020 ignition cartridges. The use of an IDIQ contract, in which Delivery orders will be issued, will allow for a rapid response as a need arises. In addition, in order to mitigate any adverse impact to the contract, the Government will continually look at the market for new capability.

d. This estimated dollar value is based on the known Program Objective Memorandum (POM) requirements for all services associated with PM CAS/SMCA procurements, along with any potential surge quantities (100% of POM) and FMS (30% of POM) in order to meet the requirements for all anticipated situations.. As total funding is programmed for the entire seven (7) year period of performance, it is very likely that the quantities under this seven (7) year contract will be utilized for either soldier’s inventory, training purposes or war reserve.

4. Authority Cited:

10 U.S.C. 2304(c)(3) as implemented by FAR 6.302-3(a)(2)(i), Industrial mobilization;

engineering, developmental, or research capability; or expert services, “to maintain a facility, producer, manufacturer, or other supplier available for furnishing supplies or services in case of national emergency or to achieve industrial mobilization.”

5. Reason for Authority Cited:

a. As described in FAR 6.302-3(a)(2)(i), use of other than full and open competition and FAR 6.302-3(b)(1)(v), restriction limited to the U.S. and Canada, are deemed applicable in order to maintain or create the required domestic (U.S./Canada) capability for the manufacture of the 120mm M1020 ignition cartridges (inclusive of Black Powder, Propellant WC (R) 816 and Nitrocellulose) and to make them available in the event of a national emergency or to achieve industrial mobilization. Over the period of this contract, should the M1020 ignition cartridge and its components not remain restricted to the NTIB, these components will be procured on a Full and Open Competition basis.

b. The planned procurement of 120mm M1020 ignition cartridges is consistent with retaining the NTIB. There is currently no alternative to other than full and open competition. The M1020 ignition cartridge, inclusive of Black Powder, Propellant

WC (R) 816 and Nitrocellulose, which are components of the Cartridges, falls under the Single Manager for Conventional Ammunition End Item/Component Watch List (see next paragraph 5c. for greater detail.) If full and open competition were attempted as an alternative, there is a substantial risk that domestic capabilities to manufacture the M1020 ignition cartridge could be lost.

c. The PEO-AMMO Industrial Base Office maintains the “Single Manager for Conventional Ammunition End Item/Component Watch List”. The watch list was developed based on industrial base assessments, which are performed pursuant to Section 806 of the Strom Thurmond National Defense Authorization Act of Fiscal Year 1999. The current Section 806 determination is currently being staffed for Program Executive Officer Ammunition (PEO Ammo) approval concurrent with the ASR/AP. The M1020 Ignition Cartridges, Black Powder, Propellant WC (R) 816 and Nitrocellulose, are identified as “At Risk” items on the June 2009 list. The 120mm M1020 Ignition Cartridge involves critical process skills (loading and handling of explosive and propellants), and would be in the best interest of the DoD to maintain these capabilities within the NTIB.

Limiting competition to the NTIB will also keep vital facilities and suppliers in business and make them available in the event of a national emergency. Black powder is produced by Goex, Inc. (Minden, LA). This component is on the Section 806 Watch List as a critical risk component. Because of the criticality of Black Powder and the critical skills and equipment required, it is necessary that a black powder manufacturing source/capability be retained in the US and Canada. Ball Propellant is currently produced by St. Marks Powder (St. Marks, FL) and is on the Section 806 Watch List. A variety of critical engineering and operator skills are involved in the operation of the Ball Propellant manufacturing facility. St. Marks operates a dedicated Nitroglycerin (NG) manufacturing unit on site, which is a required constituent for Ball Propellant (WC816).

Limiting competition of Ball Propellant (WC816) poses a low risk to the NTIB. Because of the significant importance of Ball Propellant in the M1020 Ignition Cartridges production, it is necessary that a ball propellant manufacturing source/capability will be retained in the US and Canada. Nitrocellulose is a main energetic component in the ball propellant. The manufacture of NC is a critical core capability and Radford Army Ammunition Plant (RFAAP) is the sole producer of military-grade NC within the NTIB.

RFAAP possesses the unique skills, equipment, and production processes to manufacture mil spec NC for military propellants. For this procurement, NC will be obtained from the NTIB.

An “At Risk” item is essential in cases of national emergency or to achieve industrial mobilization and for which there is a “moderate risk” that the capability will not be sustained without government intervention as outlined below:

(i) Critical Processes/Skills - The M1020 ignition cartridge consists of several components, including Black Powder, Propellant WC (R) 816 and Nitrocellulose, all of which are on the

Component Watch List. There are a variety of critical skills involved in the production of the M1020 ignition cartridge. Ignition cartridge production requires use of specialized processes to control black powder weight, moisture content, and composition stability. Specialized operations are also required on the part of the M1020 Ignition Cartridge manufacturer to load, assemble, and pack (LAP) the ignition cartridges as well as associated specialized operations for static pressure, sensitivity, and leak testing. Experience is required in LAP of munitions which incorporate rigid combustible cases, propellants, and igniters. Manufacture of ignition cartridges requires knowledge of processing, handling, storage of energetic materials, mortar ballistic performance and test requirements. Other skills required are trained load technicians, load and weight machinists, and environmental experts/engineers. Restricting this acquisition to the National Technical and Industrial Base (NTIB) will ensure that there is adequate and affordable 120mm Ignition Cartridge industrial capability to meet current and future requirements.

(ii) Capacity - There were five companies, four large businesses and one small business that responded to the market survey and were determined to be capable of producing M1020 ignition cartridges. The M1020 ignition cartridge market is characterized by adequate capacity to produce the required quantities. Two contractors are currently producing mortar ignition cartridges, and three contractors will have to design, facilitize and prove-out M1020 production lines. These facilities have the capacity to handle large order volumes, if required. Their economic rates of production may be higher than potential future requirements are able to sustain. However, if producers leave the business because of a lack of demand, surge capacity may be permanently jeopardized.

(iii) Market Risk - The conventional ammunition production base has been steadily downsizing and consolidating over the last decade in response to declining procurements by the Department of Defense (DOD) and the declining economy. Only a limited number of sources within the NTIB possess complete capability (black powder facilities, LAP facilities and skilled workforce, etc.) to assemble ignition cartridges to the detailed specification requirements. In addition to protecting domestic capabilities, by competing among the NTIB, ignition cartridge producers will generate competitive pricing and encourage the manufacturing base to streamline and improve their processes in order to provide the best product to the Government. Without restricting production to the NTIB, there is substantial risk that the capability to manufacture these cartridges could be lost. If lost, the capability to produce these cartridges would be difficult and time consuming to replace.

(iv) Quality Risk - High levels of process and quality control are required to eliminate critical defects during manufacture of the M1020 ignition cartridge. The M1020 ignition cartridge is used in production of the following 120mm Mortar Cartridges: M934A1 HE, M934E1 HE IM, M929 Smoke WP (MOF), XM929 Smoke WP (PD), M930 VL Illum, M983 IR Illum, and M931 FRPC. Production of each of these cartridges could be endangered if high quality ignition cartridges were not available.

d. As in past practices, the restriction to the U.S. and Canadian production base would allow for immediate activation of a surge in M1020 ignition cartridge production in the event of a national emergency and achieve a stronger M1020 ignition cartridge production base through the best value source selection process. Based on the Section 806 Determination it is required that this acquisition is restricted to National Technology and Industrial Base.

e. Although it is Department of Defense policy to use reliable foreign suppliers, it is also Department of Defense policy not to accept foreign vulnerability, which poses risks to national security. Award of the M1020 ignition cartridges to a producer not located in the U.S. or Canada would pose such a risk. The Army cannot jeopardize its ability to conduct a war by awarding a contract to a non-domestic producer whose future political and business policies/practices are unpredictable. The U.S. and Canada have entered into an Executive Agreement under which Canadian firms producing materials for the U.S. military are bound by the provisions of the Defense Priorities and Allocation System (DPAS). Under DPAS, firms can be compelled to meet military requirements by performing specific defense contracts on a priority basis and by rapidly increasing production to maximum capacity. While the quantities will be restricted to the minimum amount required to protect the industrial base, it is recommended that award of the M1020 ignition cartridges be restricted to the NTIB.

f. In accordance with Section 806 of the Strom Thurmond National Defense Authorization Act, a determination approved by PEO Ammunition certifying that this conventional ammunition procurement action be restricted to source within the NTIB, comprised of the U.S. and Canada has been provided along with a detailed Section 806 Watch List. Per AR 700-90, the SMCA has conducted an Industrial Base Analysis for the M1020 ignition cartridge. Ignition Cartridge production facilities have highly specialized production lines designed specifically for loading and assembling including handling black powder, ball powder, weight, moisture and composition control, static pressure, sensitivity, and leak testing. Within the NTIB only a limited number of sources possess the complete capability to manufacture Ignition Cartridges. It would cost approximately $5M and take upwards of eighteen months to replace current M1020 mortar ignition cartridge LAP facilities. This estimate was compiled by the PM CAS Project Manager and is based on the cost and time involved to design and build new ignition cartridge facilities to include ignition cartridge LAP process equipment, buildings, and temperature/humidity controls and to successfully prove out the lines.

The contractor must have available on-site or near-site storage capacity to handle/store at least 150,000 lbs of energetic materials at one time. For these reasons LAP will be limited to the NTIB.

6. Efforts to Obtain Competition:

a. As required by FAR 5.201, a pre-solicitation notice will be published in FedBizOps, with the appropriate rationale for Other than Full and Open Competition, after approval of the J&A. In addition, based on current Market Research, effective competition is anticipated.

b. Publicizing subcontracting opportunities will be complied with in accordance with FAR 5.206.

c. Subcontracting competition by the prime contractor will be maximized by the Procuring Contracting Officer as a function of negotiations.

7. Actions to Increase Competition:

a. It is anticipated that future acquisition of M1020 ignition cartridges will be restricted to the NTIB. Based on the capabilities and experience of the contractors responding to the market survey, sufficient competition within the NTIB is expected for this contract. In addition, in order to maintain competition throughout the life of this contract, the Government plans on awarding multiple firm-fixed price Indefinite Delivery Indefinite Quantity (IDIQ) contracts, where each Delivery Order will be competed. Also, the Government will continually test the market for new capability and should the M1020 ignition cartridge or its subcomponents not remain restricted to the NTIB, these components will be procured on a Full and Open Competition basis. In addition, market research will be conducted annually to determine if other sources exist that may be able to provide an acceptable product to the Government at a reasonable price. If this is the case, this will be taken into consideration and may result in a new competitive RFP.

b. A Level III Technical Data Package (TDP), suitable for competition will be used for future requirements.

8. Market Research:

A market survey was published on FedBizOps on 09 Sep 2010, under W15QKN-10-X- 0369 for the M1020 120mm Mortar Ignition Cartridge.

There were five (5) responses to the market survey W15QKN-10-X-0369, for the M1020 Ignition cartridge. Five (5) companies were determined to be capable of producing the

M1020 based on technical evaluation of information submitted combined with their past experience stated below; Pocal Industries, American Ordnance (AO), General Dynamics-Ordnance and Tactical Systems, Marion, IL, Alliant Techsystems (ATK) and Chemring Ordnance.

a. Pocal Industries 100 Electric St.

Scranton, PA 18509

- Pocal Industries, a small business, is the only known small business that is capable of producing the M1020 Ignition cartridge. They are currently producing 60mm M702 and 81mm M299 and M752A1 ignition cartridges under Government contract W52P1J-07-C-0028 and the 120mm M1020 ignition cartridge under contract W15QKN-07-C-0092. Pocal has successfully produced and delivered over 1.67 million M1020 mortar ignition cartridges since 1999. For all future efforts, they already possess all of the proven equipment, tooling, gages, and test equipment to fabricate, inspect, test, and store the M1020 Ignition Cartridges. Pocal controls the entire manufacturing process producing all critical metal parts in-house on their own automatic CNC equipment. Under Pocal’s quality program, all components are manufactured, inspected and tested in accordance with the requirements of

ISO 9001:2008.

b. American Ordnance, LLC 2280 Highway 104 West, Suite 2 Milan, TN 38358

- American Ordnance, a large business, is the operating contractor for the USG for Iowa Army Ammunition Plant (Iowa AAP) and Milan Army Ammunition Plant (Milan AAP). AO Iowa AAP is currently producing 60mm and 81mm mortar propelling charges under contracts W52P1J-09-C-0032 and W52P1J- 09-C-0029, respectively. AO Milan AAP is currently producing 60mm M702 ignition cartridges under contract W52P1J-04-C-0050. AO’s operations are capable of the load, assemble, and pack (LAP) of high explosive ordnance for the Department of Defense. AO, through its operating contract with the Government, possesses the necessary equipment, facilities, and tooling to fabricate and deliver the required end-items. AO possesses the necessary safety clearances to handle all hazard classifications associated with the 120mm M1020 ignition cartridge and its energetic components. The AO Quality Management System is modeled after, and meets, the criteria of ISO 9001:2000. AO has extensive experience with respect to propellant handling/storage and other hazardous handling/storage. AO has knowledge of producing M1020 through their past experience with 60mm and 81mm mortar ignition cartridges. AO needs to design, facilitize and prove-out a

M1020 ignition cartridge production line. AO is capable of producing M1020 Ignition Cartridges.

c. General Dynamics Ordnance and Tactical Systems (GD-OTS) 8820 Route 148 Marion, IL 62959

- GD-OTS, a large business, is currently producing the 81mm and 120mm mortar propelling charges under contract W15QKN-05-C-1167. GD-OTS Marion facility provides most of the equipment necessary to manufacture the 120mm Mortar Ignition Cartridges, including black powder pelletizing and environmentally controlled LAP operations. They are certified in Environmental Management System, ISO 14001:2004 and certified in the Occupational Health and Safety Management System, OHSAS 18001:2007.

GD-OTS Marion can produce M1020 Ignition Cartridges but will need to design, facilitize and prove out a M1020 ignition cartridge production line.

d. Alliant Techsystems (ATK), Inc.

Missile Subsystems and Components Division 210 State Route 956 Rocket Center, WV 26726

- ATK, a large business has over 50 years experience in defense products and services to the Department of Defense. Their facilities have produced nearly 500,000 rocket motors and igniter systems for the Department of Defense since 1945. Currently ATK supports the Load Assemble and Pack (LAP) operations on 120mm ammunition, warhead explosive fill for several DoD missile systems and automated energetics loading for grenade fuzing. ATK MSC encompasses all the skill sets necessary to manufacture, inspect, test, manage, and deliver the required quantities of the 120mm M1020 Mortar Ignition Cartridge. ATK MSC has a diverse staff of engineers, scientists, and technicians with cross-training experience between metal parts machining, composite materials fabrication, rocket motors, gun-launched ammunition, explosives, propellants, and associated safety, test, and inspection technologies. ATK MSC currently manufactures 120mm tank rounds such as the M865, M829A3, M1002, and M830A1. In addition, ATK MSC currently manufactures 25mm and 30mm medium caliber ammunition components.

ATK can produce M1020 Ignition Cartridge, but needs to design, facilitize and prove out a M1020 ignition cartridge production line.

e. Chemring Ordnance (COR), Inc.

10625 Puckett Rd Perry, FL 32348

- Chemring Ordnance Inc (COR), a large business, has over 40 years experience in ammunition production that includes the load, assemble, and pack (LAP) of pyrotechnic devices. COR is structured into four separate business sectors – munitions, pyrotechnics, countermeasures, and explosive ordnance disposal. Chemring Ordnance possesses the experience to produce the Ignition Cartridges, however, would need to invest in the appropriate equipment to be capable of meeting the monthly production quantities. Chemring Ordnance can produce M1020 Ignition Cartridge, but need to design, facilitize and prove-out a M1020 ignition production line, which is a time consuming process.

9. Interested Sources:

To date, no other sources have written to express an interest in this acquisition.

10. Other Facts:

a. Procurement History:

The following company has produced the M1020 Ignition Cartridge in the past:

American Ordnance LLC 2280 Highway 104 West, Suite 2 Milan, TN 38358

American Ordnance LLC is the operating contractor for the USG for Iowa Army Ammunition Plant (Iowa AAP) and Milan Army Ammunition Plant (Milan AAP). AO Iowa AAP is currently producing 60mm and 81mm mortar propelling charges under contracts W52P1J-09-C-0032 and W52P1J-09-C-0029, respectively. AO Milan AAP is currently producing 60mm ignition cartridges under contract W52P1J-04-C-0050. AO, a large business, has assembled many different HE mortars as well as Ignition Cartridges and Propelling Charges and is ISO 9001:2000 approved. AO has experience melt pouring HE into mortars. Recent experience included loading PAX 60mm shells. AO has two melt pour facilities and a cast loading facility for HE. They are capable of melt pour, x-ray, assembly, and pack. AO has an experienced work force in dealing with the USG as well as mortar melt pour operations. AO is fully capable of producing 120mm M1020 Mortar Ignition Cartridges.

b. The current manufacturer of the M1020 120mm Ignition Cartridge is Pocal Industries

Scranton, PA.

Contract Number: W15QKN-07-C-0092 Program: 120mm M1020 Ignition Cartridges Date of Award: 06 April 2007 Competitive Status: Other than Full & Open, Limited to the NTIB Authority Cited: FAR 6.302-3 Quantity: 173,129 units Award Amount: $3,056,318.50

c. Acquisition Data Availability: A Statement of Work (SOW) with a competitive technical data package is currently available and will be used for current and future competitive actions restricted to the NTIB.

d. Unusual and Compelling Urgency: Not applicable to this procurement.

e. Subcontracting Competition: The contract will include FAR Clause 52.244-5 entitled

“Competition in Subcontracting” and FAR 52.219-9 entitled “Small Business Subcontracting Plan.” Subcontracting opportunities by the prime contractor(s) will be maximized by the Procuring Contracting Officer as a function of negotiations.

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

Martin Moratz Date: 15 December 2010 Division Chief Conventional Ammo. Division Signature: //signed//

SFAE-AMO-CAS

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

Martin Moratz Date: 15 December 2010 Division Chief Conventional Ammo. Division Signature: //signed//

SFAE-AMO-CAS

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.

The resulting proposal will be subjected to price analysis and the need for certified cost and pricing data is not anticipated, per FAR 15.403-1(b)(1).

Lisa Formoso Date: 13 December 2010 Contracting Officer CCJM-CA Signature: //signed//

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

Lisa Formoso Date: 13 December 2010 Contracting Officer CCJM-CA Signature: //signed//

APPROVAL

Based on the forgoing justification, I hereby approve the procurement of M1020 120MM Ignition Cartridges on an Other than Full and Open Competition basis, pursuant to the authority of U.S.C 2304 (c)(3) subject to the availability of funds, and provided that the services and property herein described have otherwise been authorized for acquisition.

Date: _25 Jan 2011__ ____________//S//____________________

GERARDO J. MELENDEZ

Director, ARDEC