852673962 - JA.Final_Redacted.pdf

CUI

Controlled by: OSD Controlled By: DOW CIO CUI Category: OPSEC, PROPIN, PROCURE Distr

POC:

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(b), Defense FAR Supplement 216.505(b), Procedures, Guidance, and Information 216.505(b)

Military Interdepartmental Purchase Request Number: HQ06426151013 Joint Warfighting Cloud Capability (JWCC) Contract Number: HC105023D0003 Task Order (TO) Number: To be determined Procurement Title: Next Generation (NG) Special Access Program (SAP) Information Technology (IT) Estimated Value:

Statutory and Regulatory Authority: 10 United States Code (U.S.C.) 3204(a) and FAR 16.505(b)(2)(i)(B)

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 16.505(b)(2)(i)(B).

1. REQUESTING AGENCY AND CONTRACTING OFFICE:

Requesting Agency:

Department of War (DoW) Chief Information Office1400 Defense Pentagon Washington, DC 20301 United States of America

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 TO against the JWCC Indefinite Delivery/Indefinite Quantity Contract for NG SAP IT. 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 fund.

3. DESCRIPTION OF SUPPLIES/SERVICES:

NG SAP IT

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This requirement will deploy an NG SAP environment. The purpose of this prototype is to make common cloud services available to SAPs, prototyping the “next generation” SAP environment.

These services include Virtual Desktop Infrastructure, Identity Credential and Access Management, secure voice and video communication, file/print services, email services, and cross-domain exchange.

The deployed solution will provide enhance operability, secure SAP and Controlled Access Program integration, and a compliant design that aligns with the Department of War (DoW), Chief Information Officer mandates, including zero-trust. This enhances the efficiency and security of DoW operations by incorporating a Managed Service Provider model, which allows the infrastructure to evolve and update quickly and efficiently.

Deploy a NG SAP environment that provides enhanced operability, secure SAP and Controlled Access Program (CAP) integration, voice/video/collaboration, and a compliant design that aligns with DoW Chief Information Officer mandates, including zero trust–with the benefits of a Managed Service Provider (MSP) model. The purpose of this NG SAP prototype is to make common cloud services, including Virtual Desktop Infrastructure (VDI), Identity Credential and Access Management (ICAM), secure voice and video communication, file and print services, email services, and cross-domain exchange, available to SAPs, prototyping the “next generation” SAP environment. This enhances the efficiency and security of DoD operations, while incorporating a MSP model that allows the infrastructure to evolve and update at the speed of industry.

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.

Microsoft is the only cloud service provider (CSP) that is capable of performing the DoW CIO TS requirement. The Government requires a specific cloud environment to test a third-party vendor prototype that is developed exclusively using Microsoft services. The technical constraints of the prototype’s design, coupled with urgent mission validation timelines, make the issuance of the task order to another Cloud Service Provider (CSP) cost prohibitive and introduces risk to schedule delays.

In order to meet the target dates for implementation, the government requires the Microsoft solution to recreate the existing unclassified environment into the Microsoft TS environment utilizing the following capabilities: Secure Voice & Video, Microsoft Virtual

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Desktop, File and Print Services, Email Services, Identity Credential & Access Management (ICAM), Data Migration, and Monitoring capabilities.

(c) Justification.

(1) Minimum Government requirements.

The NG SAP IT is a prototype based on a capability from the vendor that deploys on Microsoft. The Government’s minimum requirements encompass several key functional areas. Core user capabilities include Virtual Desktop Interface (VDI) Services, Secure Voice and Video Services, File and Print Services, and Email Services. Foundational security services must include Identity, Credential, and Access Management (ICAM), a Cross Domain Solution (CDS), and overall Cyber Security at Protection Level 3 (PL3).

Finally, the environment requires operational capabilities for Data Migration from Legacy Systems, as well as comprehensive Monitoring, Automation, and Orchestration.

(2) Proposed sole source contractor.

Microsoft Corporation

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

This sole-source situation arises from a need to rapidly evaluate the previously developed prototype solution. The decision was made to test this specific prototype, which was developed on Microsoft prior to this requirement being validated. Due to operational timelines and compliance with DOW CIO mandates, the Government cannot absorb the significant schedule delay and cost that would be required to re-architect the existing environment to a different platform when it’s so tightly integrated with M365, Microsoft Virtual Desktop, and with authentication methods like EntraID.

(4) Demonstration of unique source.

Microsoft is the only source that can meet the Government’s requirement. This determination is not based merely on the prototype’s existing location, but also on the risk assessment of the consequences of migration to another CSP.

The prototype is not a standalone application; it is a deeply coupled ecosystem where critical functions are tied to a suite of Microsoft services. This includes the use of Microsoft Virtual Desktop for the user interface, Microsoft EntraID for the foundational identity and security model, and specific Microsoft Policy APIs for governance. These services are not available from any other JWCC CSP, and their functionality cannot be replicated without a complete redesign.

Due to this deep integration, any attempt to host this prototype with another CSP would require a complete re-architecture and redevelopment effort, as they do not offer these specific, proprietary services.

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(5) Procurement discussion.

Based upon the responses to the “Additional Research to Support an Exception to Fair Opportunity”, only Microsoft is capable of meeting the minimum needs of the Government. All four JWCC CSPs were provided the technical requirements and the sole response from Microsoft confirms that the prototype’s core architecture is dependent on proprietary Microsoft Services.

(6) Impact.

The impact of not approving this justification would be severe and unacceptable to meeting the operational validation timelines as mandated by the DoW CIO. If forced to compete this requirement, the necessary re-architecture and redevelopment effort by another provider is estimated to cause a schedule day of 9 months before a pilot can begin and lead to additional costs beyond the initial development effort. This would effectively mean funding the development of a brand-new prototype, negating the entire purpose of testing the existing one.

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 was conducted August 01, 2025 - January 26, 2026, by reviewing the specific capabilities in the JWCC Contracts and determined that Microsoft Corporation is the only source capable of fulfilling the Government's minimum needs in the manner and time frame required.

The Government’s market research results confirmed that while other JWCC CSPs offer standalone virtual desktop and compute capabilities, only Microsoft can provide the fully integrated system necessary to meet the Government’s minimum requirements. Microsoft has direct integration of Microsoft 365 (M365) with its Microsoft Virtual Desktop solution. This M365 integration also integrates with EntraID to support the government’s Identify, Credential, and Access Management requirements for single sign-on functionality.

On January 26, 2026, the Government submitted the “Additional Research to Support an Exception to Fair Opportunity” to all four JWCC CSPs that detailed the Government’s minimum technical requirements. Of the four JWCC CSPs, only Microsoft submitted a response affirming its ability to meet the requirements. The Government interprets this lack of response as a consensus that no other JWCC CSP can meet the unique, technical requirements. This result independently supports the Government’s own analysis.

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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) The agency will conduct market research to identify and evaluate additional CSPs that can meet the “fit for purpose” criteria for future components to the existing environment.

Results of the market research will help inform the development of future competitive solicitations.

(b) Procurement History:

Not Applicable

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.

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NAME: SIGNATURE: See Separate Signature Page

TITLE/AGENCY/ORGANIZATION: COR, DISA, OC ENDPOINT SERVICES &

CUSTOMER SUPPORT (FE)

PHONE: DATE:

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.

TITLE/AGENCY/ORGANIZATION: COR, DISA, OC ENDPOINT SERVICES &

CUSTOMER SUPPORT (FE)

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

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

ALL QUESTIONS REGARDING THIS JUSTIFICATION ARE TO BE REFERRED TO