P03_Consolidation Memo DAIMO_Final_Redacted.pdf

ATTACHMENT VAAM M807- C

Consolidation Determination and Findings Template

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C. Market Research. Market research was conducted in accordance with FAR 10.001(a)(2)(iv) and demonstrated that Consolidation is necessary and justified.

The Market Research Memo is attached, and a brief summary of Market research findings can be found in this section.

Market research for the required products and the potential consolidation of this effort was conducted over a period of six months by VA technical personnel who reviewed previous contract history, communicated with contractors involved with previous DA contracts, and researched requirements for operations and maintenance. The TAC published a Request for Information (RFI) on SAM.gov on November 23, 2023, to identify interested vendors under the size standard for NAICS Code 541512. Prior to the closing of the RFI on December 6, 2023, 36 vendors responded. VA technical experts reviewed the capability statements received in response and assessed the respondents� capability to meet the VA requirements, considering whether the response contained sufficient technical information to make the determination of technical capability. Responses that lacked sufficient detail and/or were deemed unable to meet the Government�s technical requirements without substantial revision were determined not capable.

Solutions that appeared to generally meet the Government�s needs were deemed capable, with specific citations provided for any shortcomings that could likely be addressed without substantial revision. Of the 36 responses received, nine were determined capable of meeting the Government�s requirements: seven large businesses, one Service-Disabled Veteran Owned Small Business (SDVOSB), and one small business. All nine companies have a General Services Administration (GSA) Multiple Award Schedule (MAS) 54151S.

On June 27, 2024, the Government sent follow-up questions to the two small businesses and based on their responses, there is a reasonable expectation to receive offers from at least two responsible small business concerns and award will be made at fair market prices, in accordance with FAR 19.502-2. Since these small businesses both have active GSA MAS contracts under Special Item Number (SIN) 54151S, IT Professional Services, the Contracting Officer determined the subject solicitation will be released as a small business set aside on the GSA MAS SIN 54151S. Further consideration will be given to SDVOSB and Veteran Owned Small Business (VOSB) concerns through the use of the Veterans Involvement evaluation factor in accordance with VA Acquisition Regulation (VAAR) 852.215-70. FAR 8.405-5(a)(1)(i) specifically recognizes that, at the Contracting Officer�s discretion, set-aside orders for any small business concerns identified in 19.000(a)(3) may be used in connection to placement of orders under Federal Supply Schedules.

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Notifications (see FAR 10.001(c)).

VA Small Business Specialist and local Small Business Administration (SBA) procurement center representative (PCR) (see FAR 10.001(c)(1)). The VA Form 2268 has been documented and approved for this procurement.

Affected incumbent small business concerns (see FAR 10.001(c)(2)). As detailed in Section III Consolidation, this procurement combines requirements from four task orders performed by three large businesses: IBM, SAIC, and BAH.

Therefore, there are no incumbent small business concerns affected by this consolidation. All three incumbents responded to the RFI for this consolidated effort and all three were determined to be technically capable of performing the consolidated requirements.

Additionally, as required by FAR 7.107-5(c), a copy of this Determination shall be posted to the Contract opportunities site via SAM.gov no later than seven days after it is approved, and the solicitation shall not be issued within seven days of the posting.

Results of Market Research (FAR 7.707-2(1)). The VA technical experts reviewed all submitted capability statements of the 36 vendors and determined 9 of 36 vendors were technically capable of meeting the Government�s requirement. The 9 capable vendors include 1 SDVOSB, 1 small business, and 7 large businesses. Therefore, the results of the market research determined that this requirement shall be set-aside for small business.

III. CONSOLIDATION.

A1. Benefits. The benefits of a consolidated acquisition substantially exceed the benefits of the current contracting approach. A consolidated contract will enhance efficiency, accuracy, and interoperability, and streamline processes, reduce errors, and allow for easier integration with other systems or future projects, ultimately improving decision making and outcomes for Veterans.

VA anticipates significant cost savings via consolidation. DAIMO is designed to eliminate excessive costs associated with maintaining four distinct task orders by consolidating the common and overlapping work, which consists of development, enhancement, modernization and daily operational sustainment of products and programs. Examination of current contracts reveal that VA is paying for redundant software development and sustainment services from different vendors on four separate task orders at varying prices and not capitalizing on substantial available cost savings by centralizing capabilities and needed skillsets to maintain, enhance, and develop similar product and platform acquisitions. Centralizing these specialized resources and combining product/platform capabilities has the potential to save 22.7% or approximately $ million for these services.

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Specifically, VA must pay delivery and program management costs to oversee each vendor and ensure each contract is successfully managed in parallel, requiring VA to commit multiple program managers, contracting officers and specialists, contracting officer representatives, and logistics specialists to oversee these contracts for identical services. Also, VA incurs duplicate costs for overhead, program management, technical writers, and developers with four contracts and multiple vendors instead of one contract with one vendor.

Non-consolidation also limits VA from pursuing its modernization efforts in a uniform manner. Data-centric products are in various stages of their modernization journeys. In some cases, this calls for the consolidation of capabilities from multiple products to be delivered on robust, developer friendly platforms that enable rapid integration by technical teams across VA.

There is also the need to reevaluate the approach, design, and engineering utilizing modern patterns to realize a scalable architecture capable of meeting VA�s needs. The intended target state of the Data Analytics portfolio and ecosystem of solutions is to minimize duplication of technology stacks and drive commonality in required skills, which will permit service providers to focus on a reduced footprint of skillsets once the target state architecture is realized.

Two overarching platforms will enable the consolidation of product capabilities across the PES DA Pillar, SDP, and VA Profile. SDP is the target modernization state for legacy data management, reporting, and analytics development products and programs. SDP will enable the future development of enterprise Machine Learning (ML) and AI solutions and will provide self-service capabilities to technical teams across OIT to build and serve source and domain aligned data products. VA Profile will deliver the enterprise�s Master Data Management (MDM) capability and will enable the transactional delivery of key master data products to IT products and systems across the enterprise.

a. Reduction in Administrative Costs:

Consolidation will substantially reduce administrative costs by requiring fewer specialized technical resources, substantially reducing vendor overhead, and flattening like product capabilities into single modern solutions, which will also have significant intangible value.

Reduction in Government Employee Administrative Costs. Table 1 below depicts the substantial tangible savings, more than $ million, that will be realized by the proposed consolidation, due to a reduction in the number of VA employees required to oversee this work, which will now require just one Contracting Officer, one Contract Specialist, one Project Manager, one Budget Analyst, one Office of Strategic Sourcing (OSS) Representative, and one Contracting Officer Representative (COR).

VAAM M807-C Page C-6 hours spent on four contracts and the number of hours spent on one contract represents the hours avoided per year (13,840-3,460=10,380). Hours were multiplied by the hourly rate of $113 to determine the costs avoided per year.

These numbers were then multiplied by five years to reflect the five-year Period of Performance. Specifically, by shifting from four contracts to one contract, VA would avoid the hours and costs associated with managing three additional contracts.

Also, consolidation creates various intangible and difficult-to-quantify benefits for VA personnel. For example, VA project teams can focus more on their core objectives without being bogged down by administrative tasks resulting in greater productivity and faster times to market. Concurrently, consolidation will result in cost savings through improved resource utilization, reducing labor requirements and costs by offloading cost driven responsibilities to shared services providers, such as infrastructure management, security, and compliance (OIS and OSS).

Reduction in Vendor Labor and Administrative Costs. Aligning a single vendor to a consolidated contract will also more effectively and efficiently align the deliverables, preventing redundant work streams and products from forming.

Table 2 below represents the annual and lifetime cost avoidance for contractor personnel resulting from consolidation, which is significant at more than The means for the analysis and findings are derived from expert analysis by VA�s contract team, consisting of the COR, OSS, budget, and PES DA leadership. To determine the annual and lifetime costs avoided by consolidating four contracts into one, first, the total number of vendor FTE across the four existing contracts in three specific functional areas, Project Manager (4 FTE), Technical Writer (4 FTE), and Developer (66 FTE), was calculated (total of 74 FTE). These three Labor Categories were used because these are the most frequently used labor categories across the four existing contracts. The hourly rate was then calculated by taking an average rate across the four contracts for each of these three specific labor categories (Project Manager: $ ; Technical Writer: $ ;

Developer: $ ). Based on market research and historical evidence, it is assumed that a reduction in FTEs can be achieved by consolidation. Specifically, if the four contracts were awarded, there would be duplication of work; hence, the number of FTEs would be 74. With consolidation, only FTEs for these three labor categories (a savings of FTEs) are required, yielding a cost savings of $ annually. This reduction equates to a savings of approximately $ million over the 5-year life of the contract.

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Additional intangible benefits are:

c. Improved Collaboration and Communication: Shared services fosters an environment and staff roster that brings collaboration tools and platforms that facilitate communication and teamwork among geographically dispersed project teams. Seamless collaboration enhances efficiency, reduces misunderstandings, and accelerates decision-making. The byproduct of these efficiency and effectiveness improvements is the contribution to significant intangible cost savings by minimizing delays and rework.

d. Early Identification of Risks: A consolidated contract will enable program managers to more effectively identify potential risks across the entire portfolio. Examples of this includes risks related to project delays, budget overruns, and regulatory compliance.

e. Improved Supplier Relationships: Fewer contractors fosters stronger long-term relationships. The proposed new approach leads to more effective and efficient communication, and collaboration. The standardization and consistency of procedures, terms, and deliverables, leads to a greater consistency and fewer discrepancies.

f. Strategic alignment: Consolidating contracts aligns with strategic goals, such as optimizing procurement processes enhancing efficiency, and maximizing value for the organization.

g. Holistic Approach: Stratifying the consolidated contract allows the PES DA Pillar to divide the work into distinct phases or components, each managed by specialized subcontractors. This enables a more systematic and strategic approach to development, with clear accountability for each aspect of the project, ultimately enhancing efficiency and effectiveness.

FAR 7.107-2(a) states: �Consolidation must provide substantial benefits to the Government.� More specifically, FAR 7.107-2(d)(1)(ii) states: �Benefits that are quantifiable in dollar amounts are substantial if individually, in combination, or in the aggregate the anticipated financial benefits are equivalent to five percent of the estimated contract or order value (including options) or $9.4 million, whichever is greater, if the value exceeds $94 million.� The tangible cost benefits of consolidation are 22.7%, or a savings of $ out of the consolidated value of $ The estimated value of all DAIMO work is $ and the $ represents a substantial savings at 5.1% savings of the total value of the proposed contract.

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70. The Federal Acquisition Regulation (FAR) 8.405-5(a)(1)(i) specifically recognizes that, at the Contracting Officer�s discretion, set-aside orders for any small business concerns identified in 19.000(a)(3) may be used in connection to placement of orders under Federal Supply Schedules.

E. Inclusion of small business concerns. This acquisition is set aside for Small Business.