I am an Army Contracting Officer in charge of the source selection for the production of an Army system. Since it always looks good for the program management folks to reach out to the other services (demonstrates you understand the “big picture”), this has occurred. In this case, the USMC wants to “be part of the procurement.” On the contracting side, it has always been our position to attempt to accommodate where it makes sense and when it does not jeopardize our core objective of meeting the Army mission. Now in the current situation, the participation of the USMC is considerable. Their desired portion/impact has the following characteristics: (1) They would be getting about 55% of the produced systems; (2) They would be providing about 55% of the funding; (3) About 20% of the specifications are not shared between the Army and USMC, so the USMC systems would require adjustment; & (4) A small but critical portion of the USMC systems would require a major configuration change. Some other important factors: The Army has based its decision to move ahead with this acquisition based on the system being COTS or an NDI. This is not a designated joint program and there is no formal agreement between the Army and USMC (no MOA exists). There is also a question as to whether the major system configuration change desired by the USMC falls under COTS or NDI.

As an Army contracting officer, I want to do the right thing and best serve the Warfighter (which includes marines). We are very much encouraged to do this. Alternatively, this is not just adding on a few extra systems for the USMC; this is slightly over half of the procurement. I (we) have already sketched out numerous legal/ regulatory pitfalls, etc., but I do not want to influence anyone.

What does everyone think about this? What are some ideas on how to best resolve?

What does everyone thing about what? Letting the Marines join in? Sounds like trouble to me in light of the differences in requirements.

But those sound like programmatic issues, not contracting issues. If the program office wants to let the Marines play, what say do you have as contracting officer? Or are asking just about whether and to what extent the Marines should participate in the source selection?

...and it doesn't appear that "major system configuration change desired by the USMC" would fall under the descriptions of a "commercial off the shelf item" or  a "non-developmental item" at:

http://www.dsp.dla.mil/Policy-Guidance/FAQs/Commercial-and-Nondevelopmental-Items/

So, are you mixing apples and oranges by combining Army and Marine Corps product requirements in one acquisition vehicle? 

This is an ACAT program so requirements are are controlled via the JCIDS process. As this is to be a production contract, its requirements must be driven by an approved CPD, which in this case is an Army CPD. The USMC requirements trace back to specs that they are sending to the Army PM folks who then blend it into their docs and then say- no impact on our stuff- ok.

And since we are talking about several 100 M here, with USMC covering a bit more than half- they of course want to be part of the source selection process. Specifically, they want folks on the eval boards. Further complicating things is the PM wanting multiple contractor support folks to be part of the evaluation team. I aggressively fought this until I met them- and they really do know this system far better than anyone else..

In regards to NDI status, folks higher up on my side have told me- even though whoever won the award would most likely have to do some development work to handle the major USMC driven config adjustment, as long as we do not contract with them for this development work (and they wrap up in their price) then it is OK and we it is still an NDI. True? Make sense?

There is a lot of pressure on this puppy and from many angles. Some are really pressing collaborating with the CORP (helps you make full bird...lol), others are freaking out when they hear about USMC level of involvement on a non-joint program, some want to shove this into a NDI status, others are very concerned that we might lose an offeror with the config change in, and there is a very limited pool of offerors- so if even 1 drops out we could very well end up in a sole source scenario. We have been trying to get PM out of sole source mode for 5 plus years now... so this would be a major set-back...  

Well, have fun. Keep good notes in case you decide to write a book.