ACC1914.pdf

CMO Control Number: 2014-119

Department of the Army Justification and Approval

For Other than Full and Open Competition

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

2. Description of the Action: The proposed contract action is for the procurement of

827 Common Remotely Operated Weapon Station (CROWS) Integration kits for the Mine Resistant Ambush Protected (MRAP) All-Terrain Vehicle (M-ATV). The initial procurement quantity is 827 kits. This action will result in a new Firm-Fixed Price Delivery Order to Basic Ordering Agreement (BOA) W56HZV-12-G-0010 with Oshkosh Corporation, Oshkosh, WI. This contract will be funded with FY14 Procurement Funds.

3. Description of the Supplies/Services:

a. This procurement is to provide a quantity of 827 CROWS Integration kits required as Government Furnished Material (GFM) to support the M-ATV Upgrade and Reset activities at Oshkosh Corporation and support the upgrade efforts at Ft. Bliss (FBTX, El Paso, TX) and Space and Naval Warfare Systems Command (SPAWAR, Charleston, SC). The kit was developed to originally conform to the M-ATV during Operation Enduring Freedom (OEF) as an Operations Needs Statement (ONS) 08- 6152 was endorsed by Headquarters Department of the Army 18 December 2009 to provide Crew Remote Operated Weapon Station (CROWS II) to the MRAP Family of Vehicles (FOVs). At the request of the Government the M-ATV Work Directive number WD M-ATV-14-0008 was developed to create the components required to integrate the standard CROWS II and enable the M-ATV to utilize the Kongsberg Defense and Aerospace, Common Remote Operated Weapon Station during operations. The CROWS Integration Field Service Kit (FSK) includes all components under Oshkosh kit number 4170217 to allow the mounting of the CROWS II to upgrade trucks to the M1277 CROWS capable configuration for the enduring fleet.

Based on the Independent Government Cost Estimate (IGCE) dated 23 April 2014, the total estimated amount of this action is $8,038,686.

b. The Oshkosh proprietary kit number 4170217 will allow mounting of the CROWS II which is a remote weapons station that provides the operator with the ability to acquire and engage targets while inside a vehicle, protected by its armor. In order to mount the standard CROWS II on the M-ATV the Government requested Oshkosh to develop a standard kit along with Engineering Change Proposal (ECP) MATV- OSK020R1. The technical data package for ECP MATV-OSK020R1 belongs to Oshkosh. These kits are required to be procured because the Government is currently at zero stock levels. These integration kits will be provided as GFM and installed on M-ATV vehicles during the Upgrade and Reset effort at Oshkosh starting in October 2014 and will also be used to upgrade trucks to the M1277 CROWS capable configuration for the enduring fleet at Ft. Bliss and SPAWAR. These

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Oshkosh proprietary kits are required to be installed as part of the Upgrade and Reset effort and if not procured rapidly, the entire M-ATV Reset Program schedule will be at risk.

4. Authority Cited: The statutory authority permitting other than full and open competition for this action is 10 U.S.C. 2304 (c) (1) as implemented by FAR 6.302-1 “Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.” These items shall be procured in accordance with FAR 6.302-1(a) (2)

(ii) (B) and (A), which provides that supplies may be deemed available from only one source when it is likely that award to any other source would result in a substantial duplication of cost to the Government that is not expected to be recovered through competition or unacceptable delays in fulfilling the agency’s requirements.

5. Reason for Authority Cited:

Background:

M-ATV vehicles were produced by Oshkosh under Indefinite Delivery Indefinite Quantity (IDIQ) contract W56HZV-09-D-0111 with the production specification as stated by the Government for the production of vehicles. Subsequently, ONS 08- 6152 was issued requesting the integration of a Remote Weapons System for the M- ATV which utilizes the Kongsberg Defense and Aerospace, Common Remote Operated Weapon Station (CROWS II) during operations. As a result, Oshkosh presented (ECP as stated in paragraph 8(g), to the Government with the design improvements that included increased safety and performance levels as the Government required to allow the mounting of the Remote Weapons Station (RWS) and therefore, CROWS II to upgrade trucks to the M1277. The Government agreed to the engineering changes and the new designs were cut into production. The improved proprietary kit designed by Oshkosh provide for safety, functionality and upgrades for the soldier. The Product Deputy Manager (PdM) M-ATV determined that the entire enduring M-ATV fleet needs to be upgraded with these integration kits to ensure the safety and survivability of the warfighter. Without the kits and the ability to mount the CROWS II, a preventable deficit in survivability capabilities will exist.

Because of the proprietary and highly specialized nature of this major system, the Original Equipment Manufacturer (OEM) Oshkosh Corporation is the only source able to satisfy the Government’s requirement. Award to any source other than Oshkosh would create a substantial duplication of cost and unacceptable schedule delay and performance risk, as detailed below

Unacceptable Delay:

a. The CROWS integration kit is proprietary to Oshkosh the M-ATV OEM. Oshkosh’s proprietary TDP defines the specifications and design specifically for the M-ATV vehicle system. The initial M-ATV acquisition strategy, competitive solicitation, and follow on production contract award did not procure the vehicle system TDP. As the

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OEM, Oshkosh is the owner of the proprietary technical data for the production M- ATV. Because of the integral relationship between the kit and overall vehicle design, the Government would need the vehicle TDP to be able to manufacture, compete and safely install the CROWS integration kits into the vehicle. These kits are the continuation of development of the highly specialized M-ATV major system. In March of 2011 and in October 2011, the Government submitted requests for a Rough Order of Magnitudes (ROMs) to Oshkosh for the procurement of the unlimited data rights for the M-ATV FOV TDPs, but Oshkosh declined to submit ROM estimates stating the TDP is not for sale. As a result, it is considered impractical for the Government to procure the CROWS integration kit design without owning the entire vehicle system TDP.

b. In addition, any attempt to reverse engineer the overall vehicle system and its survivability design is considered impractical. Based on professional knowledge and internal comparisons to similar systems performed by the PM MRAP, cost estimators and engineers estimate it would take approximately two years to procure these items competitively. If the kits are not available then the outcome is described in paragraph 5.c below. The two years includes one year to reverse engineer the technical data for the CROWS integration kit and one year for a competitive acquisition. Reverse engineering the kit would consist of analyzing the parts by scanning, measuring and evaluating prior to putting data into a Computer Aided Design (CAD) system. Materials would have to be purchased then tooling or fixtures may have to be developed. Parts for the kits would then be prototyped along with drawings and installation instructions. The prototype parts would then have to go through a test and evaluation phase to verify form, fit and function. This process would be repeated if proper form, fit and function is not achieved.

A competitive acquisition is estimated to take 9-12 months. This includes 45-60 days to prepare a solicitation package, 15 days to synopsize, 30 days to receive proposals, 60-90 days evaluate proposals and execute an award for another source, 3-6 months for a new source to set up production lines (including hiring and training sufficient personnel, procure tooling and fixtures, contract for parts and raw materials, then prototyping the kits), and 3-6 months for testing and approving the kits. The anticipated delay for a full and open competitive acquisition is unacceptable to satisfy the Government requirement to provide upgrade kits to support the Upgrade and Reset operations in October 2014.

c. An award to Oshkosh is the only method available to fill this requirement for the one-time procurement of the CROWS Integration kits needed to fulfill the GFM requirements for the Upgrade and Reset efforts. Delivery of these kits later than October 2014 is unacceptable to the Government because these kits must be on hand to be retrofitted into the M-ATVs during the Upgrade and Reset effort which will be performed from approximately August 2014 through November 2015.

Delay of the Upgrade and Reset effort would result in fielding of vehicles with increased vulnerability to crew members. Award to any source other than Oshkosh will compromise the Army’s ability to meet the Capability Set (CS) fielding schedules imposed by the Department of the Army Operations G3/5/7 office and jeopardize the current training plans for units deploying into theater.

The CS effort must be completed in order to field vehicles with the communication system required for a wartime event. In addition, delays would limit the ability to fill Army Prepositioned Stocks (APS). These war stocks are located in strategic regions of the world and can quickly be mobilized to address any emergency. The M-ATV FOV is required to be fielded in APS 1, APS 2, APS 3, APS 4 and APS 5. Fielding has begun in APS 5 located in Kuwait. The APS requirement will not be filled until vehicles complete reset and upgrades. All APS war-stocks will not have the highly survivable vehicle until reset and upgrade are completed. It is critical that the M-ATV fleet be relevant and ready to protect the warfighter in current and future operations. As a result, Oshkosh is the sole source that can meet the requirements without unacceptable delay.

Duplication of Costs:

a. Oshkosh owns the technical data package for these kits. In order to conduct a competitive procurement of these kits, the Government would need to either procure the TDP, which is not for sale, or reverse engineer the kit. PdM M-ATV Engineering and PM MRAP Cost Analysts estimate it would cost $100,770 (approximately 1000 hours at $100.77 per hour) to reverse engineer and develop a TDP suitable for competition. PdM M-ATV Engineering and PM MRAP Cost Analysts estimate it would cost $750,000 to perform testing, evaluate and approve a new source. Additionally, PdM M-ATV Engineering and PM MRAP Cost Analysts estimate the cost of conducting a competitive acquisition at $30,885 (a minimum of 330 hours are needed for the acquisition process at $93.59 per hour). These estimates are based on Government engineering knowledge of these kits and similar systems used on MRAP vehicles along with the Program Management Cost Estimating Team’s comparisons to similar MRAP efforts and historical data.

b. The Army requires 827 CROWS capable M-ATV M1277 vehicles added to the enduring fleet at Ft. Bliss and SPAWAR between approximately August 2014 and November 2015 with kits required by October 2014. If a competitive award was made, the kits would not be available in time for the Upgrade and Reset efforts. As a result, the Army would have to conduct a separate retrofit effort for these kits at a total cost of $873,312

Per Kit Cost Quantity Total Cost

$1,056 827 $873,312

This total is based on an estimated cost of $1056 per truck (16 hours per truck x $66.00 per hour). While the vehicles are entered into the Upgrade and Reset phase in August 2014 through November 2015 it is faster and cheaper to include these kits while the vehicle is going through the equipments removal and rebuilding phase. A separate retrofit effort would be required to bring the

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c. Based on an IGCE calculated using engineering estimates and analysis, the

Government could potentially save 10%, which equates to approximately $803,869, if this requirement were competed. This savings is insufficient to recoup the duplication of costs mentioned above in paragraphs a. and b.

totaling $1,754,967, and considering this is a one-time procurement. Thus, an award to another contractor would cause duplication of costs that would not be recouped through competition.

d. It is inefficient and not in the best interest of the Government to pursue re-design or reverse engineering efforts in order to make a competitive award at this time. Pursuing re-design or a new design and a competitive award of the CROWS Integration kit would result in significant duplication of costs that would not be recouped through competition and would result in unacceptable delays to the mission.

6. Efforts to Obtain Competition: The original M-ATV production contract was competed; however, only the vehicle OEM can provide the needed hardware for its particular vehicle for the CROWS Integration kit. The Government will solicit only Oshkosh for this acquisition since the kits are proprietary to Oshkosh.

7. Actions to Increase Competition: For the reasons described in paragraph 5, above, competition is not possible for this acquisition. Future requirements will be base on current Market Research at the time . No additional action will be taken to increase future competition at this time.

8. Market Research:

a. Based on their expert knowledge of the M-ATV platform and their continued collaboration efforts with the industry, APO MRAP’s personnel determined on 10 April 2014 that while other MRAP OEMs may possess the infrastructure to fulfill this requirement, none of the MRAP OEMs or commercial entities can make the kits and ensure compatibility and performance of the vehicle and meet the M-ATV’s Upgrade and Reset schedule at Oshkosh. In addition, due to the proprietary nature of the kit and the time it would take to produce a competitive TDP, the only timely source for the kits is the OEM. Otherwise the Upgrade and Reset schedule will suffer line stoppages due to parts shortfalls.

b. On April 2 & 3, 2014, TARDEC sponsored TARDEC Ground Vehicle Gateway, a forum for Government to provide Industry with future budget and military needs. Also

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c. Further, ongoing market research, last conducted 03 December 2013 by PdM MRAP personnel also includes attending industry conferences, such as the Interservice and Industry Training, Simulation and Education Conference (I/ITSEC), and researching on-line magazines consisting of Army Technology, Army Magazine, Soldiers Magazine, Army Times, and Army AL&T, and reviewing various marketing publications from vehicle manufacturers discussing their product line and their vehicle capabilities, and having attended other industry conferences (Association of the United States Army, NDIA, and prior I/ITSEC). This research identified no other sources of supply for this effort.

d. In May 2013, APO MRAP engineers attended the Michigan Defense Industrial Base

Exposition held at the Macomb Community College Expo Center, in Warren, Michigan and sponsored by the National Defense Industrial Association (NDIA) and will attend the next Expo, scheduled for 20 and 21 May 2014. This expo is a forum for Government and industry representatives to meet and discuss current products, capabilities and Government requirements. Industry representatives from all pay load classes of trucks were present along with second and third tier subcontractors.

The APO MRAP personnel obtained information about industry products and capabilities from marketing presentations; displays and distribution of commercial literature and conversations with various companies. The information obtained from the industry revealed no additional sources that can successfully produce these kits in order to upgrade and reset the M-ATV fleet within the required fielding schedule as directed by US Army’s higher officials.

e. The Market Research outcome specially shows no other contractor besides the

OEM has demonstrated the technical data, unique knowledge and experience that could provide kit upgrades to successfully meet mission requirements. The Product Manager’s expertise and the MRAP Engineers’ knowledge of the M-ATV with their continued collaboration efforts with industry and organic Research & Development (R&D) staff contributed to this outcome.

f. Based on the aforementioned market research activities, the required production in the Scope of Work, the kits can only be produced by the OEM.

g. The required Oshkosh’s proprietary TDP of the CROWS II kit is identified as ECP

NUMBER: MATV-OSK020R1 TITLE: M-ATV CROWS II.

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

However, all notices required by FAR 5.201 shall be published, as appropriate, in conjunction with this acquisition.

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10. Other Facts:

a. Procurement History: The Government has not purchased the new kits since the

ECP MATV-OSK020R1 was recently approved. The upgrade of the M-ATV to CROWS II was accomplished with a combination of various add-on produced under contract W56HZV-09-D-0111 in response to ONS 08-6152 and Government safety concerns. The Government issued contract W56HZV-09-D-0111 from a competitive solicitation, and the contract award did not include any requirement for the procurement of the vehicle system TDP. As the OEM of the M-ATV, Oshkosh owns the drawings and technical data rights and refuses to sell a complete vehicle TDP.

The Government lacks data rights to the TDP for the M-ATV platform needed to conduct a competitive procurement for this requirement. The OEM developed the vehicle and the associated CROWS II ECP kit; therefore, the TDP for this upgrade ECP is proprietary to the OEM. Ownership of the vehicle TDP is considered cost prohibitive and not in the best interest of the Government at this time. Stock on had was checked through M-ATV Logistician and Logistics Analyst’s at DLA Land and Maritime, Columbus, Ohio. None of the required kits are available through the supply system since it is a brand new kit.

b. Acquisition Data Availability: The Government does not own the TDPs for the M-

ATVs or the CROWS Integration kits; therefore, competition cannot be obtained.

c. Unusual and compelling urgency: Not applicable

d. Subcontracting Competition: The contractor will submit subcontracting plans for

Government approval. These plans will be incorporated in the resulting contract.

Also, to encourage competition at the subcontractor level, the contracts will contain the following subcontracting clauses: FAR 52.244-2 “Subcontracts” and FAR 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.”

8 May 2014

MICHAEL J. RECENIELLO

Acting Project Manager, Army Program Office Mine Resistant Ambush Protected Vehicles

Date

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.”

8 May 2014

MICHAEL J. RECENIELLO

Acting Project Manager, Army Program Office Mine Resistant Ambush Protected Vehicles

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 the results of a detailed cost and price analysis and the contractor’s submission of certified cost or pricing data.

1 May 2014

DAWN M. VANHULLE

Contracting Officer

14. Procuring Contracting Officer Certification: “I certify that this

J&A is accurate and complete to the best of my knowledge and belief.

1 May 2014

DAWN M. VANHULLE

Contracting Officer

APPROVAL

Based on the foregoing justification, I hereby approve the procurement for 827 CROWS Integration kits required as Government Furnished Material (GFM) to support the M- ATV Upgrade and Reset activities at Oshkosh Corporation, in the total estimated amount of $8,038,686 on an Other Than Full and Open Competition basis. This approval is pursuant to the authority of 10 U.S.C. 2304 (c) (1), as implemented by FAR 6.302-1(a)(2)(ii)(A) and (B), and HCA Delegation of Authority 13-01, subject to the availability of funds, and provided that the services and property provided for herein have otherwise been authorized for acquisition.

Date: _21 May 2014_____ Signature: _//signed//_________________

LARUTH SHEPHERD

Competition Advocate