DCG signed JA - NJ -Depleted Uranium Penetrators-Aeorojet Proposed Redact 31 March.docx

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Control Number: CAO-22-0255

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ATTENTION

Justification and Approval For Other Than Full and Open Competition

Control No: CAO-22-0255

Program/Equipment: Depleted Uranium Penetrators

Controlled by: Army Controlled by: Army Contracting Command – New Jersey CUI Categories: Controlled Technical Information, General Procurement and Acquisition, General Proprietary Business Information, Source Selection Limited Limited Dissemination Control: FED ONLY POC: Katherine N. Conklin, katherine.n.conklin.civ@army.mil

ATTENTION

All individuals handling this information are required to protectit from unauthorized disclosure.

Handling, storage, reproduction, and disposition of the attached document(s) mustbe in accordance with 32 CFR Part 2002 and applicable agency policy.

Access to and dissemination of Controlled Unclassified Information shall be allowed as necessary and permissible to any individual(s), organization(s), or grouping(s) of users provided such access or dissemination is consistent with or in furtherance of a Lawful Government Purpose and in a manner consistent with applicable law, regulations, and Government-wide policies.

Standard Form 901 (11-18)

Prescribed by GSA/ISOO | 32 CFR 2002

CUI//SP-PROCURE//FED ONLY

Justification Review Document for Other than Full and Open Competition – FAR Part 6

Program/Equipment: Production and Delivery of the Depleted Uranium Penetrators for Program Manager for Maneuver Ammunition Systems.

Authority: Title 10 United States Code (U.S.C.) Section 3204(a)(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.

Amount: $ 75,310,023 Prepared by:

Contracting Officer:

Technical Representative:

Requirements Representative:

Reviews

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

Program Manager Typed Name: Jessica M. Vanaman DSN: 880-6730 Email: jessica.a.vanatta.civ@army.mil

Signature: Date: 24 August 2022

Branch Chief Typed Name: Geoffrey R. Cramer DSN: 880-2917 Email: geoffrey.r.cramer2.civ@army.mil

Signature: Date: 24 August 2022

Legal Counsel Typed Name: Jered J. Leo DSN: 880-6585 Email: jered.j.leo.civ@army.mil

Signature: Date: 24 August 2022

Division Chief Typed Name: Steven M. Talmadge DSN: 880-2754 Email: steve.m.talmadge.civ@army.mil

Signature: Date: 24 August 2022

Associate Director Typed Name: Kelly Gorman DSN: 880-2164 Email: Kelly.m.Gorman2.civ@army.mil

Signature: Date: 19 August 2022

Advocate for Competition Typed Name: Frank Kosker DSN: 880-7660 Email: frank.kosker.civ@army.mil

Signature: Date: 19 August 2022

Senior Contracting Official Typed Name: Thomas A. Dougherty DSN: 880-7484 Email: thomas.a.dougherty24.civ@army.mil

Signature: Date: 14 September 2022

Justification and Approval for Other than Full and Open Competition – FAR Part 6

1. Contracting Activity: U.S. Army Contracting Command - New Jersey (ACC-NJ)

2. Description of Action:

ACC-NJ, on behalf of the Office of the Project Manager Maneuver Ammunition Systems (PM-MAS), requests Senior Contracting Official (SCO) approval for the award of a new 5-year Indefinite Delivery/Indefinite Quantity contract with Aerojet Ordnance Tennessee (AOT) for the production of Depleted Uranium (DU) penetrators on an Other Than Full and Open Competition basis.

AOT, located in the State of Tennessee (TN), has unique capabilities and expertise in producing DU penetrators and is the sole worldwide supplier of DU penetrators. AOT is the only known source with the requisite facilities/equipment, personnel, and experience to manufacture depleted uranium penetrators. There are no other known companies licensed to handle DU at this time.

DU penetrators are a critical component of the 120mm M829A4 Kinetic Energy (KE) Cartridge. The M829A4 Cartridge is the most effective anti-armor KE Cartridge round fired from the M256 120mm smoothbore cannon mounted on the Abrams Main Battle Tank (MBT). The M829A4 Cartridge system manufacturer, Northrup Grumman (NG), currently provides the DU penetrator on its M829A4 Cartridge systems contract. NG, however, has recently made a corporate decision to extricate itself from any activity involving DU including being the prime contractor for M829A4 Cartridge and will accept no further contracts as the M829A4 Cartridge systems manufacturer. As such, PM-MAS is in the process of instituting a competitive strategy to replace the current M829A4 systems contractor. In order to reduce schedule risk and cost on the systems contract and ensure continuous DU penetrator production by AOT, the Government will purchase the DU penetrators directly from AOT and provide them to the new M829A4 Cartridge systems manufacturer via Government Furnished Material (GFM). Without continuous production, AOT will be forced to shut down their DU penetrator production line and will not be able to maintain the highly specialized labor force. Failure to approve this J&A for DU penetrators would negatively impact inventory levels for the M829A4 Cartridge, which reduces the warfighter’s capability and readiness against enemy threats. Without the overmatch capability provided by the M829A4 Cartridge, the Army would be unable to defeat enemy armored targets, seriously jeopardizing the warfighter in future conflicts with peer and near-pear adversaries.

The quantity of DU penetrators purchased as GFM will be sufficient to cover all M829A4 Cartridges anticipated to be procured under the new M829A4 Cartridge systems contract. The total contract maximum of this contract is $75,310,023 based on an estimated quantity of 29,820 DU penetrators with a planned award date in the 2nd quarter of FY23. The Government anticipates that delivery orders issued under this contract will utilize Fiscal Year (FY) 2023-2028 Procurement of Ammunition Army funds.

3. Description of Supplies/Services: AOT will be responsible for the production of the DU penetrators in support of future 120mm Armor Piercing, Fin Stabilized, Discarding Sabot with Tracer M829A4 Cartridge production. DU is a radioisotope material and as such the manufacture, handling, and storage is licensed by the NRC. The license is titled “Radioactive Material License” and is issued by the TN Department of Environment and Conservation Division of Radiological Health. AOT is bound by Nuclear Regulatory Commission (NRC) regulations. TN is an “Agreement’s State” with the NRC which means that the NRC relinquishes portions of its regulatory authority to the State to uphold. Therefore, the license to handle DU is provided by the State of TN as an extension of the NRC. AOT, the sole worldwide supplier of DU penetrators for the M829A4 Cartridges, is a subsidiary of Aerojet RocketDyne and is licensed by the State of TN to handle DU and is bound by NRC regulations.

The M829A4 Cartridge is the next generation Line of Sight KE round for the Abrams MBT. The M829A4 Cartridge is the most effective anti-armor KE cartridge round fired from the M256 120mm smoothbore cannon mounted on the Abrams MBT. The M829A4 Cartridge utilizes the DU penetrator produced by AOT to achieve desired KE effects.

The table below depicts the total estimated contract quantities and dollar values associated with each FY for the overall program. The quantities are based on AOT’s minimum sustainment rate of 245 penetrators per month and the Army’s M829A4 Cartridge requirements. The Army plans to award a minimum quantity of 2,940 each DU penetrators in OP1-4, and 3,060 each DU penetrators in OP-5. In addition, 15,000 each DU penetrators is included to account for shifts in the Army’s current plan and to account for potential FMS requirements occurring in FY28. The estimated contract value is $75,310,023. An Independent Government Estimate was developed to support the maximum procurement value.

DU Penetrators

Ordering Period (OP)

1 FY23-FY24

2,358.95

6,935,313.00

OP 5 FY27-28

Foreign Military Sales, Other Service, Other Service Supplemental, Congressional Plus Ups, and Army Urgent Requirements, (Projected/Unfunded)

15000

2,545.75

38,186,250.00

$75,310,023

4. Authority Cited: Title 10 United States Code (U.S.C) Section 3204(a)(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.

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 from only one responsible source, or for DoD, 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. The following provides rationale under the authority of FAR 6.302-1(a)(2)(ii)(B) unacceptable delays in fulfilling the agency’s requirement for the procurement of the DU penetrators.

The proposed contractor for the requirement to procure DU penetrators is AOT, located at 1367 Old State Route 34, Jonesborough, TN 37659, CAGE Code: 7U273, for Depleted Uranium (DU) penetrators.

Should award be made to any source other than the proposed source, a total unacceptable delay of approximately 62 months would result.

First, approximately 36 months would be required for a new contractor to establish production facilities (design/fabricate equipment), procure standard production equipment; procure tooling/ancillary equipment, as well as develop inspection procedures, acquire inspection and test equipment, recruit and train new employees and obtain a license from the NRC to handle and store the DU penetrators. Once the facilities are established, approximately an additional 6 months of lead-time would be incurred for the contractor to produce test assemblies to complete baseline test series to establish whether the item has the capability to meet the Detailed Specification (DTL) and safety requirements. Estimates are based upon engineering expertise and experience with the manufacturing, testing and certification of DU penetrator assemblies. The above is based on the assumption that the necessary license and permits can be obtained to handle and store DU, and that the manufacture and redesign of the necessary specialty equipment such as the High Energy Rate Forming Press (HERF) can be procured. To date, no other contractors have expressed interest in establishing a DU production facility.

Following the manufacture, cartridge assembly and receipt of test hardware, testing and analysis by the Government would take an additional 20 months. The testing would consist of a comprehensive series of tests that are used to evaluate the penetrator and full-up cartridge against the DTL, as well as to evaluate the DU penetrators for all aspects of the item’s lifecycle. At a minimum, the test series would consist of Physical Configuration Audit and First Article Acceptance Testing of the penetrator itself, inspection of the projectile and cartridge assembly, and ballistic testing including Target Impact Dispersion, Strength of Design and Armor.

All of the aforementioned events must be performed in sequential order and are required to take place prior to Full Rate Production. Only after the successful completion of qualification testing and analysis will the contractor be approved to enter into Full Rate Production.

The below table summarizes the DU delays should an award be made to any source other than AOT.

DU Penetrator – Unacceptable Delays

† All activities must be performed in sequential order, prior to the approval to go into Full Rate Production. These delays were estimated based upon engineering expertise and experience with the manufacturing, testing, and certification of 120mm cartridges.

Failure to approve this J&A for DU penetrators would negatively impact inventory levels for the M829A4 Cartridge, which reduces the warfighter’s capability and readiness against enemy threats. Without the overmatch capability provided by the M829A4

Cartridge, the Army would be unable to defeat enemy armored targets, seriously jeopardizing the warfighter in future conflicts with peer and near-pear adversaries.

6. Efforts to Obtain Competition: The Contracting Officer shall publish the notices required by FAR 5.201 and any bids or proposals received shall be considered.

a. Effective Competition: Since this is a sole source action, effective competition is not applicable.

b. Subcontracting Competition: Subcontracting competition will be achieved by including FAR clauses 52.219-8 Utilization of Small Business Concerns and 52.212-9 Small Business Subcontracting Plan and FAR clause 52.244-5, Competition in Subcontracting in the solicitation and resultant contract.

7. Actions to Increase Competition: At the time of the writing of this J&A, it is unknown if a follow-on direct award contract for DU Penetrators will be necessary to sustain this capability. In Year 3 of the contract, and dependent upon the decision of the Secretary of the Army, PM-MAS and ACC-NJ will assess the need for a follow-on direct award for DU Penetrators and the feasibility of an award based upon full and open competition. The Government does not anticipate effective competition of the DU penetrator requirement. Aerojet is currently, and has been since 1999, the only source capable of producing DU penetrators and the stringent regulatory requirements, both Federal and State, for working with Depleted Uranium.

8. Market Research: In accordance with Defense Federal Acquisition Regulation Supplement (DFARS) 205.205-71, DFARS 206.302-1(d), and DFARS Procedures, Guidance and Information 206.302-1(d), a sources sought notice (W15QKN-22-X-0FMC) was posted to the Beta SAM website on 11 January 2022 and one response was received, detailed below. The purpose of the sources sought notice was to identify potential sources for the production of the DU penetrator. The notice requested respondents provide a brief summary demonstrating their capabilities to handle DU and produce the DU penetrator. Respondents were also to provide a description of their facilities and equipment, manufacturing process, inspection capability, skills, personnel and potential subcontractors’ capabilities.

The Government received one response from AOT, a large business. Starmet Corporation, the only other potential supplier, stopped producing DU in 1999, so Aerojet has been the sole manufacturer of the US Army's DU KE penetrators for 23 years. Since 2009, AOT has been manufacturing the M829A4 DU penetrator assembly to support the successful development and qualification of the M829A4 Cartridge through engineering manufacturing development and into steady state production. AOT employs highly skilled, specialized labor to handle and machine the 120mm DU penetrators AOT has the established manufacturing base for this effort for the advanced DU penetrator assembly.

Based upon the technical evaluation of the market survey response, AOT has demonstrated that they have the capabilities necessary to fulfill the requirements of the anticipated contract. AOT has the experience, technical expertise, facilities, and resources necessary to successfully meet the requirements of this effort as the prime contractor.

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

10. Other Facts:

a. Procurement History: PM-MAS procured DU Penetrators under DLA contract SPE85- 15-D-0013 in 2017 and 2018 with TW Metals, Inc. TW Metals then subcontracted to AOT for manufacture of DU Penetrators. Contract SPE85-15-D-0013 was competitively awarded.

Contract #1:

(1) Contract Number: Firm Fixed Price Purchase Order D98064015 for DU Penetrators (Issued via DLA metals contract with TW Metals, Inc. to AOT), awarded 5 November 2018. Total Contract Value: $7,057,151.4

(2) Competitive Status: Competitive

(3) Authority previously cited: N/A

(4) N/A

(5) N/A

(6) N/A

(7) N/A

Contract #2:

(1) Contract Number: Purchase Order SPE8E5-15-D-0013 for DU Penetrators (Issued via DLA metals contract with TW Metals, Inc. to AOT), awarded 5 October 2017. Total Contract Value: $5,941,125.60

(2) Competitive Status: Competitive

(3) Authority previously cited: N/A

(4) N/A

(5) N/A

(6) N/A

(7) N/A

b. Other Facts: N/A

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.

Signature: Date: 24 August 2022

Typed Name: COL. Paul E. Alessio Title: Project Manager, PM-MAS

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.

Signature: Date: 24 August 2022

Typed Name: COL. Paul E. Alessio Title: Project Manager, PM-MAS

13. Fair and Reasonable Cost Determination: I hereby determine that the anticipated cost or price to the Government for this contract action will be fair and reasonable. This determination will be based on a technical evaluation, price analysis, IGCE, and cost analysis. Certified cost and pricing data will be required in accordance with FAR 15.403- 1(b)(1).

Signature: Date: 17 August 2022

Typed Name: Katherine N. Conklin Title: Contracting Officer

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

Signature: Date: 17 August 2022 Typed Name: Katherine N. Conklin Title: Contracting Officer

CUI//SP-PROCURE//FED ONLY

Control Number: CAO-22-0255

Approval

Based on the foregoing justification, I hereby approve the procurement of Depleted Uranium Penetrators on an other than full and open competition basis pursuant to the authority of Title 10 United States Code (U.S.C.) Section 3204(a)(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. The total estimated value is $75,310,023, with a performance period of 5 years. The approval is subject to availability of funds, and provided that the services and property herein described have otherwise been authorized for acquisition.

Date:

Signature:

BRYA R. SA ON

Senior Contracting Official

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