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Abrams – MAP/Process Improvement Studies CMO Control Number: 2015-095

JUSTIFICATION AND APPROVAL FOR OTHER THAN

FULL AND OPEN COMPETITION

1. Contracting Agency: Army Contracting Command-Warren (ACC-WRN), Warren, Michigan 48397-5000 is the contracting activity for this action.

2. Description of Action: ACC-WRN proposes to award a new contract to General Dynamics Land Systems (GDLS) in Sterling Heights, Michigan for the procurement of 76,000 hours for Abrams Manufacturing Analysis and Planning (Abrams - MAP) for the Abrams series of vehicles to support production process improvement at Abrams tank production facilities. The proposed contract will be for a period of four (4) years consisting of an estimated 19,000 hours per year.

The contract type will be Cost-Plus-Fixed Fee (CPFF) and will be in the form of completion and term type work efforts with anticipated Procurement Appropriations Army (PAA) and Operation and Maintenance Army (OMA) funding. The total estimated dollar value of this effort is $12M.

3. Description of Services: This proposed acquisition will consist of manufacturing process planning for Abrams tank production facilities, which produce the Abrams Main Battle Tank family of vehicles. Abrams tank production facilities include the Joint Systems Manufacturing Center-Lima (JSMC-L) and Scranton Defense Plant (SDP). Additionally, the proposed acquisition will include manufacturing planning for Abrams production for new configurations. Work efforts will include process improvement studies such as:

(1) recommendations for improvements to the current plant layout and changes in the event of a need for increases in production capacity; (2) analysis and recommendations for facilities and plant and industrial equipment improvement projects at JSMC and SDP (3) recommendations and implementation plans for specific facilities and production base projects for expansion or modernization at Abrams tank production facilities; and (4) manufacturing planning for Abrams configuration changes.

4. Authority Cited: The statutory authority permitting other than full and open competition for 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)(iii)(A), “Only one responsible source and no other supplies or services will satisfy agency requirements.” Pursuant to FAR 6.302-1(a)(2)(iii)(A), services may be deemed to be available only from the original source in the case of a 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:

a. This authority is applicable because only GDLS can satisfy the Army’s minimum needs. Award to any other source would result in substantial duplication of cost to the Government that is not expected to be recovered through competition.

b. GDLS, possesses unique capabilities and as the sole manufacturer of the Abrams series of vehicles, GDLS is uniquely positioned to provide manufacturing analysis and recommendations for more efficient production of the Abrams vehicle. GDLS is also the facility manager at the main production facility JSMC (which is Government-Owned-Contractor Operated (GOCO)), and as such GDLS has an understanding of the current plant layout, and the condition and remaining life of the Government owned production equipment current at the facility.

Additionally, as the producer of the vehicle, GDLS has an understanding of the major manufacturing processes, and the facilities capabilities and industrial equipment needed to perform such processes. An understanding of these current production processes and the available equipment and plant layout is essential to provide the services required under this effort.

c. The cost to the Government would be approximately $2.4M for a new contractor to acquire the baseline information of Abrams production processes and Abrams production facilities, including the overall condition of the industrial property, facilities and maintenance requirements of both. This baseline information is needed in order perform the types of analyses that will be required of the contractor on this proposed effort. This cost is based on the actual costs of a recent study conducted by PEO Ground Combat Systems, who used a third party contractor to provide an independent analysis of Abrams Industrial Base Health. While this historical study is not the same effort as required by the proposed MAP effort, portions of the study required the third party contractor to gather baseline information which a new MAP contractor would also have to perform. Gathering baseline information included tasks such as conducting interviews, gathering data and historical records from multiple organizations and collating data in order to analyze the information and draw conclusions. The cost for this recent historical study over a 2 year period of performance was approximately $9.6M. Based on cost of the historical study, the Program Office estimates that the contractor expended one-quarter of the period of performance in gathering baseline data, and the corresponding cost of this phase of the study was $2.4M. Therefore, if another contractor were to perform the proposed MAP efforts, it could potentially cost the Government an additional $2.4M in order for the new contractor to gather sufficient information and experience to be able to successfully perform the proposed MAP efforts. This cost is approximately 20% of the overall value of the proposed 4 year contract, and it is unlikely that this duplication of cost would be recovered in a competition.

6. Efforts to Obtain Competition:

a. Effective Competition: No measures are taken for competition for this acquisition due to the reasons specified Paragraph 5.

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b. Subcontracting Competition: The contract will include FAR clause 52.244- 5, “Competition in Subcontracting”, which requires the contractor to select subcontractors on a competitive basis to the maximum extent practical.

7. Actions to Increase Competition: Due to GDLS’ extensive background, knowledge and know-how and its unique position as the sole source manufacturer and facilities contractor for the Abrams series of vehicles no actions have been taken to increase competition.

8. Market Research: In accordance with FAR 10.002(b)(2), engineering, logistics, production and quality assurance subject matter experts (SMEs) from the Product Manager Main Battle Tank Systems conducted an in-house market survey on 17 Oct 2014. This review included findings from the annual Association of the United States Army (AUSA), held 13-15 October 2014 in Washington, D.C. coupled with a review of current market conditions on industrial and manufacturing studies and planning related to the production of the Abrams vehicle. AUSA offered the opportunity to conduct market research in the form of direct discussions with related defense contractor SME’s, including Lockheed Martin, BAE, SAIC, Boeing, Raytheon, and GDLS. It was determined that the investment necessary in extensive documentation and technical knowledge of the Abrams systems would preclude alternate sources from participating and that only GDLS has the technical knowledge of the facilities required to perform this effort within the time frames required for this action. In addition, due to the unique situation of the Government ownership on the Joint Systems Manufacturing Center (JSMC), it was determined that no other firm other than GDLS could complete the work effort required for this proposed contract.

9. Interested Sources: To date, no other sources have written to express an interest. However, the Government will administer all notices required by FAR

5.201 for this action as appropriate and will consider any proposals it receives.

10. Other Factors:

a. Procurement History:

(1) Contract Award Date Contractor Value Sole Source Authority

W56HZV-08-C-0422 10 Jan 2008 GDLS $6.5M FAR 6.302-1 DAAE07- 02-C-0004 06 May 2002 GDLS $6M FAR 6.302-1

(2) All previous procurements were awarded on a sole-source basis to

GDLS.

(3) All previous procurements cited authority 10 U.S.C. 2304(c)(1) and FAR 6.302-1 under sole source procedures and there have been no significant changes to this circumstance.

(4) In paragraph 7 of justification for previous procurement, it stated that based on GDLS’s extensive background, knowledge, expertise and their unique position as the sole source manufacturer and facilities contractor for the Abrams series of vehicles, no action was taken to increase competition.

(5) No prior award for MAP efforts was accomplished by full and open competition.

(6) No unusual patterns have been revealed by a review of the procurement history.

(7) Previous procurements were supported by a sole source justification based on the unique capabilities that GDLS possess. There have been no significant changes since prior procurement.

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: LTC H. BRAD HODGE

Title: Product Manager DSN: 786-0216

Main Battle Tanks System

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

Name: LTC H. BRAD HODGE

Title: Product Manager DSN: 786-0216

Main Battle Tanks System

13. Fair and Reasonable 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 results from a technical review and Cost or Price Analysis. Certified cost or pricing data will be obtained for this action.

Name: LISA JONES

//s//

TITLE: Procuring Contracting Officer DSN: 786-6973

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

Name: LISA JONES

TITLE: Procuring Contracting Officer DSN: 786-6973

APPROVAL

Based on the foregoing justification, I hereby approve the procurement of 76,000 hours of effort for Abrams Manufacturing Analysis and Planning and for Process Improvement Studies on an Other Than Full and Open Competition basis pursuant to 10 U.S.C. 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. Approval is subject to the availability of funds, and provided the services and property herein described have otherwise been authorized for acquisition. The total estimated value for this acquisition is $12M.

5/13/2015

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