Justification_for_Exception_to_Fair_Opportunity_-_Laptops_Posting.pdf

IT ACE is a Client Support Center housed within DOT/FHWA Page 1

Department of Transportation

Federal Highway Administration

IT Acquisition Center of Excellence (ACE)

JUSTIFICATION FOR AN EXCEPTION TO FAIR OPPORTUNITY

UNDER IDIQ CONTRACTS

The Department of Transportation (DOT), makes this Justification for the issuance of an

Exception to Fair Opportunity order pursuant to Federal Acquisition Regulation (FAR)

16.5.

a. Identification of Agency and Contracting Activity:

Program Office:

DOT, Office of the Secretary (OST)

Office of the Chief Information Officer (OCIO)

Contracting Activity:

Federal Highway Administration (FHWA)

IT ACE

1200 New Jersey Avenue, SE

Washington, D.C. 20590

b. Nature and/or Description of Action Being Approved:

The IT ACE contracting office, in support of the DOT Office of the Chief Information

Office (OCIO), proposes to award a sole source Firm Fixed Price (FFP) Delivery Order

(DO) for a turn key equipment solution to include installation of software security imaging, preliminary asset management tagging and reports, and shipping. This sole source DO will be established with CDW-Government (CDW-G) under its National

Aeronautics and Space Administration (NASA) Solutions for Enterprise-Wide (SEWP) contract vehicle.

The purpose of this Justification for an Exception to Fair Opportunity is to provide interim laptop equipment support and services to allow the OCIO and IT ACE adequate time to execute a competitive procurement and to minimize mission disruption to DOT’s essential services. Specifically, the Department has reached a critical point in computer availability, creating an operational and cybersecurity risk. Currently DOT has no laptops, desktops, or monitors available and the limited tablet stock will be fully depleted in less than two weeks as of July 24, 2019. Properly imaged laptops, desktops, tablets and associated peripherals are in critical need for continued operations and to minimize cybersecurity risks.

The anticipated acquisition will be for a Period of Performance (PoP) of six-months base period and an option to extend for an additional three-months. The option period is necessary as the Government continues to plan transition of laptop cybersecurity imaging

IT ACE is a Client Support Center housed within DOT/FHWA Page 2 services into a new competitive environment. As a result, the support being provided under this sole source DO will operate as a bridge to a future competitive acquisition.

c. Description of Supplies/Services and Estimated Value:

The primary objective of this effort is to ensure the provision of standard and consistent hardware to DOT, p to provide image and asset processing, and to minimize security risks by utilizing CDW-G for equipment processing services. This sole source will enable

DOT to obtain the critical equipment and associated services needed within adequate time to minimize a disruption of services. The following supplies and services will be provided for this sole source:

1. End User Equipment Models (See Enclosed End User Equipment Models): CDW-G shall provide DOT with the equipment models within the attachment to include the numerous required specifications for each model.

2. End User Equipment Services: CDW-G shall provide ordering, receipt and handling of all equipment. This task includes quality assurance, asset management, and administration responsibilities. Specifically, CDW-G shall be responsible for the security imaging of the associated equipment within bullet one above.

3. Delivery Support Services: The Delivery task will provide for deliveries to

Washington, D.C. and remote location delivery nationwide.

4. Asset Reporting Services: The inventory reporting task is responsible maintenance of records and for inventory reporting based on requests by DOT.

5. End of Life/Recycling Services: The task is responsible for management of hardware end-of-life activities and disposal.

The estimated anticipated value for the purchase of approximately 4,685 workstations over the course of the period of performance is $12 million which is broken down as shown below.

IGCE Summary

Total Estimated Cost $12,000,000

d. Identification of the Exception to Fair Opportunity and Rationale:

The Contracting Officer (CO) shall give every awardee a fair opportunity to be considered for a DO unless an exception exists. An exception is sought pursuant to FAR

IT ACE is a Client Support Center housed within DOT/FHWA Page 3

16.505(b)(2)(i)(A) – the agency need for the supplies or services is so urgent that providing a fair opportunity would result in unacceptable delays. Rationale for this exception is as follows.

Urgency of the Requirement and Unacceptability of Delays

In 2016 the DOT awarded a competitive FFP NASA SEWP laptop and services catalog vehicle to CDW-G. From June 2016 through January 2019, CDW-G provided the

Department with a turn-key laptop equipment and support services solution. However, in

FY2019, DOT had a limited supply of laptops, tablets, and monitors. Specifically, DOT has only been able to purchase 279 machines this fiscal year (FY) to meet critical field laptop refresh needs for a single DOT Operating Administration (OA).

In February 2019, the Small Business Administration Procurement Center Representative

(PCR), requested DOT to submit updated market research to determine whether a small business would be capable of providing the fully integrated laptop turn key solution to the

Department in 2019. As a result, IT ACE released a Request for Information (RFI) to small businesses against NASA SEWP and other related contract vehicles to determine if small businesses were capable of providing the equipment and services. The results showed that at least two small businesses were capable.

As a result, IT ACE pursued the following two acquisitions:

1. A larger $60 million acquisition to re-compete the current CDW-G NASA SEWP catalog to support the Department for the next five years, and

2. A smaller interim acquisition to support the Department until the larger acquisition was awarded.

For the interim solution for 2nd Quarter FY 2019 requirements, DOT solicited two

Request for Quotes (RFQ) for an estimated $1.9 million of critically needed laptops, desktops, tablets and associated peripherals set aside to small businesses on NASA

SEWP. Additional requirements for urgent DOT computer equipment needs for 3rd and

4th Quarter FY 2019, including refresh for computers at End-of-Life (EoL) to address departmental cybersecurity risks, are an estimated $10.1 million, for a total estimated requirement of $12 million for this Exception to Fair Opportunity request. As documented below, both RFQ attempts for the 2nd FY 2019 requirements were unsuccessful with no compliant responses received.

• SEWP RFQ number 121186 was issued on June 11, 2019. Four small business contractors responded, but only two of the four provided the required detailed response with specifications and associated prices. Neither of the two quotes met the posted DOT requirements. On June 21, 2019, DOT requested revised quotes from all four small businesses that responded to the RFQ with detailed instructions to ensure that contractor quotes included explicit equipment specifications and certifications that the equipment matched the DOT requirements. Three contractors provided revised quotes, but none met the DOT required specifications. Therefore, the

Government reviewed its requirements and determined that the requested models within the solicited RFQ had limited availability from the Dell manufacturer. As a

IT ACE is a Client Support Center housed within DOT/FHWA Page 4 result of the limited availability, the Government modified its requirements to reflect a new generation of models.

• SEWP RFQ number 124362 was issued on July 11, 2019 with the updated models and specifications to reflect the new generation of equipment. Two small businesses responded, but again neither met the required specifications.

IT ACE, based on unsuccessful attempts to compete the laptop requirement to small businesses to date, will re-assess whether the larger award will need to be advertised as full and open competition and will work with the Small Business Administration to discuss this further.

With the Government not receiving acceptable quotes from small businesses, the procurement delay has significantly increased the backlog of required secure laptops and related equipment, and the urgency to obtain this equipment has become critical.

The DOT OCIO has an urgent and compelling requirement to procure mission essential equipment. Therefore, IT ACE is seeking an Exception to Fair Opportunity approval to complete a sole source action with the incumbent large business contractor CDW-G. This sole source will enable DOT to timely obtain the critical equipment and its associated services needed to minimize the disruption of services. If the sole source is not approved, DOT will be unable to provide mission essential laptop equipment to new and existing employees throughout the entire Department. The following OAs will be affected:

• Federal Highway Administration

• Federal Motor Carrier Safety Administration

• Federal Railroad Administration

• Federal Transit Administration

• Maritime Administration

• National Highway Transit Safety Administration

• Pipeline and Hazardous Materials Safety Administration

The continued delay in receiving laptops and the other vital equipment this acquisition provides potentially effects every employee in the Department and would be extremely detrimental to the ability of every OA to carry out its mission essential functions.

Specifically, DOT refreshes approximately one quarter of its computers annually to replace End of Life (EoL) devices that are out of warranty and no longer in cybersecurity compliance. To compound the issue in FY 2019, the Department has been unable to purchase equipment since September 2018 (except for 240 field devices) resulting in a back-log of EoL computers. This year presents unique cybersecurity risks as some of the

EoL devices use Windows 7. Beginning in January 2020, Windows 7 will no longer be supported and will be a significant security risk to the Department. New devices are also required for break/fix and to ensure continuity of operations.

To prevent this extremely undesirable outcome, DOT would like to go directly to CDW-

G until the larger catalog re-compete is awarded. Through a competitive procurement, CDW-G successfully provided laptops, desktops, tablets and associated peripherals and asset tagging/imaging to DOT since 2016 as a NASA SEWP Catalog holder. CDW-G

IT ACE is a Client Support Center housed within DOT/FHWA Page 5 has been able to successfully fulfill all orders to date at a fair and reasonable price to the

DOT. This limited exception will enable the Department to continue its mission essential functions while the DO is transitioned to a competitive acquisition strategy.

e. Determination That the Anticipated Cost is Fair and Reasonable:

To ensure that the anticipated prices to the Government will be fair and reasonable, the

Contracting Officer will evaluate the proposed prices of CDW-G and compare against its

NASA SEWP contract rates, as well as historical prices paid. Specifically, the historical prices paid were provided and via a fully and open competitive acquisition.

f. Other Facts Supporting the Justification:

It is important to note that DOT was unable to purchase any new equipment in FY 2019 until a budget was passed by Congress and funding had been appropriated accordingly.

Although Continuing Resolutions (CR) were passed, CR’s help maintain current operations and not the purchase of any new items an agency may require. As a result, a significant backlog for purchasing laptops for the entire Department has occurred. This sole source acquisition would eliminate the Department’s current laptop refresh backlog for existing employees along with providing laptops which are essential for new employees.

g. Statement of Actions:

To ensure that the circumstances that led to the Government taking exception to fair opportunity for this requirement are limited to this action only and do not recur, the

Government will turn its attention to a competitive procurement as soon as this sole source is awarded. IT ACE has developed an acquisition schedule designed to ensure completion of all necessary competitive pre-solicitation and pre-award actions prior to the expiration of this sole source.

Furthermore, to ensure that industry is made aware of all future information related to the follow-on acquisition, all information will be posted and made available to contractors under the contract vehicle selected for the follow-on requirement via the Government port of entry. Additionally, small businesses have been notified via the Small Business

Forecast tool about the larger acquisition effort.