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Control Number: CAO-13-0079 Program: M777A2 LW155mm Wheel Assemblies Est. Amount: $2,420,000

J&A CONCURRENCE SHEET

Program/Equipment: M777A2 Lightweight 155mm Howitzer Wheel Assemblies

Authority: 10 U.S.C. 2304(c)(1); FAR 6.302-1(a)(2)(ii)(A),Only one responsible source and no other supplies or services will satisfy agency requirement.

Prepared by: Typed Name: Scott Dern DSN: 880-8674

Title: Contract Specialist Date: 13 November 2012

PCO: Typed Name: David E. Drag DSN: 880-6290 Title: Contracting Officer Date: 13 November 2012

Technical: Typed Name: Keith Gooding DSN: 880-4427 Title: Program Manager Date: 7 November 2012

Requirements: Typed Name: Keith Gooding DSN: 880-4427 Title: Program Manager Date: 7 November 2012

CONCURRENCE:

Group Manager __//s//_______________ __12/12/12______ ACC-NJ-JA Albert A. Rinaldi Date

Center Director ___//s//______________ ___12/12/12_____ ACC-NJ-JA Frank Kosker Date

Legal Counsel ___//s//______________ ___12/18/12_____ RDAR-DGC-P Juan F. Garcia Date

Associate Director ___//s//______________ ____1/8/13______ ACC-NJ Sandra LaBell Date

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

1. CONTRACTING ACTIVITY:

U.S. Army Contracting Command – New Jersey

2. DESCRIPTION OF ACTION:

a. The proposed “Other than Full and Open Competition” (OF&OC) contract action is to award a new contract to Hutchinson Industries, Trenton, New Jersey, for Army wheel assemblies and Marine wheel assemblies for the M777A2 Howitzer.

b. This new requirement will be an Indefinite Delivery, Indefinite Quantity

(IDIQ) contract with five (5) one (1) year ordering periods for a total of five (5)years. The IDIQ contract will utilize Firm Fixed Price delivery orders.

The minimum contract guarantee will be 150 wheels for a total value of $150,964.92.

c. The total estimated ceiling value of this contract action is $2,420,000, utilizing Weapons & Tracked Combat Vehicles (WTCV) funding (Procurement Army), Procurement Marine Corps (PMC) funding as well as Foreign Military Sales (FMS) funding.

d. This requirement is in accordance with the M777A2 Howitzer Acquisition

Plan Revision, which was approved on 13 March 2008 and signed by John S. Thackrah, Assistant Secretary of the Navy – Research, Development & Acquisition (ASN-RDA).

3. DESCRIPTION OF SUPPLIES/SERVICES:

The M777A2 Lightweight 155mm Howitzer is a towed 155mm howitzer that provides increased capability in mobility, survivability, deployability, and sustainability in any expeditionary environment throughout the world. The M777A2 is a direct support and general support artillery system, which is replacing the M198 155mm Medium Towed Howitzer. It has incorporated innovative design technologies to overcome deficiencies inherent in the present M198 Howitzer. The M777A2 LW155mm is more deployable, mobile, lethal, and survivable than the M198. The M777A2 LW155mm is being fielded with an integrated Digital Fire Control System (DFCS) that enables the M777A2 LW155mm to emplace and displace faster and fire more accurately.

This proposed action will furnish approximately 300 Non-Run Flat wheel assemblies (Configuration 1) for the Marines supporting Foreign Military Sales production and sustainment of M777A2 LW155mm howitzers and approximately 1,000 Run-Flat wheel assemblies (Configuration 2) for the Army. The estimated unit cost of Configurations 1 for the Marine Wheel Assemblies is $1,006.43. The estimated unit cost of Configuration 2 for the Army Run-Flat is $1,854.61.

4. AUTHORITY CITED:

10 U.S.C. 2304(c)(1) – Only One Responsible Source and no other supplies or services will satisfy agency requirements as implemented by FAR 6.302-1 (a)(2)(ii)(A). Supplies deemed to be available only from the original source in the case of a follow-on contract for the continued development or production of a major system or highly specialized equipment, including major components thereof, when it is likely that award to any other source would result in substantial duplication of cost to the Government that is not expected to be recovered through competition.

5. REASON FOR AUTHORITY CITED:

The following provides rationale under the authority of FAR 6.302-1(a)(2)(ii)(A) for the procurement of M777A2 LW155mm Howitzer Wheel Assemblies:

a) Substantial duplication of cost to the Government is not expected to be recovered through competition for both Configuration 1(Marine Corps Non-Run Flat) and Configuration 2 (Army Run-Flat). For both configurations, Hutchinson Industries is the developer and current producer of the LW155mm Non-Run and Run-Flat Wheel Assemblies.

Hutchinson produced both Configuration 1 and 2 on contract W15QKN- 05-C-0608. As set forth herein, Hutchinson Industries is the only entity with the necessary knowledge and experience to produce the required configurations. It is estimated that it would cost approximately $1,260,576 in duplications cost, which would not be recovered through competition, to both gain the experience necessary and to conduct qualification testing.

In addition, it would take six weeks of qualification testing for both configurations.

b) The duplication costs are broken out by labor category and rate and listed below. These costs are due to the need for substantial engineering and design efforts, additional testing, and revision of technical documentation.

These costs were derived from prior program efforts to qualify wheel assemblies. The duplication cost is estimated as follows:

Labor Category Labor Rate # of Hours Total

Program Manager $206.10 8 $1,649 Senior Engineer $166.93 40 $6,677 General Engineer $134.97 40 $5,399 Quality Assurance Engineer $105.43 40 $4,217 Engineering Technician $87.02 40 $3,481 Draftsman $102.82 80 $8,226 Manufacturing $97.86 40 $3,914 Inspection & Testing $152.70 40 $6,108 QC Technician $124.01 40 $4,960 Production Control $113.43 40 $4,537 Model/Tool & Die Maker $142.59 80 $11,407 Total Labor $60,576

Materials (including G&A and profit)

Proving Grounds Costs for 6 weeks @ $40K/day $1,200,000

Total $1,260,576

c) The Government has been unable to locate an alternate supplier for these specific items. Additionally, the design of the Run-Flat Wheel Assembly for the M777A2 LW155mm application is proprietary to Hutchinson.

d) For the Marine and Army configuration wheel assemblies, extensive research has indicated that no other Non-Run and Run-Flat designed wheel exists to meet the M777A2 LW155mm application. The Non-Run and Run Flat Wheel Assembly is necessary to allow M777A2 LW155mms to keep moving in spite of tire damage or punctures. Hutchinson Industries has pioneered Non Run and Run Flat Wheel Assemblies for the Marines and Army land systems. Hutchinson’s run-flats are used by the majority of US wheeled fighting vehicles – including High Mobility Multipurpose Wheeled Vehicles (HMMWVs) and Strykers. Hutchinson Industries has provided wheel assemblies, including the proprietary run-flat to the Army for over 80 years.

e) Standard commercial run-flats have a connection that can break upon ballistic impact. Hutchinson's Variable Function Insert (VFI) military run-flat is a connection free system, offering the required integrity and protection.

It has excellent ballistic characteristics, allowing it to absorb a substantial amount of energy from mine or Improvised Explosive Device (IED) blasts.

The proprietary VFI run-flat by Hutchinson Industries is able to absorb impacts without damaging the tire, while significantly reducing the incidental acceleration to a vehicle subsequent to impact. The run-flat also includes an internal bead-lock, which ensures the clamping of the tire beads on the rim at lowered or zero pressure. If other wheel assemblies were to be utilized, extensive retesting will be required to assess mobility characteristics, logistics and maintenance impacts, and ability to meet user requirements. In order to eliminate potential issues with availability of wheel assemblies which could halt sustainment of M777A2 LW155mm howitzers, it is imperative that Hutchinson Industries continue with a follow-on effort to supply the Marine Corps configuration wheel assembly as well as the Army configuration.

f) Analysis of Alternatives to Other than Full and Open Competition:

Two potential procurement strategies to satisfy the requirements were analyzed. One strategy is a sole source award to Hutchinson Industries for both Configurations. The second strategy is to split the requirement into two separate requirements. Under this approach, Configuration 1 for the Marines consisting of the 300 Non-Run Flat Wheel Assemblies would be solicited utilizing full and open competition (F&OC) and Configuration 2 1,000 Run-Flat wheel assemblies for the Army would be procured through a Sole Source Contract vehicle given their proprietary nature.

Award of a sole source contract to Hutchinson Industries is the alternative that assures delivery of the Wheel Assemblies within the critical delivery schedule, without substantial duplication cost with the lowest overall risk to the Government

Requirements: The wheel assemblies are essentially the tires by which the M777A2 LW155mm howitzer is moved. The Army configuration wheel assemblies are a run-flat design which includes an inner core. The run-flat design, proprietary to Hutchinson Industries is necessary to allow M777A2 LW155mms to keep moving in spite of tire damage or punctures.

Schedule risk: If procured under F&OC and the incumbent, Hutchinson Industries was not awarded the contract; the new awardee would require extensive retesting to assess mobility characteristics, logistics and maintenance impacts to meet user requirements. This testing alone would result in unacceptable delays to the delivery schedule which would have a severe impact on sustainment of the M777A2 LW155mm both within CONUS and in Afghanistan.

Cost risk: If procured under F&OC and the incumbent was not awarded the contract, the new awardee would incur an estimated duplication cost of $1,260,576.00. This cost estimate demonstrates the enormous effort required in recreating and proving the technology needed for the wheel assembly requirements.

Performance Risk Technical Data Package (TDP): The run-flat technology design is proprietary to Hutchinson Industries. Another vendor would have to develop the technology, design a wheel assembly and undergo testing to qualify that new design. This would introduce unacceptable performance risk for the M777A2 LW155mm program.

6. EFFORTS TO OBTAIN COMPETITION:

a) As required by FAR 5.201, the pre-solicitation notice, citing FAR 6.302- 1(a)(2)(ii)(A) will be published in Federal Business Opportunities (FedBizOpps) and will contain the appropriate rationale for other than full and open competition upon approval of this J&A document. Responding firms will be evaluated and considered for potential competition.

b) Effective competition is not anticipated on the M777A2 LW155mm Wheel Assemblies because Hutchinson Industries, Inc is the only vendor that has the requisite facilities and level of expertise necessary to perform this action without substantial duplication costs being incurred by the Government.

c) This requirement is intended to be conducted on a Sole Source basis.

Any firms that respond with information papers will be evaluated and considered. Effective competition is not anticipated if this procurement were solicited competitively, given that the type of parts requested for this action are specific to the needs of the M777A2 LW155mm program.

7. ACTIONS TO INCREASE COMPETITION:

Full and open competition is not practical at this time for the procurement.

In-depth research in the field has demonstrated no other vendors capable to supplythe Army wheel assemblies. As part of sustainment activities for the M777 howitzer, the Government will review the howitzer for continued supportability and obsolescence, which will include a review of wheel assembly technology.

8. MARKET RESEARCH:

During the last twelve (12) months, members of the Project Manager Towed Artillery Systems (PM-TAS) Business office including the Contracting Officer’s Representative and the Business Manager have canvassed the industrial community, both domestic and foreign, in order to obtain the latest information concerning the availability of similar wheel assemblies that would meet the M777A2 LW155mm requirements for Configuration 1(Marine Corps Non-Run Flat) and Configuration 2 (Army Run-Flat). Results of meetings with contractors during the Association of the United States Army (AUSA) Industrial Symposium in October 2012, subsequent telephone conversations, and continuous literature searches, indicate that no similar items currently exist which would meet the M777A2 requirements. Specific checks were also made in October 2012 with Accuride and Rodgard, as well as Michelin, Goodyear and Goodrich which resulted with all (5) five indicating they currently do not produce an item which would meet the M777A2 LW155mm requirements for the Army.

9. INTERESTED SOURCES:

a) To date, no other sources have written to express an interest.

b) Notices required by FAR 5.201 shall be published and any bids or proposals received shall be considered.

10. OTHER FACTS:

a) Procurement History:

Contract Number: W15QKN-05-C-0608, Hutchinson Industries, Inc.

Competition Status: Sole Source, Date Awarded: 26 Sep 2005 Authority Cited: FAR 6.302-1(a)(2)(ii), “Only one responsible source and no other supplies or service will satisfy agency requirements.”

Summary of Section 7: Full and open competition is not practical at this time for the follow-on procurement of 884 wheel assemblies (384 Marine Corps and 500 Army), optional quantity of 334 wheel assemblies (Configuration 1 - 200 Marine Corps and Configuration 2 - 134 Army). This is the final known buy of these items and in-depth research in the field has demonstrated no other capability for the Army wheels and a non-economical situation to try to procure the Marine Corps assemblies separately. Additionally, based on market research and procurement history, there is no expectation of a change in the current circumstances that justify proceeding on a sole-source basis for this procurement with regard to the future exercise of the option for the additional 334 wheel assemblies. However, as the LW155mm program progresses through fielding and into sustainment, specific subsystem components may possibly be broken out for spares acquisition. For instance, the wheels and tires may be broken out from the run-flat in sustainment. Should that occur, there may be a greater likelihood of competing such requirements. Such decisions would be made after an analysis on a case-by-case basis to determine the feasibility of separating these items.

b) Acquisition Data Availability: The M777A2 LW155mm Wheel Assemblies being purchased from Hutchinson Industries are commercial items involving proprietary components. Acquiring the proprietary rights to the Hutchinson run-flat technology for the M777A2 Wheel Assemblies is not practical at this time given that the run-flat technology is Hutchinson’s primary proprietary knowledge.

c) Unusual and Compelling Urgency. This is not applicable to this contract action as FAR 6.302-2 is not being cited as the authority for other than full and open competition.

d) Subcontracting Competition:

Subcontracting competition by the prime contractor will be maximized by the Contracting Officer. The solicitation and resulting contract award will include FAR Clause 52.244-5 entitled “Competition in Subcontracting.”

11. TECHNICAL 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.

Name: Keith Gooding Date: 11/7/12 Title: Program Manager, PM-TAS Office Symbol: SFAE-AMO-TAS Signature: __//s//_______

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.

Name: Keith Gooding Date: 11/7/12 Title: Program Manager, PM-TAS Office Symbol: SFAE-AMO-TAS Signature: ___//s//______

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 a formal technical evaluation, cost/price analysis, and comparison to the Independent Government Cost Estimate (IGCE) that will be used to determine the anticipated cost are fair and reasonable. In addition, certified cost and pricing data will be required.

Name: David E. Drag Date: 12/12/12 Title: Contracting Officer Office Symbol: ACC-NJ-JA Signature: ____//s//_______

14. CONTRACTING OFFICER CERTIFICATION: I certify that this justification is accurate and complete to the best of my knowledge and belief.

Name: David E. Drag Date: 12/12/12 Title: Contracting Officer Office Symbol: ACC-NJ-JA Signature: ___//s//________

APPROVAL

Based on the foregoing justification, I hereby approve the procurement of the wheel assemblies for the Lightweight 155mm Howitzer on an other than full and open competition basis pursuant to the authority of 10 U.S.C. 2304(c)(1) as implemented by FAR 6.302-1(a)(2)(ii)(A) at an estimated value of $2,420,000 subject to the availability of funds, and provided that the services and property herein described have otherwise been authorized for acquisition.

Date: 29 Jan. 2013 Signature: //s// Rebecca E. Wisser

REBECCA E. WISSER

Special Competition Advocate Army Contracting Command-New Jersey