{"id":1331,"date":"2018-05-25T19:56:38","date_gmt":"2018-05-25T19:56:38","guid":{"rendered":"http:\/\/www.bidlink.net\/news\/?p=1331"},"modified":"2018-05-25T20:28:25","modified_gmt":"2018-05-25T20:28:25","slug":"1277-percent-increase-for-dod-grease-fittings-theyre-seeking-new-manufacturers","status":"publish","type":"post","link":"https:\/\/www.bidlink.net\/news\/2018\/05\/1277-percent-increase-for-dod-grease-fittings-theyre-seeking-new-manufacturers\/","title":{"rendered":"Zerk fitting price increases 1,277% at DOD – They’re seeking new manufacturers"},"content":{"rendered":"

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This week a new government solicitation was issued which will result in a Long Term Contract (LTC) for several styles of commonly used grease fittings. These grease fittings otherwise known as\u00a0lubrication fittings or Zerk fittings are used virtually in anything that moves. The US Military uses them in everything, it\u2019s a common repair part replaced when it fails.\u00a0 The one most commonly used is the straight one, the National Stock Number (NSN) is 4730-00-172-0010.\u00a0 In fact DLA purchases over 100,000 units per year.\u00a0\u00a0 This NSN 4730-00-172-0010 has the official item name of \u201cFitting, Lubrication\u201d.\u00a0 The Department of Defense forecasts an Annual Demand Quantity (ADQ) of 190,625 of these grease fittings.\u00a0 The government solicitation SPE7MX-18-R-X040<\/a> closes June 8, 2018 and the requirement includes 14 other similar styles of lubrication fittings with lower quantities.<\/p>\n

A couple factors caught our interest in this solicitation<\/strong><\/p>\n

On December 22nd<\/sup> 2017 a defense contract for the exact same group of 15 NSNs was awarded to Jamaica Aerospace Company (AKA Jamaica Bearings) CAGE code 12516.\u00a0 The total estimated contract value was listed at $800,000.00.\u00a0 The Government received only 3 responses to the solicitation SPE7MX-17-R-0085<\/a> which resulted in this award to Jamaica Aerospace.\u00a0 The contract award SPE7MX-18-D-0040<\/a> is an IDC – Indefinite Quantity Contract which they are currently delivering product under.\u00a0 It consists of a three-year base period with two one year option periods.\u00a0 It was issued by the DLA Land and Maritime, Strategic Material Sourcing Group division.\u00a0 The new solicitation SPE7MX-18-R-X040<\/a> is out of the same office also with a three-year base period with two one year option periods for the same list of items.<\/p>\n

The second factor which was interesting is\u00a0the huge price jump of\u00a01,277 percent of the NSN with the highest volume. After reviewing past procurement history, actual PDF contracts and DLA unit prices back to 1989 pricing for NSN 4730-00-172-0010 remained basically unchanged.\u00a0 Current DLA unit cost associated to this NSN (based on past activity) is set at $0.22 per unit or $5.50 per package of 25.\u00a0 Now according to the latest contract awarded to Jamaica Aerospace they now cost $3.03 per unit or $75.70 per package.\u00a0 These prices are based on government purchases on over 466 packages (per order) as that\u2019s the price break point.\u00a0 Orders under 466 price out at $5.18 per unit or $129.39 per package of 25.<\/p>\n

Overall this is a huge price increase going from $0.22 each unit to $3.03, what happened?<\/p>\n

We reviewed procurement history (contract awards) of this NSN as well all the companies CAGE code classifications over the past 10 years. Most all of the companies listed as past suppliers for this grease fitting were distributors or dealers including Jamaica. Many of the companies received contracts for this NSN only to have them cancelled soon thereafter for unknown reasons.<\/p>\n

NSN Analysis<\/strong><\/p>\n

First here are some NSN basics – Every NSN is associated to one or more reference numbers along with a CAGE code, these numbers are listed in the Master Cross Reference List (MCRL) section. These reference numbers have various purposes such as defining the number as either a manufacturers part number, specification or drawing number.<\/p>\n

This NSN 4730-00-172-0010 lists 50 distinct reference numbers along with 50 different companies and 54 distinct CAGE codes this is more than most NSN\u2019s. The majority of the CAGE codes associated are manufacturers, most of them prime manufacturers like General Motors or Oshkosh Defense.\u00a0 These companies are ones that would typically use grease fitting in their products and not make them, that\u2019s why you see so many numbers.\u00a0 The others were listed as non-manufacturers many of them obsolete CAGE codes. \u00a0Typically one or more manufacturers are listed in the MCRL section and of this entire list we only found two CAGE codes that possibly specialize in manufacturing grease fittings or Zerk fittings.\u00a0 They are CAGE 36251 McNeil Ohio Corporation and 0FKM1 Alemite, neither of them are active in the SAM database www.sam.gov<\/a> or have sold direct to the government in many years.<\/p>\n

History on lubrication fittings or Zerk fittings<\/strong><\/p>\n

Alemite LLC a manufacturer of grease guns (lubricating guns) was purchased by the Allyne-Zerk Company back in the year 1924. Oscar U Zerk an inventor designed a new style of lubricating nipples which improved on the previous designs. \u00a0October 18, 1932 Oscar U Zerk and assignee Alemite Corporation received patent number 1,883,275<\/a> for this new design.\u00a0 The lubrication nipple or fitting in this patent drawing\u00a0looks relatively unchanged from the grease fittings we use today some 86 years later. See the Military Specification<\/a> MS15002-1 and MS15002-2 as a comparison.<\/p>\n

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McNeil Ohio Corporation purchased Lincoln Industrial in 1955 they also specialized in lubrication and fluid pumping products. Today they operate under the name Lincoln Industrial. Both Lincoln and Alemite operate under the SKF Group which is headquartered in Gothenburg Sweden. \u00a0SKF USA Inc. CAGE code 52676 is the only active CAGE code currently selling to the US Government.<\/p>\n

Specifications and Drawings<\/strong><\/p>\n

This open solicitation states that the drawings\/specifications are available for any bidders. Most are SAE specifications or standards based on obsolete military specs.\u00a0 We have gathered a few of the mil-specs for you to review here. MIL-F-3541<\/a> is the general specification for lubrication fittings; MIL-F-3541 and the actual drawing MS15002 for the most commonly purchased Lubrication fitting. However you will need to obtain the current SAE standards to quote.<\/p>\n

Manufacturing of grease fittings<\/strong><\/p>\n

Part of our research included reaching out to a machine shop to gain some professional thoughts.<\/p>\n

\u201cA machine shop with a screw machine should be able to produce the grease fitting you described\u201d was the comment from a prototype machine shop we spoke to – Thanks 4M Instrument & Tool LLC.<\/p>\n

In conclusion these were our findings based on the available data<\/strong><\/p>\n