SOLE SOURCE JUSTIFICATION

Acquisition Title: Artificial Intelligence Research and Enablement (AIRE) Program- Modification to Add Intelligent Process Automation (IPA) Agency: Centers for Medicare and Medicaid Services (CMS) Acquisition Year: FY2026 Author: Tufiqul Islam, Contracting Officer Representative (COR)

1. Description of Action:

A. Nature ☐ New Requirement ☐ Follow-On Order ☒ Modification of Existing Purchase Order / Contract Number

B. Order Against 47QRAA18D0001P/75FCMC26F0061- Artificial Intelligence Research and Enablement

(AIRE)

C. Contract Type ☒ Firm-Fixed Price ☐ Time and Materials ☐ Cost Plus Fixed Fee (CPFF)

☐ Term ☐ Completion

☐ Cost Plus Award Fee (CPAF) ☐ Other: N/A

D. Projected Cost / Price of contract (Base & All Options):

E. The total estimated value of the proposed sole source action (for modifications only): $12,666,776 F. Funding Source (s): 0511: Program Operations_Direct Disc

G. Basis for Approval ☒ Individual Basis

☐ Class Basis

The Centers for Medicare & Medicaid Services (CMS) awarded the task order for the Artificial Intelligence Research and Enablement (AIRE) using the General Services Administration's Multiple Award Schedule (GSA MAS) contracts. The ordering procedures for these contracts provide for sole source actions conducted under the procedures described at General Services Acquisition Manual (GSAM) 538.7104-3, such as the modification this justification describes.

CMS awarded a task order for severable services associated with Artificial Intelligence Research and Enablement (AIRE) to Deloitte Consulting LLP using fair opportunity. The task order number is 47QRAA18D001P/75FCMC26F0061. The contract is a Firm-Fixed Price (FFP) type. The terms of the order include a 12-month base period followed by four 12-month option periods. The overall period of performance for the current order is from April 17, 2026, through April 16, 2031. The order carries a total dollar value of $14,907,234.36 to date, with an obligated amount of $4,079,133.48.

This justification contemplates approval of a modification to add Intelligent Process Automation (IPA) scope. CMS will incorporate this IPA work into the existing periods of performance of the order.

2. Description of Supplies or Services:

The Artificial Intelligence Research and Enablement (AIRE) contract serves as CMS' research and maturity development practice for responsible AI adoption. Through systematic research, evidence-based analysis, and structured experimentation, AIRE evaluates emerging technologies, builds internal workforce capabilities, and produces governance frameworks and policy guidance that enable CMS to effectively leverage artificial intelligence to serve over 160 million Medicare and Medicaid beneficiaries.

The CMS Artificial Intelligence Research and Enablement (AIRE) contract, as modified, expands its scope to include an enterprise Intelligent Process Automation (IPA) program, enabling CMS to pair ongoing AI research, evaluation, and governance efforts with a production-oriented automation capability. This addition supports CMS in reducing manual and repetitive work across components while continuing to advance responsible AI adoption, assess emerging technologies, and strengthen organizational AI readiness under the integrated AIRE framework.

The proposed modification adds production-oriented IPA program support as a centrally governed, secure, and scalable automation capability operating under the AIRE contract structure. The Contractor shall support the following services for IPA:

IPA Program Delivery (Automation Lifecycle) The IPA Program Delivery effort supports CMS in operating an enterprise Intelligent Process Automation (IPA) Program as a centrally governed, secure, and scalable automation capability. This work reduces manual, repetitive work across CMS components and improves process timeliness, accuracy, and compliance. Work under this area encompasses a repeatable, stage-gated automation lifecycle — spanning intake and prioritization, discovery and feasibility assessment, solution design and build, testing, production deployment, and ongoing operations and maintenance — using CMS-approved tooling including Microsoft Power Platform (Power Automate cloud and desktop flows), API-based integrations, low-code capabilities, and Government-approved agentic AI or coding-agent tools (e.g., Claude Code or equivalent) where authorized. A minimum of eight (8) automation solutions per contract year are built, transitioned, enhanced, or sustained, with quarterly targets established through the Government-approved planning process and aligned to measurable business and operational outcomes. All automation development, testing, and operations occur within Government-authorized environments and security boundaries. No unapproved external hosting, shadow IT, or unmanaged tooling is introduced, and all solutions align with Zero Trust principles including least-privilege access, role-based access control, secure credential management, and continuous audit logging.

IPA Program Governance and Community of Practice IPA program governance is established and operated to provide structure and oversight across the enterprise automation program. This includes:

• A use-case intake and prioritization framework to evaluate and sequence automation opportunities

• An enterprise automation catalog of reusable components available across CMS

• Executive reporting and ROI/cost-avoidance dashboards to communicate program value and performance

• A community of practice supporting citizen developer enablement and workforce training across CMS components

IPA Operations, Maintenance, and Continuity Continuity of service is maintained for all automations already in production. This includes coverage of all PACER user fees and any other existing or future third-party or external service fees, transaction charges, and usage-based expenses required to operate, maintain, enhance, or execute approved automations. Work also encompasses approved future bot enhancements, new deployments, and AI-enabled automation capabilities under a unified enterprise program structure.

IPA Program Management and Coordination Program management, status reporting, risk management, and transition-in/out obligations for this CLIN follow the cadences and standards established in Task 4 of the PWS, with IPA-specific deliverables subject to COR review and acceptance. Coordination occurs with CMS platform administrators, infrastructure operators, and other CMS contractors to ensure clear responsibility boundaries, controlled environment promotion, and alignment with CMS technical reference architecture and security standards throughout the period of performance.

3. Authority and Rationale:

The Contracting Officer shall give every awardee a fair opportunity to be considered for a delivery/task order exceeding $3,500 unless one of the following statutory exceptions applies.[GSAM 538.7104-3(b)].

Mark the applicable exception:

☐ The need is of such unusual urgency that following the procedures would result in unacceptable delays in fulfilling that need [GSAM 538.7104-3(b)(1)(i)];

☐ Only one source is capable of providing the products, services, or solution required at the level of quality required because the products, services, or solutions are unique or highly specialized [GSAM 538.7104-3(b)(1)(ii)]

☒ The order should be issued on a sole source basis in the interest of economy and efficiency because it is a logical follow-on to an FFS order already issued on a competitive basis [GSAM 538.7104- 3(b)(1)(iii)] ;

Adding Enterprise Intelligent Process Automation (IPA) Program Operations and Enablement to the existing AIRE contract represents the most economical and efficient path to meeting CMS's IPA requirements. AIRE and IPA are not independent technology tracks but interdependent components of a single automation and AI enablement strategy and evaluating them together allows CMS to conduct a unified analysis of alternatives across solutions, comparing AI-driven approaches against process automation approaches on a common basis, rather than forcing artificial, technology-specific decisions in isolation. This integrated approach reduces the risk of duplicative tooling, conflicting architectures, or misaligned roadmaps, ensuring that decisions are driven by mission outcomes rather than by which contract vehicle happens to host which capability.

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Given the natural overlap between AI-enabled automation and intelligent process automation, IPA would reasonably have been incorporated into the original AIRE scope had CMS planners been aware, at the time of solicitation, of the Government's evolving IPA requirements. Its addition now is consistent with, not a departure from, the program's original intent and scope of work. Because IPA is a natural extension of the AIRE requirement rather than a distinct or severable effort, its addition does not alter the competitive landscape that existed at the time of original award. Had IPA been included in the original solicitation, it would not reasonably have changed the field of competition or the source selection outcome, since the required technical capabilities, personnel qualifications, and compliance posture are the same capabilities already evaluated and awarded under AIRE.

The transition is further strengthened by the fact that the incumbent AIRE contractor is also the legacy IPA contractor. There is no new entity to onboard, no new compliance posture to establish, and no operational handoff required. Security clearances, NDAs, Rules of Behavior, FISMA Moderate controls, records management practices, Section 508 compliance, and OMB M-25-21/M-25-22 AI governance procedures are already in place and proven under both programs, and the existing program management infrastructure, including status reporting, QASP, and governance cadences, simply extends to cover IPA without disruption.

Taken together, consolidating IPA under AIRE avoids duplicative program management and compliance costs, eliminates transition risk to production automations and their third-party service obligations, and preserves a single, unified surveillance and governance framework. A separate procurement would introduce cost, delay, and coordination risk with no corresponding benefit, since the competitive outcome would not reasonably have differed.

☐ It is necessary to place the order with a particular FSS contractor to satisfy a minimum guarantee established in the FSS BPA [GSAM 538.7104-3(b)(1)(iv)]; or

☐ A law that expressly authorizes or requires that the purchase be made from a specified source [GSAM 538.7104-3(b)(1)(v)].

4. Market Research:

The Government conducted market research prior to determining the most appropriate acquisition strategy for Enterprise Intelligent Process Automation (IPA) Program Operations and Enablement. The market research included a review of the Federal Supply Schedule (FSS) and applicable GSA Multiple Award Schedule (MAS) offerings, an assessment of the existing AIRE contract vehicle and its scope, and an analysis of the relative costs and risks associated with pursuing a separate competitive procurement versus adding IPA to the existing contract as a logical follow-on.

Market research confirmed the following:

1. FSS Availability of Required Services. The services required under IPA program operations, automation development and maintenance, citizen developer enablement, governance framework implementation, and AI-assisted process automation are available under the Federal Supply Schedule.

Specifically, the relevant Special Item Numbers (SINs) applicable to these services are available through the GSA MAS program, confirming that the FSS is a viable and appropriate contract vehicle for acquiring these services.

2. Existing AIRE Contract Awarded Under Fair Opportunity FSS Ordering Procedures. The existing AIRE contract was awarded following fair opportunity competition under applicable FSS ordering procedures, consistent with requirements for orders exceeding the simplified acquisition threshold. The competitive award of the base AIRE contract established that the existing contractor was evaluated and selected as the best value offeror among all qualifying FSS vendors, providing a sound competitive foundation upon which this modification is based.

3. Scope Consistency with Existing Contract. The services required under IPA are within the scope of the existing AIRE contract's awarded SINs and are consistent with the nature, purpose, and general scope of work already being performed. IPA activities including automation development, operations and maintenance, governance enablement, and AI-assisted delivery are directly related to and operationally integrated with the work being performed under existing AIRE tasks, confirming that the addition of IPA does not represent a new or out-of-scope requirement.

5. Actions to Increase Competition: Provide a statement of the actions, if any, the agency may take to remove or overcome any barriers that led to the exception to fair opportunity before any subsequent acquisition for the supplies or services is made:

Accordingly, the Government intends to take the following actions to remove or overcome these barriers prior to any subsequent acquisition for these or substantially similar services: the Contracting Officer and Program Office will initiate advance acquisition planning no later prior to the expiration of the AIRE IPA period of performance to ensure sufficient lead time for a full and open competitive procurement; the Government will develop a comprehensive transition plan and incorporate transition-in and transition-out requirements into any subsequent solicitation to eliminate the operational continuity barriers that supported this exception; the Government will ensure that all security, compliance, and records management onboarding requirements are clearly defined in any subsequent solicitation so that prospective offerors can adequately plan and price for these requirements, thereby reducing the onboarding barriers that contributed to this exception; and the subsequent acquisition will be structured as a full and open competition under applicable FSS ordering procedures or other appropriate competitive vehicle. These actions are intended to ensure that the circumstances giving rise to this exception to fair opportunity do not occur and that the Government returns to full and open competition for IPA program support services at the conclusion of the current period of performance.

6. State any other facts supporting the justification: N/A

Approvals:

1. Program Office Certification. This is to certify that portions of this justification have been developed by the undersigned program office personnel, including supporting information and/or data verifying the Government’s minimum needs, schedule requirements and other rationale for a Sole Source Justification, which form the basis for this justification.

Contracting Officer Representative (COR) / Date

Program/Project Manager (P/PM) / Date

2. Contracting Officer Certification and Best Value Determination:

This is to certify that the justification for the proposed acquisition has been reviewed and that to the best of my knowledge and belief, the information and/or data provided to support the rationale and recommendation for approval is accurate and complete.

By my signature below, after reviewing the relevant documents, I have determined that the order subject to this Justification represents the best value for the Government as set forth in GSAM 538.7104-3 and constitutes a fair and reasonable price. The basis for my determination is as follows:

The Contracting Officer has determined the price to be fair and reasonable. In accordance with GSAM 538.7102-2 (d), contracting officers are not required to conduct any additional price analysis of GSA Federal Supply Schedule (FSS) prices, as the FSS contract prices have already undergone price reasonableness determinations by GSA during the FSS award process.

The pricing for this order is based on the rates established in Deloitte’s GSA FSS contract, which GSA has determined the FSS level pricing to be fair and reasonable. The Contracting Officer will verify the proposed labor rates are consistent with rates established under the current competitively awarded task order (47QRAA18D0001P/75FCMC26F0061) and represent a continuation of the validated pricing structure.

Contracting Officer / Date

3. CMS Competition Advocate Approval

I hereby confirm the circumstances described above apply and approve the Limited Source Justification.

Name / Date

4. Head of Contracting Activity (HCA) Approval

I hereby confirm the circumstances described above apply and approve the Limited Source Justification.

N/A

5. Office of Small and Disadvantaged Business Utilization

N/A

6. OGC Legal Review

7. HHS Competition Advocate Approval

8. Senior Procurement Executive (SPE) Approval

Based on the foregoing justification, I hereby confirm the circumstances described above apply and approve the Limited Source Justification.