ACC-WRN16-2000.pdf

CMO Control No: 15-041

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

1. Contracting Activity: Army Contracting Command - Warren (ACC-WRN), Warren, Michigan, is the contracting activity for this action.

2. Description of the Action: Project Directorate Main Battle Tank Systems (PD MBTS) anticipates multiple requirements related to the Abrams Transmission program. ACC- WRN proposes to award supplemental agreements via modifications to Allison Transmission, Incorporated (ATI) on requirements contract W56HZV-08-D-0159. The awards will span the two remaining years on the current requirements contract and will consist of the following estimated total quantities of Abrams X1100 transmissions, System Technical Services (STS), upgrade kits and components to support the Abrams M1A2 System Enhancement Program Version 2 (SEPv2) production vehicles and previously fielded M1A2 tanks. The referenced requirements will be funded with Fiscal Year (FY) 2013-2016 Procurement Appropriation, Army (PAA) funds.

Requirements from March 2015 through March 2016:

This effort will be awarded on a Firm Fixed Price (FFP) basis for production and a Cost Plus Fixed Fee (CPFF) for STS. STS work directives are both completion and term.

3. Description of Supplies/Services: This acquisition is for the Abrams Transmission and related parts and services. Unlike automotive transmissions, the Abrams transmission is a unique heavy, cross-drive transmission which handles steering and braking in addition to providing power to the drive sprockets and tracks. This acquisition will support the Joint Services Manufacturing Center (JSMC) production build of six M1A2 SEPv2s and provide transmissions for the Federal Supply System (FSS) in support of the M1A2 SEPv2 and future SEPv3 fleet. Currently there are insufficient M1A2 SEPv2 transmissions and no SEPv3 compatible transmissions in stock. The current transmission stock in the Federal Supply System (FSS) is for the M1A1 Situational Awareness (SA) tanks. Using a M1A1 X1100 transmission in a M1A2 SEPv2 would degrade the reliability and durability of the vehicle fleet. The version of the Abrams transmission used in the M1A1 SA will not support the operation and increased weight of a SEPv3 tank.

a. STS hours will support production in areas including transmission and final drive, shaft strength testing, Technical Manual (TM) reviews, configuration

* Freedom of Information Act (FOIA) Exemption #4 management, System Enhancement Version 3 (SEPv3) development, logistics services and field services.

b. Upgraded Abrams transmission kits/spares will be utilized at Anniston Army Depot (ANAD) for rebuilding, repairing, and upgrading non-serviceable field returns to the depot for the purpose of supporting SEPv2 production.

4. Authority Cited: The statutory authority permitting Other than Full and Open Competition is Title 10 United States Code (U.S.C.) 2304(c)(1), as implemented by Federal Acquisition Regulation (FAR) 6.302-1(a)(2)(ii)(B), “Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.”

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. (See 10 U.S.C. 2304(d)(1)(B) or 41 U.S.C. 253(d)(1)(B).)

5. Reason for Authority Cited: ATI currently produces the M1A2 SEPv2 configured transmission using in-plant production data. ATI is the custodian of the technical data and owns the proprietary rights to two major replacement components in the Abrams X1100 transmission. The key components are the torque converter assembly and the hydrostatic steer unit. These two components consist of 32 individual parts.

The Government has only the higher level, source controlled drawings of those 32 parts. The drawings available to the Government do not contain sufficient technical data for competition, manufacture, or production of the transmission.

a. It would not be feasible for any other contractor to compete for this requirement because of ATI’s expertise and extensive array of industrial equipment in

b. In accordance with subject matter experts in the Tank Automotive Research, Development and Engineering Center (TARDEC) and PD MBTS who are currently conducting a study on the complete re-engineering process required to produce the X1100-3B transmission, FOIA Exemption #4

FOIA Exemption #4

FOIA Exemption #4

FOIA Exemption #4

c. The 10.5 years estimated for a re-engineering effort and development of a new supplier of the transmission would create an unacceptable delay for the Abrams SEPv3 program. SEPv3 tanks are estimated to be produced in July 2017 with the requirement for 45 transmissions to be available to the production line by January 2017. It is expected the requirement for transmissions will then increase to 60 per year throughout the SEPv3 production. ATI has been developing upgrades to the X1100-3B transmission necessary to support the operation and increased weight of the SEPv3 tank. Developing a new supplier for the transmissions would place SEPv3 transmission production in approximately June 2025, delivering transmissions 8.5 years after they are required to support tank production.

6. Efforts to Obtain Competition: The only known requirements PD MBTS has prior to SEPv3 are listed in paragraph 2 of this justification. Production for this transmission is expected to remain at low levels for the foreseeable future. Therefore, developing another source at this time is not feasible or economical for the Government.

7. Actions to Increase Competition: This requirement will be synopsized in Federal Business Opportunities (FedBizOpps) to maximize subcontracting opportunities. At the subcontract level, ATI will be required to make maximum use of competition for its subcontracts awarded to Small and Small Disadvantaged Business firms. The PD MBTS Transmission Enterprise Team continually assesses the industrial base and the second and third tier vendor base to ensure there are sufficient subcontract sources to maintain competitive part pricing and availability to ensure the Army benefits from competitive pricing to the fullest extent possible. For reasons stated in paragraphs 5 and 6, there are no further actions planned to increase competition.

8. Market Research: PM Abrams engineering, logistics, production, and quality assurance subject matter experts conducted market research in October 2014 to determine if commercial items are available or could be modified to meet the Government's needs. In accordance with the tenets set forth in FAR 10.002(b)(2), this same team also conducts continuous market surveillance. This continuous review includes discussion of business opportunities with potential vendors at conferences, trade shows, and symposiums such as the Association of the United States Army (AUSA), and use of internet search engines to monitor tracked vehicle transmission development and production. Searches have identified contractors who manufacture alternative heavy vehicle transmissions, but it is anticipated such contractors would require the process detailed in paragraph 5b requiring approximately 10.5 years to produce a transmission which meets the current performance specification. It would not be feasible for any contractor to compete for the X1100 transmission with current requirements decreasing and future requirements estimated at low production levels.

In October 2014 a contingent of PD MBTS subject matter experts attended the Association of the United States Army (AUSA) Annual Meeting and Exposition. During this time, members of PD MBTS team spoke with along with other Defense Department combat equipment producers to determine if any other viable sources existed to produce the Abrams transmission. The PD MBTS team determined no other transmissions existed to replicate or replace the X1100 at this time.

As stated in paragraph 7, this effort will be synopsized in accordance with FAR 5.201 to maximize subcontracting opportunities. No responses have ever been received to any synopsis posted as a result of the contract actions included in the procurement history;

however, if a response to the synopsis is received, it will be given due consideration.

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

This action will be synopsized in FedBizOpps to improve business access to the acquisition information and to enhance competition by identifying contracting and subcontracting opportunities. All previous transmission requirements have been synopsized but no responses have ever been received. All notices required by FAR

5.201 shall be published, as appropriate, for this action and any proposal received will be considered by the Government.

10. Other Facts: All previous procurements were awarded on a sole source basis to ATI, and all cited 10 U.S.C. 2304(c)(1) and FAR 6.302-1(a)(2)(ii), “Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.” ATI has declined requests by the U.S. Government to provide a competitive TDP. No prior award for transmissions was accomplished by full and open competition. Continuous production requirements for the Abrams transmission reflect a pattern of approved J&A’s, but no unusual pattern is revealed. There have been no significant changes to this circumstance with the exception of a significantly smaller ATI business base. Justification for the current contract, W56HZV-08-D-0159, was based on only one source pursuant to FAR 6.302-1, “Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.”

a. Procurement History: Listed below is a history of contracts awarded to ATI for military transmissions, transmission upgrades, and modification kits:

Contract AWD Program Dollar Value

W56HZV-08-D-0159 19 Sep 08 X200-4A/X1100-3B $ 420,078,000 W56HZV-05-C-0233 14 Feb 05 X200-4A $ 76,612,524 W56HZV-04-C-0422 29 Apr 04 X200-4A $ 2,631,146 DAAE07-03-C-N197 18 Sep 03 X200-4A $ 35,573,723 DAAE07-03-C-N079 27 May 03 X200-4A $ 18,913,307

b. Acquisition Data Availability: A TDP suitable for the competitive procurement of the transmission is not available. The Government has only the high level source controlled drawings of those 32 key components and parts. However, these drawings do not contain sufficient technical data for competition or production. ATI owns the proprietary rights to

A Technical Data Package (TDP) suitable for competitive procurement has not been developed due to the nature of the proprietary designs, as well as the time and expense it would take to develop one. ATI has rejected Government efforts to purchase the technical data and license rights, either Government Purpose or Unlimited.

c. Unusual and Compelling Urgency: Not Applicable.

d. Subcontracting Competition: To ensure ATI competitively subcontracts to the maximum extent possible, the contract will include FAR clause 52.244-5, “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: LTC H. Brad Hodge Date: _23 Nov 14 Title: Product Manager, Abrams

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: Constance M. Tucker Date: ___5 Dec 14 Title: Deputy Project Director, Main Battle Tank Systems

13. Fair and Reasonable Cost Determination:

I hereby determine that the anticipated cost for this contract action will be fair and reasonable. This determination will be based on results of a Defense Contract Audit Agency (DCAA) audit, Defense Contract Management Agency (DCMA) Technical Data, and Cost and Price Analysis. Certified cost or pricing data will be obtained for this action.

Name: Lisa Behnke Date: __15 December 2014___ Title: Procuring Contracting Officer

14. Procuring Contracting Officer Certification:

I certify that this justification is accurate and complete to the best of my knowledge and belief.

Name: Lisa Behnke Date: __15 December 2014___ Title: Procuring Contracting Officer

15. Concurrence:

Date:________________

Signature:

KRISTAN A. MENDOZA

Principal Assistant Responsible for Contracting Army Contracting Command - Warren

APPROVAL

Based on the foregoing justification, and as Principal Assistant Responsible for Contracting pursuant to Army Materiel Command (AMC) Head of the Contracting Activity (HCA) Delegation of Authority #14-01, I hereby approve the procurement for the X1100 transmission related production and services listed in paragraph 1 of the justification with a total estimated value of $81M 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, specifically FAR 6.302-1(a)(2)(ii)(B), “Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.” This approval is subject to the availability of funds, and provided the services and property herein described have otherwise been authorized for acquisition.

Date:_____________ Signature:_________________________

THEODORE C. HARRISON III

Major General, U.S. Army Commanding Army Contracting Command