JA Pega PaaS SaaS FY24_Redacted.pdf

JUSTIFICATION

FOR AN EXCEPTION TO FAIR OPPORTUNITY

1. Contracting Activity: Department of Veterans Affairs

Office of Procurement, Acquisition, and Logistics Technology Acquisition Center 23 Christopher Way Eatontown, NJ 07724

2. Description of Action: The proposed action is for the award of a Firm Fixed Price (FFP) delivery order issued under the National Aeronautics and Space Administration (NASA) Solutions for Enterprise-Wide Procurement (SEWP) V Government-Wide Acquisition Contract (GWAC) for the purchase and renewal of brand name PegaSystems Inc. (Pega), Platform as a Service (PaaS)/Software as a Service (SaaS) Cloud subscriptions for Government, inclusive of licenses and supplemental support services.

3. Description of the Supplies or Services: VA Digital Transformation Center (DTC) has a requirement for brand name Pega PaaS/SaaS cloud subscriptions to support the Veterans Health Administration (VHA) Electronic Health Record Modernization (EHRM) program and other VA customers that utilize PaaS/SaaS technology solutions.

Specifically, VA has an immediate need for renewal of one brand name Pega Foundation for Healthcare Bundle - PCFG Subscription and one brand name Pega Standard Sandbox – PCFG Subscription. VA also has requirement for three Optional Tasks to address anticipated needs for new start subscriptions to acquire additional quantities of Pega PaaS/SaaS subscriptions (not to exceed two (2) 10 FTE Pega Foundation for Healthcare Bundle - PCFG Subscriptions, not to exceed four (4) 50 FTE PGP Foundation for Healthcare Bundle - PCFG Subscription, and not to exceed one Large Sandbox – PCFG Subscription) to modernize current legacy products to cloud-based technology. These subscriptions and associated solutions would support the management of activities associated with the end-to-end acquisition management lifecycle for the program, and to collect, manage and report on the critical data metrics for acquiring elements of the EHRM’s integration program that allows clinicians to easily access a Veteran’s full medical history in one secure location. Previously, the EHRM effort was managed in SharePoint, Excel and email silos. The delivery of new subscription access shall be within 30 days after Option Exercise.

The period of performance shall be a 12-month base period, during which the three optional tasks for additional user subscriptions may be exercised, and shall co-term with the existing period. The entire effort shall not exceed 12 months. XXXXXXXXXXXXX

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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

Pega Platform as a Service/Software as a Service VA-24-00083079 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 extensive market research, as described in Section 8 of this document, it was determined that limited competition is available among authorized resellers for the brand name Pega PaaS/SaaS subscriptions and services.

Specifically, only Pega or its authorized resellers, can provide a solution that is interoperable with existing platforms and with end to end capabilities that are used today due to proprietary constraints of the source code. For example, use of an alternative brand name solution will result in interoperability issues with existing deployed and developed Pega applications. Specifically, certain VA business products and services have been piloted and developed, configured, operated, enhanced, and supported through use of the proprietary Pega commercial-off-the-shelf (COTS) systems development tools and source code. No other source, other then Pega or its authorized reseller, has access to this proprietary source code to develop or implement updates to deployed programs and application, thereby leaving them open to potential security vulnerabilities. Additionally, these subscriptions are paramount for managing in real time, relational data for VA Senior Leadership to properly assess and analyze the impacts of decisions on the larger program objectives of VA objectives such as EHRM.

Further, the required Pega PaaS/SaaS cloud service provides enterprise development, test and production environments to enable end-to-end software delivery from planning all the way to production release and support, which is critical to keep existing applications up to date. As VA moves to a more cloud-based infrastructure and away from on-prem solutions, only the Pega PaaS/SaaS services can meet the aforementioned seamless interoperability requirements. VA is required to modernize legacy applications for improving Veterans health care, as well as cost saving opportunities by adhering to VA Cloud-First Policy that is articulated in VA Directive 6517, Cloud Computing Services. Additionally, the required subscriptions includes access to the Pega App Factory so that DTC can assess its ability to support rapid low code/no code assembly of Pega workflow applications enabling DTC to quickly respond to emerging customer business needs.

To deploy an alternative brand solution would require extensive time and duplicative costs to VA, that would not be recouped through competition. For example, multiple instances of current Pega applications represent years of configuration, implementation, and security hardening work from several teams. Redesigning and re-platforming these modules would require, at minimum, a similar amount of time, resources, infrastructure, and economies of scale, and platform repeatability would be compromised. Redesigning and re-platforming these applications would lead to extensive delivery delays of newly planned functionality releases, duplicative costs that would not be recovered or justified through competition (as the same functionality would have to be rebuilt on a new platform), and a major development effort to re-architect. An alternative vendor’s solution would require a significant data migration effort. XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

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XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX. This estimate is based on the work required to conduct requirements gathering/elaboration, solution design, solution architecture, solution development/configuration, integration development, end user training, VA security compliance support, implementation/rollout support, data migration, licensing, and sustainment/maintenance costs. This duration includes normal Software development life cycle (SDLC) activities with an extensive operational transition, as well as non-Pega interoperability and integration levels of effort. If transition to a new platform were pursued, there would be increased operations cycle times that could negatively impact customer service level agreements (SLAs) and deliveries, as well as degradation of services by expanding current resources to support both environments; prior to, during, and after transition;

product delivery delays, and potential impact to Veteran care.

Failure to execute this action as proposed will hinder VA’s mission to providing the best healthcare and service to Veterans. For instance, absent this action, existing users of the EHRM Pega solution will be forced to revert back to manual/legacy methods of enabling clinicians to access a Veteran’s full medical history, rather than having the ability to access this history easily in one location, which is a direct impact to patient care and unnecessarily long lead times. These subscriptions are critical to ensuring EHRM’s continuity of service and allowing senior leadership to have real-time access to relational data to properly assess and analyze the impacts of decisions on the larger EHRM program objectives with regard to patient care.

6. Efforts to Obtain Competition: Market research was conducted, details of which are in section 8 of this justification. This effort did not yield any additional sources that can meet the Government's requirements. However, the undersigned VA technical representative determined that limited competition is available among authorized resellers. 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.

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 enabling the Government to better be positioned to invest in future technologies that meet the Government’s needs.

8. Market Research: VA technical experts conducted market research from February to May 2024, which reviewed similar software subscription services from Microsoft Azure, Oracle Generation 2 (OCI Gen2) and Appian. As a result of the market research, the technical experts confirmed that no other solution can seamlessly interoperate with the existing Pega infrastructure and appliciations, nor do any of these sources have access to the proprietary source code. Based on the market research efforts, the Government’s technical experts have determined that only brand name Pega Paas/SaaS can meet all of VA’s needs as described in section five of this justification.

Additional market research was completed in June 2024 in the form of a Request for Information (RFI) issued under Contracting opportunities page (sam.gov) and the National Aeronautics and Space Administration (NASA) Solutions for Enterprise-Wide Procurement (SEWP) V Government-Wide Acquisition Contract (GWAC) to assess general industry capabilities and if there were equivalent products to the Pega PaaS/SaaS products and to assist in determining the acquisition strategy. This effort is part of a larger potential acquisition. Interested parties were informed that set-aside decisions may be made based on the information provided in response to the RFI and that responses should be as complete and informative as possible. A total of three (3) capability statements were provided. The one response from a NASA SEWP V GWAC vendor was a Service-Disabled Veteran Owned Small Business (SDVOSB), and its response was for the brand name Pega solutions. The two responses from SAM.GOV (one small, one large business) provided potential alternatives to the Pega PaaS/SaaS solution, however these responses were reviewed by the Government technical experts and determined unacceptable as both responses described requirements beyond the intent of the RFI, such as including System Integrator/System Implementation services;

these proposed services are not applicable to the PaaS/SaaS subscriptions/licenses requirement.

Further research was conducted under NASA SEWP V GWAC in July 2024 via use of the Market Research tool. This research indicates that there are sixteen (16) resellers of Pega PaaS/SaaS products and services, five (5) of which are SDVOSBs that have Veteran Small Business Certification and could be utilized to fulfill the Government requirement of purchasing Pega PaaS/SaaS cloud subscriptions.

9. Other Facts: None

10. Technical and Requirements Certification I certify that the supporting data under my cognizance, which are included in this justification, are accurate and complete to the best of my knowledge and belief.

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11. Fair and Reasonable Price Determination I hereby determine that the anticipated price to the Government for this contract action will be fair and reasonable based on comparison of the proposed price of the acceptable quote to others received in response to this solicitation. Additional Price Analysis will be completed by comparison of the successful quote to historical data for the same or similar items, as well as the proposed pricing based onthe published catalog and published price indices under NASA SEWP V GWAC. Finally, the successful quote will be compared to the Independent Government Cost Estimate.

12. Contracting Officer Certification/Approval

I certify that this justification is accurate and complete to the best of my knowledge and belief. This contract action exceeds the simplified acquisition threshold, but does not exceed $750,000, therefore, the certification required by FAR 16.505(b)(2)(ii)(A) serves as the Contracting Officer’s approval.