JA NEC Face Enterprise-wide Software (FINAL) - Redaction.pdf

U.S. Department of Homeland Security Justification & Approval for Other than Full and Open Competition Office of Biometric Identity Management

Justification No. FY24-00336

JUSTIFICATION AND APPROVAL FOR OTHER THAN FULL AND OPEN

COMPETITION 41 U.S.C. 3304(a)(1)

Pursuant to the requirements of the Competition in Contracting Act (CICA) as implemented by the Federal Acquisition Regulation (FAR) Subpart 6.3 and in accordance with the requirements of FAR 6.303-1, the justification for the use of the statutory authority under FAR Subpart 6.3 is justified by the following facts and rationale required under FAR 6.303-2 as follows:

1. Agency and Contracting Activity.

The Department of Homeland Security (DHS), Office of Procurement Operations (OPO), Departmental Operations Acquisition Division (DOAD) on behalf of the Office of Biometric Identity Management (OBIM), proposes to enter into a contract on a basis of other than full and open competition for NEC Facial License Software Maintenance.

2. Nature and/or Description of the Action being Approved.

(a) Nature of action: OBIM intends to procure on a sole source basis maintenance for existing perpetual NEC Facial software licenses for the Face Enterprise-wide Software Advanced Identity Manager eXtensible Multimodal (AIM-XM) and Advanced Identity Matcher - Edge Source (AIM-ES) products and assessment tools for unlimited biometric quantities, on unlimited hardware platforms, and at unlimited locations. This procurement is for maintenance of software for which the Government already owns a perpetual-use license.

OBIM is only seeking to procure the maintenance of the current customized facial license software and not new perpetual licenses.

(b) Contractor name and address: NEC National Security Systems, Inc. (NEC NSS), 4310

Wilson Blvd, Suite 505, Arlington, VA, 22203

(c) Contract type: Firm Fixed Price

(d) Estimated total value:

Period Period of Performance Annual Price Total Price Base Year 9/30/2024-9/29/2025 Option Period 1 9/30/2025-9/29/2026 Option Period 2 9/30/2026-9/29/2027 Total

(e) Type of funding: Operations and Support funds

(f) Year of funding: Fiscal Year 2024

U.S. Department of Homeland Security Justification & Approval for Other than Full and Open Competition

(g) Solicitation number: 70RDA124R00000007

(h) Background information about the requirement: NEC Advanced Identity Manager (AIM)

Perpetual Face Enterprise-wide Software and two years of annual software maintenance were purchased under Task Order No. 70RNPP18FR0000069 to CSRA, LLC under the DHS- Eagle Indefinite Delivery Indefinite Quantity (IDIQ) No. HSHQDC-16-D-00001 with a period of performance of September 30, 2018, through September 29, 2020.

Contract No. 70RCSA20C00000006 was awarded to NEC Corporation of America on sole source basis, under Justification No. FY20-00324, for the annual software maintenance for the period of September 30, 2020, through September 29, 2023. Contract No.

70RDAD23C00000012 was awarded to NEC National Security Systems, Inc. (NEC NSS) on a sole source basis, under Justification No. FY23-00231 for the period of September 30, 2023, through September 29, 2024.

3. Description of Supplies/Services.

OBIM requires renewal of the NEC Face Enterprise-wide Software Maintenance for AIM- XM and AIM-ES products and assessment tools currently operational within the Automated Biometric Identification System (IDENT) production and non-production environments and professional services in support of OBIM and OBIM’s stakeholders.

The renewal of maintenance for the NEC AIM-XM product is available for large gallery implementations and AIM-ES for smaller galleries. This service will include the assessment tools. The DHS perpetual license includes both AIM products for unlimited biometric quantities, on unlimited hardware platforms, and at unlimited locations.

4. Identification of Statutory Authority Permitting Other Than Full and Open Competition.

The statutory authority permitting other than full and open competition is 41 U.S.C.3304(a)(1) implemented by the FAR Subpart 6.302-1 entitled “Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.”

5. Identification of Exception to the Buy American Statute

N/A

6. Demonstration that the proposed contractor’s unique qualifications or the nature of the acquisition requires use of the authority cited.

Pursuant to the FAR Subpart 6.302-1, “Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements,” NEC Advanced Identity Manager software maintenance is essential to the continued proper functioning of the NEC NSS AIM software, which DHS uses to perform its essential tasks of biometric identification in support of screening, vetting, and credentialing of individuals seeking immigration benefits, U.S. Department of Homeland Security Justification & Approval for Other than Full and Open Competition employment, or entry/exit to the United States.

Only NEC NSS can provide the annual software maintenance to the existing NEC AIM Software currently operational within IDENT because no other firm product can interconnect with and perform the necessary customized maintenance of the NEC NSS AIM software.

The NEC NSS AIM software itself is customized, with the algorithm having been developed and fine-tuned by NEC NSS over the years to where only NEC NSS can provide the maintenance for such an application. If the Government were not able to procure the necessary annual software maintenance, the system would be at risk for potential security vulnerabilities and system malfunctions.

Additionally, these systems will naturally experience degradation in system performance, negatively impacting the ability to make operational decisions such as, but not limited to, national security and public safety, identifying known or suspected terrorists, supporting enforcement actions, granting, or denying benefits such as immigration benefits or trusted traveler status for OBIM, Customs and Border Protection (CBP), Immigration & Customs Enforcement (ICE), Transportation Security Administration (TSA) and U.S. Citizenship and Immigration Services (USCIS) who are currently using the NEC AIM product.

OBIM procured perpetual licenses for the above stated DHS component organizations for facial matching capabilities to perform biometric identification in support of screening, vetting, and credentialing of individuals seeking immigration benefits, employment, or entry/exit to the United States. A DHS wide license enables continuity of efforts across multiple system implementations and allow for cost savings associated with future implementations. As a result, if OBIM were not able to procure the annual maintenance for the NEC Face Enterprise-wide Software, at a minimum, each component would need to separately procure that annual maintenance support from NEC at a cost of $8M per DHS component, for a total of $40M for a one-year period of performance as compared to OBIM procuring the annual maintenance support from NEC on behalf of the entire department for a cost of $8M over a one-year period of performance.

Procuring an alternate product other than NEC NSS AIM would not enable continuity of efforts across multiple system implementations and not allow for cost savings associated with future implementations. The IDENT infrastructure (Transaction Manager I (TM) and Matcher Interface Service (MIS)) have been designed around the NEC NSS AIM product for facial and iris recognition. The TM and MIS architecture would need to be rebuilt for both IDENT and HART in order to accommodate a different manufacturer’s matching product, which would increase the cost by at least $50M per system, for a total of $100M, which was estimated based on the previous costs required to build each system. DHS network architecture, maintenance platforms, and configuration systems require the use of NEC NSS’s product to ensure interoperability with other DHS systems at all data centers. The NEC NSS Facial Software must be configured in accordance with DHS OCIO system architecture requirements. The use of other products would result in interoperability, compatibility, interface issues that would preclude the system’s support team from providing efficient and effective customer support.

U.S. Department of Homeland Security Justification & Approval for Other than Full and Open Competition

There are many steps that must occur before any new technology can be utilized. One critical step is to test new products in a laboratory environment before implementing in a production environment. It is overly unrealistic to suggest that adding a new cloud instance of a product would be close to providing a completely operational product in a DHS production environment. If OBIM were to replace the NEC Face Enterprise-wide Software without the minimum critical step of testing in a non-production environment, it would be new development and OBIM would have to contract for the entire lifecycle of the work to install, build, integrate, test, and compute face matching templates for the new system. The templates regeneration alone previously took six months when OBIM transitioned to the NEC software.

The Chief Information Officer published the DHS Instruction 026-11-001, on September 11, 2023, and OBIM’s task to strengthen the Instruction is to remediate any testing deficiencies in OBIM’s face recognition-based systems. On July 31, 2024, the OBIM Director signed a memo to establish an OBIM Biometric Laboratory Environment (BLE). The BLE will be dedicated testing environment for evaluating new and existing biometric matcher technologies.

This Matcher Marketplace will enable OBIM to perform the kind of test necessary to compare matcher service providers. The BLE is scheduled to be operational in June 2025.

Without extensive testing, it is impossible to determine if the other products could replace the current customized facial license software. OBIM would need to conduct a series of first article testing to determine if the accuracy of the vendor’s facial license software will achieve the same level of accuracy OBIM currently has with its current customized and fine-tuned matcher. First article testing is imperative to understand the accuracy of the product, specific to OBIM data. The risk in executing a new facial license product without proper testing before going “live” would cause nationwide catastrophic delays to stakeholder operations. Any drop in accuracy would result in OBIM not being able to perform its mission to DHS internal and external Stakeholders. A decrease in accuracy would result in an increased workload on the Biometric Support Center (BSC) human resources, resulting in missed Service Level Agreements (SLA’s) with OBIM stakeholders. For example, a 1.84% drop in face matching accuracy for a given stakeholder would result in a 13x manpower requirements increase to sustain their day-to-day operations. The potential increase in -4 Fingerprint Identification Numbers (FINs) would require a semi-annual process to clean up, taking away valuable time and resources for maintaining mission critical operations. -4 FINs are unknown biometrics that don’t match anything else on record in IDENT. Additional funding and manpower would be needed to manage the increase in workload for OBIM and its stakeholders. The extent of which would only be discovered after going live, if executed without proper testing beforehand.

The Homeland Advanced Recognition Technology System (HART) will replace IDENT system upon Initial Operation Capability (IOC). Anticipated IOC date for HART is fourth quarter fiscal year 2026. While OBIM is still using IDENT, a transition to another contract mechanism without critical disruptions to system operational availability would be very difficult and cost prohibitive due to the size and complexity of the IDENT system requirements. Replacing the vendor that is supporting IDENT at this time would be synonymous with the cost and time associated with the initial development and testing for the HART face matching capability but multiplied by a factor of two to account for replacing the

U.S. Department of Homeland Security Justification & Approval for Other than Full and Open Competition face matching capability in both the HART and IDENT systems to include retesting with all +55 interfacing stakeholders for each system. There are over 1.2 billion face images that have been feature-extracted for use with the NEC AIM XM product in both OBIM/IDENT and OBIM/HART systems that would need to be re-extracted for a replacement face matching product. The timeframe to complete such an endeavor is a minimum of 6 - 12 months for both HART and IDENT. It is anticipated that the other four DHS components would have to undergo a similar feature extraction endeavor for every system that the AIM-ES/XM product is implemented in. OBIM is in the process of establishing a Biometric Laboratory Environment (BLE) for the purpose of testing matcher software. This matcher marketplace will enable OBIM to perform the necessary tests to compare matcher service providers. The anticipated schedule for the BLE to be operational is June of 2025.

OBIM is requesting a sole source to NEC for a 12-month base plus two 12-month option periods. This will provide OBIM the necessary time to stand-up and test the BLE environment and then test vendors facial software products to fully compete this requirement in FY27.

7. Description of Efforts Made to Ensure that Offers are Solicited from as Many Potential Sources as is Practicable.

An announcement on the intent to issue a sole source award will be posted on www.SAM.gov in September 2024.

8. Determination by the Contracting Officer that the Anticipated Cost to the Government will be Fair and Reasonable.

The unit price for the NEC Face Enterprise-wide Software Maintenance will be determined to be fair and reasonable after a comparison of the proposed price to the historical prices paid under Contract No. 70RCSA20C00000006 and 70RDAD23C00000012 for the same items in accordance with FAR 15.404-1(b)(2)(ii). As this is a requirement for commercial items, the pricing will be compared to published pricing for the items.

9. Description of Market Research.

Only NEC NSS can provide the customized maintenance of NEC NSS AIM software.

Authorized resellers of NEC NSS AIM software are unable to provide the customized maintenance of NEC NSS AIM software. In discussions with NEC NSS, they confirmed that there are authorized resellers for the annual software maintenance required for DHS’ NEC NSS AIM perpetual software license. However, resellers can only provide non-customized software maintenance. Resellers are not capable to provide maintenance of OBIM's customized NEC software, because NEC has altered the commercial software specific to OBIM’s requirements. Further, OBIM's requirement cannot be separated into a portion of maintenance for non-customized NEC software and a portion of maintenance for customized NEC software, as the customized coding is integrated throughout the OBIM environment. If procured from a reseller, OBIM would have to repay the perpetual license fee of $33.8M, which was previously paid in 2018, and to customize the software to meet OBIM

U.S. Department of Homeland Security Justification & Approval for Other than Full and Open Competition requirements, which is not possible without access to the underlying source code owned by

NEC NSS.

In August 2024, the two vendors, Pangiam and Rank One Computing (ROC), provided Capabilities Briefing to OBIM and OPO. Pangiam and ROC are not authorized resellers of NEC software maintenance. These vendors were unable to meet the current requirement of the maintenance of the current customized facial license software. Instead of proposing to maintain the current NEC software, these vendors provided their capabilities of their own facial software products. However, without proper testing, it is impossible to determine if the two vendors’ products could replace the current customized facial license software.

OBIM requires sufficient time to establish the BLE to evaluate new and existing biometric technologies to establish a matcher marketplace and determine if proposed alternative software meets OBIM’s requirements.

10. Any Other Facts Supporting the Use of Other Than Full and Open Competition.

Only NEC NSS can provide the required customized software maintenance. The continued use of the current NEC software guarantees the continued availability of the IDENT operational system. Maintaining the current licenses keeps OBIM stakeholders from being negatively impacted by lack of biometric identification services to perform biometrically based validation and provide actionable information that uniquely identifies individuals who may pose a threat to national security. Issuance of a sole source contract to NEC NSS will ensure the operational availability of IDENT while OBIM prepares to test alternative software solutions. The continued maintenance of the existing software will support stakeholder and customer requests for biometric identity services.

11. A Listing of the Sources, if Any That Expressed, in Writing, an Interest in the

Acquisition

Two vendors, Pangiam and Rank One Computing (ROC), submitted responses to the notice of intent to sole source in FY23. OBIM reviewed the responses and found:

ROC is an artificial intelligence (A.I.) software company and provides face recognition search platforms, biometric algorithms, and computer vision technologies. ROC is also in the “process of developing their own iris recognition algorithm” using cutting edge A.I. and modern computer vision techniques.

Pangiam developed Traveler Verification Service (TVS), CBP’s cloud-based facial recognition system. The agile software development effort produced the first cloud-native software application hosted by CBP and laid the technological groundwork and security apertures necessary for authority to operate CBP’s new commercially hosted virtual private cloud (VPC). Pangiam’s Trueface Matcher has the capability to perform a one-to-many (1:n) match against the entire IDENT facial gallery.

NEC NSS currently provides face matching, iris license maintenance, bug fixes, and security patches required for OBIM’s system to interconnect NEC NSS and functions with the current

U.S. Department of Homeland Security Justification & Approval for Other than Full and Open Competition

DHS network architecture, maintenance platforms and configuration. As explained above, this procurement is to maintain the existing NEC software. This procurement is not to replace the existing permanent NEC software license that supports IDENT. Pangiam and ROC propose to replace NEC software; they did not propose to maintain the existing NEC software. Replacement of the existing NEC software would first require BLE testing. Based on what ROC and Pangiam submitted in response to the notice of intent, the Government cannot determine at this time if either vendor is capable of meeting all of the Government’s underlying requirements for biometric identity management software. ROC indicated in their response that they are in the process of developing their iris recognition algorithm, which OBIM needs now. While both companies do have facial recognition algorithm, there is not enough evidence to determine if all the requirements can be met. Again, the requirement at this time is to maintain NEC, which supports IDENT, not to replace NEC. A three-year contract award to NEC NSS would provide OBIM with the additional time necessary to conduct additional market research, to include engaging with both ROC and Pangiam in order to better assess their capabilities and test it within the OBIM framework. Upon IDENT's replacement by HART, new opportunities may exist for software support to HART.

12. A Statement of the Actions, if Any, the Agency May Take to Remove or Overcome Any Barriers to Competition Before Any Subsequent Acquisition for Supplies or Services Required.

OBIM, with the support of OPO, will continue to conduct market research to review available technology and products for facial and other biometric identification systems to promote competition in future acquisitions. IDENT, DHS’s legacy Automated Biometric Identification System, is not a long-term solution. OBIM is currently developing IDENTs replacement system, HART, obtain IOC, and subsequently retire IDENT. OBIM’s market research will consider the next iteration of face matching algorithm/licenses for HART after IOC is obtained, which is currently estimated for the fourth quarter of fiscal year 2026.

Additionally, OBIM will have sufficient time to establish the BLE to evaluate new and existing biometric technologies to establish a matcher marketplace. If it is determined that there are technology solutions available in the market that are beneficial to the DHS, action may be taken to plan, test, and migrate the infrastructure and systems.

(Remainder of this page left blank intentionally)

U.S. Department of Homeland Security Justification & Approval for Other than Full and Open Competition

13. Contracting Officer’s Certification. I certify that the data supporting the recommended use of other than full and open competition is accurate and complete to the best of my knowledge and belief.

Ronald Jean-Baptiste Contracting Officer Office of Procurement Operations

Date

14. Technical/Requirements Personnel Certification. I certify this requirement meets the

Government’s minimum need and that the supporting data, which forms a basis for this justification, is complete and accurate.

DeMocha Smith-Benjamin Technical Representative Office of Biometric Identity Management (OBIM)

APPROVAL:

Victoria Short Head of Contracting Activity Office of Procurement Operations

RONALD JEAN

BAPTISTE

Digitally signed by RONALD

JEAN BAPTISTE

Date: 2024.09.19 07:49:13 -04'00'

DEMOCHA D

SMITH-BENJAMIN

Digitally signed by DEMOCHA

D SMITH-BENJAMIN

Date: 2024.09.19 07:36:07 -04'00'

VICTORIA D

SHORT

Digitally signed by

VICTORIA D SHORT

Date: 2024.09.19 17:59:08 -04'00'