20144674 - JA for Leidos Extension_Redacted.pdf

U.S. Customs and Border Protection Justification and Approval For Other Than Full and Open Competition for contracts above the Simplified Acquisition Threshold (SAT)

Version 4.0 April 2024

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

1. Agency and Contracting Activity.

The Department of Homeland Security (DHS), U.S. Customs and Border Protection (CBP), Office of Information and Technology (OIT), Enterprise Infrastructure and Operations Directorate (EIOD), Integrated Logistics Division (ILD), and CBP Office of Acquisition (OA), Procurement Division (PD), Information Technology Contracting Division (ITCD) prepared this Justification and Approval for Other than Full and Open Competition.

2. Nature and/or description of the action being approved.

(a) Nature of action: CBP utilizes Large and Small Scale (LS) Non-Intrusive Inspection (NII) Equipment at various CBP locations within the Continental U.S. (CONUS) and outside of the Continental U.S. (OCONUS) to intercept and disrupt the flow of contraband. The equipment includes CBP’s fixed position and mobile LS Imaging /X-ray equipment. To maintain this equipment, CBP has purchased systems from Leidos, Inc. to deploy and maintain specialized equipment as the Original Equipment Manufacturer (OEM). CBP intends to extend its current maintenance contract with Leidos 70B04C22C00000102 which ends on May 30, 2024, for three (3) months through August 30, 2024, using the authority under FAR Part 52.212-4(c) Changes to procure maintenance support and on-demand services.

(b) Name and address of contractor: Leidos, Incorporated, 10260 Campus Point Drive, San Diego, CA 92121-1522

(c) Contract type: Hybrid, Firm, Fixed-Price (FFP) and Time and Materials (T&M)

(d) Estimated total value (including options).

The contract will be extended from May 30, 2024, by 3 months to August 30, 2024. As a result of this action, the contract’s ceiling will be increased from $49,006,443.62 by $8,697,390.13 (for the 3-month period) to $57,703,833.75.

(e) Type of funding: Operations and Support (O&S).

(f) Year of funding: Fiscal Year 2024 (one-year).

(g) Solicitation number: N/A.

(h) Background information about the requirement:

The Leidos radiation detection equipment (RDE), LS, and SS equipment is a part of the CBP NII portfolio deployed to CONUS, OCONUS and mission-related locations to detect illicit material entering or exiting the United States or OCONUS locations. Leidos is the original equipment manufacturer (OEM) of the RDE, and LS NII equipment and they are the only entity that can service the Leidos-manufactured equipment.

3. Description of Supplies/Services.

CBP utilizes Radiation Detection and Non-Intrusive Inspection Equipment at various CBP locations to intercept and disrupt the flow of contraband. To maintain this equipment CBP has purchased systems from Leidos Inc. to deploy and maintain specialized equipment as the Original Equipment Manufacturer.

EIOD has a requirement to procure maintenance support and on-demand services in support of existing Leidos security technology equipment.

The Leidos equipment is comprised of fielded, specific NII Gamma Imaging/X-ray equipment, and Radiation Portal Monitors (RPMs). The services required include scheduled preventive and corrective maintenance, as well as other on-demand services that may be needed throughout the term of this contract, such as relocations, engineering, installation, disposal, and other activities that are peculiar to the equipment or may be required on short notice. An example of one such anticipated on-demand service will be the requirement to add the capability for Optical Character Recognition (OCR) to the XML X-Ray fleet.

4. Identification of Statutory Authority Permitting Other Than Full and Open Competition.

The statutory authority permitting other than full and open competition for this effort is 41

U.S.C. 3304(a)(1) implemented by FAR 6.302-1: "Only One Responsible Source and No Other Supplies or Services Can Satisfy the Agency’s Requirements.”

5. Demonstration That the Nature of the Acquisition Requires Use of the Authority Cited.

The equipment to be maintained (1,322 individual pieces of equipment deployed, both CONUS and OCONUS) used under CBP/ILD is comprised of fielded non-intrusive Inspection (NII) equipment. These systems detect illicit material as well as radiological threats that are attempting to enter or exit the borders. The systems must be operational 24x7x365 to ensure people, cargo, mail and transportation continue to move safely and securely with minimal or no delays in service. A lapse in services to the Leidos systems will adversely impact the mission of CBP, keeping America safe. Without this equipment being deployed and functional, the nation's border security would be compromised.

Leidos provides technically complex and high-value inspection, detection equipment systems, currently being used by CBP/ILD to assist in securing the land border crossings, airports, seaports, rail crossings, mail handling, and express cargo consignment facilities within the United States and participating countries. Under the proposed contract modification, Leidos will continue to provide the necessary supplies, parts, maintenance services, and subject matter expertise to fully sustain and transition Non-Intrusive Inspection

(NII) equipment under the NII Program, currently operational at CBP land, sea, air, and rail ports of entry. This support includes, at a minimum, program management, configuration management, warranty transitions, preventative maintenance, trouble call handling, corrective maintenance, and other requested services. Other requested services shall include engineering, site surveys, parts provisioning, retrofits, relocations, corrosion control, source change outs, disposal, maintenance training, operator refresher training, special event support, and emergency services on a case-by- case basis. In addition, the contractor may be required as on-demand services to repair damage resulting from accidents, incidents, natural disasters, and weather events, regardless of warranty status.

(a) Rationale for using the authority cited in section 4 of the J&A:

With the acquisition of NII equipment maintenance services through competitively awarded BPAs delayed, the Government must, in the interim, acquire these services from Leidos on a sole-source basis. As the original equipment manufacturer, Leidos is capable of providing the maintenance services needed by the Government. As the current provider of these services under Contract 70B04C22C00000102, Leidos is also the only responsible source capable of providing these services without risking unacceptable delay and is the only source with the requisite proprietary information to perform the requirement.

The existence of limited rights in data, patent rights, copyrights, and trade secrets make a subset of the requirement available only from Leidos. They develop and are the only company that has access to the source code and programming information for the VXML and VACIS systems and the newly installed MEP and LEP systems. Neither their proprietary manuals, nor their maintenance training on equipment are commercially available to other vendors. No other vendor has access to Leidos’s proprietary capabilities. Their technical data and software for CBP’s detection systems are proprietary information. Leidos will not sell data rights, maintenance training, technical manuals, drawings, schematics, or special tools associated with their equipment. It does not provide spare parts outside a maintenance plan. Without Leidos’s unique capabilities, this equipment could not be maintained or fixed in the field.

(b) Detailers covering what events lead the situation requiring use of other than fully and open competition procedures including whether any portion of the work can be segregated for competition:

In June 2022, Enterprise Infrastructure Operations Directorate began the acquisition process to award two Blanket Purchase Agreements (BPA), one NII and one for RDE equipment maintenance and related on-demand services through a combined solicitation.

CBP had to cancel the solicitations due to unforeseen issues with the requirements and solicitation.

As a result of these delays, the anticipated award date of a new multiple year sole source contract (9-month base period, 2 twelve-month option periods) for NII is now August 31, 2024. In the interim, it is necessary to extend the current Leidos contract for three months beyond its current expiration date of March 30, 2024 through August 30, 2024.

It is anticipated that with the data obtained from the above improvements in contract requirements over the course of the new multiple year contract, CBP will be prepared to issue an unrestricted competitive solicitation for subsequent year RDE/NII requirements.

(c) Summary of alternatives considered and why they will not work:

Of the alternatives considered was the usage of Department Wide Contract vehicles (DWAC), Contract vehicles on the GSA MAS schedule, and possible other vehicles that were in use in the Agency that could be utilized. It was determined that these vehicles could not be utilized due to the specialized needs of the requirement and the salient characteristics. Ultimately, this requirement is so specialized, and due to the proprietary nature of the requirement, that the only source that could be resourced would be the

OEM.

(d) Impact to the mission that would result if the J&A is not approved and, consequently, the product or service not provided:

The impact to operations of a lapse in service would be felt immediately through the steady decrease of Operational Availability. The NII equipment that Officers and Agents rely on to complete the mission would begin failing due to lack of maintenance. This failure would alternately create a necessity for increased manpower at locations where manpower is already limited. Overtime hours and staffing would be substantially taxed and the resultant effect at Ports of Entry would be longer wait times, possible lower seizure rates, and increase in Operational tempo.

In conjunction with this negative effect the resultant cost to repair the systems that were disabled while off-contract would be a significant amount. Every repair action that occurs during this period would equate to both an assessment fee, and a Time and Materials quote to repair, and dependent on the extent of the repair may have to be sent in for Depot level repair.

The effect of a lapse in service of this Mission Critical System would represent a significant operational and monetary impact to the Agency.

6. Description of efforts made to ensure that offers are solicited from as many potential sources as is practicable.

No additional sources have been solicited for the 3-month extension of Leidos’s current contract, considering the unique capabilities of the OEM, past RFI and RFP releases, and the compelling need to ensure continuity of services and better enable CBP to pursue the unrestricted competitive award of a future contract which opens the door for large and small vendors to submit viable proposals for the subject services.

7. Determination by the Contracting Officer that the Anticipated Cost to the Government will be Fair and Reasonable.

CBP has developed an independent government cost estimate (IGCE) and will conduct a thorough price analysis of the proposed price to form the basis for the Contracting Officer's determination of fair and reasonable prices. The Contracting Officer will work with the OIT EIOD ILD to review historical pricing information.

8. Description of Market Research.

Market research has been conducted to determine if a competition could be conducted for the requirement. CBP has also done market research with other DHS component agencies on how they have acquired similar services in the past. CBP has also met with multiple vendors to determine if a competition was viable. The current market research does not support a competition that will yield a technical solution at a fair and reasonable price.

9. Any Other Facts Supporting the Use of Other Than Full and Open Competition.

There are no other facts supporting the use of other than full and open competition.

10. A Listing of the Sources, if Any That Expressed, in Writing, an Interest in the

Acquisition.

No sources, other than Leidos, have expressed an interest in this requirement.

11. A Statement of the Actions, if Any, the Agency May Take to Remove or Overcome

Any Barriers to Competition Before Any Subsequent Acquisition for Supplies or Services Required.

This justification will be synopsized in SAM.gov after award. If other visible sources are manifested as a result of the publication of the sole source justification, they will be considered for future competitive services acquisitions.

12. Planning and Funding Statement.

This acquisition does not result from a lack of planning or the expiration of funds.

13. Posting Requirement.

CBP will post this requirement on SAM.gov pursuant to FAR 6.305.