A.02.06 JA Metasys 30 OCT 24 FINAL Redaction.pdf

CUI

Control No: CEHNC-23-0004

FAR PART 6 JUSTIFICATION AND APPROVAL FOR OTHER THAN

FULL AND OPEN COMPETITION

Program/Equipment: Proprietary Metasys Building Automation System in support of USACE Huntsville Center’s Utility Monitoring and Control Systems (UMCS) Program

Authority: 10 U.S.C. 3204(a)(1) as implemented by FAR Part 6.302-1 “Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.”

Amount: $630,000,000.00

Contract Specialist:

Contracting Officer:

Technical Representative:

Requirements Representative:

Center/District Reviews

I have reviewed this justification and find it adequate to support other than full and open competition.

SCO-ALX and Headquarters Review:

The following signatures indicate concurrence with the contents of this document.

CONCURRENCE:

1. Contracting Activity: United States (U.S.) Army Corps of Engineers, Engineering and Support Center, Huntsville, (CEHNC) Redstone Gateway (RG 300), Redstone Arsenal, Alabama 35808.

2. Description of Action: CEHNC’s Utility Monitoring and Control Systems (UMCS) Program seeks approval to award a sole-source, Firm-Fixed-Price (FFP), Indefinite Delivery, Indefinite Quantity (IDIQ) Single Award Task Order Contract (SATOC) for the legacy Metasys Building Automation System (BAS). Award is to Johnson Controls Building Automation Systems, LLC (JCBAS) (an affiliate of Johnson Controls, Inc. and Johnson Controls Federal Systems). The Metasys BAS (hereby referred to as Metasys) is a proprietary system that provides an automated, computer-networked distributed control system to monitor the mechanical, security, fire, flood, lighting, heating/air conditioning, and ventilation systems located within Government facilities.

The Government projects an award on or about 20 December 2024. The task orders will be FFP.

The majority of customer funding is Operations & Maintenance (O&M), but may also include Research, Development, Test, and Evaluation (RDT&E), Defense Working Capital Funds, and Pentagon Reservation Maintenance Revolving funds. The RDT&E funds are used for customer requirements at laboratories such as the Chemical Biological Research lab and the Army Research Lab at Aberdeen Proving Ground. The Defense Working Capital Funds are provided by a few different customers, including the Navy, for requirements at the Naval Information Warfare Center. The Pentagon Reservation Maintenance Revolving funds are used to fund efforts at the Pentagon.

3. Description of Supplies/Services: Under the resulting SATOC, the contractor shall provide all personnel, equipment, tools, materials, supervision, and other items and non-personal, performance-based services necessary to provide the Procurement and Installation (P&I) and/or the Maintenance and Service (M&S) of proprietary JCBAS’s Metasys at an estimated 254 installations. The P&I and/or the M&S of UMCS, and other related automated control and monitoring systems include but are not limited to:

• Heating, Ventilation and Air Conditioning (HVAC) Systems

• Supervisory Control and Data Acquisition Systems

• Fire Alarm Systems

• Life Safety Systems

• Electronic Security Systems

• Direct Digital Control Systems

• Chiller/Boiler Systems Installation and/or Integration

• Other automated control and monitoring systems associated with chemical/biological/radiological contaminant detection/filtration/response

• Utilities metering (e.g., electric, gas, water, steam)

• Security and/or force protection measures (e.g., barriers, fencing, gates, window treatments, hardening, and lighting)

In addition, the services required include repairing portions of Metasys legacy systems that are close to or at end-of-life, upgrading existing systems that use Metasys, and providing M&S to preserve and ensure accurate function. The close to end-of-life components are those that require repair versus costing the Government billions for replacement (refer to Table 3 below). All of the services mentioned above will be referred to as UMCS. These services are required for Government buildings located throughout the U.S, including Alaska, Hawaii, Guam, and Puerto Rico, as well as foreign locations outside the Continental U.S to include: Japan, South Korea, Laos, India, Indonesia, Greece, Serbia, Germany, Belgium, Romania, Norway, Montenegro, Georgia, Italy, Jamaica, Suriname, Haiti, Ecuador, Costa Rica, Brazil, Mali, Gabon, Tanzania, United Arab Emirates (UAE), Kazakhstan, Iraq, and Saudi Arabia where Metasys systems are installed.

In some foreign locations, Host Nations may define portions of the work as construction (e.g., South Korea and Germany). In those cases, the work must be performed separately and in accordance with the applicable Host Nation laws and international agreements. The Contracting Officer will determine whether such work may be executed under the SATOC, de-scoped from the project, or executed under a separate contract vehicle. The Contractor must be capable of responding to simultaneous service requests and maintaining each individual installation’s compliance requirements.

The Table 1 below depicts the estimated period of performance and capacity distribution for the SATOC ordering period.

4. Authority Cited: 10 United States Code (U.S.C.) Section 3204(a)(1), as implemented by FAR 6.302-1(a)(2), “Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.”

5. Reason for Authority Cited:

a. Background:

Installations rely on Metasys to provide the required building automated systems infrastructure. Metasys requires ongoing maintenance and upgrades. Metasys is based on installation requirements and may also need servicing to maintain optimal levels of building automation monitoring and control. A typical life cycle of a UMCS is 20 to 25 years and systems are still within their initial lifecycle at approximately 254 Government installations. Despite the efforts to eliminate the dependency on Metasys (as described below in section 6, Efforts to Obtain Competition and in section 7, Market Research), those systems are still in operation and will require further maintenance and upgrades to properly operate and function. The table below depicts CEHNC’s previous Metasys SATOCs.

This justification provides rationale for the fourth iteration of these services. The proposed SATOC valued at $630M includes an increase of $230M in capacity from the previous SATOC based upon: (1) historical usage (2) identification of additional installation facilities that are seeking the proprietary services, (3) cost associated with inflation (parts, labor, etc.), (4) variances created by inaccurate/inadequate information in customer provided estimates and/or changes in priorities by installations, and (5) contingency for unanticipated corrective/preventative maintenance. CEHNC does not have the ability to mandate change from the proprietary system to an open-source protocol system (refer to Sections 3 above).

b. Justification:

Metasys is JCBAS’s copyright protected intellectual property with proprietary network protocols and systems in place at various Government installations worldwide. JCBAS is the developer, manufacturer, and patent holder of the Metasys product line of software and hardware controls.

These components are used to integrate all sensing/controlling action points in each building into the central user interface (head end). This allows an operator to gain insight into field operations and send control functions throughout the buildings as needed. The head end software and communication protocols are unique to the specified hardware and therefore considered closed-source protocol system as they are not interoperable with other manufacturers’ open-source protocol systems. Metasys does not interface with other non-proprietary UMCS and/or HVAC equipment and systems.

JCBAS is the only contractor capable of performing the necessary services because JCBAS is the sole source that can provide licensed and trained technicians capable of working within the proprietary Metasys System Configurations Tools (SCT) software. The Metasys software products are proprietary and are not available to other manufacturers or service providers. In the event another contractor works on the system; it will void any active system warranties. In addition, the expense to upgrade the usable systems compared to replacing them with open-source protocol systems is not economically feasible (refer to Section 5(c), Alternatives).

c. Alternatives

i. Replacement of Metasys: Table 3 below depicts the estimated costs the

Government would incur if a new, open-source protocol system, such as Building Automation Control Network (BACnet) systems, were procured and installed to replace the existing Metasys at 254 installations. For the purpose of this example, the Government assumed each new system was at a “medium-sized” installation with 200 buildings and an average of 250 sensing/controlling action points per building that would require integration to the head end. The sensing/controlling action points per building selected in this scenario are indicative of a simple system and would increase in number with more robust and complex configurations.

As depicted in the table above, the cost associated with converting each installation from a proprietary system to a non-proprietary system is approximately per installation and represents the estimated cost to replace the system for that sample installation. The estimated total cost to replace Metasys across 254 installations is . The values are based on average cost from UMCS contractors executing projects in several different geographic areas and of various levels of difficulty. The materials cost includes, but is not limited to, the controllers, enclosures, conduit, wire, and software needed for the connected building systems to report back to the head end server. The labor costs include the cost to program and integrate all sensing/controlling action points in each building into the head end. Purchasing a new head end requires extensive effort and additional equipment purchases to reprogram the systems in each building to communicate with the new head end software and communication protocols. Further, approximately 25% of the 254 installations have systems that are near end of life, which would leave a remaining Government cost of an estimated per medium sized installation and approximately in duplicative cost. There is no opportunity for the Government to obtain data rights by JCBAS because it would not be advantageous for their company. However, CEHNC has another competitive contract vehicle readily available for use once installations make the decision to move to an open-source protocol system (refer to Section 5(c)(ii), Use of current

UMCS MATOC).

ii. Use of current UMCS MATOC: CEHNC has an existing $1.1B UMCS MATOC which provides a mechanism to competitively procure open-source protocol system for new facilities and those where the command is investing in replacing end of life systems. Open-source protocol systems are interoperable with other manufacturers. JCBAS is a contractor on the current UMCS; however, in order to procure the referenced proprietary requirement via the MATOC each task order for the proprietary Metasys services will require an approved Justification for an Exception to Fair Opportunity (JEFO) and will also deplete capacity from the MATOC. As a result, it is more suitable to continue to procure these sole source requirements under a separate SATOC.

iii. Impact: Without Metasys services at the requiring installations, automated control and monitoring systems, such as HVAC, fire alarms, meters, etc., could not be regulated at various critical facilities which would impact daily operations resulting in mission failures. Metasys is proprietary to JCBAS and is used at various Government installations worldwide. The Government has made a significant investment in the existing proprietary Metasys. The proprietary system does not interface with other non-proprietary UMCS and/or HVAC equipment and systems. The replacement of Metasys prior to the end of useful life to increase competition would result in a substantial duplication of costs to the Government. The duplicate costs the Government would incur to increase competition is approximately over the life of the SATOC (refer to Section 5(c) above). It is not in the best interest of the Government to replace existing proprietary Metasys that are within their useful life with non-proprietary systems. In addition, the use of the current UMCS MATOC is not the best procurement strategy because the proprietary Metasys services from JCBAS are an ongoing requirement for numerous installations. Each task order under the MATOC for the proprietary services would require an EFO for the required proprietary Metasys services. The planned acquisition of such a vast amount of proprietary Metasys services under the MATOC would unnecessarily and prematurely deplete the MATOC’s capacity.

6. Efforts to Obtain Competition: The market research detailed below (section 7, Market Research) failed to find any viable source other than JCBAS. There are no other known or competent sources that have the capability to provide the needed services.

a. Effective competition. Not applicable. As described in Section 7, Market Research was conducted between 19 May 2022 through 09 May 2024. A synopsis of a proposed contract action was published on SAM.gov. on 19 May 2022 through 31 May 2022. In accordance with FAR 5.207(c)(15) Preparation and transmittal of synopses, the synopsis identified the intended source and included a statement of the reason justifying the lack of competition. In accordance with FAR 5.207(c)(16)(ii), the synopsis included a statement that all responsible sources may submit a capability statement, proposal, or quotation, which shall be considered by the agency. No responses were received.

Note: Additional Efforts to Obtain Competition utilizing the original synopsis is discussed in section 7.b. below.

b. Subcontracting competition. JCBAS will be required to submit an acceptable individual subcontracting plan by adequately addressing the required elements of FAR 52.219-9(c) and (d) “Small Business Subcontracting Plan” prior to award. In addition, JCBAS will be required to submit an Individual Subcontracting Report in accordance with FAR 52.219-9 “Small Business Subcontracting Plan.” JCBAS has a proven track record of meeting or exceeding previous Metasys subcontracting goals. Under the current contract, W912DY20D0041, JCBAS had a goal of subcontracting of work to small business concerns and was able to exceed this goal by subcontracting of work to small business concerns.

c. Actions to Increase Competition: On-going efforts to increase competition for this sole-source requirement are the following: CEHNC’s UMCS program has begun installing open-protocol equipment and assisting in lifecycle planning with the installations. To increase competition on new requirements, the USACE has adopted an open-source protocol system (e.g., Lon Works Technology, BACNet, etc.), which are interoperable with other manufacturers. Installations that have no existing UMCS system or need replacement of its entire UMCS system will use the new open-source protocol system.

d. The push for more energy efficient buildings has resulted in the installations revisiting the list of buildings with existing Metasys. The customer is to identify buildings that need upgrades/replacements, and the CEHNC’s engineering staff works with the customers to form a long-term strategy. While the program continues to discuss lifecycle planning with customers and has been successful in encouraging some to transition away from Metasys, it anticipates this to be an on-going effort until there is a mandate from the Department of Defense (DoD) to remove proprietary systems from installations. As the majority of installations have not yet made that transition, based on the historical usage, current projections, and inflation, the proposed capacity is needed for the new acquisition.

To date, some Commands have taken the initiative and are working towards changing their systems from Metasys to an open-source protocol system, despite the significant cost. Ultimately CEHNC anticipates these efforts may result in increased competition and open protocol solutions in the future.

7. Market Research: In accordance with (IAW) FAR 10, Market Research, extensive market research was conducted to identify potential sources. The following paragraphs summarizes all market research techniques conducted between 19 May 2022 through 9 May 2024:

a. Publication of Sources Sought Notice - A sources sought notice was published on 19 May 2022 to 31 May 2022 on SAM.gov IAW DFARS PGI 206.302-1(d))- Only one responsible source and no other supplies or services will satisfy agency requirements. No responses were received.

b. A search of the SBA Dynamic Small Business website was conducted on 13

June 2022, for competitive sources using the NAICs and keywords (e.g., Metasys and Building Automation Systems). The search resulted in 20 contractors who were potentially capable of providing building automation services and none for Metasys.

The original sources sought notice (see paragraph 7.a. above) was sent to the 20 contactors, requesting if they had licensed technicians to work on Metasys. One response was received on 14 June 2023 from

, stating that they do not have a license to perform the work. Based on the sources sought responses JCBAS is the only firm capable of providing the services based on their proprietary software rights.

On 31 Jan 2024 the findings were revalidated by contacting JCBAS via phone to ask if anything has significantly changed since the submission of their response to the sources sought. In addition, on 13 April 2024, the 20 contractors were contacted to verify if there were any changes to their responses to the sources sought and there were no updates by JCBAS or other respondents. It was determined that a new sources sought to industry would not provide sufficient time for vendors to acquire the required software to execute the Metasys services.

c. Other Customers or Agencies Buying these Services/Other Contract Vehicles Available – On the same dates of the sources sought, the Interagency Contract Directory Portal (https://www.contractdirectory.gov), was searched using PSC N059 “Installation of Equipment Electrical & Electronic Equipment Components” and the NAICS for the purpose of identifying other vehicles for use and no other agencies were identified as a viable source for these services.

d. General Services Administration (GSA) website. On 03 June 2022, 13 April 2023, and 09 May 2024, a search on the GSA website was performed to locate any available Federal Supply Schedules, Government Wide Acquisition Contracts (GWAC), or blanket purchase agreements under FSS contracts to provide Metasys services. None were available. JCBAS’s GSA contracts (e.g., GS-06F-0060P, GS-07F-190CA, GSA 03FAC) do not offer the Metasys system, compatible software, or the complete engineered solution as provided through the Metasys SATOC.

GSA inquirers requested that CEHNC consider using the ordering system on their JCBAS GSA 03FAC Schedule, as mentioned above (GS-06F-0060P) instead of establishing a separate contract. The GSA 03FAC contract does not allow access to the intellectual property of Metasys System Extended Architecture revision 5.0 or later, which is required for the system to be installed in the Government computing equipment (either hardware or virtual servers) and configured to meet Army Information Assurance, Risk Management Framework and other cybersecurity requirements in order to provide a fully complete, usable, and legal installation of Metasys. The proprietary services necessary for the conversion of the existing legacy systems to Metasys 5.0 or higher would not be possible under the GSA http://www.contractdirectory.gov/

03FAC. Both the Government USACE Project Engineer and a JCBAS technical analysis found the GSA Schedule unable to provide the necessary services as required in the PWS for the Metasys requirement.

e. Ability One Program, Federal Prison Industries (FPI), FSS, GWAC, DOD Enterprise Software Initiative Website and Computer Hardware, Enterprise Software & Solutions (CHESS). On 11 May 2022, 13 April 2024, and 09 May 2024, a search was conducted on the Ability One website, FPI website, Unicor website, and the required services were not found on the websites.

As stated in Army Federal Acquisition Regulation Supplement (AFARS) 5108.7403(5)(iii) “Acquisition Procedures,” before procuring commercial software outside of the CHESS contracts, the Contracting Officer must ensure that the requiring activity obtains a waiver (see 5139.101-90(a)). AFARS 5139.101-90 – “Policy,” outlines the waiver process for information technology hardware, software, and services. This requirement does not meet the FAR definition of the term "information technology." FAR 2.101(3)(ii) “Definitions” states that information technology does not include any equipment that “contains imbedded information technology that is used as an integral part of the product, but the principal function of which is not the acquisition, storage, analysis, evaluation, manipulation, management, movement, control, display, switching, interchange, transmission, or reception of data or information. For example, HVAC (heating, ventilation, and air conditioning) equipment, such as thermostats or temperature control devices, and medical equipment where information technology is integral to its operation, are not information technology. While Metasys does contain embedded information technology, the primary function of this requirement is not the acquisition, storage, analysis, evaluation, manipulation, management, movement, control, display, switching, interchange, transmission, or reception of data or information.

Rather, the system is used to interact with the physical environment (or manage devices that interact with the physical environment). Therefore, as the requirement is not information technology as defined in the FAR, a waiver is not required.

8. Interested Sources: To date, no other competent sources have written to express an interest.

9. Other Facts:

a. Procurement History: Previous Metasys IDIQ SATOCs were solicited as sole source requirements to JCBAS. After the first generation SATOC ended, the services were still needed. Table 4 below captures the previous JCBAS SATOCs.

The Contracting Officer is not aware of any concerns regarding the JCBAS’s reliability or performance based on their past performance. In order to make this determination, there was a discussion with the current assigned UMCS Contract Administration team (Program Manager, Project Manager, and KO), in addition to a review of Supplier Performance Risk System in accordance with DFARS 204.76 Supplier Performance Risk System. JCBAS’ supplier risk score of and the risk of unsuccessful performance is low.

b. Competitive status of these actions: Sole-Source Basis

c. Authority previously used for less than full and open competition: Statutory

Authority is 10 U.S.C. 3204(a)(1). FAR 6.302-1, “Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirement.”

d. If any prior award was accomplished by full and open competition, a detailed explanation of the changed circumstances: Not applicable, prior requirements were awarded sole source.

e. An explanation of any unusual patterns which may be revealed by the history, e.g., several consecutive, urgent buys: Not applicable, no unusual patterns have been revealed.

f. If a justification was prepared to support the procurement before this one, briefly describe the circumstances justifying the buy and whether there have been any significant changes: Three J&As were previously approved pursuant to the above-mentioned authority (see Table 5 below).

10. Technical Certification: "I certify that the supporting data under my cognizance which are included in the justification are accurate and complete to the best of my knowledge and belief."

11. Requirements Certification: "I certify that the supporting data under my cognizance which are included in the other than full and open competition are accurate and complete to the best of my knowledge and belief."

12. Fair and Reasonable Price Determination and Contracting Officer Certification: I hereby determine that the anticipated price to the Government for this contract action will be fair and reasonable. The final agreed upon price will be evaluated by pricing techniques to make a determination of fair and reasonable price. The Government will determine price reasonableness in accordance with FAR 15.404-1 Proposal Analysis Techniques. Determination will be made through comparison to historical data, and the Independent Government Estimate (IGE) per FAR 15.403-1, and other than certified pricing data.

"I certify that this justification is accurate and complete to the best of my knowledge and belief."

13. Contracting Officer Certification: I certify that this justification is accurate and complete to the best of my knowledge and belief.

Name:

Contracting Officer

Approval

Based on the foregoing justification, I hereby approve the award to Johnson Controls Building Automation Systems, LLC (JCBAS) for upgrade of existing Metasys Proprietary Building Automation Software for the Utility Monitoring and Control Systems. The total estimated cost is $630,000,000.00. Award is on an other than full and open competition basis pursuant to the authority of Title 10 U.S.C.3204(a)(1) as implemented in Federal Acquisition Regulation 6.302-1(a)(2), “Only one responsible source and no other supplies or services will satisfy agency requirements.” Approval is subject to the availability of funds, and provided that the services and supplies herein described have otherwise been authorized for this acquisition.

Date: