W56HZV18C0068_J&A_Redaction_Unusual_and_Compelling_Urgency.pdf

CMO Control Number: 2018-026

W56HZV-1 6-R-0009

Department of the Army Justification and Approval for Other than

Full and Open Competition

1. Contracting Activity: Army Contracting Command-Warren (ACC-WRN) is thecontracting activity for this action.

2. Description of Action: ACC-WRN proposes to award a new, Firm-Fixed Pricecontract to WEW Container Systems GmbH (WEVV) for Load Handling System Compatible Water Tank Racks (Hippos), Model M-105 (National Stock Number 5430-01-487-7760). The period of performance shall be 12 months. The funding type for thisprocurement is Fiscal Year (FY) 2017 Other Procurement Army funds, which will beprovided by the office of the Product Manager (PdM) Petroleum and Water Systems(PAWS).

3. Description of SupplieslServices: PdM PAWS requires a quantity of 241 M-1 05Hippos to support urgent requirements Outside the Continental United States (OCONUS). The Hippo currently provides the Army with the capability to receive, store,and distribute potable water utilizing the Heavy Expanded Mobility Tactical Truck—LoadHandling System (HEMU-LHS) and Palletized Loading System (PLS) and PLStrailer. The Hippo M-105 is the only variant in the field that meets the Automotive Tank Purchase Description (ATPD) 2319 specifications

—_The procurement of the proposedquantity illiüpport the Statement of UrgenciMemorandum dated 30 June 2017provided by U.S. Army Combined Arms Support Command (CASCOM). The totalestimated value of this action based on the Independent Government Cost Estimateprepared by PdM PAWS on 24 August 2017 is $21 .7M.

4. Authority Cited: The statutory authority permitting other than full and open competition is 10 U.S.C. 2304(c)(2) as implemented by Federal Acquisition Regulation(FAR) 6.302-2(a)(2), Unusual and Compelling Urgency. Specifically, FAR 6.302-2(a)(2)states, “When the agency’s need for the supplies or services is of such an unusual andcompelling urgency that the Government would be seriously injured unless the agencyis permitted to limit the number of sources from which it solicits bids or proposals, fulland open competition need not be provided for.”

5. Reasons for Authority Cited: Per the Statement of Urgency cited above, the Army has an immediate need for a quantity of 241 Hippos. The Hippos are required to support Quartermaster Composite Supply Companies and____ as they provide direct support to the Maneuver Brigades.____________________ flies

The DepcrneiIL ot uetense UUU) is the Executive Agent iur Lanu 1asec1 waters Iesources pet DOD Directive 4704.1E and the PUM for PAWS is the 9ated PdM for the U.S. Army to acquire and manr

W56HZV-1 8-R-0009

There are no current contractors other than WEW Container Systems (CAGE: C61 19)that have the experience and background with the Hippo program to meet theGovernment’s delivery schedule. WEW has been the Original Equipment Manufacturer(OEM) of the tank and frame that ate the integral non-commercial parts of the Hippo M105 system. Mit-Mat Century Corporation (MMC) (CAGE: 2X262) has been the primecontractor for 17 years on the Hippo M-105, however, every M-105 delivered to the U.S.Army by MMC has contained the tank and frame manufactured by WEW. MMCassembled commercial-off-the-shelf components to the tank and frame. WEW hasintegrated the same type of commercial components contained in Hippo into a watertank system it produces for the German Army. Additionally, the U.S. Army will provideprovisioning data, engineering data, and a production representative M-105 unit toWEW to assist in validating production units.

During June and August 2016, the Government issued two separate market surveyspertaining to the Hippo M-105 system, NSN: 5430-01-487-7760. One market surveyinquired about industry’s ability to provide a Technical Data Package (TDP) for thesystem and the other sought information on industry’s ability to produce an M-1 05Hippo. Nine companies responded to the market survey for the TDP. Eight of thecompanies indicated it would have to obtain source data directly from WEW or reverseengineer the design. MMC indicated that it would not have to obtain source data sinceit is the OEM of the Hippo.

As a result of the 2016 market survey results, the Government determined that onlyMMC and WEW could provide the current Hippo M-105 without reverse engineering.Therefore, when the urgent requirement was received, the Government only pursuedadditional information from MMC and WEW. The Government issued market surveys toboth MMC and WEW seeking clarification on their proposed delivery schedule andteaming arrangements based on a potential urgent requirement for 250 M-105 Hippos.The Government’s required delivery schedule was provided to both companies. Itincludes the need for one Hippo to be delivered 45 days after award for contractor FirstArticle Test (FAT), with subsequent deliveries as outlined below:

Urgent Hippo Delivery Schedule Quantity Days After Contract Award

20 220 20 240 20 260 20 280 20 300 20 320 20 340 20 360

In MMC’s response, it indicated it wouldn’t be able to deliver the first unit until The company stated itdoes not have a current teaming agreement With WEW, and anticipates that such anagreement would not be made. MMC offered working with Armor Inc. in Mason, Ohio,to produce the tank rack portion of the Hippo, and stated that “Due to the patents ownedby WEW, Armor would make sufficient changes to not infringe on those patents.” In afollow-up e-mail, the Government informed MMC that FAR clause 52.227-1,“Authorization and Consent (Dec 2007),” would be in any resulting Hippo M-105contract and asked if that would change its delivery schedule. MMC responded, “Wehave determined that the ability to use the patents will not effect our projected deliveryschedule. However, it will allow the M105 Hippos we produce to be identical to theoriginal 1427 we delivered previously.”

MMC’s proposed delivery schedule does not meet the Government’s requirement.Additionally, because MMC is choosing to switch manufacturers, it would have toundergo 18,000 miles of Reliability and Maintainability (RAM) testing prior to production,which would add an additional three months to its schedule.

WEW indicated it does not intend to team with any other contractor to produce the M105 system. No additional testing other than a two week contractor FAT consisting of aPhysical Configuration Audit and limited RAM testing would be required for WEWbecause it is the OEM for the non-commercial items in the M-105 design. Allmanufacturing processes that originally passed testing would remain intact. WEW’smanufactured tank tack has already endured 18,000 miles of RAM testing.Furthermore, WEW indicated that it would need 90 days to deliver the first unit due tomaterial lead time; while this first unit delivery is 45 days past the Governmentrequirement for the first unit, all 241 required units could be delivered in twelve months.

Based on the information gathered, the Government has determined WEW to be theonly source capable of fulfilling this urgent quantity within a period of 12 months. Anysource other than WEW would either have to wait until the Government procures theTDP or reverse engineers a Hippo prior to production as MMC has offered. Either ofthese alternatives would result in a delay of delivery and the Government would not beable to meet the immediate need.

6. Efforts to Obtain Competition:

a. Effective Competition: Competition will not be obtained for this effort for thereasons stated in paragraph 5.

b. Subcontracting Competition: The resultant contract will contain FAR clauses52.244-5, “Competition in Subcontracting,” and 52.244-2, “Subcontracts.”

7. Actions to Increase Competition: This effort is a one-time requirement to procure241 Hippo model M-105 systems based on a production representative unit. Furtheractions to increase future competition are planned for the Hippo M-105 using full andopen competition for the remaining Army Acquisition Objective (AAO) quantity. It is theGovernment’s intent to procure a Production Level 3 TDP, as defined in MilitaryStandard 31000A (MIL-STD-31000A), for the M-105 on a full-and-open basis. The TDPwill then be provided in a future competitive Request for Proposal for a, new Hippo Ml05productioncontract.

B. Market Research: A market survey was issued to both WEW and MMC inSeptember 2017 requesting information on manufacturing and assembly capabilitiespertaining to the production of Hippos over the next year. Both WEW and MMC repliedand indicated that they had manufacturing capabilities to successfully completeproduction for 241 Hippo units. A supplemental survey was sent in November 2017,and MMC indicated that a new partnership with Armor Inc. would be sought for tank andframe assembly. MMC indicated that the first unit could be delivered 180 days afteraward. WEW indicated that the first unit could be delivered in 90 days. For reasonsstated in paragraph 5, MMC units would require additional testing certification and theurgent requirement could not be fulfilled in 12 months. WEW units would requite limitedtesting, however; they are able to fulfill the urgent requirement within 12 months.

9. Interested Sources: As noted above, a market survey was issued to both WEWand MMC (the only sources that have produced a Hippo M-105) in November 2017, andonly WEW was found capable to meet the urgent requirement. As a result, theGovernment will only solicit to WEW. This action will not be synopsized per FAR5.202(a)(2), which provides an exception for proposed contract actions being acquiredunder conditions of unusual and compelling urgency in which the Government would beseriously injured if it complied with the time periods required by FAR 5.203.

10. Other Facts:

Procurement History: In August 2006, the Army awarded fixed price contract W56HZV-06-D-0165 to MMC for 1,427 Hippos. The last contract ordering period expired inAugust 2010. The 1,427 units procured have been fielded. WEW was the sub contractor that manufactured and assembled the water tank and frame.

On 28 September 2012, contract W56HZV-12-D-0143 was awarded to Eniwistle Company for the procurement of 851 Hippos. The acquisition was solicited through acompetitive small business set aside. The procurement was based on the ATPD.Entwistle failed FAT in November 2015, and again in Match 2016. The contract wasterminated on 25 July 2016. The Army did not receive any Hippo units to field underthis contract.

11/12. TechnicallRequirements Certification: I certify that the supporting data under my cognizance, whith are included in the justification, are accurate and complete to the best of my knowledge and belief.

SIGNED: I/signed/l

BRYAN J. MCVEIGH

Project Manager, Force Projection

DATE: 4 December2017

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, based upon cost and price analysis. Certified cost and pricing data will be requited.

SIGNED: I/signed/I

LYNN M. BYRNE

Contracting Officer

DATE: 5 December2017

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

SIGNED: I/signed/I

LYNN M. BYRNE

Contracting Officer

15. Concurrence:

DATE: 5 December2017

NAME: SEAN M. O’REILLY DATE:

TITLE: Principal Assistant Responsible for Contracting

SIGNATURE:

ng

1cL i oL7

The termination of contract W56HZV-12-D-0143 [ 1: —. . . . . - ..

— his procurement action will assist in mitigating the risk.

CMO Control Number: 201 8-026

Approval

Based on the foregoing justification, and as Principal Assistant Responsible forContracting (PARC) pursuant to Army Materiel Command (AMC) Head of theContracting Activity (HCA) Delegation of Authority (DOA) #17-04, I hereby approve theProcurement of 241 Hippos on an other than full and open competition basis pursuantto the authority of 10 United States Code (U.S.C.) 2304(c)(2) as implemented byFederal Acquisition Regulation (FAR) 6.302-2(a)f2), Unusual and Compelling Urgency.The approval is subject to availability of funds, and provided that the services andproperty herein described receive authorization for acquisition. The total estimatedvalue of this acquisition is $21.7M.

Date: 2.1 /?

Principal Assi nt Responsible for Contracting