J A 12-06 HC1028-08-F-2812 Redacted.pdf

USTRANSCOM LIMITED SOURCE JUSTIFICATIO

Distribution Service Program Management Office (DS P 0)

HCI028-08-F-2812

1. CONTRACTING ACTIVITY.

United States Transportation Command (USTRANSCOM), Distribution Proce s 0 er (DPO) Support Division, USTRANSCOM/TCAQ-D, 508 Scott Drive, Building 1900W, cott B, IL 62225.

2. NATURE AND/OR DESCRIPTION OF ACTION BEING APPROVED.

USTRANSCOM/TCAQ Program Management Office (PMO) requires continu I fonnation Technology (IT) program management support from Paragon Technology Group 1:1 r all assigned IT programs within the PMO. The PMO requires other than full and open competitio for he acquisition of program management support for cost, schedule, performance and risk for all IT ac UiSi~'on services currently provided. This action constitutes a labor hour contract action to continue erv'ces current.ly provided under contract number HCI028-08-F-2812. Subject contract was previou ly c mpeted among GSA Schedule holders in accordance with applicable GSA ordering procedures an awatded to Paragon Technology Group. In accordance with FAR 8.401, this acquisition was conducted under the authority of the Multiple Award Schedule Program. The addition of a one-year option period der his task order is anticipated. Accordingly, this action constitutes a logical continuation of existing slrvices to an original federal supply schedule order.

3. DESCRIPTION OF THE SUPPLIES OR SERVICES RE UIRED TO ME T HE AGENCY'S

NEEDS (INCLUDING THE ESTIMATED VALUE). I

The purpose of this requirement is to provide continued acquisition support to t e P¥O which is chartered to execute the day-to-day management of assigned IT programs and projefts. fhe PMO requires an integrated approach to the management of cost, schedule, performance, and risk, r0ri~ontally across all PMO IT programs along with a vertical integration of support to the Program Mana er, q:;hief PMO, Portfolio Manager, Program Executive Officer, and Chief Information Officer, prov ding tailored views of the same informatioJ? for each management level. I

The PMO provides support and integration across all disciplines within acquisit on p~ogram management for support of assigned IT programs. Acquisition program manageme t c01jlsists of management of cost, schedule, performance and risk. The disciplines include, but a e no~ limited to;

Program Control, Resource Management, Requirements Management, Configuratio M agement, Test and Evaluation, Systems Engineering, Security Engineering, Program Management up ort, Risk Management, IT Administrative Support, Acquisition Support, and integration of all the isciplines.

Additional PMO requirements:

• A team approach where support contractors work side by side with PMO G e ent civilians, military, MITRE, and development contractors.

• Cost avoidance through elimination of duplications, redundancies, and non- alue added processes.

• Assistance with accomplishment of acquisition program management in full applicable laws, regulations, instructions, circulars, and guides.

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• Quality improvement through the Capability Maturity Model® Integration roc ss.

• An integrated program management tool set supporting project manageme t, rilk, resource management, Earned Value Management, metrics, requirements managem nt'lnd configuration management.

The current task order effort began on 1 October 2008 with a Base Period thro gh JO September 2009, and included two Option Periods, Option Period 1 (1 October 2009 through 30 Sep emJer 2010) and Option Period 2 (1 October 2010 through 30 September 2011). The proposed mod fica~ion would add a third Option Period from 1 October 2011 to 30 September 2012. The total value 0 this contract at time of award was $15,523,098.23; however, numerous modifications have been accompli hed as a result of increased program requirements (AT21, CMS, and TRAC2ES) and the need for ad itio allabor hours in support of more ofthe same effort; the current contract value is $27,485,235.66. T e Cfntracting Officer determined that a prior $8.1M increase in effort was within the scope of the origina co~~ract; however, future actions would require a limited source justification. Accordingly, a limited urc~ justification is submitted for the continued support to be added through this contract action. Base ent Government Cost Estimate (IGCE), the total estimated value of this modification is

4. AUTHORITY AND SUPPORTING RATIONALE.

FAR 8.405-6(a)(1)(i)(C). In the Interest of Economy and Efficiency, the N work is a Logical Continuation of Existing Services to an Original Federal Supply Schedule rd (.

5. DETERMINATION BY THE ORDERING ACTIVITY CONTRACTING FFICER THAT THE

ORDER REPRESENTS THE BEST VALUE CONSISTENT WITH 8.404(d).

In the interest of economy and efficiency, the Govennnent has a need to extend the urrent contract for one year due to FY12 in-sourcing activity. This will add 134,390 additional labor h urs at and travel expenditures of$ for a total cost of to the exist ng t sk order.

The current PM 0 contract expires 30 September 2011. The transition plan man ate I by the Secretary of Defense Resource Management Decision - 802 on "in-sourcing" requires transiti n 0tapproximatelY 50 positions from contractor support to Department of Defense (DOD) civilian. The in sou cing transition will require a period of implementation longer than originally forecasted. With the ncre sed growth resulting from in-sourcing DOD civilians, the Govennnent has taken care to identif gui~elines and procedures for use of DOD Civilian employees to perform program management fu ctiohs that will be performed during the transition. Due to the uncertainty of the in-sourcing progress Urin~FY12' the Government is unable to define the requirement sufficiently to compete a new contr ct. is, in conjunction with the impact of in-sourcing on small businesses, would likely limit c mp tition severely when the Government's intention is to promote competition rather than restrict it. ddit' nally, it is expected that bringing a new contractor on-board during this transition period woul reSit in substantial duplication of cost and unacceptable delays to the Govennnent that are not expected to b· recovered through competition.

USTRANSCOM's Directorate of Acquisition recognizes the in-sourcing as an 0 staqle in determining the requirements for an accurate Request for Quote (RFQ). USTRANSCOM/TCJ1 as f<hrecasted a timeline of six to eighteen months to complete this in-sourcing effort. At this time, war1'ng another contract for 1 October 2011 would require a new contractor to immediately ramp up ppr ximately 85 employees, then have to begin eliminating positions shortly thereafter. The high nu ber fpositions being in-sourced (50 of approximately 85) will likely restrict the number of contractors su mitt ng quotes, particularly small business contractors. PR Newswire published an article indicating that!the in-sourcing of even 30 to 40 positions from small businesses would be crippling to small businesse '''a ility to succeed in

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Additionally, there would be a significant loss of knowledge. Many of the ne co tractor employees would not have sufficient time to learn the PMO programs and tasks sufficiently e ougb to facilitate the transition of the new Government employees who would be replacing them. As a esult, there is a concern of not only potentially limiting competition, but also experiencing degradation of t e seh,ices provided to USTRANSCOM and, subsequently, the warfighter. GovExec.com cited a report om the Federal Acquisition Innovation and Reform Institute which warned the Government of the ffedt of in-sourcing on the loss of "skill and core competencies contractors currently bring to the table" ( vet,.,ent Executive, 20092).

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The Air Force Manpower Agency (AFMA) has received the DOD civilian "in- our<eing" position descriptions for review and classification for those positions aligned under the TC Q d,rectorate; however, the positions matrixed to the PMO from TCJ6 (30 of the 50) have not yet left Scott AFl'for AFMA. The ultimate hiring of 50 DOD civilian positions indentified for in-sourcing is estimate to t', ke a minimum of six months after review and classification action on the part of AFMA. It is anticip ted that many acquisition professionals will come from outside the local area. The transitioning f res' onsibility from a contractor environment to a DOD civilian environment creates challenges that requ re sbnsitive time ~~. i

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The Government intends to recompete a follow-on contract effective 01 Octob r 20 2 (FY13). It is vital to the success of US TRANS COM's mission that the current task order contin e to support the PMO during transition for performance and to bring incoming DOD civilians up to speed on the many complex programs and acquisition activities the current contractor is presently performing. ddi~ional impacts

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• The current contractor is currently supporting AT21, DPS, IOC, TRAC2ES an~ similar programs at USTRANSCOM. Having the current contractor support these requireme ts l!ould minimize disruptions to cost, schedule, and performance when compared to the inte tio' of a contractor with no previous background in USTRANSCOM PMO programs. Integrat on 0 a new contractor would take several weeks to a month or more, resulting in a loss ofproduc(vity"delays, and additional costs. '

• It is estimated that it would take up to 120 hours per position to bring a new con 'ractor without background knowledge up to speed since additional time would need to be xpe~ded due to reduced productivity while ramping up the new contractor to acceptable pe orm~nce levels. For example, it would take approximately three weeks for a Project Manager to eco!~e sufficiently familiar with USTRANSCOM related activities to provide effective progra suRPort. Using an average labor rate of$119.39 multiplied by 120 hours times 85 FTEs result in a~total cost of approximately $1,217,778.00 for a transition period for a new contractor, w ich fS an estimated of funds the current IOCE of . Neither this $1, 17,p8.00 cost nor the approximate three week delay would be made up in any competition compa ed t6 the incumbent who has previous USTRANSCOM experience and would, therefore, not req ire his transition expenditure.

I PR Newswire. (2010). Federal Insourcing Policies Questioned at American Legion Small usin Iss Conference.

Retrieved from http://www.prnewswire.comlnews-releases. !

2 Government Executive. (2009). Acquisition Reform Group Warns Government Not to Rush Inso rcing. Retrieved from http://govexec.comldailyfedl0609/061209el.htm '

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The additional Government labor costs providing training to incoming DO DCIlians as a result 0 f• in-sourcing results in additional costs that would be incurred while rampin gup the PMO to acceptable performance levels. I

These costs (e.g., from mobilization/ramp up from new co ptractor) along with bringing incoming DOD civilians up to speed would not likely be recovered and re~ucdld program support activities would likely result in unacceptable delays to critical programs supportin~ th rarfighter. There would also be potential disruption in program support that could extend for as long as tIp'ee months while contracting actions (market research, preparing the solicitation, evaluating proposa s, additional source selection activities, etc.) occurred prior to award of the new contract.

The labor rates in the current task order have already been determined fair and eas~nable in accordance with Paragon's GSA schedule. USTRANSCOM/TCAQ will add labor hO], in accordance with their GSA schedule labor rates.

6. DESCRIPTION OF THE MARKET RESEARCH CONDUCTED AMON( G A SCHEDULE

HOLDERS AND THE RESULTS OR A STATEMENT OF THE REASON M ARKET RESEARCH

WAS NOT CONDUCTED.

IPrior to award of the existing task order, HC1028-08-F-2812, market research Ivas ~onducted. The award ofthe PMO task order was a small business set-aside under the GSA 70 sch€ dul AlthoughI

Paragon's prices have already been determined fair and reasonable by GSA, the Gc vernment has conducte d I additional price analysis by comparing Paragon's hourly prices to those of four oth r GSA schedule holder s (two large and two small businesses) in order to ensure that the costs to the Govern !nentl for this additional period of performance are fair and reasonable. The rates were averaged across eacl labor category for eac h of those four GSA schedule holders; the table below shows the percentage differen eteenthat averaged rate and Paragon's GSA schedule rates:

Labor Category Paragon CAC} CSC Devine Light house

AV~?

RAJ. E

DELTA

Subject Matter Expert $321.75 $165.00 $196.18 $227.64 Program Manager $189.43 $199.36 $193.07 $158.82 $18~.17 BPR Specialist I $144.47 $141.47 Project Manager $137.76 $161.38 $125.00 $130.79 $138.73

Senior System Analyst $112.61 $11~.61 Sr Database Admin $80.10 $103.01 $120.00 $10l·04

Senior Test Engineer $139.91 $87.19 $11~.55 Int Software Developer $90.00 $90\.00

Project Manager I $117.87 $128.94 $105.88 $11t.56 Junior Test Engineer $96.02 $961.02

Jr System Administrator $56.96 $561.96

Although Paragon's rates are higher than the averaged rate for four of the labor r the rates fo r each of the remaining seven labor categories are lower. Overall, Paragon's rates an the averaged rate for the four GSA schedule holders.

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7. ANY OTHER FACTS SUPPORTING THE JUSTIFICATION. ,

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N/A

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8. STATEMENT OF THE ACTIONS IF ANY THE AGENCY MAY T TO 'REMOVE OR

OVERCOME ANY BARRIERS THAT LED TO THE RESTRICTED CONS ERATION

BEFORE ANY SUBSE VENT AC VISITION FOR THE SUPPLIES OR S RVilCES IS MADE.

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The services required under this acquisition were previously procured in a co petitive environment. A sole source modification against the existing task order will be executed for an add'tionhl 12-month period of performance, The Government intends to re-compete this effort prior to the tas ord¢r period of performance (30 September 2012) to ensure a competitive best value source select'on i~ conducted with a contract start date of 1 October 2012. II.

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9. CONTRACTING OFFICER'S CERTIFICATION.

I certify that this justification is accurate and complete to the best of my knowl dgeland belief.

Contracting Officer

10. TECHNICAL AND RE VIREMENTS PERSONNEL CERTIFICATIO ,

I certify that the data supporting the recommended use of this justification is ac ural1e and complete to the best of my knowledge and belief.

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PATRICK GAFFNEY, Lt C Contracting Officer Repres

CONTRACTING ACTIVITY: United States Transportation Command, DP(i)) Support Division, USTRANSCOM/TCA -D,11508 Scott Drive, Building 1900W, Scott AFB IL 62 25-~357

PROGRAMIPROJECT: Distribution Services Program Management Office, clOl~8-08-F-2812

AUTHORITY: FAR 8.405-6(a)(I)(i)(C)

!I ESTIMATED CONTRACT COST: (Modification increase is e tima1ted at

REVIEW AND APPROVAL:

Chief, DPO Support Division

Chie, /~ '('I'I

DATE

~RA~£JJ

Competition Advocate

APPROVED:

I hereby determine the Limited Source Justification identified in Paragraph 4 above apPiies to this order.

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