Justification and Approval_852470848 FINAL_Redacted.pdf

Controlled By: DISA Controlled By: PSD/PS8511 CUI Category: PROCURE Distribution/Dissemination Control: FEDCON POC: disa.scott.ditco.mbx.ditco-jwcc@mail.mil

CUI

JUSTIFICATION & APPROVAL FOR FEDERAL ACQUISITION

REGULATION SUBPART 16.5 ACQUISITIONS

EXCEPTION TO FAIR OPPORTUNITY

Multiple Award Contract

Orders under Fair Opportunity Federal Acquisition Regulation (FAR) 16.505, Defense FAR Supplement 216.505-70, Procedures, Guidance, and Information 216.505-70

Military Interdepartmental Purchase Request Number: HC1085450472 Joint Warfighting Cloud Capability (JWCC) Contract Number: HC105023D0003 Task Order Number: To Be Determined Procurement Title: Department of Defense Information Systems Agency (DISA) Hybrid Cloud - Top Secret (TS)

Statutory and Regulatory Authority: 10 United States Code (U.S.C.) 2304c(b) and FAR 16.505(b)(2)(i)(B)

EXCEPTION TO FAIR OPPORTUNITY

Number: JA23-147

Upon the basis of the following justification, I, as the Procuring Activity Competition Advocate (PACA), hereby approve this exception to fair opportunity pursuant to the Statutory Authority of 10 U.S.C. 2304c(b) and Regulatory Authority of FAR 16.505(b)(2)(i)(B).

1. REQUESTING AGENCY AND CONTRACTING OFFICE:

Requesting Agency:

Defense Information Systems Agency (DISA)/OC ENDPOINT SERVICES &

CUSTOMER SUPPORT (FE)

6910 Cooper Avenue Fort Meade, MD 20755 United States of America

Contracting Activity:

DISA/Defense Information Technology Contracting Organization/PS85 2300 East Drive Scott Air Force Base, IL 62225-5406

2. NATURE/DESCRIPTION OF ACTION(S):

This action is to issue a firm-fixed-price task order (TO) against the JWCC Indefinite Delivery/Indefinite Quantity Contract for DISA Hybrid Cloud - TS. This TO will be issued directly to Microsoft. The anticipated period of performance (PoP) is for a 1-year base period.

JA24-147 DISA Hybrid Cloud - Top Secret

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The total estimated value is which will be funded by Operations & Maintenance funds.

3. DESCRIPTION OF SUPPLIES/SERVICES:

This requirement is for the procurement of virtual desktop services and data services for customers on TS networks, supporting the integration and consolidation of DISA TS enterprise services for the Department of Defense (DoD).

4. SUPPORTING RATIONALE, INCLUDING A DEMONSTRATION THAT THE

PROPOSED CONTRACTOR’S UNIQUE QUALIFICATIONS OR THE NATURE OF THE

ACQUISITION REQUIRES USE OF AN EXCEPTION TO FAIR OPPORTUNITY:

(a) Exception to Fair Opportunity.

FAR 16.505(b)(2)(i)(B) - Only one 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.

(b) Description of the Justification.

The cloud solution must be able to provide native integration within the Microsoft Office 365 TS platform, native federation at the identity level with other tenants of the Microsoft Office 365 TS platform, and collaboration between tenants of the Microsoft Office 365 TS platform. This level of native integration at the platform level is only available via the Microsoft cloud platform.

(c) Justification.

(1) Minimum Government requirements.

This requirement is for the procurement of virtual desktop services and data services for customers on TS networks, supporting the integration and consolidation of DISA TS enterprise services for the DoD.

The cloud offering must support multi-tenant virtual desktop capabilities utilizing a shared gateway mechanism. The offering must also support collaboration services, to include email, synchronized file storage, document processing, document collaboration, and chat/collaboration capabilities. These services must be able to interoperate with other DoD/Intelligence Community (IC) tenants and allow for identity federation and cross-organization collaboration.

(2) Proposed sole source contractor.

Microsoft

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

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The specific office collaboration and federation requirements with other Microsoft Office 365 TS users and the required native integration of Microsoft Office 365 TS services into the virtual desktop solution are singularly unique to Microsoft due to the specialized compliance with security requirements. The TS cloud solution has been specially developed to meet the agency’s specific security protocols, including advanced encryption, data sovereignty, and multi-factor authentication tailored to the agency's classified environment. Microsoft’s solution is the only one that meets the highly specialized compliance requirements set by the agency's security policy and the IC standards. These compliance features are integral to maintaining the required level of quality and security, making it unfeasible for any other CSP to deliver the required service from a cost and timeframe standpoint.

(4) Demonstration of unique source.

Microsoft is the only CSP that supports both a multi-tenant virtual desktop capability utilizing a shared gateway mechanism and a natively integrated collaboration service that includes all of the required features. Additionally, Microsoft is the only CSP that provides the interoperability with other DoD/IC tenants and allows for identity federation and cross-organization collaboration.

(5) Procurement discussion.

Microsoft’s procurement solution is required to support interoperability, identity federation, and collaboration capabilities with other office tenants within the Microsoft Office 365 TS platform. This level of integration and federation is only achievable by being a tenant inside the Microsoft Office 365 TS platform. As such, Microsoft is the only provider of Microsoft Office 365 TS.

Additionally, the use of Office 365 and Azure Virtual Desktop is consistent with the services delivery model we utilize on both the unclassified and secret fabrics. The consistent user experience, standardized delivery model, and standardized operations model is the cornerstone of all the business practices, operations procedures, and risk management strategies. Introducing another solution into the design only on one classification level would force the Government to redesign the architecture, retrain Government personnel, and solicit a new contract for operations support for the new technologies. This will cause a delay in schedule and increase costs to an unsustainable point.

(6) Impact.

Establishing a solution outside of the Microsoft Office 365 TS platform would create an inability to directly collaborate with other DoD/IC partners. Additionally, the lack of a virtual desktop component natively integrated with the Microsoft Office 365 TS collaboration suite would require the proliferation of segmented and siloed top-secret networks, leading to a lack of information sharing and communication breakdowns

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between different DoD/IC components and partners. If delayed, critical mission development required for the National Leadership Command Capability community would have cascading effects on the Government’s ability to deliver service to the warfighter.

5. COST/PRICE FAIR AND REASONABLE DETERMINATION:

A determination that the price is fair and reasonable will be based on a comparison of the contractor’s proposal to the independent government cost estimate and the JWCC Catalog pricing, including any discounts, which was previously found to be fair and reasonable and based on the contractor’s commercial pricing.

6. MARKET RESEARCH: Market research for the basic JWCC Contracts was conducted and resulted in a signed market research report on 9 Nov 2021. After a survey of the market, it was concluded that the JWCC Contract is in the Government’s best interest due to technical feasibility and cost to the Government.

Additional research was conducted July 31, 2024 - September 6, 2024, by reviewing the specific capabilities in the JWCC Contracts. The Additional Research to Support Exception to Fair Opportunity request was sent to all four CSPs on September 4, 2024. Amazon Web Services (AWS), Oracle, and Microsoft responded, while Google did not provide a response. Based on the available market research data provided, only AWS and Microsoft’s responses could be considered. Oracle’s response did not contain enough information to validate. While AWS Workspaces does provide a Platform-as-a-Service Virtual Desktop solution, that solution does not natively integrate with the Office 365 identities to provide a full single identity solution for both desktop delivery, collaboration, and office capabilities. It was determined that Microsoft Corporation is the only source capable of fulfilling the Government’s minimum needs in the manner and time frame required. Beginning in July 2024, the team met multiple times with both civilian personnel and contractor personnel from the National Security Agency (NSA) who directly support the NSA-sponsored Microsoft Office 365 TS fabric. Through multiple conversations, it was identified that the direct association with the Office 365 fabric, that Microsoft is the only CSP offering providing multi-tenant collaboration solution which supplies mail services, document processing services, and other collaboration capabilities. Additionally, it is known that the only CSP provided virtual desktop solution which has native integration to identities supplied by the Microsoft Office 365 fabric is the virtual desktop solution provided by Microsoft.

7. ANY OTHER SUPPORTING FACTS: None.

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

THAT LED TO THE EXCEPTION TO FAIR OPPORTUNITY:

(a) Procurement History:

None

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(b) The barrier for fair opportunity in this case is native integration and federation with the Office 365 platform. From a technical perspective, only one CSP offers the ability to natively integrate and federate from a service level with the platform. To remove the barrier for fair opportunity, other CSPs would need to build in native integration and federation into their services platform with the Office 365 platform on the TS fabric. The Government will continue to conduct market research to determine if there are changes in the marketplace that would enable future competitive actions.

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TECHNICAL CERTIFICATION: I certify that the supporting data under my cognizance which are included in the J&A are accurate and complete to the best of my knowledge and belief.

NAME: Mr. Korie Sevi

TITLE/AGENCY/ORGANIZATION: Deputy Chief Technology Officer, DISA, OC ENDPOINT

SERVICES & CUSTOMER SUPPORT (FE)

REQUIREMENTS CERTIFICATION: I certify that the supporting data under my cognizance which are included in the J&A are accurate and complete to the best of my knowledge and belief.

NAME: Mr. Terelle Howard

TITLE/AGENCY/ORGANIZATION: Program Manager, DISA, OC ENDPOINT SERVICES & CUSTOMER

SUPPORT (FE)

CONTRACTING OFFICER CERTIFICATION: I certify that this justification is accurate and complete to the best of my knowledge and belief.

NAME: Lara Chiaurro

TITLE/ORGANIZATION: JWCC Contracting Officer/DISA/DITCO/PS8511

PROCURING ACTIVITY COMPETITION ADVOCATE APPROVAL: I have reviewed this justification and find it to be accurate and complete to the best of my knowledge and belief.

Since this justification does not exceed this review serves as approval and my written determination that the aforementioned FAR circumstances apply.

NAME: Gay D. Arnold

TITLE/AGENCY/ORGANIZATION: PACA

ALL QUESTIONS REGARDING THIS JUSTIFICATION ARE TO BE REFERRED TO

Morgan Bauer