XM204 Redacted JA.pdf

Control No:

Controlled Unclassified Information (See FAR 2.101 and 3.104-4)

JUSTIFICATION REVIEW DOCUMENT

FOR OTHER THAN

FULL AND OPEN COMPETITION

Program/Equipment: Terrain Shaping Obstacle / XM204 – Top Attack (TA)

Authority: Title 10 United States 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:

Typed Name: DSN:

Title: Contract Specialist Date: Sept. 22, 2020 Email:

Contracting Officer:

Email: Date Reviewed: Sept. 22, 2020

Technical Representative:

Title: Project Manager Date Reviewed: Nov. 16, 2020 Close Combat Systems

Requirements Representative:

Title: Project Manager Date Reviewed: Nov. 16, 2020 Close Combat Systems

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

Project Manager:

Date: 16 Nov 2020

Division Chief:

Legal Counsel:

Associate Director:

Advocate for Competition:

Senior Contracting Official:

Nov 2020

Justification and Approval for Other than Full and Open Competition

1. Contracting Activity: Army Contracting Command – New Jersey

2. Description of Action: The Office of the Project Manager Close Combat Systems (PM CCS) requests approval to award a five year Indefinite Delivery/Indefinite Quantity (IDIQ) contract with Firm Fixed Price (FFP) Delivery Orders. It is anticipated that delivery orders issued under this contract will utilize Procurement of Ammunition, Army funds for the XM204 TA and associated Engineering Services. In the event that Foreign Military Sales (FMS) requirements arise, FMS funds will be utilized. Requirements from other services will utilize Procurement of Ammunition funds from that service. This action is a follow-on to Department of Defense (DoD) Ordnance Technology Consortium (DOTC) Other Transaction Agreement (OTA), DOTC- 19-04-INIT4711, competitively awarded to Textron Systems.

3. Description of Supplies/Services: The XM204 TA program is being acquired

The Milestone Decision Authority is the Joint Program Executive Officer for Armaments & Ammunition (JPEO A&A).

The XM204 TA is a complex system that is comprised of two major systems and multiple sub-components.

The XM204 TA is a munition system

The XM204 TA will also be fielded with a training only variant. The trainer will have similar external design features, dimensions, and weight. The trainer will require the acquisition of spare parts and components. The contract will include engineering services. The engineering services will support analysis and studies to develop design efficiencies and improvements that will result in mutually agreed upon product improvements to reduce system unit cost. These improvements will be codified in value engineering change proposals.

the U.S. Government (USG) competitively awarded a DOTC OTA for the XM204 Top Attack to the only capable respondent, Textron Systems, Wilmington, MA. The DOTC prototyping effort is for the purpose of verifying, through test and analysis, that the prototype system meets the specified requirements and that the design can be produced. The scope of the DOTC effort is to reduce risk in key technology areas and mature the existing technology, such as improving and integrating sensors, and packaging the munitions into a dispenser to develop and qualify for production. This production contract will support the transition from prototyping to XM204 TA production. While the OTA provided for the possibility of a follow-on contract, the effort would need to meet “success criteria” prior to the start of the solicitation process. Per the Statement of Work, the prototype project will be deemed successful if the government System Verification Test (SVT) results demonstrate an acceptable level of performance. The “success criteria” could not be met until SVT, currently scheduled for . As DOTC requires completion of qualification testing prior to pursuit of a production OTA, a follow-on OTA would cause a delay of at least eight months and this timeframe would result in failure to deliver the requisite IOC quantities by . Therefore, the Program Management Office (PMO) intends to shift from the DOTC prototyping effort to a Federal Acquisition Regulation (FAR) based production contract.

The FAR-based production contract will not be awarded until all prototyping efforts under DOTC prototype project, to include SVT, are complete. However, the PMO intends that there will be approximately 60 days of overlap between the award of the FAR based production contract and the full completion of the DOTC prototype project period of performance. This overlap allows for the organized wind-down of the DOTC Prototype Project. The effort on the part of Textron during this wind-down is to provide/revise documentation and/or answer Government inquiries with respect to documents There will be no prototyping efforts on the part of Textron with respect to the continued design, development, test or evaluation of the XM204 TA prototype following award of the FAR-based production contract.

The proposed award has a contract ceiling of , to include potential other service buys and FMS. Promising results in the current Defense Exportability Features effort to include the identification of no critical program information is likely to bolster support for foreign military sales resulting in the exercising of high quantity ranges resulting in reduced cost to the USG. The minimum order guarantee will be provided on the first delivery order issued at the time of contract award.

The current funding identified for the procurement of the XM204 TA is . PM CCS expects to procure and field a total of XM204 TA

Systems and supporting emplacement trainers with spare parts and components to meet the ONS requirement. The PMO determined the XM204 with the associated trainer Average Procurement Unit Cost is and the Program Unit Acquisition Cost is

The JPEO A&A has been designated as the Single Manager for Conventional Ammunition (SMCA) and is responsible for the procurement and management of this item for all of the Department of Defense and approved foreign military customers. The United States Marine Corps (USMC) and foreign militaries have shown significant interest in procuring the XM204 TA capability within the next years. The projected contract ceiling covers the expected USMC buy as well as the other Services and foreign militaries.

The quantity of supplies listed in Table 1 are a best estimated quantity only and will be not obligated by this contract. All delivery orders placed against this IDIQ contract will be subject to receipt of appropriated funds. The IDIQ contract will provide maximum flexibility and alignment of funding profile with the approved Procurement History and Planning, which the production schedule exhibits. If the USG’s requirements do not result in orders for the estimated quantities, that fact shall not constitute the basis for an equitable price adjustment.

As outlined in the ONS, XM204 TA is required to meet IOC no later than . If there is a delay to the delivery of the XM204 TA, there will be a severe capability gap

TABLE 1 - Total budget quantities and funding based on President’s Budget ceiling value includes additional headspace for unbudgeted quantities

/ Total

Dollars in Millions / Hardware

Fiscal Year Base Ordering Period

Ordering Period 1

Ordering Period 2

Ordering Period 3

Ordering Period 4

Total

Budget H/W Quantity

Budget

$ ($M) projected.

*This table outlines the budget profile and funding solely for XM204 TA.

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)(iii)(B), 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), NASA and the Coast Guard, from only one or a limited number of responsible sources, and no other types of supplies or services will satisfy agency requirements, full and open competition need not be provided for. 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. The proposed contractor for this action is Textron Systems, Wilmington, MA 01887, a large business. The following provides rationale under the authority of FAR 6.302-1(a)(2)(iii)(B), unacceptable delays in fulfilling the agency’s requirement for the procurement of the XM204 TA.

Textron Systems has extensive experience in integrating thermal sensors, integrated circuits, radar sensors, ground and airborne sensors, anti-vehicle munitions technologies, Rocket Motors for Anti-Vehicle Munition applications, HMX, Electronic Safing & Arming Devices, Thermal Batteries, and Low Energy Exploding Foil Initiators into one system. Historically, Textron Systems has developed and refined this capability over various efforts that span more than 20 years. There are significant resources required to design, develop and produce the XM204 TA. The resources include personnel, specialized equipment, specialized equipment inspection calibration and test procedures, equipment tooling, tooling manufacturing, material forming process, and mold development.

These unique personnel skills, equipment, and associated processes are corporate core competencies that must be developed and maintained over time. It is unlikely that these unique technical skills can be acquired by any other potential offeror and still meet the

Maximum Contract Value

Max $ ($M)

Max H/W Qty

Min H/W Qty required USG delivery timeframe. Therefore, Textron Systems is the only source currently capable of meeting the USG requirement for the production of the XM204 TA Systems to be delivered to theater to meet IOC no later than . Textron Systems has the equipment, tooling and facilities to fabricate the XM204 TA Systems. Textron Systems possesses both the knowledge and the technical capability required to meet the USG requirements for the XM204 TA Systems. Textron Systems has the qualified technical personnel such as quality engineers, process engineers, manufacturing engineers, technicians, and inspectors to ensure production control. Personnel and facilities are already in place for the XM204 TA production given the aforementioned production programs. Textron has successfully proven maturity of several subsystems and components in multiple demonstrations and soldier touch points. Textron has level of confidence that moving towards production prior to the completion of the prototype OTA will result in a successful system. There is no opportunity to compete this requirement and successfully meet the ONS. As a result, the planned strategy is to solicit and award on Other Than Full and Open Competition to Textron pursuant to 10 U.S.C.

2304(c)(1), as implemented by FAR 6.302-1(a)(2)(iii)(B), only one responsible source and no other supplies or services will satisfy agency requirements.

All estimates below are based upon engineering expertise and experience with the manufacturing, testing, and certification of similar TA munition and ground based munition systems.

TABLE 2:

XM204 TA Sole Source (SS) versus Full & Open Competition (F&OC)

Task Description

Duration

(SS)

Duration

(F&OC)

Delay

Hire Requisite / Unique Skill Sets +

Establish Production / Test Facilities

(concurrent efforts) Contractor Design / Development Cycles & System Integration

Material Procurement

Build Test Hardware

Contractor End to End Testing and System Analysis

Analyze Results of Testing

Contracting Timeline

Lead time of Initial Production and First Article Test (FAT) Delivery already completed subsystem development and tests evaluation testing

, system

The government is now ready to conduct Design Verification Testing

. Based on Textron’s achievements thus far, there is a high

Control No: CAO-20-0524

Total months until FAT

Total months until IOC

If the USG were to award to a contractor other than Textron Systems, there would be a delay of at least for another contractor to obtain the requisite capabilities that Textron Systems has today. Therefore, the Army’s current requirements cannot be met by any other source without unacceptable delays. A detailed breakout of the delay by task is as follows:

Hire Requisite / Unique Skill Sets ( ) Should award be made to any source other than the proposed source, an approximate delay would be incurred for a new contractor to hire personnel with the requisite skill sets capable of developing, and producing testable production representative systems that meet the requirement. The complexity and wide ranging skillsets needed for such a technical system demand a unique human resources structure. The contractor would need to find and hire a core team of technical subject matter experts who are primarily, and currently, employed by Textron Systems and its’ subcontractors. Then, begin hiring design, quality, systems, and various other engineering specialties, all of which would rely on the core team to train and develop their skills sets over the course of a year in order to develop this system. Additional hiring actions would need to incorporate necessary knowledgeable core competencies, such as integrated supply chain.

Concurrently, the contractor would need to determine which production facilities to establish (laboratories to design/fabricate equipment), procure standard and customized production equipment, procure specialty tooling/ancillary equipment, as well as develop inspection procedures and acquire standard and custom inspection and test equipment.

These combined steps of facility determination, sourcing, set-up and inspection, calibration, and equipment familiarization would take an estimated for another contractor to have ready. This effort would occur at the same time as the hiring of requisite skill sets mentioned above.

Contractor Design / Development Cycles & System Integration ( Based upon facility and employee readiness, an additional would be incurred for another contractor to procure sample material, design various levels of prototypes, and validate system aspects at the sub-component and component level. Hardware and software component design will likely take approximately , and then full system integration testing would take an additional , which drives the aforementioned assessment. The iterative design cycles required for component and system validation to ensure safety and performance specifications will be extensive. Any common issues encountered during integration add an additional one to two months for each solution and re-test. As a result, for this process could easily extend to or more with normal design challenges.

Material Procurement Once system integration is complete, the contractor would have a validated bill of materials to procure for the design validation test hardware. The contractor would need to establish the capability for key components with their qualified supplier base, separate from Textron System’s suppliers, which drives additional schedule considerations. The supplier search, bid, and delivery order process would take , taking into consideration the sourcing and receipt of raw materials and potential for long lead items.

Build Test Hardware Upon receipt of materials, the contractor would be able to begin building test hardware in preparation for their risk reduction and integrated testing. In order to fabricate the requisite test quantities, the contractor would need three months to produce the initial lot of test systems until fabrication and testing could be concurrent efforts.

Contractor End to End Testing Following the fabrication of test hardware (noted above), subcomponent, subsystem, and system level contractor end to end testing and system analysis activities would take an additional . The testing would be a comprehensive series of tests that are used to evaluate the system against its performance metrics, as well as evaluation on all aspects of system and component safety during each of the system’s lifecycles. Analysis of final results and validation of system design through a design review, based on USG and industry standards and requirements, would take an additional . This would be the point in which the contractor would have sufficient data and confidence in their production capability to offer a proposal to the USG for the XM204 TA requirement.

Contracting Timeline Upon the contractor’s readiness to deliver a proposal of proven capability, and assuming a seamless transition between contractor readiness and posted contract solicitation, the resulting contracting effort would take approximately until contract award.

Textron Systems has the necessary and collective in-house capabilities and subcontractor base to maintain continuous production and meet the requirements within the required delivery schedule. The schedule risk of entrusting time critical requirements to a contractor with no proven production process for this unique XM204 TA System design is high. Textron Systems is currently developing the item and can commence subsequent manufacturing immediately upon contract award. This will prevent any lapse in prototyping to production that could be detrimental to the supplier base.

Textron Systems has documented the key characteristics, processes and inspections, and has determined how to tightly control production on the XM204 TA System to minimize variability from lot-to-lot. This margin between the current level of performance and the requirement has mitigated risk by providing a buffer against anomalies which might otherwise cause lot failures and delay deliveries. There is a high risk that another contractor may fail to achieve acceptable performance until they are able to identify and implement the processes and controls necessary for their particular combination of component sources. The learning curve for an inexperienced XM204 TA producer will likely be costly in terms of delivery shortfall and user confidence.

The timeline for another contractor to achieve IOC for the XM204 TA does not take into consideration additional delays in the contractor’s preparative efforts, or failed efforts during the FAT. The likelihood that a contractor would be willing to take on such substantial risk to hire personnel with niche skill sets, facilitize, and successfully develop XM204 TA Systems within the next five years is not only improbable, but impractical.

Textron Systems is the only source able to produce the XM204 TA in the timeline required by the USG due to decades of previous experience directly correlated with the USG performance specifications that were derived from a specific theater’s needs.

XM204 TA systems are needed to provide a near-term solution to an Extremely High Risk Gap which outlines the severe need for the TA and complex obstacle terrain shaping capability within U.S. Army Europe’s Area of Responsibility. If there is a delay to the delivery and availability of these systems by for IOC, the U.S. Army will likely be unable to successfully defend against deliberate enemy counter attacks

6. Efforts to Obtain Competition:

a. Effective Competition: Effective competition is not anticipated for this effort.

The notice required by FAR 5.201 shall be posted and any bids or proposals received shall be considered.

b. Subcontracting Competition: The USG intends to ensure the awardee obtains subcontracting competition to the maximum extent possible. All appropriate clauses, to include FAR 52.219-8 “Utilization of Small Business Concerns”, FAR 52.219-9 “Small Business Subcontracting Plan”, and FAR 52.244-5 “Competition in Subcontracting”, will be included in the resultant contract.

7. Actions to Increase Competition: In order to increase competition for future requirements, the USG will continue to seek sources capable of producing new or improved systems which meet Warfighter requirements. The USG will solicit industry capability by conducting market research in the form of surveys posted on beta.SAM.gov, attending armaments conferences, and having open communication and awareness with the industrial base’s capabilities to produce this type of requirement for the purposes of fostering future competition. The XM204 TA effort is only intended to be procured for five years. It is strictly an interim capability in the Army’s Terrain Shaping Obstacle Strategy, and is currently not intended to be pursued for a program of record.

The Army is already resourced to procure the Improved TA in . This Improved TA design will be a Program of Record with acquisitions exceeding seven years. Therefore, multiple future opportunities for competition will be available. The USG, through those multiple production contracts and their potential for product improvement programs, will expand the qualified component suppliers, supporting increased competition among system contractors.

8. Market Research: In accordance with Defense FAR Supplement (DFARS) 205.205- 71, DFARS 206.302-1(d), and DFARS Procedures, Guidance and Information (PGI) 206.302-1(d), sources sought notice W15QKN-20-X-0BJP was posted to the beta.SAM.gov website on 12 May 2020. This sources sought notice was open to all interested parties. The sources sought notice requested information regarding industry capabilities and potential sources to produce and deliver an item meeting the design capabilities of the XM204 TA and its variants.

As outlined within the formal sources sought notice, the USG requires sources that can manufacture, Load, Assemble, and Pack, deliver, and support XM204 TA in accordance with the ONS requirements. Additionally, it was stated that the manufacturer should be able to produce a base quantity range of 100 – 250 annually, as well as be able to surge up to 300 quantities to accommodate additional customer requirements. The manufacturer must be capable of meeting FAT within nine months after contract award, and production delivery beginning no later than 15 months post contract award. The critical capabilities and/or criteria used to assess respondents are listed below.

Criteria utilized to determine capability (in no particular order):

Ability to produce and experience with integrated circuits Ability to produce and experience with thermal, radar, ground, and airborne sensors Ability to produce and experience with anti-vehicle munitions Ability to produce and experience developing / utilizing rocket motors with anti-vehicle munition technology Ability to produce and experience with HMX Ability to produce and experience with Electronic Safe and Arming Devices Ability to produce and experience with Low Energy Exploding Foil Initiators Ability to integrate and produce all aforementioned criteria

One response was received by the USG from Textron Systems, Wilmington, MA, and was evaluated with respect to the required capabilities and the questionnaire appearing in the sources sought notice. Textron identified within their response that qualified personnel, sub-vendors, and facilities are in place for production, which was substantiated by their past contract history of prototyping and production. Textron provided capabilities for production output and a delivery timeframe that fulfills the USG’s requirements, thereby presenting a low risk of unsuccessful performance. Based upon the results of the market research, Textron was found to be the only known producer of the XM204 TA and its variants.

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

10. Other Facts:

a. Procurement History:

(1) (2)

(3) Authority Previously Cited: Not applicable (N/A)

(4) Paragraph 7 of Previous Justification and Approval: N/A

(5) Changed circumstances: N/A

(6) Unusual patterns: N/A

(7) Significant Changes: N/A

b. Other Facts: A DOTC OTA is the contracting mechanism being utilized to conduct competitive prototyping through the Research and Development phases. The Terrain Shaping Obstacles (TSO) Product Manager capitalized on the use of non-traditional defense contractors under the DOTC OTA to support the specialized prototyping and integration of insensitive munition initiators, techniques and technologies, and materials he DOTC for Close Terrain Shaping Obstacles. The DOTC OTA operates under the authority of 10 U.S.C. 2371b and is administered by U.S. Army Contracting Command-New Jersey.

prototyping effort is for the purpose of verifying, through test and analysis, that the prototype system meets the specified requirements and the design can be produced.

The scope of the DOTC effort is to reduce risk in key technology areas, and mature the existing technology, The production contract will support the transition from prototyping to XM204

TA production. The PMO will ensure that all prototyping is complete prior to the XM204 TA’s transition into production.

This acquisition presents an overall low risk to the National Technology Industrial Base

(NTIB).

Control No: CAO-20-0524

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.

Typed Name: Date: _

Title: Project Manager, Close Combat Signature:

Systems

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.

Typed Name: Date:

Title: Project Manager, Close Combat Signature:

Systems

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 a formal technical evaluation, costs analysis and comparison to the Independent Government Estimate to determine that the anticipated costs are fair and reasonable. Certified Cost or Pricing Data is required and will be obtained in accordance with FAR 15.403-4.

Typed Name:

Title: Contracting Officer

Date: _

Signature: _

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

Typed Name:

Title: Contracting Officer

Date: _

Signature: