RedactedACC13C0319.pdf

CMO Control #:12-031

DEPARTMENT OF THE ARMY

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

1. Contracting Activity:

Army Contracting Command – Warren (ACC-WRN), Warren, Michigan 48397-

2. Description of Action:

Approval is sought for a new, follow-on cost-reimbursement (no fee) Contract.

The proposed sole source acquisition is required to support the Government property and Real property located in the Government-Owned, Contractor- Operated (GOCO) production facility located at Lima, Ohio. The Government anticipates awarding a five year consolidated facilities contract to General Dynamics Land Systems (GDLS) of Sterling Heights, Michigan, to support production work effort at the Joint Systems Manufacturing Center-Lima (JSMC- L). Production Base Support funds will be used.

3. Description of Supplies/Services:

The services and equipment proposed to be provided by GDLS include the acquisition of new Contractor acquired industrial and other plant equipment, Real Estate and Installed Systems, Replacement and Rehabilitation, Installation, Use, Maintenance and Repair, Preservation, Protection and Surveillance, Accountability, and Disposition of the Government-Owned assets within the

JSMC-L.

Currently, the JSMC-L is being used to produce multiple US Army vehicle systems, either wholly or partially, such as the M1A2 Abrams System Enhancement Package (SEP), M1A1 Abrams Integrated Management (AIM), M1A1 Co-production Kits, and Stryker vehicles. The Stryker program is utilizing the JSMC-L on a Rent-Free, Non-interference basis. Collectively, these uses will be in accordance with the Commanding General’s Ground Systems Industrial Enterprise (GSIE) Initiative to “Provide an Efficient and Effective Ground Systems Manufacturing, Repair, Storage, and Deployment Capability for a Multitude of Customers.” GDLS will utilize existing Government property and Real property and Installed Systems at JSMC-L to support Army.

It is anticipated that the Program Manager for HBCT, Warren, MI, will utilize the facilities contract beginning FY 2012 through FY 2016. GDLS will continue to utilize a Company Work Order (CWO) process to procure actual services or equipment. The anticipated amount will include $6.0 *million in Production Base Support funding per year, for a total of $32.2 million over a five-year period. The estimated value, $32.2 million, is based upon historical usage as well as planned projects.

4. Authority Cited:

10 U.S.C. 2304 (c) (1) and FAR 6.302-1 Only one responsible source and no other supplies or services will satisfy agency requirements.

5. Reason for Authority Cited:

a. As described in FAR 6.302-1 (a) (2), use of “Other Than Full and

Open Competition” is necessary due to the unique production-oriented nature of the services GDLS is currently providing to the Government. No other source has the engineering and manufacturing background knowledge necessary to manage the production equipment for the Abrams platform within the JSMC-L facility. GDLS has maintained the Government property and Real property at JSMC-L since 1978. During this time, GDLS has established maintenance processes and procedures to ensure the production equipment is properly maintained and repaired in an efficient manner. The established processes and procedures allow for timely completion of maintenance work on Government property which results in efficient production of Abrams tanks. Additionally, the facility maintenance services are of a diverse and unique characteristic involving production equipment which requires close management by GDLS for cost effective production and facility operation. Abrams tanks cannot be produced to Army specifications without the continuation of facility and maintenance production support from GDLS.

b. GDLS has been utilizing the JSMC-L to produce military vehicles for over twenty years. No other source could complete Abrams vehicle production without considerable, unrecoverable duplication of cost. GDLS has already established a support network for materials and specialized labor necessary for the maintenance of Government Furnished Equipment (GFE). GDLS also has a maintenance staff on hand that is qualified and has significant experience maintaining the production equipment. Currently there are 11 Abrams contracts (W56HZV-06-G-0006 Delivery Orders 1-

11) that are in production, the G&A that has been calculated into them includes a portion of the operating costs of JSMC-L, contracting with a separate company would result in a duplication of costs. The Government estimate of duplicative costs is approximately $75,000,000 to $100,000,000.

c. To have another contractor provide the required services and equipment would cause a delay in production of at least two years while a new contractor gained the corporate knowledge and experience necessary to provide the services required to maintain the GFE for the Abrams program. A delay of this duration would effectively terminate the Abrams program and expose the Government to various claims under the Abrams production contracts. The Abrams production contracts are conditioned on furnished GFE which requires maintenance support.

d. The established contractor manufacturing processes are utilized in the production of Abrams tanks at the JSMC-L facility. GDLS’ technical expertise and detailed knowledge of its own devised and implemented production processes is considered vital to the continued operation of the JSMC-L facility in a manner that is responsive to production demands.

e. Since 1978, the Government has invested approximately $1.2 billion dollars in interdependent tank production facilities.

f. GDLS has invested approximately $90 million dollars since 1978.

Some of the most recent investments include:

Facilitization for the Cougar MRAP area, $9M, 2007 Friction Stir Welding Machine, $3.4M, 2009 Large Welding Robots, $3M, 2008 Large Cell Coordinate Measuring Machine, $2M, 2010 Laser Cutting Machine, $1.8M, 2002

g. If the Government awards the management of JSMC-L, to a company other than GDLS, the Government’s risks of delays and costs in coordinating repairs and downtimes with GDLS in performance of the Abrams production contracts will be increased.

6. Efforts to Increase Competition:

The removal of barriers to competition and avoidance of non-competitive acquisition for the instant requirement is not feasible for reasons stated above.

To promote increased competition at the subcontractor level, this proposed acquisition will be synopsized under Federal Business Opportunities located on the TACOM website. Also, at the subcontract level, GDLS is required to maximize the use of competition from Small and Small Disadvantaged Business Firms.

7. Actions to Increase Competition:

The agency requirements are so closely interrelated to production and the attendant facilities that award to any other contractor is not practical for the reasons stated in paragraph 5 above.

8. Market Research:

Market research to determine if another source could be utilized for a follow-on Facilities Contract was conducted and completed on 25 Aug 11. A World Wide Web search found that there are many companies that could manage aspects of the facility. Further research on the companies’ web sites listed below, confirmed that they could manage maintenance of select equipment and various landscaping requirements of the facility. Yet General Dynamics was found to be the only company that could manage the complexity of coordinating preventive maintenance and repairs while Abrams production contracts are active.

Additionally, the facility maintenance services are of a diverse and unique characteristic involving production equipment which requires close management by GDLS for cost effective production and facility operation.

Sources of market research:

a. Aramark - http://www.aramark.com/Industries/businessandindustry/

b. Emcom - http://www.emconfm.com/ accessed via http://www.bessed.com/ facilitymanagementcompanies/

c. UGL Services - http://www.ugl-unicco.com/ accessed via http://www.bessed.com/facilitymanagementcompanies/

d. CH2M Hill IDC http://www.idcfs-ch2m.com/idc_fsg/ accessed via http://www.bessed.com/facilitymanagementcompanies/

9. Interested Sources

In accordance with FAR 5.201, this GFE support contract for the Abrams program will be synopsized on the Federal Business Opportunities website to identify contracting and subcontracting opportunities and to notify potential offerors that all proposals received within 45 days after the date of publication of the synopsis will be considered by the Government.

10. Other Factors:

a. Selection of GDLS as the prime M1 Tank System contractor was made on a competitive basis. It was recognized at the outset that unique M1 Tank production processes, developed by the system designer, would preclude further competition at the prime contract level regarding the Facilities contract.

b. Acquisition of supporting facilities and related services through contracts with the prime vehicle producer (GDLS) avoids splintering of responsibility for the implementation of major configuration changes.

Closely coordinated changes in the facilities are required for transition from M1A2 to SEP production and subsequent concurrent production of tracked vehicles.

c. Procurement History:

The acquisition of Abrams facilities has been on a sole-source basis since 1979. A partial procurement history is shown below:

GOCO Facility: W56HZV-04-E-0001, Awarded June

2004, Sole Source to GDLS

Detroit Arsenal Tank Plant: DAAE07-91-E-A002, Awarded December 1990, Sole Source to GDLS

Lima Army Tank Plant: DAAE07-90-E-A001, Awarded June

1990, Sole Source to GDLS

Authority cited for the previous contracts was 10 U.S.C. 2304 (c) (1), “Only One Responsible Source”.

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".

Kevin Houser _12 OCT 2010___________ Name Date

Acting Deputy Project Manager, PM HBCT _/s/ Kevin Houser_______ Title Signature

12. Requirements Certification:

"I certify that the supporting data under my cognizance which are included in the J&A are accurate and complete to the best of my knowledge and belief".

Kevin Houser __26 OCT 2011_________ Name Date

Acting Deputy Project Manager, PM HBCT __/s/ Kevin Houser __ Title Signature

13. Fair and Reasonable Cost Determination:

“I hereby determine that the anticipated cost for this action will be fair and reasonable. This determination will be based on results from DCAA Audit, DCMA Technical Data and Cost and Price Analysis. Certified cost or pricing data will be obtained for this action.”

Lisa M. Jones _____8 Nov 11__________

Procuring Contracting Officer_ _____lmj//s//____________

14. Procuring Contracting Officer Certification:

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

Lisa M. Jones _____8 Nov 11_________________ Name Date

Procuring Contracting Officer_ ___lmj //s//___________________

15. PARC Concurrence:

MARTIN J. GREEN 18 Jan 12

Principal Assistant Responsible for Contracting

APPROVAL OF JUSTIFICATION

FOR OTHER THAN FULL AND OPEN COMPETITION

Based on the foregoing justification, I hereby approve the support of Government Furnished Equipment used to support the Abrams program 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 and pursuant to Delegation of Authority 10-04, subject to the availability of funds and provided that the services and property described herein have otherwise been authorized for acquisition. The total estimated value of this procurement under an anticipated five year consolidated facilities contract is $32.2 million.

DATE:_______19 Jan 2012_ SIGNATURE:__Hand signed______________

MICHAEL D. VIGGATO

Deputy to the Commander