J&A_(CMO_2018-103)-_Knight-Stryker_FSV_MEP_STS-SSTS-PPSS_Services_-_Redacted.pdf

CMO Control Number: 2018-103

DEPARTMENT OF THE ARMY

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

1. Contracting Activity: Army Contracting Command-Warren (ACC-WRN), Warren, MI 48397-5000 is responsible for this action.

2. Description of Action: ACC-WRN proposes to award a new, five-year Cost Plus Fixed Fee requirements contract to DRS Sustainment Systems, Inc. (DRS-SSl) in St.

Louis, MO. This contract will contain completion and level of effort work directives.

The anticipated funding for this contract consists of Army Procurement Appropriation;

Operations and Maintenance, Army; Research, Development, Test and Evaluation;

and Army Working Capital Funds. The total estimated value of this contract is $48.7M.

3. Description of Supplies/Services: The proposed contract will provide uninterrupted System Technical Support (STS), Sustainment System Technical Support (SSTS), and Post Production Software Support (PPSS) services for M1200 Armored Knight Vehicles, and for the common Fire Support Mission Equipment Package (MEP) utilized in both M1200 Armored Knight Vehicles and Stryker Fire Support Vehicles (FSVs). STS and SSTS services for the M1200 Armored Knight and common Fire Support MEP will consist of program, configuration, and obsolescence management; software engineering and enhancements; testing and test support; Field Service Representative (FSR) services;

systems and equipment training; vehicle survivability enhancements; product assurance (quality engineering and quality assurance) support; and Integrated Logistics Support.

PPSS services will consist of software maintenance and sustainment-related activities.

The $48.7M total estimated value of the proposed contract is based on the Independent Government Cost Estimate for this requirement. The total estimated value, by Ordering Period (OP), is listed in Table 1 below.

Table 1: Estimated Value of STS/SSTS/PPSS Requirements OP1 OP2 OP3 OP4 OP5 Total

$9.8M $9.4M $9.6M $9.8M $10.1M $48.7M

4. Authority Cited: The statutory authority permitting other than full and open competition is Title 10 United States Code (U.S.C.) 2304(c)(1), as implemented by Federal Acquisition Regulation (FAR) 6.302-1(a)(2) which states, “When supplies or services required by the agency are available from only one responsible source, or, for DoD, NASA, and the Coast Guard, from only one or a limited number of responsible sources, and no other type of supplies or services will satisfy agency requirements, full and open competition need not be provided for.” Specifically, FAR 6.302-1(a)(2)(iii) which states, "For DoD, NASA, and the Coast Guard, services may be deemed to be available only from the original source in the case of follow-on contracts for the continued provision of highly specialized services when it is likely that award to any other source would result in – (A) Substantial duplication of cost to the Government that is not expected to be recovered through competition.”

5. Reason for Authority Cited:

a. Background: DRS-SSI is the Original Equipment Manufacturer of the M1200 Armored Knight Vehicle and the common Fire Support MEP for the M1200 Armored Knight and Stryker FSV. It developed, tested, and integrated the original MEP for the M707 Knight Fire Support Vehicle, then later transitioned from the M707 Knight Fire Support Vehicle to the M1200 Armored Knight, and integrated an improved common Fire Support MEP on both the M1200 Armored Knight and Stryker FSV. The common Fire Support MEP is not merely a kit (or kits); it is an amalgamation of many components, kits, and subsystems that are comprehensively and precisely combined and integrated into and made part of the fire support mission operation of the vehicle system.

The Government does not possess unlimited technical data rights to the Technical Data Package (TDP) for the M1200 Armored Knight vehicle chassis or other subsystems. The Government does currently possess unlimited technical data rights to all Level III drawings comprising the TDP for the current configuration of the M1200 Armored Knight MEP; however, various upgrade and modification efforts are currently being performed under current Contract W56HZV-15-D-0082 and these efforts will extend beyond the conclusion of the final ordering period. Therefore, additional Level III drawings and required modifications to the MEP TDPs will be delivered after award of this follow-on contract. For instance, DRS-SSI is currently designing and developing a technology refresh of the Stryker FSV MEP in order to resolve obsolescence issues by leveraging and enhancing the non-recurring engineering efforts it performed on the M1200 Armored Knight MEP. The technology refresh of the Stryker FSV MEP consists of development of the Next Generation Architecture (NGA) and an improved boresight system, including development and integration of a new system architecture for the Stryker FSV MEP to ensure a Fully Mission Capable system for precision, far-target netted sensor capability on the battlefield. The Government will not receive delivery of all Stryker FSV NGA MEP Level III drawings with unlimited technical data rights until December 2019.

For the current configuration of the Stryker FSV MEP, the Government does not possess all Level III drawings; however, the composition of both the M1200 Armored Knight MEP and Stryker FSV MEP is so similar that the cost to reverse engineer the delta between the two MEPs is immaterial to the overall effort.

b. Duplication of Cost: If the Government were to award to a contractor other than the incumbent, the Government would incur a substantial duplication of cost, as further discussed below.

People Months Hours per

Month Hours

Hourly Rate

Total

SME Educator 1 9 172 1,548 166,178$

Contractors 4 9 172 6,192 664,711$

SME Educator 1 9 172 1,548 166,178$

Contractors 6 9 172 9,288 997,067$

SME Educator 2 9 172 3,096 332,356$

Contractors 15 9 172 23,220 2,492,667$

29 44,892 4,819,157$

People Months Hours per

Month Hours

Hourly Rate

Total

SME Educator 1 12 172 2,064 221,570$

Contractors 4 12 172 8,256 886,282$

SME Educator 1 12 172 2,064 221,570$

Contractors 6 12 172 12,384 1,329,422$

SME Educator 2 12 172 4,128 443,141$

Contractors 15 12 172 30,960 3,323,556$

29 59,856 6,425,541$

Duplication of Cost New Contractor SME Education for current MEP

FY19, $

Function

MEP

Trainers

107.35$ FSR

Engineers

Training Subtotal

Training Subtotal

New Contractor SME Education for Next Generation Architecture MEP

FY20, $

Function

MEP

Trainers

109.51$ FSR

Engineers

In order for another contractor to be considered fully capable of providing the required STS, SSTS, and PPSS services to support the M1200 Armored Knight and common Fire Support MEP at the same technical competency level as DRS-SSI, including development of technical data, it would require the Government to expend nearly $11.3M in duplicative costs that the Government has already invested in the incumbent. These duplicative costs consist of an estimated $4.8M in Fiscal Year (FY) 19 and $6.4M in FY20 for 29 personnel to dedicate nearly 45,000 and 60,000 hours, respectively, to learn the intricacies of the M1200 Armored Knight and the current common Fire Support MEP in FY19 and new common Fire Support NGA MEP in FY20 in order to become technical Subject Matter Experts (SMEs). The 29 personnel would consist of four contractor employees to become SME Educators who would then educate an additional 25 personnel, including four MEP Trainers, six FSRs, and 15 engineers to be capable of providing the required STS, SSTS, and PPSS support services at the same level as DRS-SSI.

This learning curve would span approximately nine months for the current common Fire Support MEP and 12 months for the common Fire Support NGA MEP at an estimated hourly rate of $107.35 and $109.51, respectively. Nine months is based on the average amount of time it takes to train Government personnel on the Stryker FSV, of which the MEP comprises the majority of vehicle training, while 12 months is based on the fact that the NGA is a complete redesign of the current common Fire Support MEP and includes more complex technologies, requiring three months longer to become a SME. The estimated hourly rate of $107.35 was calculated by taking the Second Ordering Period fully burdened labor rate of $133.76 on the current DRS-SSI contract and applying a 20% savings as a result of competition. The estimated hourly rate of $109.51 was calculated by taking the Second Ordering Period fully burdened labor rate of $133.76 on the current contract with DRS-SSI and applying an inflation factor of 2.8% and a 20% savings as a result of competition. Table 2 above includes a detailed breakout of the duplicative costs calculation.

In addition to the learning curve costs, the four vehicles and two System Integration Laboratories (SILs) currently at DRS-SSI would need to be transported to the new contractor’s facility since the vehicles and SILs are necessary components of the SME education. The total estimated cost to transport two Stryker FSVs, two M1200 Armored Knights, and two SILs is $86K.

Based on the above rationale, a sole source acquisition with the incumbent, DRS- SSI, is the only acceptable method that will not result in a substantial duplication of cost of approximately $11.3M. The M1200 Armored Knight program has transitioned from production to sustainment, and an Army decision has been made to eventually replace the vehicle with a different platform; therefore, there are no known future requirements at this time and it is highly unlikely that the Government would recoup these substantial duplication of costs through competition.

6. Efforts to Obtain Competition:

a. Effective Competition: The Government intends to solicit only DRS-SSI for STS/SSTS/PPSS services for the M1200 Armored Knight and the common Fire Support MEP in both the M1200 Armored Knight and Stryker FSVs based on the rationale provided in paragraph 5 above.

b. Subcontracting Competition: To ensure the contractor competitively awards subcontracts to the maximum extent possible, the contract will contain FAR Clauses 52.244-5, “Competition in Subcontracting,” and 52.244-2, “Subcontracts.” DRS-SSI will also be required to submit a subcontracting plan for review and approval.

7. Actions to Increase Competition: There are no known future requirements at this time. Should additional requirements be identified, the Government will conduct market research accordingly.

8. Market Research: Market research was performed in accordance with FAR 10.002(b)(2)(iii) by posting a formal Request for Information (RFI) on the Federal Business Opportunities website. The RFI was posted on 18 December 2017 and closed on 18 January 2018. Two companies submitted responses to the notice, DRS-SSI and

Government SMEs from Engineering, Program Management, and Contracting conducted a review of the two responses received. DRS-SSI’s response submittal demonstrated

Operational Security

(OPSEC)

capability to perform for each of the potential requirements. DRS-SSI is the incumbent contractor that is currently performing all of the required services. Based on DRS-SSI’s current successful performance, as well as its thorough response to the RFI, the Government has determined that it possesses the capability and readiness to perform this effort. The other response received was from , and that response demonstrated that the respondent does not possess the capability and readiness to perform at least six of the core required services (Configuration Management, Quality Assurance, Engineering Support, Logistics Support, Program Management), which are critical to the requirement; therefore, was determined to be a nonviable source. These market research results support the justification for use of a sole source contract (other than full and open competition), as required by DFARS PGI 206.302-1(d).

9. Interested Sources: This action will be synopsized in accordance with FAR

5.201. No other sources other than those mentioned above in paragraph 8 of this justification have expressed interest in providing the M1200 Armored Knight and M1200 Armored Knight and Stryker FSV MEPs STS/SSTS/PPSS requirements.

10. Other Factors:

a. Procurement History:

i. Contract W56HZV-15-C-0082 Contractor: DRS-SSI Requirement: This contract was for an estimated 188,106 labor hours for STS/SSTS/PPSS for the M1200 Armored Knight and the common Fire Support MEP over three ordering periods.

Basic Award Date: 22 Sep 2015 Total Amount: Not to Exceed (NTE) $25.5M Competitive Status: Sole Source Authority: 10 U.S.C. Section 2304(c)(1), as implemented by FAR 6.302-1.

The applicable J&A paragraph 7 detailing actions to increase competition reflected that the Government was in the process of collecting Technical Data under the then current contract, that the data would be collected to be used for provisioning and sustainment of the Armored Knight through spares, and that the ability to compete the M1200 Knight as a system was not anticipated to be a requirement in the foreseeable future.

ii. Contract W56HZV-09-C-0398 Contractor: DRS-SSI Requirement: This contract was for an estimated 280,000* option hours for the M1200 Armored Knight Vehicle STS effort.

Basic Award Date: 08 May 2009 Total Amount: $22.97M Competitive Status: Sole Source Authority: 10 U.S.C. Section 2304(c)(1), as implemented by FAR 6.302-1.

OPSEC

OPSEC

The applicable J&A paragraph of actions to increase competition reflected that it was not cost effective to have a new contractor to take on STS responsibility for the Armored Knight Vehicle System fleet. Because of the unique nature of the requirement, the Government took no further action to increase competition.

*Modifications P00005, P00037, and P00053 added a total of 663,892 (250,000 + 300,000 + 83,892) additional option hours. Modifications through P00060 extended the final ordering period through 09 May 2015.

No unusual patterns were revealed by the procurement history.

b. Other Facts: Not Applicable.

11/12. Technical / Requirements 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: Peter T. Sturos Date: 10 July 2018 Title: Team Lead, Fires/Scout Signature: Peter T. Sturos, //s//

Vehicles-Sensor/MEP Integration Team (Stryker FSV, FSV/V-A1, RV ICV/V-S & Knight)

Fleet Engineering (P&VM), PM-SBCT

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. The contractor's proposal will be reviewed by Government requirements personnel who· will address the appropriateness of the proposed labor hours and labor categories, material, Other Direct Costs, and other cost elements as requested by the Contracting Officer.

Cost/Price Analysis and audit recommendations will be used to discern whether the costs proposed are current and justifiable. The final negotiated agreement will give full consideration to all contractual requirements, to support a determination of fair and reasonable prices for this action. Certified Cost or Pricing Data, which may be subjected to DCAA audit, will be required and will form the basis for negotiating a fair and reasonable price.

Name: JACLYN M. FLEWELLING Date: 10 Jul 2018 Title: Contracting Officer, Signature: //signed// JMF Production & Program Support Team

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

Name: JACLYN M. FLEWELLING Date: 10 Jul 2018 Title: Contracting Officer, Signature: //signed// JMF Production & Program Support Team

APPROVAL

Based on the foregoing justification, and as Principal Assistant Responsible for Contracting pursuant to Army Materiel Command Head of the Contracting Activity Delegation of Authority #18-23, I hereby approve the contract for the procurement of System Technical Support, Sustainment System Technical Support, and Post Production Software Support for the M1200 Armored Knight and the common Fire Support Mission Equipment Package in both the M1200 Armored Knight and Stryker Fire Support Vehicles, from DRS Sustainment Systems, Inc., 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(a)(2)(iii), Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirement. This approval is 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 the procurement is $48.7M.

7/23/2018

X Daniel J. Gallagher Daniel J. Gallagher

ACC-WRN PARC

Signed by: GALLAGHER.DANIEL.JOSEPH.1034297360 __

DANIEL J. GALLAGHER

Principal Assistant Responsible for Contracting