JA_M3P(Spares)_2015-003_Final_-_redaction_v1.pdf

CMO Control: 2015-003

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 for this action.

2. Description of Action: This action is for the award of a new three year Firm Fixed Price (FFP) Requirements contract to FN Herstal SA (FNH) to procure various parts for the M3P Machine Gun. Army Working Capital Funds (AWCF) will be used for this procurement.

3. Description of the Supplies/Services: The total estimated value of this action is $5,515,761.34. The spare parts listed below are those identified by the TACOM Life Cycle Management Command (TACOM-LCMC), Weapons Product Support Integrated Directorate (PSID), necessary to sustain the M3P Machine Gun (MG), NSN End Item:

1005-01-303-5250, Part Number: 13264604. This action will establish ordering authority for each of the items listed below, for each of the three ordering periods. Each NSN has a yearly estimated quantity, with no option for additional ordering years.

NSN

NOMENCLATURE

YEAR 1

YEAR 2

YEAR 3

LAST ACQ COS

EACH

3 YEAR TOTAL

5360-13-114-0817 SPRING,HELICAL,COMP 444 444 444 $1.80 $2,397.60

5360-13-115-3473 SPRING,HELICAL,COMP 223 230 226 $13.72 $9,315.88

5305-13-116-1929 SCREW,CAP,SOCKET HE 148 154 155 $8.89 $4,062.73

5945-13-116-2037 SOLENOID ASSEMBLY 0 85 168 $1,685.16 $426,345.48

5305-13-116-2049 SCREW,MACHINE 162 161 162 $13.90 $6,741.50

1005-13-116-2052 SLEEVE 0 40 41 $110.95 $8,986.95

5305-13-116-2053 SCREW,MACHINE 0 124 132 $21.26 $5,442.56

5325-13-116-2054 RING,RETAINING 127 134 134 $6.56 $2,591.20

1005-13-116-2064 SWITCH EXTRACTOR 319 331 331 $75.47 $74,036.07

5360-13-116-2065 SPRING,SPIRAL,TORSI 489 501 501 $7.06 $10,526.46

1005-13-116-2070 CAM,BREECH LOCK 251 0 255 $204.21 $103,330.26

1005-13-116-2087 LOCK,PLATE LATCH 24 24 24 $40.02 $2,881.44

5310-13-116-2092 WASHER SET 75 78 77 $123.01 $28,292.30

5360-13-116-2094 SPRING,REGULATOR 0 174 174 $5.05 $1,757.40

1005-13-116-2095 CONE,THRUST,REGULAT 97 97 97 $33.61 $9,780.51

5310-13-116-2097 WASHER ASSORTMENT 0 40 42 $145.52 $11,932.64

1005-13-116-2104 PLATE SUPPORT,SPECI 60 59 60 $1,083.78 $193,996.62

5935-13-116-2111 CONNECTOR,RECEPTACL 72 72 72 $43.87 $9,475.92

1005-13-116-2116 COVER,PROTECTIVE 0 52 54 $100.50 $10,653.00

5305-13-116-2117 SCREW 2559 2557 2558 $5.33 $40,902.42

5315-13-116-2118 PIN,SHOULDER,HEADLE 93 92 92 $19.99 $5,537.23

1005-13-116-2123 BARREL BUFFER ASSY 262 262 262 $604.60 $475,215.60

1005-13-116-2130 PIN,BELT FEED SLIDE 0 90 90 $24.23 $4,361.40

1005-13-116-2132 PAWL ASSY,BELT FEED 0 284 306 $150.35 $88,706.50

1005-13-116-2133 ARM,BELT FEED PAWL 184 196 197 $91.65 $52,882.05

5360-13-116-2134 SPRING,HELICAL 0 431 450 $2.87 $2,528.47

1005-13-116-2136 PIN,BELT FEED PAWL 58 60 60 $9.54 $1,698.12

1005-13-116-2137 LEVER,FEED,BELT 0 104 104 $414.86 $86,290.88

5360-13-116-2138 SPRING,HELICAL 183 183 183 $3.51 $1,926.99

1005-13-116-2139 SPRING,COVER EXT. 183 183 183 $21.34 $11,715.66

1005-13-116-2140 BLOCK,BOLT,MACHINE 10 10 10 $1,236.53 $37,095.90

1005-13-116-2146 LEVER,BREECHBLOCK,C 770 770 771 $47.79 $110,442.69

NSN

NOMENCLATURE

YEAR 1

YEAR 2

YEAR 3

LAST ACQ COS

EACH

3 YEAR TOTAL

1005-13-116-2149 STOP PIN,SEAR SLIDE 589 594 595 $8.70 $15,468.60

5315-13-116-2150 PIN,STRAIGHT,HEADED 620 620 620 $9.40 $17,484.00

1005-13-116-2152 STOP,FIRING PIN EXT 0 249 258 $38.90 $19,722.30

5315-13-116-2154 PIN,RETAINING 642 642 642 $9.05 $17,430.30

1005-13-116-2155 EXT.,FIRING PIN 563 562 562 $122.21 $206,168.27

1005-13-116-2157 ROD,DRIVING SPRING 0 330 356 $78.28 $53,700.08

1005-13-116-2162 EJECTOR,CARTRIDGE 650 650 650 $54.16 $105,612.00

1005-13-116-2163 AXIS,EJECTOR 820 818 818 $8.77 $21,539.12

5360-13-116-2164 SPRING,HELICAL,COMP 1200 1200 1200 $5.32 $19,152.00

5315-13-116-2309 PIN,STRAIGHT,THREAD 0 25 25 $9.23 $461.50

5360-13-116-2310 SPRING,HELICAL,COMP 60 60 60 $14.53 $2,615.40

1005-13-116-2311 PIN,FIRING 730 730 730 $123.01 $269,391.90

1005-13-116-2597 BARREL EXTENSION AS 409 409 410 $656.05 $805,629.40

1005-13-116-2599 SPRING,BUFFER VALVE 7 7 7 $6.07 $127.47

1005-13-116-2600 COVER FEED BELT ASS 13 12 13 $573.24 $21,783.12

1010-13-116-2692 ADAPTER,LINK CHUTE 186 186 185 $193.76 $107,924.32

1005-13-116-2693 ADAPTER TRUNNION 35 34 35 $156.78 $16,305.12

1005-13-116-2696 PLUG,ADJUSTIN 0 40 40 $33.45 $2,676.00

1005-13-116-2698 SLIDING BLOCK,REAR 178 182 181 $118.19 $63,940.79

5340-13-116-3066 LEVER,LOCK-RELEASE 30 30 30 $47.63 $4,286.70

5360-13-116-5037 SPRING,HELICAL,COMP 580 580 579 $3.00 $5,217.00

1005-13-116-5754 TIE WRAP 415 415 415 $0.20 $249.00

5360-13-116-5757 SPRING,FLAT 175 180 180 $2.44 $1,305.40

1005-13-116-9125 BREECHBLOCK 297 297 297 $1,400.55 $1,247,890.05

1005-13-118-2209 SEAR 0 1020 1020 $213.86 $436,274.40

1005-13-118-2396 SLIDE,SEAR 0 886 926 $79.25 $143,601.00

5360-13-118-3496 SPRING,HELICAL,COMP 980 980 980 $7.39 $21,726.60

1005-13-121-1911 DEPRESSOR,LEFT 177 178 175 $60.55 $32,091.50

1005-13-121-1912 DEPRESSOR,RIGHT 0 124 133 $55.01 $14,137.57

Totals 16,149 20,062 20,537 Totals $5,515,761.34

4. Authority Cited: The statutory authority permitting Other Than Full & Open Competition for this action is 10 U.S.C. 2304 (d)(1)(b), 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," which states there will be a substantial duplication of cost to the Government that is not expected to be recovered through competition.

5. Reason for Authority Cited:

a. The M3P Machine Gun is uniquely designed entirely at private expense by FNH. The M3P machine gun is designed such that the dimensions and tolerances of each individual part are proprietary to and known only by FNH. These dimensions and tolerances are critical to the proper and safe operation of the M3P machine gun and essential for proper interface of parts as assembled into the M3P machine gun. No other vendor possesses the requisite knowledge of the correct dimensions, tolerances, form, fit or function of M3P machine gun parts and therefore, no other vendor is able to properly manufacture these parts. Obtaining them from any other vendor increases the possibility of improperly manufactured parts liable to damage equipment, increasing the risk of safety hazards to operational personnel and operational failure. Therefore, since the proprietary data rights for these items are solely owned by FNH, it is concluded only FNH can provide these parts.

b. A Government TDP is not available and no qualification procedures exist to approve an alternate source. ARDEC Engineering has estimated that to establish qualification procedures to approve an alternate source would cost approximately $1,500,000 and consume approximately 36 months of effort. It is also estimated that the engineering testing and analysis would cost $4,500,000 and take 24 months to complete. Additionally, it is estimated that reverse engineering to develop a competitive TDP would consume 12 months and cost approximately $9,000,000. As a result, the total cost to develop a competitive TDP is estimated at $15,000,000 and the effort would require 72 months to complete. Therefore, an award to any other source would not recover these costs through competition and it would result in an unacceptable delay in fulfilling agency requirements.

c. The costs required to develop a competitive TDP are not expected to be recouped through competition based on the projected demands for these items. The three year demand for these parts has an estimated value of $5.5M. In order to recoup the reverse engineering costs through competition, the Government would have to extrapolate the current three year buy out to an approximate 12 year buy based on the following. Recent procurement for similar small arms parts (components of the M240 medium machine gun and M4 carbine) which were competed for the first time showed a cost savings from competition between 20% and 40%. If we use the most optimistic cost saving and assume a value of 40%, in order to recoup $9M in reverse engineering costs, approximately $22.5M in spare parts would have to be procured. Since this buy is only valued at $5.5M for three years, this buy would have to be four times greater than it is to break even with the reverse engineering costs. Based on the aforementioned, award to any other source would result in substantial duplication of cost to the Government and is unjustifiable at this time. Procuring these parts sole source from FNH is in the best interest of the Government.

6. Efforts to Obtain Competition: At this time it is not possible to pursue competition for these items (spares) due to the proprietary nature of the repair/spare parts and the information listed above in section 5.

7. Actions to Increase Competition: The technical data rights required to produce this item are proprietary to FNH, Herstal, Belgium, and they have no interest in selling the technical data rights to the Government. In addition, per paragraph 5 above, it is not cost effective for the Government to pursue a reverse engineering effort to develop a competitive TDP for this item. The Government, however, will continue to monitor both FNH's willingness to sell its data rights and whether or not procurement of spare parts quantities changes such that the reverse engineering effort becomes cost effective for future procurements. If either condition changes, a reconsideration of the sole source status of the M3P spare parts will be made at that time.

8. Market Research: The following market research was conducted on May 29, 2014 to identify all qualified sources appropriate to support this procurement action: Based on the assigned engineer's extensive knowledge of machine guns, including years of

OPSEC #1 Equipment capabilities, limitations, & vulnerabilities

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

Signature: _____//signed//______________ ___4 Aug 2014_____ Typed Name: Wayne J. Schaaf Date:

Title: Director, Weapons PSID

13. Fair and Reasonable Cost Determination: I hereby determine the anticipated cost to the Government for this contract will be fair and reasonable based on cost and price analysis. Certified cost or pricing data will be obtained in accordance with FAR 15.403-4.

Signature: //MRJ// ___19 September 2014___ Typed Name: Matthew R. Jewell Date:

Title: Contracting Officer

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

Signature: //MRJ// ___19 September 2014___ Typed Name: Matthew R. Jewell Date:

Title: Contracting Officer

APPROVAL

Based on the foregoing justification, I hereby approve the procurement of Spare Parts for the M3P MG on an other than full and open competition basis pursuant to the authority of 10 USC 2304(c)(1) as implemented by FAR 6.302-1, "Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements", subject to availability of funds, and provided the services and property herein described have otherwise been authorized for acquisition. Total estimated amount of this action is $5,515,761.34.

DATE: 29 Oct 2014 SIGNATURE: ______________________________

LA RUTH SHEPHERD

Competition Advocate