REDACTED_JA_TRM_II_Extension_for_ERI_2017-119.pdf

CMO Control Number: 2017-119

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 contracting activity responsible for this action.

2. Description of Action: This action proposes to award a modification for a fourth ordering period from 4 December 2017 to 3 December 2018 to the current contract W56HZV-13-D-0117 for the production of the Modular Fuel System (MFS) Tank Rack Model (TRM) to Isometrics Inc. of Reidsville, North Carolina for Model M108 MFS TRM, Basic Issue Items (BII), Authorized Stockage List (ASL), and Special Tools associated with each TRM. The Army will fund the proposed award with Fiscal Year (FY) 2017 Overseas Contingency Operations funding that is specifically slated to support the European Reassurance Initiative (ERI).

3. Description of Supplies: The proposed contract extension will procure an estimated quantity of 142 each MFS TRM M108 to fulfill the ERI requirement. The MFS TRM is a 2,500-gallon (9,464 L) fuel storage tank, nominal 35 gallon per minute electric pump, Heavy Expanded Mobility Tactical Truck (HEMTT) Tanker interface, portable ladder, fuel spill kit, nozzle, and hoses to perform its mission. The MFS TRM is capable of receiving, storing, and issuing fuel. The initial use of the MFS TRM is to provide mobile fuel storage and issuing capability for the Brigade Combat Team. Each MFS TR can transport fuel over all types of terrain. The MFS TRM provides rapid establishment of fuel storage at any location without the use of material handling or construction equipment. A HEMTT Load Handling System or Palletized Load System can recover the MFS TRM, transport it to a new location, and position the system upon arrival in the following configurations: empty, full, or partially loaded. With this capability, the MFS TRM is ready for transporting, uploading, and moving in a fraction of the time required for a collapsible tank. The total estimated value for this action is $10,242,034 based on the IGCE as outlined in the table below:

TRM II Extension Cost Unit $70,512

BII 150

ASL 1232

Special Tools 233

Total $72,127 142 Units $10,242,034

Grand Total $10,242,034

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

“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 award to any other source would result in unacceptable delays in fulfilling the agency’s requirements.”

5. Reason for Authority Cited:

History/Background: The MFS TRM M108 is a non-commercial item specifically designed by Isometrics (TDP Owner) for the US Army and is required to pass all Government testing to verify effectiveness, suitability and survivability of the system per the requirements specified by the Capability Developer in accordance with Army Regulation (AR) 73-1. As described in AR 73-1 re-procurements of a current specification from a previous source that have been out of production for a period of less than two years will not be required to perform a complete First Article Test (FAT).

Isometrics is currently in production of the MFS TRM M108 and is scheduled to continue until March 2018. The MFS TRM M108 produced by Isometrics has passed specific Government testing encompassing reliability, durability, performance and Operational Test taking place over an approximately 12 month period.

As described in AR 700-142 Table 1-3, follow on re-procurements of materiel produced under a performance specification that is out of production for two or more years or materiel produced under a performance specification changes manufactures will require Materiel Release (MR).

ERI – The requirement for M108 TRM supports the ERI. ERI systems are required immediately to reassure allies of the US commitment to their security and territorial integrity as members of the North Atlantic Treaty Organization (NATO) Alliance. The FY 2017 budget request provides near-term flexibility and responsiveness to the evolving concerns of US allies and partners in Europe (especially Central and Eastern Europe), and helps to increase the capability and readiness of US allies and partners. The FY 2017 funding request also supports the expansion of ERI to provide measures for a quick joint response against any threats made by aggressive actors in the region.

Specifically, the request funds enhanced training and exercises, improvements to key infrastructure, and three continuous brigade-sized rotations to train with allies. It also funds the placement of a full set of Army Prepositioned Stocks in Europe consisting of one Armored Brigade Combat Teams (ABCT), a fires element, a division headquarters, and associated enablers. The request sustains the ABCT European Activity Set currently in theater conducting exercises with NATO allies and partners. The DoD would continue several lines of effort to accomplish the purposes of this initiative, including: (1) increased US military presence in Europe; (2) additional bilateral and multilateral exercises and training with allies and partners; (3) improved infrastructure to allow for greater responsiveness; (4) enhanced prepositioning of US equipment in Europe; and (5) intensified efforts to build partner capacity for newer NATO members and other partners.

Unacceptable Delay : The proposed contract extension will avoid unacceptable delays in equipping units in support of ERI requirements using funding budgeted to specifically support ERI. Based on their experience with similar actions, PdM PAWs subject matter experts estimate that awarding a competitive re-procurement and completing FMR requirements to a vendor other than Isometrics will take approximately 53 months, as shown in Table 1 below, which would delay system fielding procured with ERI funding until First Quarter FY23.

Table 1: Delay Analysis

Task Competitive Avg. Days

Sole Source OEM Days

RFP Development 210 15 RFP Response Time 75 30 SSEB / Negotiations 270 50

PDR / CDR 200 0

Testing IOT & OT 120 0 Tech Manuals Development & Val/Ver

300 0

Full Material Release / MR 365 0 FUE After FMR 60 0 Average Days 1600 95

Table 1 outlines the estimated time to solicit and award a new competitive contract. In comparison, the estimated to time to solicit and award a sole source award to Isometrics is 95 days to award (If the USG awarded to another company, the net delay would result in a 50 month delay. This delay is unacceptable as it would not be able to provide support to the ERI measures mentioned above for an additional 50 months. This 50 month delay in fielding TRMs will significantly impede the Army’s ability to distribute fuel to critical USG tactical and combat vehicles, aircraft and other fuel consuming equipment.

Fielding teams will work to accelerate the fielding schedule and PdM PAWS will work with the contractor to accelerate deliver where possible.

6. Efforts to Obtain Competition:

a. Effective competition. Competition will not be pursued for this action for reasons stated in paragraph five above.

b. Subcontracting competition. The current contract contains FAR clause 52.244- 5 entitled “Competition in Subcontracting”, to ensure the prime contractor competitively subcontracts the efforts to the maximum extent possible. The current contractor is a small business.

7. Actions to Increase Competition: After completion of this action, the Army still has 1,591 TRM systems to procure to fulfill the Army Acquisition Objective. PdM PAWS intends to conduct additional market research for the next procurement to determine if there are any interested vendors that can offer an existing system to meet the requirement. Those efforts are not currently being pursued because of the unacceptable delay to perform these actions as outlined in Paragraph 5.

8. Market Research: On 29 June 2017, the Project Engineer’s Market Survey Questionnaire/Request for Information (RFI) closed on the FedBizOpps website. One vendor responded expressing its interest for this procurement. Sources that replied to the market research survey was limited to one vendor, Parallax Group. Parallax Group is proposing a system manufactured by Chart Inc. The response addressed the Government’s specific questions by utilizing brochure pictures, pictures of the manufacturing facility, and plain text. However, Chart is not a small business. Further, while it may have the production capability, it is not capable of meeting the delivery and fielding requirements described in paragraph 5 above so is not being considered for this action.

9. Interested Sources: The notices required by FAR 5.201, will be published on the FedBizOpps website and any responses will be taken into consideration per the FAR provision previously stated. Notices required by FAR 5.201 will be published, and any bids or proposals received will be considered.

10. Other Facts:

Procurement History: Background - The Load Handling System Modular Fuel Farm (LMFF) was initially procured under a five-year contract with the predecessor to DRS Sustainment Systems, Inc. in 2005. The Government canceled the LMFF program on 25 May 2007, before full rate production began. However, due to the maturity of the design the contract was allowed to continue to complete development of the TRM. In 2008, the Army re-started the system as the Modular Fuel System (MFS), with specific direction to fill urgent requirements of the Stryker Brigade Combat Teams and Modified Brigade Combat Teams. The contract with DRS contained an option which was exercised to resume the MFS acquisition program. The ordering period of this contract expired in April 2010.

Contract W56HZV-12-C-0131 was awarded sole source to DRS (CMO Control #11-092) for the procurement of 800 TRMs on 17 February 2012 in accordance with FAR 6.302-1(a)(2)(ii)(B). All M107 units have been built and are currently in the fielding process. The M107 has been out of production for a period greater than two years so, as discussed in paragraph five above, any re-procurement requires both FAT and the completion of all tasks to achieve MR. The total estimated time to achieve MR is estimated at one year. This delay is unacceptable so a new re-procurement of the M107 TRM is not a viable option at this time.

The Government does not own the technical data to the DRS MFS design. The

DRS product produced under the contract was not the result of a Government-funded development program, so the Government cannot claim any rights to the technical data.

The Government queried DRS about buying the technical data, and the price quotes was sufficiently high, making introducing competition by buying the technical data uneconomical.

Contract W56HZV-13-D-0117 for the acquisition of the TRM system was solicited through a competitive small business set aside and awarded to Isometrics, Inc. on 10 July 2013. The ordering period expired 9 July 2016. Production deliveries of 807 M108 MFS TRMs under that contract are expected to be completed in March 2018.

11. Technical Certification: I certify the supporting data under my cognizance, which are included in the justification are accurate and complete to the best of my knowledge and belief.

Typed Name: LTC CRAIG FOURNIER Date: 19 July 2017 Title: Product Manager, PAWS Signature: ///S///

12. Requirements Certification: I certify the supporting data under my cognizance, which are included in this justification, are accurate and complete to the best of my knowledge and belief.

Typed Name: LTC CRAIG FOURNIER Date: 19 July 2017 Title: Product Manager, PAWS Signature: ///S///

13. Fair and Reasonable Cost Determination I hereby determine the anticipated cost to the Government for this contract action will be fair and reasonable based upon the IGCE and price analysis in accordance with FAR 15.404-1(b). Certified cost or pricing data will be required.

Typed Name: Lynn M. Byrne Date: 21 July 2017 Title: Contracting Officer Signature: //signed//

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

Typed Name: Lynn M. Byrne Date: 21 Jul 2017 Title: Contracting Officer Signature: //signed//

APPROVAL

Based on the foregoing justification, I hereby approve the procurement of Modular Fuel System Tank Rack Modules from Isometrics, Inc. on an other than full and open competition basis pursuant to the authority of Title 10 U.S.C. 2304 (c)(1), as implemented by FAR 6.302-1(a)(2)(ii)(B), “Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements” with an estimated value of $10.2M, subject to availability of funds and provided the items herein described have otherwise been authorized for acquisition.

8/29/2017

X LaRuth Shepherd LaRuth Shepherd Competition Advocate Signed by: SHEPHERD.LARUTH.1230673116