852573590 JA - Final_Redacted.pdf

CUI

Controlled by: DOD Controlled By: PROGRAM MANAGER SPECIAL PROGRAMS (PMSP) CUI Category: PROCURE Distribution/Dissemination Control: FEDCON

POC: LAUREN DOYLE, +1 7037043335, LAUREN.M.DOYLE10.CTR@ARMY.MIL

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) 16.507-6(b) (RFO), Defense FAR Supplement 216.507-

6(b) (RFO), Procedures, Guidance, and Information 216.507-6(b) (RFO)

Military Interdepartmental Purchase Request: MIPR2610032886 Joint Warfighting Cloud Capability (JWCC) Contract Number: HC105023D0003 Contract Support System Tracking Number: 852573590 Procurement Title: Knowledge Augmentation System Estimated Value:

Statutory and Regulatory Authority: 10 United States Code (U.S.C.) 3204(a) and FAR 16.507-6(b)(2) (RFO)

EXCEPTION TO FAIR OPPORTUNITY

Number: Not Applicable

Upon the basis of the following justification, I, as the Contracting Officer, hereby approve this exception to fair opportunity pursuant to the Statutory Authority of 10 U.S.C. 3204(a) and Regulatory Authority of FAR 16.507-6(b)(2) (RFO).

1. REQUESTING AGENCY AND CONTRACTING OFFICE:

Requesting Agency:

Department Of Defense (DOD) / Program Manager Special Programs 10401 Totten Road, Building 399 Fort Belvoir, VA 22060

Contracting Activity:

Defense Information Systems Agency (DISA)/Defense Information Technology Contracting Organization (DITCO)/ Cloud Capabilities Section (PS8511)

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 Joint Warfighting Cloud Capability (JWCC) Indefinite Delivery/Indefinite Quantity Contract for the Knowledge Augmentation System. This TO will be issued directly to Microsoft Corporation. The anticipated period of performance (PoP) is for a 1-year base period. The total estimated value is which will be funded by Research, Development, Test & Evaluation funds.

Knowledge Augmentation System

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• Ingest all data via common open-source database architectures, which can be tokenized and have embeddings generated for retrieval purposes for multiple file types across multiple database sources

• Operate in a secure environment on an Impact Level 7 network at the Top-Secret classification level, with access controls and user-defined permissions for Windows 11 Operating System

• Support data ingestion for retrieval purposes occurring from both text and image-based sources (Optical Character Recognition must be available)

• Have a rapid response time

• Support a large number of rapid requests

• Support multiple, concurrent users

• Incorporate access controls for sensitive, need to know data

• Provide referenced outputs with corresponding citations.

The LLM can be used in conjunction with government databases. The model will process and store the data sources in a vector or graph database, which the LLM can use to recall, summarize, and present results to analysts at a speed that far exceeds human capability.

(2) Proposed sole source contractor.

Microsoft Corporation

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

Microsoft remains the only CSP capable of immediately meeting the Government’s stringent minimum security requirements, without requiring significant retooling, refactoring or compromising critical security protocols. Microsoft has exclusive rights to the AOAI tool and market research has indicated that this is the only commercially available tool capable of meeting the requirement. Other factors that contributed to the cause of the sole source include the following:

1. Microsoft is uniquely positioned to fulfill this requirement due to the existing services that they provide on an existing Unified Agreement. Microsoft currently provides full-time support on site and is the only CSP with an existing owned tenant in an enclave of the TS network. Microsoft’s knowledge of the Government’s networks, equipment, data repositories, and placement and access greatly reduce overall program risk.

2. The current Authorization to Operate (ATO) process to accredit tenants on the network is over 12 months. Microsoft’s already approved ATO accreditation and presence on the TS network makes them the only CSP capable of currently meeting the Government’s needs.

(4) Demonstration of unique source.

Page 4 of 7 Pages conducted thorough Market Research and solicited responses to the

Additional Research to Support an Exception to Fair Opportunity on July 31, 2025, both of which indicated that Microsoft was the only CSP capable of meeting the Government’s minimum requirements. Microsoft’s AOAI tool possesses the unique capabilities required, and no other CSP offers a comparable solution with the required level of performance, security, and interoperability necessary for mission.

Oracle lacks the necessary accreditation and availability on TS networks and does not offer a robust Software as a Service (SaaS) capability. Amazon Web Services, Inc.

(AWS) partially addressed requirements but does not provide a fully functional "chat-bot" tool natively on TS networks. This chatbot functionality is crucial for ensuring accurate text extraction and automating the quality control process, which is integral to the success of the project. AWS's Bedrock tool, focused primarily on information generation and agentic capabilities, falls outside the scope of USSOCOM’s specific needs. Google currently cannot meet all minimum requirements at this time.

Ultimately, none of the alternative solutions offered by the other JWCC CSPs fulfill USSOCOM's critical requirements.

(5) Procurement discussion.

encountered no significant procurement constraints. A comprehensive examination of alternative CSPs was diligently conducted through extensive Market Research and the issuance of Additional Research to Support an Exception to Fair Opportunity request. The Market Research results, and the responses received from all four JWCC CSPs, including a thorough review of their respective capabilities, conclusively demonstrate that only Microsoft possesses the capacity to meet all critical performance parameters and attributes essential for fulfilling the Government's requirement. Microsoft is, therefore, the only CSP currently capable of satisfying the Government's minimum needs without introducing unacceptable delays or risks.

(6) Impact.

No other CSP can meet this requirement and soliciting industry for an alternative solution would introduce costly and substantial delays that elevate program risk to an unacceptable level, which jeopardizes the Government’s ability to meet its critical mission objectives.

Adapting alternative software solutions to meet unique requirements would incur significant development and customization costs that cannot be tangibly forecasted due to the unique nature of this software and integration risk with the current infrastructure. This additional expense is unforeseen with the FY26 budget and could divert resources from critical program activities. The inherent risks associated with integrating untested and unproven solutions would threaten the stability and security of the TS network and negatively impact the performance of the program.

5. COST/PRICE FAIR AND REASONABLE DETERMINATION:

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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 November 9, 2021, that was revalidated and recertified on July 29, 2024.

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.

conducted market research May 30, 2023 - July 25, 2025, by reviewing the specific capabilities in the JWCC Contracts and 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. Market research was conducted by subject matter experts to try to identify additional sources which could meet the Government’s requirements. This market research looked at open-source LLMs, commercial offerings, and custom developments. Research determined that open-source LLMs were not feasible to meet this requirement due to the lack of security features, scalability, and performance guarantees required for this procurement It also presents significant risks with model accuracy, performance optimization, and long-term maintenance. Thus, the next phase of our market research focused on commercially available LLM offerings. Market Surveillance identified that there were three potential CSPs that provided Retrieval-Augmented Generation LLM capabilities commercially. Research concluded that Microsoft is the only source that can meet the Government’s requirement in full, and that Booze Allen Hamilton (not a JWCC direct service provider) and Google’s capabilities do not fully meet the requirements as illustrated in the Description of Work.

Additionally, in July of 2025, released an Additional Research to Support Exception to Fair Opportunity notification to all four JWCC CSPs. After evaluating the responses received, Microsoft is the only vendor capable of supporting the Government requirement. Google, Oracle and AWS were all unable to meet the minimum requirements.

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:

Not Applicable

(b) Currently, only one tool, Microsoft AOAI, possesses the capability to meet the stringent Key Performance Parameters (KPPs) and Key System Attributes (KSAs). This justification is primarily driven by Microsoft's pre-existing support infrastructure and its

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CUI

operational tenant within the customer's specific computing environment on the TS network. The established infrastructure, stringent security policies, and complex accreditation processes are, for practical purposes, unalterable, effectively precluding other CSPs from competing for this particular requirement within the required timeframe.

The Government intends to continue conducting market research on who may become capable of meeting the technical and security requirements necessary or explore alternative solutions that would allow for use of another CSP. Additionally, the Government is committed to analyzing the established KPPs and KSAs to determine if they are absolutely necessary or if they can be modified to open competition.