CAO-17-0508_M107_Variants_Requirements-Redaction_Applied.pdf

Control No: CAO‐17‐0508

FOR OFFICIAL USE ONLY

JUSTIFICATION REVIEW DOCUMENT

FOR OTHER THAN

FULL AND OPEN COMPETITION

Program/Equipment: M107 Long Range Sniper Rifle (LRSR) the M107A1 Sniper Rifle and the M82A1 Sniper Rifle.

Authority: Title 10 United Stated Code (U.S.C.) Section 2304(c)(1), as implemented by Federal Acquisition Regulation (FAR) 6.302-1 – Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.

Amount:

Prepared By:

Contract Specialist Date: 5/3/2017

Contracting Officer:

Date Reviewed: 7/13/2017

Technical Representative:

Product Manager Crew Served Weapons Date Reviewed: 7/13/2017

Requirements Representative:

Product Manager Crew Served Weapons Date Reviewed: 7/13/2017

Reviews: I have reviewed this justification and find it adequate to support other than full and open competition.

Program Manager:

Typed Name:

Signature: Date: 7/13/2017

Legal Counsel:

Typed Name:

Signature: Date: 7/24/2017

Center Director:

Typed Name:

Signature: Date: 7/29/2017

Associate Director:

Typed Name:

Signature: Date: 8/3/2017

Justification and Approval for Other than Full and Open Competition

1. Contracting Activity: U.S. Army Contracting Command – New Jersey

2. Description of Action:

Project Manager Soldier Weapons (PMSW) requests approval for the award of a new Firm Fixed Price (FFP) Requirements contract with five (5) one (1) year ordering periods for the M107 Long Range Sniper Rifle, a commercial item, and two alternate commercial configurations, the M107A1 Sniper Rifle (an upgrade to the M107) and the M82A1 Sniper Rifle (the commercial variant of the M107) using other than full and open competition (herein referred to as the M107 variants). The government projects award for the first quarter of Fiscal Year 2018. It is anticipated that a mixture of Foreign Military sales, Pseudo Foreign Military sales and Procurement funds will be used on future requirements.

3. Description of Supplies/Services: The M107 variants are .50 Caliber semi-automatic, shoulder-fired, man-portable weapons. They will be capable of delivering precision and rapid fire on vehicle sized (2m x 3m) materiel targets out to 2,000 meters.

The M107 is built in accordance with MIL-PRF-32327, while the M107A1 Sniper Rifle and M82A1 Sniper Rifle are Commercial off the Shelf (COTS) items developed from the type classified M107. Spare part kits are also required for each configuration and will be separate Contract Line Items (CLINS) on this instant action. The following is a synopsis of what spare part kits will consist of: Magazine and magazine assembly; Case Carrying;

System Scope Ring Assembly; Strap, case (Short & Long); Bag Drag; Cheek Piece;

Knobs, Lock; Assembly, Monopod; Kit Deployment (components) and Cover, Muzzle.

The total estimated value of the requirement is

4. Authority Cited: Title 10 United States Code (U.S.C.) Section 2304(c)(1), as implemented by Federal Acquisition Regulation (FAR) 6.302-1(a)(2)(ii)(A), Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.

5. Reason for Authority Cited: As described at FAR 6.302-1(a)(2), when the supplies or services required by the agency are available only from one responsible source, or for Department of Defense (DoD), National Aeronautics and Space Administration (NASA) and the Coast Guard, from only one or a limited number of responsible sources, and no other type of supplies or services will satisfy agency requirements, full and open competition need not be provided for. As further described in FAR 6.302-1(a)(2)(ii)(A), 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 substantial duplication of cost to the Government that is not expected to be recovered through competition. The proposed contractor is Barrett Firearms USA, Inc. (hereinafter referred to as BFMI), 5926 Miller Lane, Christiana, TN 37037.

Duplication of Cost

Any competitive requirement to fill the needs of the Government (other agency) and Foreign Military Sales (FMS) requirements would result in considerable duplication of costs as there are currently no other systems which meet the M107 Qualification Requirements as outlined in MIL-PRF-32327. Duplicated costs for this effort would total

A representative breakout of duplicated costs is provided in the following table, these costs are derived from a recent similar acquisition for the Compact Semi- Automatic Sniper System (CSASS).

Activity Cost Engineering & PM Support Developmental Testing Operational Testing Airborne Drop Testing

Army Test and Evaluation Command (ATEC) Evaluations

Contract for Test Weapons (30 units)

TOTAL

This cost breakout takes into account the cost to test, and evaluate a new weapon system that would be added to inventory along with any M107 variants which are currently fielded. If there were another company that could compete for the M107 variant requirement, which there is not, it could be expected that the duplication of costs would not be recovered by a cost savings through competition due to the fact that the current requirement is sporadic and will primarily be used to support Foreign Military Sales and other agency requirements. The table above does also not include the cost of the Technical Data Package, and the impact that would have on overall duplication of cost.

The table above indicates a duplication of cost in comparison to the maximum dollar value of the effort.

Furthermore, maintaining two physically unique versions of a weapon system with the same primary purpose would double the logistical burden in terms of additional lifecycle costs. It would have a detrimental impact on operator and maintenance training, an increased burden on logistics/supportability and, in the case of other DoD Agencies, require a second, separate maintenance contract to provide repairs and refurbishment of weapons. In the past, BFMI has not been willing to sell the technical data package (TDP) for the M107 LRSR, M107A1 Sniper Rifle and M82A1 Sniper Rifle to the USG.

The Army Acquisition Objective (AAO) was met during performance of the previous contract, W15QKN-11-D-0197. In meeting the AAO, the need for the Army to inquire on purchasing the TDP was diminished. There would be no reason for the Army to purchase the TDP for an end item with no requirements. Remaining and future requirements, while still including other Government agencies, will be primarily driven by FMS. In some previous cases, a note contained in the Letter of Offer and Acceptance the FMS Customer(s) requested in writing that BFMI be designated as the Prime Contractor for the requirement. The Department of Defense accepted that request.

Due to the nature of FMS requirements, it is difficult to reliably strategize future acquisitions. Recently indications have been that FMS requirements will continue to be received, raising the priority of this contract. Substantial harm could be felt due to any delays associated with not having a contract in place. These delays could negatively impact allied nations’ abilities in these conflicts, possibly resulting in US intervention and ultimately the potential for the loss of life for military personnel. Awarding this contract would provide additional support for these potential FMS requirements and allow for the expeditious fulfillment of their needs.

6. Efforts to Obtain Competition:

a. Effective Competition: As this is a sole source contract, effective competition is not applicable.

b. Subcontracting Competition: Subcontracting arrangements are not feasible nor applicable to the instant acquisition. BFMI is a small business.

7. Actions to Increase Competition: PMSW is always looking for ways to lower the cost and provide the best value weapon to satisfy the many requirements under its charter. PMSW attends trade shows and conventions, which provide opportunities for communication with industry and obtaining market research. Most recently, PMSW attended the Shooting Hunting Outdoor Trade (SHOT) Show in January 2017. PMSW also preforms Market Research through periodic internet searches (as recent as February 2017) and have not yet found another rifle meeting the M107 performance specification MIL-PRF-32327. The initial startup cost required of another contractor with no guaranteed contract or steady demand to help offset that risk, serves as a large barrier of entry. In addition, to date BFMI has not been willing to sell the TDP to the Government. Additionally, as previously mentioned, with the AAO having been met, the Army does not intend to fund the purchase of a TDP that the Army would not be able to utilize to realize any potential cost savings a competitive acquisition could produce. The Government will continuously conduct market research to determine if other sources exist that may be able to provide an acceptable product to the Government.

8. Market Research: A sources sought notice W15QKN-16-X-07HH was posted on Federal Business Opportunities (FedBizOpps) on 17 August 2016 as market research.

A market research report was conducted and assessed by the Government of the availability of qualified alternative sources dated 11 July 2017. There were two (2) submissions received in regards to the posted announcement as listed below:

Based upon the evaluation of the submissions, the Government technical experts determined that was the only company identified in the market research currently capable and qualified to meet the M107 variants production requirements.

Comments provided by the evaluator are seen below:

– submitted a response dated 31 August 2016. Upon evaluation it was determined that this submission provided a viable solution to the requirement, and owner of the Technical Data Package for these systems. The technical evaluator fully supports the ability of to produce M107 rifles to meet the requirements of MIL-PRF-32327 and the M107A1 Sniper Rifle and M82A1 Sniper Rifle as commercial off the shelf items.

– An email offer to negotiate sale of three M107 LRSRs was submitted by on 2 September 2016. This is not a potential solution for the Government as the items are not in new condition, and is not a legitimate vendor of the required weapon system or business that can be awarded a Government contract that would meet requirements.

9. Interested Sources: To date, no other sources have written to express an interest.

The Contracting Officer shall publish the notices required by FAR 5.201 and any bids or proposals received shall be considered.

10. Other Facts:

a. Procurement History

Contract W15QKN-11-D-0197

(1) W15QKN-11-D-0197 Period of Performance 7/6/2011 to 6/30/2016

(2) Sole Source Acquisition

(3) Authority previously cited if less than full and open competition was used. 10 USC 2304(c) (1), FAR 6.302-1 (a) (2) (ii) (A)

(4) In summary of Paragraph 7 of the previous Justification and Approval for Other than Full and Open Competition, Market Research has been ongoing and other vendors have been afforded the option to undergo the qualification process at their own cost to remove a substantial portion of the duplicated costs incurred by the Government through a competitive solicitation. No vendors have decided to pursue that path.

(5) The initial competition included no qualified sources. When BFMI won the initial award, they became the only qualified source as such, leading to potential duplication of cost to qualify another.

(6) No unusual patterns have been identified.

(7) Contract W15QKN-11-D-0197, for the M107 LRSR was awarded to support sister agencies and FMS. The contract minimum was met on Delivery Order 0001. There have been no significant changes other than the introduction of the M107A1 configuration which is more desired in the FMS community.

Contract W15QKN-10-C-0102

(1) W15QKN-10-C-0102 Period of Performance 16 September 2010 to 16 September

(2) Sole Source Acquisition

(3) Authority previously cited if less than full and open competition was used. 10 USC 2304(c) (4), FAR 6.302-4 (a), International Agreement

(4) In summary of Paragraph 7 of the previous Justification and Approval for Other than Full and Open Competition, Market Research has been ongoing and other vendors have been afforded the option to undergo the qualification process at their own cost. This would effectively eliminate a bulk of duplicated costs that would result from a competitive solicitation. To date, no vendors have decided to pursue that path.

(5) The initial competition included no qualified sources. When BFMI won the initial award, they became the only qualified source as such, leading to potential duplication of cost to qualify another.

(6) No unusual patterns have been identified.

(7) Contract W15QKN-10-C-0102 was awarded to meet specific FMS requirements.

An International Letter of Acceptance (LOA) directed the contract to BFMI. As such, a contract was put into place to allow the USG to exercise multiple options within a 1 year period of performance to fulfill any requirements that arose and were directed via LOA to BFMI.

b. There are no additional facts relating to this requirement.

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.

Date: ____7/13/2017______ Product Manager Crew Served Weapons

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.

Date: ____7/13/2017______ __ Product Manager Crew Served Weapons

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 shall be made using price analysis, as the item(s) to be procured are deemed to be commercial items in accordance with FAR 2.01. As part of this basis, certified cost or pricing data will not be required and the following exception applies (FAR 15.403): A commercial item is being acquired.

Date: _7/13/2017____

Contracting Officer

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

Date: _7/13/2017____

Contracting Officer

Approval Based on the foregoing justification, I hereby approve the procurement of M107 Variants and spare parts kits, on an other than full and open competition basis pursuant to the authority of Title 10 United States Code (U.S.C.) Section 2304(c)(1) as implemented by Federal Acquisition Regulation (FAR)Part 6.302-1 – Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements subject to availability of funds, and provided that the services or property herein described have otherwise been authorized for acquisition.

Date: 22 August 2017 Advocate for Competition Army Contracting Command – New Jersey