NNG15SD26B-180.pdf

Control Number: TAC-19-55496

JUSTIFICATION FOR AN EXCEPTION TO FAIR OPPORTUNITY

1. Contracting Activity: Department of Veterans Affairs (VA) Office of Procurement Acquisition and Logistics Technology Acquisition Center 23 Christopher Way Eatontown, New Jersey 07724

2. Description of Action: The proposed action is for award of a firm-fixed-price Delivery Order (DO) issued under the National Aeronautics and Space Administration (NASA) Solutions for Enterprise-Wide Procurement (SEWP) V Government-Wide Acquisition Contract (GWAC) for the renewal of existing brand name ServiceNow software licenses, as well as the purchase of additional brand name ServiceNow software licenses.

3. Description of the Supplies or Services: VA, Office of Information and Technology (OIT), Service Management Office (SMO) has a requirement to renew existing ServiceNow licenses currently in production, procure additional ServiceNow brand name software licenses as well as new licenses to provide additional functionality within the currently deployed Information Technology Service Management tool, which consists of ServiceNow commercial software. ServiceNow is a multi-instance architecture Platform-as-a-Service (PaaS) with software delivered via the internet through a subscription service delivery model, commonly referred to as Software-as-a- Service (SaaS). The ServiceNow licenses have been configured to support VA service desk operations across the entire enterprise, and provide event and incident management for early warning and detection of system degradations and service interruptions to prevent outages to critical VA business systems. The ServiceNow platform provides VA with a single service management console to support key stakeholders across the VA enterprise including OIT, Veterans Benefits Administration, Veterans Health Administration, and National Cemetery Administration.

VA requires the renewal of the existing brand name ServiceNow subscription licenses, which are expiring in September 2019 and December 2019 and additional quantities of the existing licenses to support an increase in the number of users across the enterprise. Furthermore, VA also requires additional service modules within the brand name ServiceNow subscription licenses as new functionality is added to VA’s existing ServiceNow Platform to support service management operations for SMO and additional stakeholders throughout the enterprise. The license renewals include three production and two non-production server instances required to support code development, testing and implementation; 15,900 Fulfiller licenses and 12,000 Approver licenses required to enable Information Technology Infrastructure Library users, fulfillers and supervisors to process, resolve and approve incidents or requests in the existing ServiceNow tool; 550,000 Password Reset licenses required to support the password reset capability for all VA users; 1,000 Planner licenses required to support VA Program and Project Management teams utilizing the ServiceNow Information Technology Business Management (ITBM) modules; and 1,000,000 Discovery and 15,000 ServiceWatch Insight licenses to support discovery and monitoring of applications, devices and configuration profile needs.

ServiceNow Software Licenses Control Number: TAC-19-55496

Optional line items to procure additional quantities of the aforementioned licenses will be included to support an increase in the number of users across the enterprise Specifically, optional line items will be included to procure up to 6,000 additional Approver licenses, 3,100 additional Fulfiller licenses, one additional production and three additional non-production server instances, 45,000 additional ServiceWatch Insight licenses, 2,000,000 additional Discovery licenses, 5,000 additional Planner licenses, and 150,000 additional Password Reset licenses.

Optional Line items for new subscription licenses will be included for users to access additional service modules that are anticipated to be implemented within the existing ServiceNow platform during this 12-month effort to support changing demands in functionality across the enterprise. VA requires that functionality be added to the existing ServiceNow platform in order for VA to manage the full cycle from request fulfillment to discovery to reconciliation and analytics across the entire enterprise, thereby, allowing work to flow seamlessly across all domain areas. The licenses for the additional functionality include optional line items for up to: 400 ITBM Analyst licenses, 7,000 Human Resources User licenses, 600,000 Software Asset Management licenses, one Security Operations Module for 1,000 devices along with 1,000,000 Security Operations licenses, 1,700 Enterprise Asset Management for Clinical Software licenses, and 1,700 Metal Device Cyber Add-On licenses. Performance Analytics shall be included with all applicable licenses to enable the Service Quality Management team to create and manage service-related Key Performance Indicators and Dashboards used throughout the VA Information Technology (IT) community for operational service improvement. An optional line item will also be included for six months of ServiceNow’s Customer Success package which provides architectural and operational support for the ServiceNow platform. The Customer Success package will assess VA capabilities and maturity to create a tailored success plan aligned to VA strategic objectives and industry best practices.

The period of performance for the overall effort will be 12 months from September 22, 2019 through September 21, 2020. The period of performance for each optional line item for additional subscription licenses will be up to 12 months to be co-termed with the initial 12-month license renewal period to end on September 21, 2020. The period of performance for the Customer Success package optional line item shall be 6 months from date of exercise but shall not exceed September 21, 2020.

4. Statutory Authority: Pursuant to Federal Acquisition Regulation (FAR) Subpart 16.505(a)(4), the following brand name requirement is being justified and approved as an exception to fair opportunity under the statutory authority of Section 41 U.S.C.

4106(c)(2) as implemented by FAR Subpart 16.505(b)(2)(i)(B), entitled “Only one awardee is capable of providing the supplies or services required at the level of quality required because the supplies or services ordered are unique or highly specialized”.

5. Rationale Supporting Use of Authority Cited Above: Based on market research, as described in Section 8 of this document, it was determined that limited competition is available among resellers of the aforementioned brand name software licenses and Customer Success package. The ServiceNow tool was selected via a competitive procurement under the NASA SEWP V GWAC in September of 2017 and is comprised of an integrated suite of ServiceNow applications that are built upon ServiceNow’s proprietary platform. VA’s existing platform represents nearly two years of configuration and implementation work for the licensed applications to operate in VA’s production environment and across the enterprise costing over $55 million to date. Currently, the existing environment supports daily operations for 550,000 end users and over 15,000 OIT professionals to track and resolve incidents and service requests for all VA users across multiple systems. VA requires an annual renewal of its existing licenses as well as additional quantities of these licenses to support an increased user base as the platform expands to support IT requests across the enterprise and as new service desk resources are onboarded to support VA service management operations for all VA users. No other brand software is compatible or interoperable with the existing ServiceNow platform due to the proprietary and integrated nature of the platform.

Replacing the existing software licenses with any other brand software would require a complete replacement of the existing platform estimated to take at least 18 months to implement at a cost of $45-$50 million just to replicate the existing environment, along with associated renewal and enhancement costs that would exceed the estimated costs of this proposed action. This would lead to extensive delivery delays of ongoing and planned functionality releases, as well as duplicative costs that would not be recovered or justified through competition as the same functionality would have to be reconfigured on a new platform to operate in VA’s production environment. A failure to renew and expand upon the existing licenses will bring VA’s automated system monitoring capabilities and VA service desk operations to an immediate halt. Specifically, the license renewals and additional quantities are required to support the continued monitoring and troubleshooting of VA mission essential systems such as the Veterans Benefit Management System and Veterans Health System.

Additionally, ServiceNow brand software is the only software that can continue to build upon VA’s existing ServiceNow platform. ServiceNow is an eco-system of service management and business management modules that build upon one another to provide for holistic analysis, dashboards and reporting. The new licenses being included as optional line items under this effort are required for VA to utilize additional capabilities that are already available within ServiceNow’s existing platform, but must be licensed separately and configured to operate within VA’s production environment. VA has a large and complex enterprise and as such, requires a myriad of people, processes and tools to manage its critical business infrastructure and service operations. The additional applications and/or capabilities for which licenses will be included as optional line items will be integrated into VA’s existing environment to provide two-way communication with all other areas of the platform. Two-way communication is needed to maintain data integrity. Managing multiple applications for disparate service and business management functions across the enterprise would not be possible nor would the VA gain the visibility necessary to measure and improve its business processes. The ServiceNow SaaS offering is uniquely poised to meet VA’s requirements for a single service management console because of its ability to integrate disparate business functions. All applications in the ServiceNow Portfolio are built on the ServiceNow Platform, and therefore all metrics, tasks, services, assets, people, locations, and information are stored together, creating a single system of record and a single system of engagement for the enterprise. For example, the human resources module is fully integrated with the asset management database to accomplish role-based provisioning, and the facilities module, asset database and governance risk and compliance module are all integrated to enable VA to pinpoint the location of a biomedical or IT asset at a field location with a zero-day security vulnerability.

ServiceNow is the only platform on the market that can collect these disparate data points within a single management dashboard and turn them into information to drives timely actions and decisions across the enterprise. Obtaining the required capabilities through disparate, incompatible systems will result in duplicated costs and effort as the same functionality would have to be implemented and configured on a new and separate platform thereby creating multiple systems of record and service management dashboards. This will significantly degrade the efficiency of VA’s service management operations, as well as compromise data integrity, thereby disrupting critical service to Veterans. No other brand name software can communicate with the existing ServiceNow software and applications already in production on VA’s ServiceNow platform.

Furthermore, six months of ServiceNow’s brand name Customer Success package will be included as an optional line item under this effort. The Customer Success package provides customized strategic, architectural and operational support specific to the ongoing expansion VA’s ServiceNow platform to include 24x7x365 technical support.

The ServiceNow Customer Success package is a proprietary engagement that utilizes ServiceNow proprietary tools to include ServiceNow Health Scan Scripts and Sprint Scan Scripts which provide for a comprehensive and unique analysis of the platform.

Access to these proprietary tools is required in order to provide the customer success support.

In summary, only brand name ServiceNow software can meet VA’s requirements to renew existing software licenses and expand the existing environment for increased functionality while maintaining a single service management console without the requirement for a complete replacement of the existing platform, which would result in additional risks, delivery delays, and costs.

6. Efforts to Obtain Competition: Market research was conducted, the details of which are in the market research section of this document. This effort did not yield any additional solutions that can meet the Government’s requirements. It was determined however that limited competition is available among resellers for the required ServiceNow brand name software. In accordance with FAR 16.505(a)(4)(iii)(A)(1), this justification will be provided with the solicitation to all appropriate NASA SEWP V GWAC holders. Furthermore, in accordance with FAR 5.301, 16.505(b)(2)(ii)(D), and 16.505(a)(4)(iii), the award notice for this action will be synopsized on the Federal

Business Opportunities website and this justification will be made publicly available within 14 days of award.

7. Actions to Increase Competition: The Government will continue to conduct market research to ascertain if there are changes in the marketplace that would enable future actions to be competed. Specifically, OIT will continue to monitor market trends, new/emerging products, looking for compatible and more advanced technologies to meet VA needs.

8. Market Research: The Government’s technical experts have conducted market research by reviewing similar SaaS and PaaS service management software and associated support services. Most recently, in May 2019, similar products reviewed included BMC, Computer Associates Inc, ChangeGear and Salesforce. Although these products are similar, based on the review of these similar products by the Government’s technical experts, it was determined that none of these products or associated services can meet the Government’s interoperability and compatibility requirements previously discussed in Section 5 of this justification. Specifically, no other software products can communicate with ServiceNow’s proprietary code, and therefore, none of these products can be implemented enterprise-wide to continue and increase the service management capabilities within VA’s existing ServiceNow platform. Further, no other vendor can access ServiceNow’s proprietary tools in order to provide the Customer Success package. Based on this market research, it was determined that only ServiceNow brand name software licenses and Customer Success package can meet all of VA’s needs to retain and expand the existing platform.

Additional market research was conducted in August 2019 by utilizing the NASA SEWP Provider Lookup tool to determine whether the brand name ServiceNow software and support packages are available from NASA SEWP V GWAC holders. The search resulted in multiple NASA SEWP GWAC holders that are resellers of brand name ServiceNow products including 12 SDVOSB concerns in Group B(2). Therefore, limited competition is expected among SDVOSBs for this proposed action.

9. Other Facts: None.