FCC_-_JOFOC_-_Power_Auctions_OEA.pdf

Justific tion for her t an Full a d Open Competition J

1. Identification of the agency and contracting activity.

a. Federal agency and contracting activity: Federal Communications Commission, Enterprise Acquisition Center

• Name of responsible contracting officer: Sunny Diemert

• Mailing address: 445 12th Street, S.W., Washington, D.C. 20554

• E-mail address: Sunny.Diemert~fcc.gov

• Telephone number: (202) 418-0594

b. FCC Requiring Activity. Office of Economic Analysis, Auctions Division

c. Program Office information.

• Program Manager: Rita Cookmeyer

• Mailing address: 445 12th Street, S.W., Washington, D.C. 20554

• Email address: Rita.Cookmeyer~fcc.gov

• Telephone number: (202) 418-0434

2. Nature andlor description of the action being approved.

a. Acquisition purpose and objectives.

The Federal Communications Commission (“FCC”) is an independent Federal agency established in the Communications Act of 1934, as amended, to regulate communications by wire, radio, television, satellite, and cable. The FCC uses competitive bidding to assign spectrum licenses. The primary objective of the acquisition is to continue the license and services needed to support this competitive bidding, which will allow the FCC to meet the current and anticipated needs for auctions in previously announced, likely, and possible scenarios.

b. Project background.

This action is for is for a sole source, follow-on contract to support the auction competitive bidding. The license and services are currently provided by Power Auctions LLC.

3. Description of the supplies or services required to meet the agency’s needs (including the estimated value).

a. Project title. Auction Bidding System

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b. Project description. The FCC currently uses the Auction Bidding System for competitive bidding to assign spectrum licenses and award universal support.

The FCC requires the continuation of Auction Bidding System license and services to support competitive bidding, which will allow the FCC to meet the current and anticipated needs for auction bidding in previously announced, likely, and possible scenarios. Recently, the FCC has taken actions to make spectrum available for fifth-generation (5G) wireless, Internet of Things, and other advanced services. These actions will promote robust and efficient spectrum use and help to ensure the rapid deployment of advanced wireless technologies — including 5G — in the United States, and the more efficient and speedier introduction of those technologies by United States firms and others.

Requirement type.

U Research & development (R&D) O R & D support services U Support services (non-R&D) O Supplies/equipment X Information technology (IT) O Construction U Architect-engineer (A & E) services 0 Design-build O Other (specify): ____________________

• Type of action.

U New requirement X Follow-on U Other (specify): ________________________

• Proposed contractlorder type.

X Firm-fixed-price U Other fixed-price (specify, e.g., fixed-price award-fee, fixed-price incentive-fee): ____________

U Cost-plus-fixed-fee O Other cost reimbursement (specify, e.g., cost-plus-award-fee, cost-plus-incentive-fee): ____________

O Time and materials U Indefinite delivery (specify whether indefinite quantity, definite quantity, or requirements): ____________

U Other (specify): _____________

c. Total estimated dollar value and performance!delivery period.

The total value of this procurement is estimated to be $39,901,922.00 which includes a base period and four one-year option periods. Prior to exercising an option, the government will assess the availability of funds, that the optional services fulfill an existing Government need, that exercise of the option is most advantageous to the

Government, and other factors set forth in Federal Acquisition Regulation (FAR) 17.207.

4. Identification of the statutory authority permitting other than full and open corn petition.

This acquisition is conducted under the authority of 41 U.S.C. § 3304(a)(1), as implemented in FAR 6.302-1, entitled ‘Only one responsible source and no other supplies or services will satisfy agency requirements.”

5. Demonstration that the proposed contractor(s) unique qualifications or the nature of the acquisition requires use of the authority cited.

a. Name and address of the proposed contractor(s).

Power Auctions LLC, 3333 K St NW #425, Washington, DC 20007

b. Proposed contractor’s unique qualifications; nature of the acquisition requires use of the authority cited.

This is a follow-on commercial contract for a license and services that can only be obtained from the original source.

Power Auctions LLC (Power Auctions) is the current provider of the Auction Bidding System (ABS). The original contract for ABS required the vendor to provide a software solution, with or without minor modification, that could be configured to meet FCC’s minimum requirements. Consequently, only vendors that already had a commercially available software solution that could meet the minimum requirements submitted proposals. The FCC also required the vendors to demonstrate capabilities to provide additional design features and included an option for the FCC to request special support services to configure/modify the system for additional auction designs. Power Auctions was selected as having the best commercial solution for the FCC to meet these requirements. Power Auctions demonstrated that, as an adjunct to the commercial bidding system license and services, it also had extensive knowledge in designing and developing other auction designs to meet the additional and emerging requirements, which were anticipated to be increasingly sophisticated.

Since the award of the contract to Power Auctions, the vendor has developed additional auction designs to meet the FCC’s specific needs. Some of Power Auctions’ software and services, including some of these additional auction designs, rely on patented proprietary incentive and other auction features that have been integrated into the agency’s public-facing auction procedures and which, after periods of public comment, are a matter of public expectation. Among these are auction features described in Auctions of Upper Microwave Flexible Use Licenses for Next-Generation Wireless Services Notice and Filing Requirements, Minimum Opening Bids, Upfront Payments, and Other Procedures for Auctions 101(28 GHz) and 102 (24 GHz) Bidding in Auction 101 Scheduled to Begin November 14, 2018;

AU Docket No. 18-85; FCC 18-1 09 (rel. Aug. 3, 2018), https//docs.fcc.gov/public /attachments/FCC-18-109A1.pdf, which include intra-round bidding and a no excess—supply rule. No other vendor can supply the licensed features and related services, which are necessary to satisfy agency requirements and conduct optimal auctions that employ those features. Moreover, as part of its current contract, Power Auctions is developing other modified features that rely on its proprietary software, including , which will likely be used in future auctions, or t e agency s inves ment in these features to be realized, it must continue work with the current vendor.

Security and stability is paramount for a government Auction Bidding System. The vendor would need to host the auction system at a FedRAMP facility, meeting all government security requirements (including FISMA Authority To Operate). Power Auctions uses a FedRAMP facility and meets all government security requirements, as documented by receiving a FISMA ATO. It is unlikely that any other vendor could obtain a FISMA ATO in time to provide important required services under the projected timeline.

Particularly as regards 5G-related auctions, time is of the essence. As noted by FCC at the White House 5G Summit, the U.S. IT and computing manufacturing and service base needs to seize the opportunities of 5G as a matter of international competition. To achieve this result, the FCC has released a 5G FAST plan — a plan to Facilitate America’s Superiority in 5G Technology. The FCC must continue to be extremely aggressive in making more airwaves available for the commercial marketplace. The FCC has scheduled America’s first two high-band 5G spectrum auctions to begin later this year [Auctions 101 and 102] and is on track to auction off three more bands next year [Auction 103]. This Fast Track plan doesn’t allow FCC margins for delay. FCC has already announced the competitive bidding schedule during the 12-month period following September 30, 2018 (httrs://docs.fcc.qov/public/attachments/DA-1 8-997A1 . pdf).

Power Auctions developed the bidding system used for the Broadcast Incentive Auction, which was the first of its kind. Another vendor would not have the necessary designs in place, and, were FCC to change vendors, it would need to change the current public-facing auction designs and incur a substantial duplication of cost, a cost that is not expected to be recovered through competition, as well as unacceptable delays in fulfilling the FCC’s pressing requirements. These designs are highly specialized and essential to satisfying the FCC’s auction goals for next several years. The Power Auctions contract ends in April 2019. Some of the already-announced auctions will not begin before the end of the Power Auctions contract.

Power Auctions is the only responsible source that can supply the license and services necessary to timely satisfy agency requirements. The vendor is uniquely qualified to provide them based on the following:

• Meticulously developed, public-facing auction rules and designs that rely, and other projected auctions that will rely, upon patented, proprietary auction software belonging to Power Auctions.

• The vendor owns the commercial software to be used for the auctions that are the focus of the existing contract, and FCC has licenses to use the software that it must maintain for those auctions.

• The vendor is currently developing additional valuable auction features under contract, FCC’s investment in which will be lost without a continuation of the contractual relationship.

• The vendor’s auction software is hosted at a FedRAMP facility and meets all government security requirements, as documented by receiving a FISMA ATO.

• Recently adopted rules that provide for a 5G Band incentive auction, see https://www.fcc.gov/news-events/events/201 8/1 2/december-201 8-open-commission-meeting, make Power Auctions knowledge and experience with the

Broadcast Incentive Auction, and its novel and inventive designs for those auctions and other auctions, uniquely qualified to implement the next 5G and other incentive auctions for the FCC.

• The necessary and pressing timing of 5G band auctions make it unlikely that any other vendor could provide the required licensing or services, or feasible alternatives, under the projected timeline.

In summary, transition to another contractor’s system and services, and unwinding the agency’s auction process and published procedures from the incumbent’s license and services, while meeting its auctions schedule, appears impossible and unrealistic from a cost and schedule standpoint, and, even if it could be achieved, is likely to result in unacceptably inferior auctions and auction results.

6. D scription of the efforts made to ensure that offers are solicited from as many potential sources as practicable. Indicate whether a FedBizOpps notice was or will be publicized as required by FAR Subpart 5.2 and, if not, which exception under FAR 5.202 applies.

FCC posted a Sources Sought Announcement on February 15, 2019 on Federal Business Opportunities (Solicitation # 273FCC 1 9S0001).

7. Determination by the Contracting Officer that the anticipated costlprice to the Government will be fair and reasonable.

The cost has been determined to be fair and reasonable based upon comparison of cost to historical contract data.

8. Description of the market research conducted (see FAR Part 10) and the results, or a statement of the reasons market research was not conducted.

Contracting Officer issued a sources sought announcement in FedBizOpps on February 15, 2019, and no response was received. The Agency routinely makes itself aware of vendors that other countries use for spectrum auctions, and, given its position in spectrum auctions, the Agency is contacted by vendors seeking to market its services for this type of work.

9. Any other facts supporting the use of other than full and open competition.

The agency has also made other, more general IT investments in the continued use of the existing system (e.g. integration with FCC’s CORE system, VPN costs) that would be lost or duplicated were it to change contractors.

10. Listing of sources, if any, that expressed, in writing, an interest in the acquisition.

Contracting Officer issued a sources sought announcement in FedBizOpps on February 15, 2019 and no response to the announcement was received. No interest was expressed by any other firm on any other basis.

II. Statement of the actions, if any, the agency may take to remove or overcome any barriers to competition before any subsequent acquisition for the required supplies or services.

The FCC will continue to evaluate the availability of other vendors to meet the FCC’s needs to ensure competition. Representatives of the Auctions Division are continually performing market research through discussions and meetings with industry. Longer lead times can be expected in future procurements.

12. Program Office Certification.

This is to certify that supporting data (such as minimum needs statements, schedule requirements, or facts in support of the justification) contained or relied upon in this JOFOC that were developed by, or that are the responsibility of, the program office or technical personnel signing below, are complete and accurate.

Off cial me e Signa ure ate

Project Officer Rita Cookmeyer, Program Digil~IIysig edbyRilaCook~ey~r or COR Manager (COR) Rita Cookmeyer~ Date: 2019. .18 1 1~29~26 -0400

Project Margaret ~A!iener Digitallysi edbyGARYMICHAELS

Officer’s/COR’s Car” Michaels GARY ~~

I m di t Consmissio cn=GARYMICHAELS,

0.9.2342.1. 00300.100.1.1=2700100

Supervisor IVI I C H A E LS Date:2019. 418

Head of the Giulia McHenry Sponsoring qj ~ j(cj

Program Office

13. Contracting Officer Certification.

This is to certify that the justification for the proposed acquisition is accurate and complete to the best of my knowledge and belief and that it has been reviewed and certified by the appropriate program or technical personnel as to supporting data for which they are responsible.

Officia e Signature ate I ~~Sutiny

FCC

email=sunn .diemert@fcc.gov, c=USContracting Sunny Diemert temer Date:2019. .18091129-0400

Officer