RedactedJA60mmShellBodyRework.pdf

Program/Item: 60mm, HF-1, Shell Body

Estimated Amount: $250,000.00

JUSTIFICATION & APPROVAL CONCURRENCE SHEET

Program/Equipment: 60mm High Fragmentation-1 (HF-1) Shell Bodies

Authority: 10 U.S.C.2304(c) (1); as implemented by FAR 6.302-1(a) (2) (ii) (B) - Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements

Prepared By:

Jennifer Hughes DSN: 880-4856 Contract Specialist Date: 19 Feb 2014

ACC-NJ-CA

E-mail: jennifer.m.hughes56.civ@mail.mil

PCO:

Karen Thompson DSN: 880-2586 Contracting Officer Date: 5 March 2014

ACC-NJ-CA

E-mail: karen.a.thompson.civ@mail.mil

Technical:

Peter DeMasi DSN: 880-9066 Acting Deputy Project Manager Combat Ammunition Systems (PM-CAS) Date: 4 March 2014

SFAE-AMO-CAS

Requirements:

Peter DeMasi DSN: 880-9066 Acting Deputy Project Manager Combat Ammunition Systems (PM-CAS) Date: 4 March 2014

SFAE-AMO-CAS

CONCURRENCE:

Center Director 4 March 2014

ACC-NJ-CA Signature

Date

Legal Counsel 4 March 2014

RDAR-GCB Signature Date

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

1. Contracting Agency: US Army Contracting Command – New Jersey

2. Description of Action:

a. The nature of this J&A is a sole source delivery order to a current firm fixed price production contract/delivery order with Medico Industries, Inc. (W15QKN-11-D- 0149/0011) for the rework of 25,000 contaminated 60mm High Fragmentation-1 (HF-1) M720A1/M768 shell bodies received from General Dynamics-Ordnance Technology Systems (GD-OTS) Canada. The existing contract with Medico was awarded as a five (5) year Multiple Award Indefinite Delivery Indefinite Quantity (ID/IQ) contract. The contract is for the production of 60mm and 81mm HF-1 Shell Bodies. FY12 PAA funding will be used for this effort which is projected for the 2nd Qtr FY14 and is estimated at $250,000.00.

b. GD-OTS is currently performing on a contract (W52P1J-07-C-0022) for the Load, Assemble and Pack (LAP) of 60mm High Explosive (HE) Mortar Cartridges, however, inventory of the Government furnished shell bodies is dwindling. GD- OTS has 25,000 M720A1/M768 shell bodies that were previously loaded with PAX-21 explosive that did not meet the contractual requirements for explosive melt-pour. The loaded shell bodies were placed in storage to be cleaned out and re-used at a later date. Having reached the end of their contract and run out of empty shell bodies, these 25,000 shell bodies are now needed to complete the remainder of 60mm LAP contractual requirements at GD-OTS, requiring IMX-104 explosive fill, in support of 60mm Insensitive Munitions mortar requirements.GD- OTS shall clean out the explosive from the cavity of the shell bodies for reuse in 60mm IM mortar LAP. Upon completion of cleaning the hazardous explosive out of the shell bodies, the explosive will leave a crystallized residue on the exterior surface requiring complete stripping of the original coatings which then must be reapplied. In addition to the stripping and recoating, the shell bodies will require the application of 7 notches to the front face in accordance with the new IM mortar cartridge production requirements. This is a new delivery order to the current Medico contract for the rework of those 25,000 shell bodies. GD-OTS needs the reworked shell bodies for LAP beginning in May 2014. Medico will need to begin working on this effort in April 2014. Lead time associated with the delivery of the reworked shell bodies is approximately 30 days after contract award.

3. Description of Supplies/Services:

a. The 60mm HF-1 Shell Bodies are a one piece tear drop shaped body made of HF-1 steel. When assembled during the LAP process, the shell body is the part of the mortar cartridge that holds the explosive. These specific bodies will be used to support an order of IM cartridges. These shell bodies, in addition to being stripped and recoated, will have IM notches applied. The purpose of the IM notches is to secure the fuze to the shell body. IM mortar cartridges use a plastic fuze adapter requiring the fuzes to be mechanically staked into the notches to prevent the fuze from unthreading.

b. The Acquisition program for the 60mm HF-1 M720A1/M768 Shell Bodies is an

Acquisition Category III (ACAT III) program.

c. The total estimated value of this action is $250,000.00 for a quantity of 25,000 each reworked 60mm HF-1 Shell Bodies. The total estimated value was developed based on historical unit prices from a previous effort similar in nature to this. The average unit price is reflected in the table below. The required monthly deliveries are 12,500 each per month beginning April 2014 and shall be shipped to GD-OTS, Canada.

Total Number of Units

Times (X) Unit Price Equals (=) Total Estimated Dollar Value

25,000 X $10.00 = $250,000.00

4. Authority Cited: 10 U.S.C.2304(c) (1) as implemented by FAR 6.302-1, Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements. Paragraph 6.302-1(a) (2) (ii) (B) applies where supplies may be 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 unacceptable delays to the Government in fulfilling the agency’s requirement.

5. Reason for Authority Cited: As described in FAR 6.302-1(a) (2) (ii) (B), supplies may be 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 unacceptable delays in fulfilling the agency’s requirements.

a. Competition for this effort is not feasible due to the delivery schedule associated with the 25,000 reworked shell bodies. If a new vendor were awarded a contract, this would cause significant program delays. The contractor would have to establish lines and processes for stripping existing coatings including residual explosive on the exterior, phosphate coating, painting, application of IM notches, required inspections, rubber stamping, process development for maintaining traceability of the original manufacturing lot numbers of the reworked shell bodies, and packaging. Additionally, there would be time required for process approval, gauging approval, production prove-out, and a First Article Inspection.

From contract award to delivery, this would indicate a potential United States

Government (USG) incurred delay of at least an additional five (5) months on contract W52P1J-07-C-0022 with GD-OTS.

b. Contract W52P1J-07-C-0022, which includes a base with four option years was awarded in 2007 to GD-OTS, Canada for the Load, Assemble and Pack (LAP) of 60mm High Explosive (HE) Mortar Cartridges. The GD-OTS Canada contract requires that 60mm HF-1 Shell Bodies be furnished as Government Furnished Material (GFM). These shell bodies were already purchased and provided to the LAP contractor as GFM during the tenure of the contract and are required to complete the contractual end item deliveries. Shell bodies are a necessary component for the LAP operation, in the case of HE mortars to carry the explosive, making end item delivery without shell bodies impossible. GD-OTS is required to deliver the 60mm HE Mortar Cartridges as delineated below:

Delivery Date Quantity

30 July 2014 12,500

31 Aug 2014 12,500

c. The current producer (Medico Industries, Inc.) for the 60mm HF-1 Shell

Bodies has proven manufacturing equipment and the highly specialized skills required to fulfill the agency’s requirement. They are currently in production of the shell bodies and are the only producer that has a process and equipment in place to machine the notches into the shell bodies required to support the IM cartridge design. Specialized equipment is required for stripping and reapplication of phosphate coatings, exterior paint, interior primer, and lot information for the shell bodies. Gaging is also required since the parts must be inspected before and after rework. Medico has all of the proper equipment, processes, and gaging in place and is providing a quality product at this time.

d. If the 25,000 reworked shell bodies are not received by May 2014, there will be no feasible way for GD-OTS to meet their IM cartridge order on time. Delayed delivery will negatively impact war readiness for the United States Marine Corps (USMC), the customer receiving this order. Currently, the USMC does not have any insensitive munitions available in their inventory due to the suspension of the use of ammunition filled with PAX-21 explosive which was deemed an environmental hazard. IMX-104 explosive is the replacement explosive that will be used to deliver all unfilled orders for 60mm HE mortar munitions.

6. Efforts to Obtain Competition: As required by FAR 5.201, this procurement action will be synopsized in the Federal Business Opportunities (FedBizOpps) with the appropriate rationale for other than full and open competition. The current contract was awarded as a small business set-aside. The Government intends to continue promoting competition within the small business arena in order to ensure that the Government receives the overall best value for the 60mm HF-1 shell Bodies. In the meantime, this notice will alert any interested small businesses that competition for this requirement will be on a sole source basis to Medico Industries, Inc.

7. Actions to Increase Competition: The 60mm HF-1 Shell Bodies have historically been procured from small businesses; therefore, this current effort will continue to be awarded to a small business. This current contract is a five (5) year Multiple Award ID/IQ contract.

8. Market Research: Market Research on proven capable producers is based on information obtained from Picatinny Arsenal’s Acquisition and Engineering Support Offices from April 2013. Market Research to date indicated that the only small business capable of stripping the shell bodies and reapplying required coatings is the required timeframe is current producer, Medico Industries. There are no other small businesses that have a proven production line set up and operational. Additionally, Medico is the only company that has notched the shell bodies required to meet IM cartridge requirements. Any other companies would have to develop production lines and process and complete a successful First Article Test (FAT).

9. Interested Sources: To date, the following companies listed below have been awarded under the Total Small Business Set-Aside ID/IQ effort (W15QKN-10-R-0302):

1. Medico Industries

2. Modern Industries

Due to the fact that Modern Industries has not received a Delivery Order for production quantities; this requirement will be issued to Medico Industries in order to meet the required delivery schedule to support the war fighter.

10. Other facts:

a. Procurement history:

1. Contract Number: W15QKN-07-C-0065

2. Contractor: Medico Industries, Inc

3. Award Date: 13 February 2007

4. Competitive Status: Small Business Set-Aside

b. Subcontracting Competition: Competition at the subcontractor level will be encouraged through publication of the synopsis required by FAR 5.201 and the contract includes FAR 52.244-5 “Competition in Subcontracting”.

c. Acquisition Data Availability: A competitive Technical Data Package is available and is currently being used in all current/future efforts.

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: Peter DeMasi DSN: 880-9066 Title: Acting Deputy Project Manager Combat Ammunition Systems (PM-CAS)

Signature: //s//Peter DeMasi Date: 4 March 2014

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: Peter DeMasi DSN: 880-9066 Title: Acting Deputy Project Manager Combat Ammunition Systems (PM-CAS)

Signature: //s//Peter DeMasi Date: 4 March 2014

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 contractor’s proposal will be subjected to a technical evaluation, cost analysis and comparison to the Independent Government Cost Estimate (IGCE).

Name: Karen Thompson DSN: 880-2586 Title: Contracting Officer

Signature: Date: 5 March 2014 D ATE

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

Name: Karen Thompson DSN: 880-2586 Title: Contracting Officer

Signature: Date: 5 March 2014

Approval

Based on the foregoing justification, I hereby approve the procurement of the 60mm High Fragmentation-1 Shell Bodies on an other than full and open competition basis pursuant to the authority of 10 U.S.C.2304(c) (1), provided that the services and property herein described have otherwise been authorized for acquisition.

Date: 5 March 2014

Karen Thompson Contracting Officer