842470639 DeCA ESL JA -Redacted.pdf

Electronic Shelf Labels (ESLs)

CUI

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Controlled By: DISA Controlled By: PSD/PS8413 CUI Category: Procure Distribution/Dissemination Control: FEDCON POC: disa.scott.ditco.mbx.ps84-new-requirements@mail.mil

JUSTIFICATION FOR OTHER THAN FULL AND

OPEN COMPETITION (OTFAOC)

Federal Acquisition Regulation (FAR) Part 6 Justification & Approval (J&A), Supporting Procurements under FAR Part 12, and FAR Part 15

Purchase Request Number: To be determined (TBD) Contract Number: TBD Task/Delivery Order Number: TBD Procurement Title: Electronic Shelf Labels Solution Estimated Value:

Statutory and Regulatory Authority: 10 U.S.C. 3204(a)(1) and FAR 6.302-(1)

Justification for OTFAOC Number: JA25-051

Upon the basis of the following justification, I, as the Senior Procurement Executive, hereby approve the use of other than full and open competition of the proposed contractual action pursuant to the authority of FAR 6.302-(1).

1. REQUIRING AGENCY AND CONTRACTING ACTIVITY:

Requiring Agency:

Defense Commissary Agency (DeCA) DeCA Headquarters, 1300 Eisenhower Avenue Fort Gregg-Adams, Virginia 23801

Contracting Activity:

Defense Information Systems Agency (DISA)/Defense Information Technology Contracting Organization (DITCO)/ PS8413 2300 East Drive, Building 3600 Scott Air Force Base, Illinois 62225

2. NATURE/DESCRIPTION OF ACTION(S):

(a) The nature of this action is to procure a proprietary, commercial off-the-shelf, brand-name Pricer Electronic Shelf Labels (ESLs) solution for DeCA, in support of DeCA’s Continental United States (CONUS) and Outside the Continental United States (OCONUS) store locations. This procurement will provide sustainment and upgrades to the current Pricer ESL solution in CONUS locations, as well as new installation, training and support of the Pricer ESL Solution in OCONUS locations. The procurement will be awarded as a Firm-Fixed Price (FFP), Indefinite Delivery/Indefinite Quantity (IDIQ) contract, to a reseller of Pricer, the original equipment manufacturer (OEM). The minimum guarantee for the IDIQ is and will be satisfied by the issuance of the

JA25-051 Electronic Shelf Labels (ESLs)

Page 3 of 8 Pages the Commissary Advanced Resale Transaction System Replacement/Modernization (CARTS R/M) contract. The contractor shall provide a test and integration environment to fully support DeCA’s test and production environments. The ESL solution will include program management to assist DeCA throughout the lifecycle of the contract.

(d) Existing OEM products are proprietary, and upgrades and support are available from only the OEM or its authorized resellers. If the currently installed hardware and software is not renewed, the hardware would not receive the necessary updates, upgrades, and patches upon which the Government depends to provide continuity of operations. OEMs for applicable hardware and software do not authorize any third-party hardware modifications or patches to their equipment. DeCA’s minimum need is maintain the current ESL solution while providing upgraded hardware and software to CONUS and OCONUS locations. DeCA places high priority on ensuring that its capabilities are stable, reliable, and secure. Performance requirements for the ESL solution include:

• Program Management

• Hardware Maintenance

• Software Application and Operating System Maintenance and Administration

• Firmware

• Release Notes for all approved software change requests

• Change Management Support

• Worldwide Help Desk Support (Tier 2 and above)

• Training

• Infrared technology communication

• Addition or Alteration to store ESL configuration

• Web Ordering Support

• New ESL Installations (CONUS and OCONUS)

• Maintenance of current ESLs and support of new ESL templates

• Provide and maintain multi-colored, segmented and graphical ESLs with a minimum 10-year battery life

4. IDENTIFICATION OF STATUTORY AUTHORITY:

Only one responsible source and no other supplies or services will satisfy agency requirements. This acquisition is conducted under the statutory authority of 10 U.S.C.

3204(a)(1) and regulatory authority of FAR 6.302-1/DFARS 206.302-1.

5. DEMONSTRATION OF CONTRACTOR’S UNIQUE QUALIFICATIONS:

The current store infrastructure consists of Pricer servers, base stations, transceivers, shelf rails, and labels that utilize infrared communications to update labels as opposed to using a wireless solution. Pricer is the only ESL provider working with the reliable and scalable optical wireless communications system in the near infrared spectrum.

(a) Description of events.

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The current ESL solution utilizes infrared technology for in-store communication. This eases the burden on the existing wireless infrastructure within the stores. DeCA operates commissaries in 13 countries that all have their own rules and regulations regarding WI- FI usage. In order to comply with WI-FI regulations in all countries, DeCA needs to continue the use of infrared technology communications. As stated above, Pricer is the only ESL provider which uses the infrared technology for in-store communications. As Pricer ESL products are already integrated into DeCA’s infrastructure, and Pricer legacy system maintenance is required prior to upgrading of the system, no other products can seamlessly integrate with the existing infrastructure without making changes to the baseline. Existing equipment was specifically designed to interface and operate with specific OEM products. Other hardware and software brands may provide similar functionality, but without rewriting the application source code and reconfiguration of system connectivity to integrate other OEMs’ solutions into existing OEM-centric environments, the competing programs would not be functional. Introducing alternative products would not meet the Government’s need for interoperability.

(b) Justification.

(1) Minimum Government requirements.

The Government’s minimum requirement is the sustainment of its current mission critical environment, comprised of brand-name Pricer products, and upgrading of the ESL system to include new ESL hardware, software, training and support.

(2) Proposed sole source contractor.

Not applicable as this requirement will be solicited as full and open to all authorized resellers of the required Pricer ESL solution to provide the sustainment and upgrade of DeCA’s current ESL solution.

(3) Discussion regarding cause of the sole source situation.

Not applicable.

(4) Impact.

DeCA will not be able to modernize the organization and improve the customer shopping experience. The continued operation of the 240 commissaries globally is DeCA’s mission. The brand-name solution provides sustainment of the current solution, as well as implementation and installation of an upgraded ESL solution. If not awarded, DeCA would not be able to maintain the current ESL solution at its CONUS locations, and would need to continue to use outdated, paper shelf tags at OCONUS locations which require significantly more time and money to update.

6. CONTRACT OPPORTUNITIES ANNOUNCEMENT/POTENTIAL SOURCES:

A synopsis for this requirement, along with a redacted justification for OTFAOC, will be published to SAM.gov website, as required by FAR 5.2.

7. DETERMINATION OF FAIR AND REASONABLE COST:

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The contracting officer will determine the validity of pricing information for comparative purposes and determine that the contract represents a solution that is the lowest price, technically acceptable. Certified cost and pricing data are not required for this commercial item acquisition, in accordance with FAR 15.403-1(b)(3). The contracting officer will determine whether the price is fair and reasonable, based on one or more of the techniques described in FAR 15.404-1:

(a) Comparison of proposed prices received in response to the solicitation.

(b) Comparison of the proposed prices to historical and existing prices paid, whether by the

Government or other than the Government, for the same or similar items.

(c) Comparison with competitive published price lists, published market prices of the same commodities.

(d) Comparison of proposed prices with the IGCE.

8. MARKET RESEARCH:

(a) Market research was conducted from February 2024 through March 2025. Market research included gathering data from previous acquisitions, reviewing current contracts, internet searches, reviewing catalogs and other contractor literature, contacting manufacturers and authorized resellers, conducting internal discussions, releasing a Request for Information (RFI) Announcement on SAM.gov, and conducting an Industry Day.

(b) First, market research was conducted to determine if another brand-name solution could meet DeCA’s requirement. A RFI announcement was posted on SAM.gov in February 2024. The RFI requested market research information on an alternative solution in support of ESLs and sources who can provide the solution. Four responses were received in total, all from large businesses. One respondent proposed the brand-name Pricer solution, while the other three respondents proposed two different solutions, neither of which could integrate with the current solution, nor operate on infrared communication capabilities.

DeCA hosted an Industry Day in April 2024, inviting vendors who offer ESL solutions to showcase the solutions and their capabilities. As one RFI respondent, ValuTrack, removed themselves as a potential ESL provider, the three remaining RFI respondents were invited to the Industry Day along with an additional ESL solution provider, Vusion.

The information received confirmed that the OEM, Pricer, has proprietary rights to the hardware and software, and only the OEM or their resellers can provide the required sustainment of the current solution. Furthermore, no other vendor or distributor can legally obtain access to the software and hardware, nor can they make duplicate copies since it is protected by copyright and patent laws.

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(c) The second step in conducting market research was to determine a method of procurement. Market research reviewed several internal DoD contracts such as Enterprise Software Initiatives, General Services Agency Federal Supply Schedules, National Aeronautics and Space Administration Solutions for Enterprise-Wide Procurement V, and ENCORE III. Based on research of the various procurement options, it was determined that these vehicles cannot meet the requirement.

Four large businesses have shown significant interest in this requirement; no small businesses were found. This acquisition will be posted on SAM.gov, open to all resellers of Pricer.

(d) No competitor’s functional replacement product exists currently in the market to meet the requirements. The Government will continue to conduct market research to determine if there are changes in the marketplace that would enable future competitive actions (e.g., there are similar products and/or product support in the marketplace that provides the same functionality, the OEM releases ownership rights of the product, or it is economically feasible to procure a new solution).

9. ANY OTHER SUPPORTING FACTS:

The current ESL solution utilizes infrared technology for in-store communication. This eases the burden on the existing wireless infrastructure within the stores. DeCA operates commissaries in 13 countries that all have their own rules and regulations in regard to WI-FI usage. In order to comply, DeCA will continue to use infrared technology. As stated above, Pricer is the only ESL provider working with the reliable and scalable optical wireless communications system in the near infrared spectrum.

10. LISTING OF INTERESTED SOURCES:

(a) International Business Machines Corporation (IBM) (Large Business) 6710 Rockledge Drive Bethesda, Maryland 20817

(b) NCR Government Systems, LLC (Large Business) 20370 Seneca Meadows Parkway

Germantown, Maryland 20876-70

(c) Aperion (Large Business) 12999 St. Charles Rock Road Bridgeton, Missouri 63044

(d) Vusion (Large Business)

625 N. Michigan Ave.

Suite 650 Chicago, IL 60611

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11. ACTIONS THE AGENCY MAY TAKE TO REMOVE OR OVERCOME BARRIERS

THAT LED TO THE EXCEPTION TO FULL AND OPEN COMPETITION:

Procurement History.

Contract Number: HC102816D0007 Contract Title: DeCA CARTS R/M Contract Type: FFP Incumbent and their size: IBM Corporation - Large Business Method of previous acquisition: Full and Open Period of performance: July 1, 2016 – June 30, 2026

As future DoD security mandates and requirements evolve; the agency could need to upgrade its entire wireless worldwide infrastructure. This could require the agency to then pursue alternative solutions to Pricer. Every effort will be made to keep industry informed of these potential upgrades and compete future requirements to the maximum extent practicable.