Modifications to the Defense Information Systems Network (DISN) Satellite Transmission ServicesGlobal (DSTS-G) contracts expiring on 15 February 2011
Added: Apr 20, 2010 10:41 am JUSTIFICATION AND APPROVALTO PROCURE USING OTHER THAN FULL AND OPEN COMPETITION Upon the basis of the following justification, I, as Senior Procurement Executive, hereby approve the use of other than full and open competition for the proposed contractual action pursuant to the authority of 10 U.S.C. 2304 (c)(1). JUSTIFICATION 1. Agency and Contracting Activity. The requiring activity for this procurement is: Defense Information Systems AgencyProgram Executive Office (PEO) - SATCOM, Teleport, and Services (STS)Program Management Office (PMO) Satellite Communications (SATCOM) Falls Church, VA 22030 The contracting activity is: Defense Information Systems AgencyDefense Information Technology Contracting Organization (DITCO)Scott Air Force Base, IL 62225-5406 2. Nature/Description of Action(s). This procurement action is for modifications to the Defense Information Systems Network (DISN) Satellite Transmission Services-Global (DSTS-G) contracts expiring on 15 February 2011. The modifications will continue the existing fixed-price Indefinite Delivery/Indefinite Quantity (ID/IQ) contracts providing domestic and international commercial fixed satellite services (FSS) to the Department of Defense (DoD), Federal Agencies, and other users, including U.S. Allies authorized by DoD until the competitive award of, and transition to, replacement contracts. The DSTS-G contracts DCA200-01-D-500(2-4) (3 year base period with seven (7) 1-year options) were originally competitively awarded as a small business set-aside to tee providers: CapRock Government Solutions, Inc. (formerly Arrowhead Global Solutions, Inc. and now a subsidiary of CapRock Communications), ARTEL Inc. (small disadvantaged business) and DRS Technical Services, Inc. (DRS-TSI) (formerly Spacelink International LLC) on 16 February 2001. The current combined ceiling of the tee DSTS-G contracts is $2.196 if all options are exercised. Total estimated DSTS-G expenditures to date are approximately $1.46B and are projected to increase to $2.15B by 15 Feb 2011 when the original contract period of performance ends. Cost requirements of the DSTS-G extension total $451.9M and increase total estimated DSTS-G lifecycle contract requirements to $2.60B, necessitating an increase to the DSTS-G ceiling of $407.8M. The contracts were awarded to support DoD's FSS requirements and support transmission of critical command, control, and intelligence information in a crisis or national emergency. These extensions are essential to DoD providing services without interruption until the award and transition to the Future COMSATCOM Services Acquisition (FCSA) contracts. To avoid disruption of vital warfighter services, DSTS-G contracts must be extended for one year with two six-month options. Per Defense Federal Acquisition Regulation Supplement (DFARS) 239.7405 Delegated Authority for Telecommunications Resources, there is a ten year limitation on the lifespan of a telecommunication contract. Therefore, this sole source J&A is required to allow DoD to continue providing the necessary communications capabilities without interruption. 3. Description of Supplies/Services The contracts provide DoD, Federal and other authorized users with the major categories of services listed below: •a. Domestic and international commercial FSS, as defined by the International Telecommunications Union (ITU), on an ID/IQ basis; •b. Services of all available commercial satellites for use with terminals acquired under this and other contracts from a single or multiple contractor(s) acting as a bandwidth broker in the following order of priority: •1. Satellites compliant with DoD Directive 8581.1E;•2. Other available satellites when DoDD 8581.1E -compliant satellites are not available. •c. Commercial terminal and teleport services, and when necessary, associated commercial terrestrial services, for use with the bandwidth services procured under this and other Government contracts; •d. Commercial satellite-based business and enterprise services and applications, such as business video, telemedicine and payroll and logistics transactions, for use with services procured under this and other Government bandwidth contracts; •e. Specialized support services to plan, engineer, implement, manage, and report on satellite services obtained under this contract on a Task Order basis; and •f. Associated host nation approvals, including necessary landing rights, terminal operating and connection approvals and licenses. The services described above are applicable for the entire contract period of performance. It is projected that the total estimated cost will be funded tough the Defense Working Capital Fund (DWCF): 12-Month BASE PERIOD2/16/11 - 2/15/12OPTION 16 month period2/16/12 - 8/15/12OPTION 26 month period8/16/12 - 2/15/13TOTALDWCF$328.5M$84.8M$38.6M$451.9M Period of performance (POP) for all tee DSTS-G incumbents will be: 12-month Base Period: 16 Feb 11 - 15 Feb 12Option Period 1: 16 Feb 12 - 15 Aug 12Option Period 2: 16 Aug 12 - 15 Feb 13 4. Identification of Statutory Authority The statutory authority that will be used for these contract actions is 10 U.S.C. 2304(c)(1) - Only one responsible source and no other supplies or services will satisfy agency requirements - Federal Acquisition Regulation (FAR) 6.302-1 (a)(2)(iii). 5. Demonstration of Contractor's Unique Qualifications In 2008, the Joint Staff Net Centric Functional Capability Board (NC FCB) defined COMSATCOM "floor" capabilities and "user selectable" enhancements that are consistent with the Federal Information Security Management Act, commercial best practices, and appropriate for the entire Federal marketplace. Today there is no Federal contract other than DSTS-G (to include SATCOM II) that has the ability to satisfy the eight (8) capabilities defined by the NC FCB, to include specifically, the protection / information assurance requirements specified and in use today on DSTS-G task orders. The proposed acquisition is a continuation and extension of work performed by CapRock, ARTEL, and DRS-TSI under the DSTS-G contracts DCA200-01-D-500(2-4). The contracts work together to provide COMSATCOM bandwidth and terminals while providing value-added engineering and integration services on over 300 active task orders. With the high demand for satellite services over Southwest Asia, Afghanistan and Africa, it is imperative that all task orders remain active with the current vendors until those services can be successfully transitioned to the follow-on contract(s). This contracting action is necessary to ensure the continuation of telecommunication services provided by these tee vendors that support global FSS bandwidth and enterprise satellite-based services and applications. Replacing current DSTS-G services will require extraordinary efforts of contracting, engineering, implementation, and transition activities to ensure uninterrupted service to the warfighter, and maximum competition and participation by industry to provide the most up-to-date technology and innovative solutions. In order to maintain operational readiness and ability to perform its primary mission, including supporting the efforts in Southwest Asia, DoD cannot afford any interruption in telecommunications services to its users. The majority of satellite communications supporting Operation Enduring Freedom (OEF) and Operation Iraq Freedom (OIF) has been, and remain today, serviced tough DSTS-G. Loss of these services would have a disastrous impact on the DoD command and control infrastructure and thus the security of the United States. It is critical to ensure continuation of telecommunications services that support the CONUS, sustain base information infrastructure, and allow rapid dissemination of information to deployed military forces anywhere in the world. Since the period of performance for most requirements is one year, whether it is base or option period, a transition period overlapping by at least one year between DSTS-G and FCSA enables requirements to roll from the old to the new contract vehicle without having to establish shorter periods of performance at higher costs. Furthermore, a one year transition allows DISA to plan for and maintain a manageable work stream for the transition to the new contract for DISA, our customers, and the vendors. 6. FEDBIZOPPS Announcement/Potential Sources: A notice of intent to award sole source will be synopsized on Federal Business Opportunities (FEDBIZOPS) website as required by FAR Subpart 5.2. •7. Determination of Fair and Reasonable Cost The costs are determined to be fair and reasonable on a task order level as each order is competed between all tee vendors. Prices are also compared to historical data and the original CLIN structure awarded with the basic contract. Studies have consistently demonstrated the superior cost performance of the DSTS-G vehicle as compared to average industry bandwidth prices and other DoD COMSATCOM vehicles. According to the FY 2007 COMSATCOM Annual Report, DSTS-G lease prices for a standard 36 MHz transponder are 19% lower than average market prices and approximately 30% lower than prices on other DoD COMSATCOM vehicles. Discontinuing use of DSTS-G prior to the start of the FCSA contracts will negatively impact the favorable prices DoD currently enjoys on DSTS-G. (Deleted Text) 8. Description of Market Research DISA evaluated 30 DoD COMSATCOM and COMSATCOM-related contracts from various DoD organizations to determine their initial ability to meet DoD's COMSATCOM services needs. The contracts evaluated include the Technology for Infrastructure, Geospatial, and Environmental Requirements (TIGER), Army Corps of Engineers World-Wide Satellite Systems Program (WWSS), Communications for TROJAN/Intelligence Electronic Warfare (TROJAN/IEW). Further evaluation of these contracts concluded that no individual DoD contract meets the terms, conditions and set of attributes described in Section 3.1 of the DSTS-G PWS. For example, although the TIGER contract can provide satellite equipment and associated services, its primary focus is to provide information technology, security, productivity consulting, drafting/design, facilities/installation management, public safety, and geographic information systems (GIS). Additionally, the TIGER contract was awarded in 2005 as a 4-year base contract with tee 2-year options and has a ceiling of $689 million. Similarly, the primary purpose of WWSS is to provide satellite terminals and associated engineering services, not COMSATCOM service. Although WWSS has a $5 billion ceiling, it expires in 2011. TROJAN/IEW supports the procurement, engineering, installation, and maintenance of COMSATCOM services for the TROJAN/IEW communications systems, with a ceiling of $286 million, but was not established to support the magnitude and diversity of requirements inherent in a multi-billion dollar DoD-wide acquisition of services. Additionally, DISA also evaluated SATCOM II. Market research conducted by DISA showed that bandwidth prices were around 20% higher on SATCOM II as compared to DSTS-G. Studies have consistently demonstrated the superior cost performance of the DSTS-G vehicle as compared to average industry bandwidth prices and other DoD COMSATCOM vehicles. Also, extensive market research was conducted to evaluate the future satellite needs of the DoD and to determine the best method to implement a follow-on effort to the DSTS-G contracts. The Office of the Assistant Secretary of Defense (Networks and Information Integration) (OASD (NII)) recommended executing a two-phase approach to modify and improve the DSTS-G contract vehicle while examining how best to craft a successor contract vehicle. The DSTS-G contract was modified in 2007 to implement immediate improvements and an Acquisition Strategy was developed to provide a successor vehicle to the DSTS-G contract vehicle expiring in February 2011 and June 2012 respectively. Initially, DISA intended to follow the recommendations from the Commercial Satellite Communications (COMSATCOM) Service Cost Benefit Analysis (CBA) in response to Fiscal Year 2005 National Defense Authorization Act Section 818 to continue procuring FSS tough a DISA-owned competitive contract mechanism. The degree of scrutiny and deliberation of the DSTS-G successor within DISA and the Office of the Secretary of Defense (OSD) to ensure FCSA will successfully accommodate pre-existing and emerging user requirements and be aligned with the current COMSATCOM marketplace has taken more time than would have been required to simply follow the recommendations of the Section 818 CBA. DISA prepared an updated CBA whose scope was expanded and refined during DISA and DoD review. To determine the best acquisition approach for this critical effort, DISA and Program Analysis and Execution (PA&E) leadership requested that several possible contracting routes and options be explored beyond the initial scope, including leveraging or partnering with other agencies. As the various options were vetted, additional time was required to complete the additional data gathering and analysis. Since that time, the acquisition strategy has been changed to a joint effort between DISA and the General Services Administration (GSA), in order to leverage resources and maximize the potential value to the DoD and other Federal Agencies. In 2008, in preparation for FCSA, a Request for Information (RFI) was released and follow-up Industry Days held to understand the current COMSATCOM marketplace. The Industry Days revealed that the lines between FSS and mobile satellite services (MSS) are quickly blurring, sometimes allowing FSS to directly compete with MSS, and vice versa, to provide best value solutions. Further, commercial customers are moving away from procuring bandwidth, terminals, etc. in a piecemeal fashion and instead opting to buy end-to-end managed services. These new insights resulted in a change in the acquisition strategy to encourage competition between FSS and to ensure managed services, including both pre-engineered subscription services and customer driven end-to-end solutions, are available on the DSTS-G successor contract mechanisms. Commercial SATCOM Trends Current DoD use of COMSATCOM is at an all-time high. Since FY 2003, the compound annual growth rate of DSTS-G expenditures has been 19.6%, while the corresponding rate of growth in DSTS-G bandwidth has been 21.1%. The increased COMSATCOM demand is a function of the increased information needs of military forces conducting operations using net-centric applications/capabilities, and an increasing demand for Airborne Intelligence, Surveillance, and Reconnaissance (AISR) assets. The next generation military satellite communications (MILSATCOM) systems will accommodate some of this increasing demand. Consistent with historical SATCOM and broadband use by DoD as well as other user segments, DoD projects a continued increase in demand for SATCOM capacity. This requirement for bandwidth cannot be satisfied exclusively by MILSATCOM systems, suggesting a continued demand for commercial SATCOM. While capacity shortfalls may exist across narrowband, wideband, and protected SATCOM, commercial SATCOM only provides capabilities to fill narrowband (i.e., Ultra High Frequency [UHF], Mobile User Objective System [MUOS]) and wideband (i.e., Defense Satellite Communications System [DSCS], Wideband Global SATCOM [WGS]) shortfalls. Additionally, DISA conducted market research to identify industry best practices, standard service offerings, emerging technology, and industry trends. This market research indicated the COMSATCOM marketplace is segmented into the following service types (i.e., targeted service areas): •(1) Transponded Capacity: Dedicated bandwidth on a commercial satellite in any commercially available frequency band, including L-, S-, C-, X-, Ku-, and Ka-band (satellite bandwidth and power only). Transponded Capacity also includes approvals required to use the transponded capacity, such as Host Nation Agreements (HNAs), frequency clearances, and landing rights; •(2) Subscription Services: Preexisting, pre-engineered FSS or MSS solutions, including terminals, in any commercial frequency band. Subscription services utilize vendor-defined or selected waveforms and are often billed on a per-use basis (e.g., dollars per minute, dollars per Megabit (MB), dollars per month); and •(3) End-to-End Solutions: Custom end-to-end solutions, including bandwidth that can include FSS components, MSS components, or hybrid solutions consisting of both FSS and MSS components. End-to-end solutions may also include service enabling components such as terminals, teleport, and terrestrial tail circuits. Contract vehicles segmented along these tee market capabilities allows customers to directly access the source of the value chain for best value solutions while providing the full range of services. 9. Any Other Facts Supporting the use of Other Than Full And Open Competition It is not possible to establish another contract vehicle capable of supporting the large, complex communications networks with many special features required for current DSTS-G requirements quicker than the path on which FCSA currently follows. Lead-time beyond the time needed to accomplish FCSA would likely be required for any other contractor to be able to support the current requirements while FCSA is being completed. It is technically possible for other service providers to modify their existing networks to provide the critical requirements; however, this could only be achieved by expending considerable resources and time and adding delay to the development of the FCSA contract vehicles. 10. Listing of Interested Sources DCA200-01-5002 with Artel, Inc., 1893 Preston White Drive, Reston, VA 20191. DCA200-01-5003 with DRS Technical Services, Inc., 12930 Worldgate Drive, Suite 700, Herndon, VA 20170. DCA200-01-5004 with CapRock Government Solutions, Inc., 2751 Prosperity Avenue, Suite 300, Fairfax, VA 22031. •11. Actions Taken to Remove Barriers to Competition DISA's DSTS-G contract vehicle has supported the majority of DoD's FSS needs over its period of performance. As DoD's only authorized provider of COMSATCOM services, DISA worked with the Joint Staff and United States Strategic Command (USSTRATCOM) to document DoD's current and future COMSATCOM service requirements and service capabilities (contract attributes). These capabilities and requirements were endorsed by the Net Centric Functional Capabilities Board in June and July 2008 respectively and act as the foundation of the DSTS-G follow-on effort (FCSA). Increasing the ceiling and extending the period of performance for the DSTS-G contract is the best interim solution until the competitive FCSA is awarded. DISA is partnering with the GSA Federal Acquisition Service (FSA) on FCSA. Acquisition execution will proceed in accordance with an interagency memorandum of agreement (MoA) between the Commissioner, GSA FAS and Director, DISA. The MoA establishes the working agreements, roles and responsibilities, and guidelines for the acquisition of future COMSATCOM services (pre-solicitation and source selection) and the ensuing post-award program execution. GSA will award the ID/IQ contracts and Schedule 70 COMSATCOM Special Item Numbers (SINs) and DISA will be delegated procurement authority at the task order level. The Acquisition Strategy has been tailored to remove unnecessary constraints on industry. Unless dictated by statute or policy, this acquisition will avoid imposing restrictions unique to the Government that would significantly increase industry cost or unnecessarily deter qualified offerors, including non-traditional defense firms, from submitting proposals. Because DoD has limited foresight of the bandwidth procurements that will occur in a given year, competition is a productive means of ensuring each individual bandwidth procurement includes competitive pricing and responsiveness. Two tiers of competition will be realized: competition to win contract vehicle award and competition on each individual customer requirement on a task order basis. This acquisition will leverage competitive forces at both tiers. First, vendors will compete to be awarded a GSA Schedule COMSATCOM Special Item Number (SIN) or ID/IQ contract, and the subsequent task order requirements will be competed among prime contract holders, allowing individual user COMSATCOM requirements to be competed among a number of vendors. Communication with Industry GSA, in partnership with DISA, will execute a transparent source selection process tough frequent and clear communication with potential offerors. Communication avenues will include conducting a Strategy Announcement on the FCSA Way Ahead; issuance of a draft IT Schedule 70 Refresh for industry feedback; an Industry Day to discuss Schedule Refresh responses/questions; issuance of a draft ID/IQ Request for Proposal (RFP) for industry feedback; an Industry Day to discuss responses/questions to the draft ID/IQ RFP; and a Pre-Solicitation Conference prior to release of the final ID/IQ RFP to assist vendors understanding of the requirements. GSA will provide adequate time for offer preparation and clear feedback during discussions. Such ongoing communication will benefit both the Government and prospective offeror community by ensuring contract requirements and service are clearly understood. FCSA updates will be available via the GSA website. DoD will partner with GSA to pursue a managed Hybrid, Multiple Award (Targeted Scope) approach. The tee targeted service areas are: Transponded Capacity; Subscription Services and End-to-end Solutions. The commoditized nature of services within the Transponded Capacity and Subscription Services market segments make them logical candidates for procurement tough a GSA IT Schedule 70 with the addition of COMSATCOM SINs for these services. End-to-End Solutions are not suitable for GSA Schedules since they tend to be specifically tailored for each requirement. Accordingly, GSA and DISA will partner to create two new GSA-owned multiple award ID/IQ contract vehicles for End-to-End Solutions. One of the ID/IQ contract vehicles will be set aside for small business. Awardees in each targeted service area will compete for individual requirements on a task order basis in the service areas in which they were awarded a contract. Vendors can be awarded a contract and compete for individual requirements in more than one targeted service area. By creating targeted service areas, DoD will ensure best value solutions by competing requirements among best-of-breed vendors at the heart of the value chain. (Deleted Text) Establishing a meaningful role for small business participation. The Acquisition Strategy prepared by DISA has evolved significantly during staffing and review to ensure the recommended multiple award, targeted scope approach will deliver contracts that can satisfy existing and emerging customer requirements, provides significant opportunities for small business, and satisfies the DoD Acquisition of Services policy. While DISA was able to award the DSTS-G contract vehicle as a small business set-aside in 2001, in recent years the volume and complexity of COMSATCOM has significantly increased. Whereas in the past, DoD primarily needed point-to-point or point-to-multipoint fixed COMSATCOM solutions, DoD's needs have shifted to include highly complex Very Small Aperture Terminal (VSAT) networks, portable solutions, occasional use solutions, unmanned aerial vehicles, etc. Many of these needs are spread across the globe. The growth in business levels and complexity alone makes it unlikely for small business (under North American Industry Classification System [NAICS] code 517410-Satellite Telecommunications) to adequately meet the full scope of DoD demands. Market research results from the February 2008 RFI/Sources Sought and the March 2008 Industry Days supported this position, revealing that no small businesses could take on the entire scope of work; however, small businesses do have the capacity to satisfy some categories of service requirements, making it practical to set aside some portion of the work exclusively for small business. Consistent with DISA's Office of Small Business Programs (OSBP) recommendation, (Deleted Text) set-asides will be established which will give small business a significant opportunity to be part of a procurement of this magnitude. If small businesses receive awards for both Full and Open and Small Business ID/IQ requirements, they will receive two separate contracts. Finally, in an effort to remove all possible barriers to competition, an additional layer of competition will be available on the IT Schedule 70 by means of a continuous enrollment process providing opportunity for new vendors to compete for requirements; and, the ID/IQ contracts will only have a period of performance of a 3-year base with 2, 1-year options. (Deleted Text) 12. Reference to the Approved Acquisition Plan (AP) The Acquisition Plan for the DSTS-G extension will be approved in conjunction with the Justification and Approval. (Deleted Text)
Defense Information Systems Agency
4/20/10, 10:41 AM