Redacted_-_W56HZV-12-C-0199_P00076_FSR_Signed_JA_2016-079.pdf

CMO Control Number: 2016-079

Justification and Approval

For Other than Full and Open Competition

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

2. Description of Action: ACC-WRN proposes to award a modification to contract W56HZV-12-C-0199, to add one option year, with DRS Network & Imaging Systems (DRS-NIS), LLC, Huntsville, Alabama, for services necessary for System Technical Support (STS) for the Direct Support Electrical System Test Set (DSESTS). The contract type will be Cost-Plus-Fixed-Fee, Term. Award is anticipated during Fiscal Year (FY) 2016, 3rd quarter. Operations Maintenance Army FY 16 funds will be used in this procurement.

3. Description of Supplies or Services: This one year option will provide personnel, equipment, and resources to enhance the efficient response to requests for assistance related to the maintenance, troubleshooting and configuration of DSESTS, Test Program Sets, and related equipment. Additionally it will provide for onsite maintenance, training, and technical support via phone or e-mail. Contractor support for Maintenance Support Devices/Software Loader Verifier (SL/V) will include only software installation of updates if applicable. The period of performance will be one year from the date of award of contract modification. The total estimated value of this contract is $1,000,000.00.

4. Authority Cited: The statutory authority permitting other than full and open competition for this action is Title 10 United States Code Section 2304(c)(1), as implemented by FAR 6.302-1(a)(2)(iii)(A), “Only One Responsible Source and No Other Supplies or Services will Satisfy Agency Requirements.” Specifically, “services may be deemed to be available only from the original source in the case of follow-on contracts for the continued provision of highly specialized services 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.”

5. Reason for Authority Cited: Project Director-Main Battle Tank Systems (PD MBTS) purchases its diagnostic test equipment, DSESTS, SL/V, and Embedded Diagnostics (ED) test equipment at the same time it purchases its vehicles. The test equipment provides fault isolation diagnostics at the Line Replacement Unit and Shop Replaceable Unit levels to support problem resolution in an effort to keep vehicle operational readiness rates high during the vehicle life cycle. Pentastar Electronics Incorporated developed and manufactured the diagnostic test equipment and associated software for the Abrams series vehicles in the early 1990s. Subsequently, DRS-NIS purchased the company with all rights to its products in early 2000. At this time, complete Government Technical Data Packages do not exist.

Critical to the success of the FSR is a knowledge base that encompasses the manufacture of the individual electronic components of the DSESTS. It would be extremely difficult to grow this very specific skill set in another contractor because they would have to first be able to show the ability to manufacture the items. Since there is not a complete TDP available, the only way for another contractor to manufacture the items would be to reverse engineer them. A reverse engineering review was performed in partnership with the U.S. Army Tank Automotive Research, Development and Engineering Center (TARDEC) and Automation Alley contractor representatives. This review was performed in September 2012 on a sampling of circuit cards and cable and conduit assemblies used in the DSESTS system, since these items were determined to be the least complex items. The data of the review is still relevant as the components of the DSESTS remain unchanged. The sampling included 16 of the approximately 100 circuit cards and 16 of the approximately 80 cables. The study reflected an average estimated cost per circuit card of $35,500.00 for TARDEC to develop the circuit card TDP and an additional average cost per circuit card of $29,700.00 for TARDEC completion of the prototype. Based on this, the expected cost for the approximately 100 circuit cards is $3,550,000.00 for development of the TDP and $2,970,000.00 for completion of the prototype, for a total of $6,520,000.00. The study reflected an average estimated cost per cable of $14,000.00 for TARDEC to develop the cable TDP and an additional average cost per circuit card of $14,300.00 for TARDEC to develop the prototype. Based on this, the expected cost for the approximately 80 cables is $1,120,000.00 for development of the TPD and $1,144,000.00 for completion of the prototype, for a total of $2,264,000.00. The total projected cost to reverse engineer and construct prototypes for those quantities would be approximately $8,784,000.00. There are no recent studies to analyze core components or intermediate assemblies for DSESTS. Based on the complexity level of those types of assemblies, the cost to reverse engineer those components and assemblies would be considerably higher than the $8,784,000.00 for the circuit card and cable and conduit assemblies.

In addition to the costs stated above, funding for testing and evaluating a new supplier would be difficult to secure for a system at the end of its product life cycle, which is the case with the DSESTS. The Government does not have serviceable assets to provide to a new supplier as government furnished material. Those assets would be necessary so that a new supplier would have material to benchmark their efforts against. Also, it is unlikely that any firm would accept such risks for this requirement with no assurance that any future requirements would exist given the phase out date of the system currently projected in 2025.

Based on the estimated cost of $8,784,000.00 to reverse engineer and construct prototypes of the DSESTS, and the estimated $1,000,000.00 value of this action, it has been determined reverse engineering these circuit cards and cables would be a substantial duplication of cost not expected to be recovered through competition, and therefore no cost savings are expected to be recovered if this effort is competed.

6. Efforts to Obtain Competition:

a. Effective Competition: There is no plan to obtain competition for this requirement due to the reasons stated in paragraph 5 above.

b. Subcontracting Competition: The Government will require DRS to submit a subcontracting plan IAW FAR 19.702. Additionally, subcontracting competition will be encouraged by including FAR clause 52.244-5 in the contract, “Competition in Subcontracting”, which requires the contractor to select subcontractors on a competitive basis to the maximum extent practicable.

7. Actions to Increase Competition: There are no anticipated actions to increase competition for subsequent procurements. The U.S. Government is currently in the process of replacing DSESTS with the Next Generation Automated Test Sets. It would not be cost effective for the Government to qualify a new vendor due to the DSESTS becoming obsolete.

8. Market Research:

Market research was performed in February 2016, by an Equipment Specialist from the Bradley Group. Four companies were contacted to include: Caztek Inc; Divebiss Corp;

Cepoint Networks; and SIE Computing Solutions. Information was requested regarding DSESTS experience. Companies notified stated that they currently do not work with DSESTS. Market research has shown DRS-NIS is the only known source with the requisite system knowledge and experience to adequately meet the Government’s needs for this requirement without substantial duplication of cost. There are no other known active firms currently available capable of satisfying these requirements.

A sources sought questionnaire was posted to Feb Biz Opps on 22 February 2016 and closed on 08 March 2016. No responses were received.

9. Interested Sources:

To date, no other sources have written to express an interest. Notices required by FAR

5.201 shall be published and any proposals received shall be considered.

10. Other Facts:

a. Procurement History.

1. Contract: W56HZV-11-C-0357

Contractor: DRS-NIS Award Date: 04 August 2011 Competitive Status: Sole Source Authority: FAR 6.302-1 Award Amount: $884,226.94

A Justification and Approval was prepared to support the previous procurement under contract W56HZV-11-C-0357. The basis for the previous justification was the lack of a competitive drawing package and the fact that a new supplier would have to reverse engineer the diagnostic system of the DSESTS. Due to the lack of a competitive TDP package, the previous Justification and Approval stated that “there would be a substantial duplication of cost and effort associated with the Reset effort and the Government would not be exercising its fiduciary responsibility to the taxpayer in applying resources in a prudent and judicial manner.” There have not been any significant changes to the previous Justification and Approval.

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: Loren Morse Date: 10 MAR 2016 Title: Chief, Medium Caliber Systems Signature: //s// Loren L Morse

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: Michael Papakonstantinou Date: 14 March 2016 Title: Acting Infantry Support Group Leader Signature: //s//MSP

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 cost analysis. Certified cost or pricing data will be required for this effort.

Name: Lisa Behnke Date: 21 March 2016 Title: Contracting Officer Signature: //S//LB

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

Name: Lisa Behnke Date: 21 March 2016 Title: Contracting Officer Signature: //S//LB