APPROVED HNC_JA ESS VII MATOC 450M Capacity Increase_Redacted.pdf

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Requirement: Electronic Security System Services Location: CONUS & OCONUS

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(Source Selection Information - See FAR 2.101 and 3.104-4)

Control Number: CEHNC-25-0009 in the amount of $450,513,013 is required to ensure the ESS Program can continue to meet mission requirements until the ESS VIII MATOC is awarded.

a. Background: DoW installations are high-value targets facing constant threats from state-sponsored actors, terrorist groups, and individuals seeking to harm national interests. ESS provides layers of defense against these threats safeguarding physical assets from sabotage, terrorism, and theft. Additionally, ESS protects classified and sensitive data from unauthorized access, theft, or compromise. A security breach can jeopardize the life and safety of personnel, disrupt critical operations, delay deployments, and have an adverse impact on national security.

ESS is an integral part of an overall physical security plan for DoW installations required to enhance current antiterrorism/force-protection measures and reduce vulnerabilities in the physical security environment. They are complex systems consisting of one or more of the following components: Access Control Systems (ACS), Closed-Circuit Television (CCTV) Systems, Intrusion Detection Systems (IDS), Video Surveillance Systems (VSS), Physical Access Control (PAC) Systems, and Data Transmission Media (DTM) Systems (a means to communicate information internally and externally to DoW sites).

The ESS VII MATOC has a shared capacity of $675M with a 7-year ordering period (26 September 2022 to 25 September 2029) consisting of a base period of 36 months and two 24-month option year periods. It also includes 52.217-8, Option to Extend Services, which, if exercised, allows the Government to extend the ordering period up to six months. The $675M capacity was based upon $91M of projected contract capacity usage in the first year with approximately 1.96 percent (%) growth each year for the remaining six years.

Two equally impactful factors; an unanticipated surge in customer demand and accelerated inflation have caused the capacity to be exhausted significantly earlier than anticipated, rendering the $675M insufficient for the 84-month total ordering period. The increased demand for ESS services stems from an increased focus on maintenance of existing systems and modernization to comply with evolving security requirements.

The U.S. Government Accountability Office noted in its January 2022 report, “Defense Infrastructure: DoD Should Better Manage Risks Posed by Deferred Facility Maintenance” (GAO-22-104481), deferring maintenance and modernization leads to significantly higher costs when systems inevitably fail and require more expensive emergency repairs. As a result, the ESS program has experienced a notable increase in usage due to an increase in funding at installations across the DoW, enabling long-overdue repairs, maintenance, and modernization. In addition to increased demand, inflation driven by the Coronavirus Disease 2019 (COVID-19) pandemic directly impacted labor, material, and equipment costs for ESS projects. It is important to note the acquisition planning for ESS VII occurred prior to the pandemic. All capacity projections were based on pre-pandemic historical pricing. The accelerated inflation driven by the pandemic effectively re-baselined the cost of labor and materials and resulted in higher than originally projected prices for ESS for the entire duration of the contract.

In FY23, 29 task orders (TOs) were awarded under the ESS VII MATOC valued at $119M. In FY24, there were 44 TOs awarded (51% increase from FY23) valued at $277M (141% increase from FY23). The ESS Program awarded 44 new task orders in FY25 (0% increase from FY24) valued at $235,757,503 (15% decrease from FY24). The actual burn rates for FY24 and FY25 are sufficient to serve as a basis for projecting ESS expenditures through October 2027 when the ESS VIII MATOC is projected for award. Table 5 below depicts the actual burn rate for the ESS VII MATOC. The percentage over column is based on the originally planned total task order value for awards made in each FY.

Table 5: ESS VII Burn Rate

Fiscal Year Task Order Awards Total Task Order Value Percentage Over Original Planned Yearly Burn

FY22 23 $6,000 N/A

FY23 29 $119,268,820 31%

FY24 44 $277,980,690 199%

FY25 44 $235,757,503 149%

Totals: 140 $633,013,013

Location: CONUS & OCONUS

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(Source Selection Information - See FAR 2.101 and 3.104-4)

Control Number: CEHNC-25-0009

Note: FY22 data represents minimum guarantee obligations. No task orders for ESS work were awarded.

In November 2024, a capacity assessment identified the need for additional capacity for ESS VII and planning for the ESS VIII acquisition was initiated. The Center Acquisition Review Board (CARB) was held in January 2025 to obtain leadership approval to begin ESS VIII. Following Command Services Executive (CSE) approval in May 2025 and the conclusion of market research in June 2025, the Request for Services Contract was approved in August 2025. The combined acquisition strategy and plan was submitted to the Senior Contracting Official (SCO) for approval in November 2025. The ESS VIII solicitation is projected to be issued on 21 August 2026 and the MATOC is projected for award on 27 October 2027.

b. Justification: Based on the historical burn rate, the current remaining shared capacity in the amount of $41,986,987 will not be sufficient to satisfy all FY26 and FY27 ESS projects. In addition to failing to meet all FY26 and FY27 ESS requirements, there will be no contract vehicle to fulfill any new ESS requirements until the ESS VIII MATOC is awarded in October 2027. Anticipated new award projections for FY 26 through FY27 shown in Table 3 are based on FY26 requirements that are currently being developed by the ESS Program and an average of actual burn rates for FY24 and FY25 for FY27 ESS requirements.

In addition to recurring preventative and corrective maintenance service requirements, several customers have communicated to the ESS Program their planned new ESS requirements for FY26 through FY27. These requirements include new systems as well as the lifecycle replacement of existing equipment and systems that no longer meet operational requirements or current standards. All were factored into the requested capacity increase and align with the projected burn rates for FY26 and FY27. The requested $450,513,013 capacity increase will allow the ESS-MCX to continue providing highly specialized design, procurement, installation, operation, and maintenance services for ESS that are required to support ongoing operations until the ESS VIII MATOC is awarded.

The services provided under ESS VII are not merely administrative; they are categorically critical to the life, safety, and operational security of DoW installations. The statutory exception for this capacity increase is justified by the unacceptable delays that would occur if these requirements were forced to wait for a new, competitive contract action (ESS VIII). Because ESS requirements are executed sequentially; where one phase must immediately follow the other to maintain security integrity, any lapse in contract capacity will force installations to operate with known, exploitable vulnerabilities. The requirements covered by this justification are in varying stages of the security system life cycle and timely execution of each service category is paramount to mission success. The categorical criticality of these uninterrupted services are detailed below:

• Vulnerability Assessments & Site Surveys: Serving as the mandatory catalyst for the entire upgrade pipeline, this initial phase takes 2 to 6 months, depending on site complexity and scheduling with the installation. These assessments are required to identify active security gaps and produce the foundational data necessary for the subsequent system design. Because this step feeds directly into the procurement cycle, delaying these assessments prevents installations from understanding current threats and immediately halts all downstream phases of the security pipeline.

• Procurement and Installation (P&I) & Modernization: Dependent entirely on the data and designs generated during the site surveys, the pipeline advances to P&I, which spans approximately 2 years from design to completion. This phase is highly time-sensitive due to complex funding requirements.

Customer-provided funding and requires 100% obligation of Operations & Maintenance funds and a minimum of 80% obligation of Other Procurement, Army funds in the first year of receipt (despite non-expiring status). Furthermore, Military Interdepartmental Purchase Requests carry strict priority stipulations for obligation and execution; failure to award in the year of execution to meet Force Protection Guidelines results in lost funding, regardless of expiration dates. Halting this phase severs the pipeline, meaning failing legacy systems cannot be replaced, leaving perimeters, classified areas, and sensitive data dangerously exposed to modern threats.

• Quality Verification, Acceptance Testing, & Training: Once the 2-year P&I phase concludes, the physical infrastructure is in place but not yet operational, requiring an immediate transition into testing. Taking just a few weeks at the tail end of the project, this phase produces and feeds the critical input data required for the Installation to obtain an approved Authority to Operate. The newly

Location: CONUS & OCONUS

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(Source Selection Information - See FAR 2.101 and 3.104-4)

Control Number: CEHNC-25-0009 installed systems must undergo rigorous, DoW-mandated testing and operator training to achieve network accreditation. A delay at this critical juncture nullifies the previous two years of effort, as the newly installed system remains offline, unaccredited, and completely useless to the installation’s security forces.

• Life-Cycle Maintenance and Service (M&S) & Technical Support: Upon successful testing, ATO approval, and P&I completion, the fully operational system transitions into its permanent sustainment phase, which remains ongoing for the usable life of the system. This continuous phase requires quarterly or semi-annual preventative maintenance; alongside corrective repairs managed via a service order process (initiated either by the contractor during preventative checks or identified by the customer). Because newly accredited projects require immediate M&S for sustainment, halting this technical support unravels all prior pipeline investments. Without it, there is no mechanism to repair a downed camera or a failed access control server, rapidly degrading the system and resulting in critical, life-threatening blind spots for installation commanders.

When two or more of these systems are integrated into a multi-faceted ESS, the complexity of the system along with the need to have highly specialized experience and capability increases dramatically. Although ESS are typically non-proprietary systems, they are not “plug and play” systems that a typical low voltage technician can install or maintain. There are several systems in use at DoW installations such as Vindicator by Honeywell and OnGuard by Lenel that require manufacturer specific training and certifications for installation, programming, testing, and maintenance. ESS for DoW installations differs from the commercial environment in that it is treated as critical infrastructure that demands a high level of sophistication and integration that far exceed commercial requirements. Systems that protect DoW personnel and assets must be designed, installed, and maintained in a manner that maintains system functionality while complying with a myriad of DoW and agency specific regulations that include but are not limited to: Unified Facilities Guide Specifications (UFGS) 28-10-05 Electronic Security Systems, UFGC 01-78-23 Operation and Maintenance Data, and Unified Facilities Criteria (UFC) 4-021-02 Electronic Security Systems. DoW ESS must undergo rigorous testing and accreditation to ensure they meet all DoW and agency specific security requirements.

This process can be lengthy and complex, requiring extensive documentation, validation, and certification to operate on DoW networks. Failure to comply with all with DoW requirements and specifications for ESS will result in exploitable vulnerabilities to the installation.

The ESS VII MATOC awardees were selected based on multiple factors that included their demonstrated experience in properly designing, configuring, installing, and testing ESS. The current ESS VII MATOC holders have the resources to continue supporting ESS requirements for the DoW and other Government agencies without having to expend additional time assessing requirements, forming competent teams, acquiring manufacturer certifications, researching mandatory requirements, and executing similar required tasks. The highly specialized nature of the work can take new contractors several months to attain required training, certifications, and a working knowledge of all ESS related DoW regulations to successfully fulfill ESS requirements. Continued use of the ESS VII MATOC minimizes this given current MATOC holders already have the specialized knowledge and experience to successfully perform on DoW ESS requirements.

The additional time associated with an alternative method of support is not recoverable through competition and will result in unacceptable delays in fulfilling the Agency’s needs, as discussed below (reference subparagraph 6.c., Alternatives). Historically, the Procurement Acquisition Lead Time (PALT) for the ESS program to award new task orders under the ESS VII MATOC is approximately 2.5 months. The PALT for a new standalone “C” type contract is 6 months minimum depending on the complexity of the requirement.

Additionally, labor costs required to award a standalone “C” type contract are significantly higher than what is required to award a task order under the ESS VII MATOC.

Because critical physical security infrastructure cannot be left inoperable, unmaintained, or vulnerable to modern threats for up to half a year, DoW ESS requirements cannot tolerate the increased risks. Without a fully functional ESS including Intrusion Detection Systems (IDS), Access Control Systems (ACS), and Video Surveillance Systems (VSS), an installation becomes immediately susceptible to unauthorized entry by adversaries, insiders, or other hostile actors. Sensitive areas such as Sensitive Compartmented Information Facilities (SCIFs), arms rooms, and operational control centers would lack proper monitoring and access controls, drastically increasing the risk of espionage, theft of weapons, or sabotage of critical infrastructure.

A malfunctioning or unavailable ESS may fail to detect intrusions or other security incidents, delaying

Location: CONUS & OCONUS

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(Source Selection Information - See FAR 2.101 and 3.104-4)

Control Number: CEHNC-25-0009 response times from security forces and potentially allowing an incident to escalate. Without operational surveillance systems, security personnel lose real-time situational awareness, leaving significant blind spots across an installation and hindering the ability to record incidents for investigations, after-action reviews, or legal proceedings.

Most DoW installations rely on ESS to secure facilities housing mission-critical equipment, weapon systems, and communication hubs. A failure in these systems could disrupt access to vital resources, directly impacting mission readiness and execution. Furthermore, a non-functional ESS would prevent an installation from effectively implementing heightened Force Protection Condition (FPCON) levels during periods of increased threat, leaving it dangerously unprepared. Ultimately, without real-time detection and monitoring, threats such as active shooters, insider threats, or terrorist activities may go undetected until it is too late, directly endangering the lives of service members and civilians.

c. Alternatives: The Government has analyzed three possible alternatives:

(1) Existing Contract Vehicles: There are no existing contract vehicles suitable for and available for use in support of CEHNC’s ESS program.

The USACE Total Record of Acquisition Capacity (TRAC) application was queried on 28 March 2025. It contains information on all active contract vehicles and existing contract capacity across the USACE enterprise (including Centers, Districts, and Divisions). TRAC is the preferred USACE system for researching, requesting, and approving contract capacity transfer requests throughout USACE. Contracts external and internal to CEHNC having similar scopes were analyzed to determine if the contract vehicle could fulfill ESS requirements. CEHNC’s Utility Monitoring Control Systems (UMCS) Program could potentially fulfill some ESS requirements via the UMCS V MATOC;

however, the UMCS program has experienced the same increase in demand and cost and lacks sufficient capacity to support ESS requirements. As a result, the UMCS V MATOC is not a viable alternative. No other contract vehicles capable of supporting ESS requirements were identified in

TRAC.

On 25 April 2025, CEHNC’s ESS contracting team conducted a search of the U.S. General Services Administration’s (GSA) Governmentwide Acquisition Contracts (GWACs) using a keyword search for “electronic security system” and an additional search for North American Industrial Classification System (NAICS) code 541512, Computer Systems Design Services, which is the same NAICS code utilized for ESS Program requirements under the ESS VII MATOC. The following GWACs were searched: (a) 8a Streamlined Technology Acquisition Resource for Services (STARS) III GWAC; (b) VETS 2 GWAC; (c) Alliant 2 GWAC; (d) the Multiple Award Schedule (MAS); and (e) One Acquisition for Integrated Services+ (OASIS+). Based on a scope review with GSA, it was determined that ESS requirements could potentially be sourced through GSA's MAS or OASIS+ contract vehicles, but this approach presents considerable risk. While certain ESS components may be procured through GSA GWACs, these contracts do not encompass the full scope of work required—specifically the design, installation, operation, and maintenance of complete electronic security systems. Only 6 of 23 ESS VII contractors are in the GSA pool and all are large businesses.

Additionally, the contract access fees (CAF) required by GSA are not cost effective when compared to the costs associated with a capacity increase for the ESS VII MATOC. The MAS requires a .75% CAF which equates to $4.5M in fees for $600M in task orders. OASIS+ has a .15% CAF which equates to $900K in fees for $600M in task orders. While the MAS and OASIS+ are potential contract vehicles, the customer will still be required to pay CEHNC for project management, project engineering, and contracting support to execute their projects. This would be in addition to the CAF required by GSA. As a result, GSA GWACs are not considered a viable alternative for meeting the comprehensive requirements of the CEHNC ESS Program.

Naval Information Warfare Center (NIWC) supports ESS requirements for various DoW and/or non- DoW customers; however, they recently made the decision to divest from all non-Navy ESS requirements. An inquiry was sent to the NIWC contracting office to determine if it has a suitable contract vehicle that USACE could utilize to meet its ESS requirements. No response was received from the NIWC contracting office. Note: In February 2022, the NIWC denied a USACE request for use of its contract stating NIWC does not share or lend capacity for its contract.

Location: CONUS & OCONUS

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(Source Selection Information - See FAR 2.101 and 3.104-4)

Control Number: CEHNC-25-0009

The Acquisition Gateway Solution Finder was queried on 27 March 2025 to determine the existence of suitable contract vehicles available for use to meet the CEHNC’s ESS customer requirements.

There were no strategic sources or any other suitable contract vehicles identified in Acquisition Gateway.

(2) New Stand-Alone Type ‘C’ Contracts: The majority (80-85%) of the CEHNC ESS Program’s mission is executed in the third (3rd) and fourth (4th) quarters of each FY due to multiple factors, including customer decisions, and whether the Government is in a continuing resolution pushing out receipt of appropriated funding for specific projects. The program’s year end mission requires the ability to quickly award task orders once a requiring activity’s final decision is made and the contract package is submitted. The Procurement Administrative Lead Time (PALT) associated with awarding multiple stand-alone “C” type contracts is extensive when compared to new task orders issued under the ESS VII MATOC. The nominal timeline for award of a new standalone contract is approximately 6 – 9 months between the point of requirement submission and award, depending on dollar value and resulting review thresholds, as well as the complexity of the scope considered. Forcing these specific projects to endure an additional 3.5 to 6 months of procurement delay (compared to the 2.5 month task order PALT) extends the window of vulnerability for critical DoW ESS infrastructure to an unacceptable degree. Relying on stand-alone contracts means installations will be forced to operate with unmaintained Intrusion Detection Systems (IDS) and Access Control Systems (ACS), directly jeopardizing the operational security of high-value targets such as SCIFs and arms rooms.

Additionally, based on a conservative estimate of 90 new ESS requirements anticipated across FY26 and FY27, the use of standalone “C” type contracts in lieu of ESS VII task orders are projected to result in an estimated $3.4M increase in procurement costs over the two-year period. This increase is attributable to the added administrative burden, extended acquisition timelines, and inefficiencies associated with awarding individual contracts outside the streamlined ESS VII MATOC framework.

The additional time and cost required to award a “C” type contract render it an unviable alternative to the requested capacity increase for the ESS VII MATOC.

Table 6: Task Orders versus Stand-Alone Contracts

Procurement Approach

PALT in Calendar Days

Approximate Number of Labor Hours

Estimated Hourly Rate

(PDT

Average)

Total Labor Cost Per Award

Projected

FY26 &

FY27

Task Orders

Total Estimated Procurement Cost

(3) Temporary Suspension of New Task Orders: A temporary suspension of new task orders under the ESS VII MATOC will preclude the ESS program from completing many of its mission assignments beyond FY26 until the ESS VIII MATOC is awarded in October 2027. Although this alternative would allow the ESS program to reserve capacity for higher priority projects, it will delay many new ESS requirements and jeopardize multiple existing systems that are currently protecting DoW personnel and assets around the world. The majority of contract awards for the ESS program occur in 3rd and 4th quarters of the FY with expiring funds. A suspension of new task order awards under the ESS VII MATOC will result in a loss of funding intended for specific ESS requirements.

Given “C” type contracts are not viable and based on the forecasted award date for the ESS VIII MATOC, opting for a temporary suspension of new task orders under the ESS VII MATOC will delay most FY26 and FY27 ESS requirements until late FY28 (resulting from the backlog of requirements & customers’ historical use of expiring O&M funds) and severely impact the security and readiness of the DoW. For these reasons, a temporary suspension of new task orders is not an acceptable alternative to the capacity increase requested for the ESS VII MATOC.

d. Impact if not approved Lack of additional capacity on the ESS VII MATOC will result in mission failure for requirements arising in and beyond FY26, continuing until the ESS VIII MATOC is awarded.

Location: CONUS & OCONUS

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(Source Selection Information - See FAR 2.101 and 3.104-4)

Control Number: CEHNC-25-0009

Without the requested capacity increase, the ESS Program will be incapable of providing essential ESS system design, installation, and commissioning for new customer requirements and will jeopardize the continued maintenance and service of existing security systems across the Department of War (DoW) and other Government agencies. Based on the demand experienced thus far under ESS VII, an estimated 90 critical ESS requirements will be delayed until October 2027. This gap in capability creates severe vulnerabilities that can be exploited by adversaries and have catastrophic effects on DoW personnel, assets, and missions.

The requested $450,513,013 of additional capacity for the ESS VII MATOC is essential to ensure the

ESS Program can continue to meet mission-critical ESS requirements for the DoW, providing vital layers of protection for its personnel, data, equipment, weapons, and installations until the follow-on contract is in place.

7. Actions to Increase Competition: The ESS VII MATOC was competitively awarded to 23 qualified contractors. The MATOC pool consists of 11 small businesses and 12 other than small businesses. All task orders awarded under the ESS VII MATOC are competed IAW FAR 16.505(b), Orders Under Multiple Award Contracts, and Defense Federal Acquisition Regulation Supplement (DFARS) 216.505-70, Orders Under Multiple Award Contracts. ESS VIII is currently in the acquisition planning phase with an anticipated award date of 27 October 2027 and will also be awarded using full and open competition.

The ESS VII MATOC includes a defined process for on-ramping new contractors. This process may be utilized to maintain adequate contractor capacity to fulfill all ESS requirements and maximize competition. An assessment of the need for additional contractors is conducted before the close of each ordering period.

Given the current ordering period ends on 25 September 2027 and the follow-on ESS VIII MATOC procurement is underway, an on-ramp assessment will not occur at the end of the current ordering period.

The ESS VIII Acquisition Strategy and Plan (ASP) is currently under SCO review (requires SSM approval), supporting a projected solicitation release date of 21 August 2026. For the upcoming ESS VIII MATOC, the Government intends to award contracts to all qualifying offerors in accordance with FAR 15.104(b)(1)(ii)(A), with all services to be obtained through competitively awarded, performance-based firm-fixed-price task orders.

a. Effective competition: CEHNC solicited and awarded the ESS VII MATOC in accordance with FAR Subpart 6.1, Full and Open Competition and made awards to 23 qualified contractors. Of these, 11 are small businesses that compete for requirements specifically set aside for small business competition. This structure supports small business participation while maintaining a competitive environment. Fair opportunity procedures, as required under FAR Part 16.507-2, are provided for all task orders awarded under the ESS VII MATOC. The competitive process has been effective, with an average of 3 to 5 proposals received for each task order requirement solicited, indicating robust participation and competition among contractors.

See section 8, Market Research for additional details.

b. Subcontracting competition: All large business firms under the ESS VII MATOC were required to submit a Small Business Subcontracting Plan prior to award which, at a minimum, should be consistent with their Small Business Participation Plan. Ample opportunity exists for subcontracting with all types of small businesses including Small Disadvantaged Businesses (SDB), Women-Owned Small Businesses (WOSB), HUBZone, Veteran Owned Small Businesses (VOSB), and Service-Disabled Veteran Owned Small Businesses (SDVOSB). By providing subcontracting opportunities to small businesses, the large businesses both formally and informally mentor these businesses by helping them gain experience and increasing their ability to perform at a higher level. This in turn helps the small businesses grow as companies and independently compete for larger projects as prime contractors or first-tier subcontractors. The following small business participation goals were included in ESS VII:

• Small Business - 15%

• SDB - 5%

• WOSB - 4%

• HUBZone - 2%

• VOSB - 4%

• SDVOSB - 3%

Location: CONUS & OCONUS

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(Source Selection Information - See FAR 2.101 and 3.104-4)

Control Number: CEHNC-25-0009

8. Market Research: A notice (NOI Reference Number PANHES-25-P-0000-002024) conveying the intent to increase the capacity of the existing contracts was published to SAM.gov on 27 March 2025 to meet the requirements of FAR Subpart 5.2 and DFARS PGI 206.302-1(d). This notice informed industry of CEHNC’s intent to modify the ESS VII MATOCs and solicited capability statements to determine if sources other than the 23 incumbent contract holders could meet the Government's minimum requirements without a substantial duplication of cost or unacceptable delays.

This notice also solicited feedback from industry in terms of firms’ qualifications and capabilities to satisfy ESS requirements. In response to this NOI, the Government received feedback from a total of 3 firms. Only one of the responding firms appear to have the capability to satisfy ESS requirements; all 3 of the responding firms represent themselves as small business concerns.

The team then considered if an off-cycle on-ramp opportunity was viable to increase competition under the existing MATOC based upon the NOI responses. Given the ample competition currently offered by the ESS VII MATOC pool of 23 contractors and the limited interest from additional viable firms, the Government determined it is not in its best interest of the Government to conduct an on-ramp at this time. Adding new contractors to the ESS VII MATOC pool demands a comparable level of Government effort as was required for the initial solicitation, evaluation, and award of the original contracts (see paragraphs below related to unacceptable delays and duplication of costs). Consequently, the process of on-ramping new contractors to the ESS VII MATOC pool may affect and potentially delay the award of ESS VIII.

Unacceptable Delays in Fulfilling Agency Requirements- The Procurement Acquisition Lead Time (PALT) to conduct a formal on-ramp, including solicitation, evaluation, and award, is estimated to be 9-12 months. Such a delay would prevent the execution of critical requirements scheduled for FY26 and FY27, directly impacting mission readiness. Furthermore, the award of the follow-on ESS VIII MATOC is anticipated by 27 October 2027, making a lengthy on-ramping process for this short remaining duration an inefficient and impractical undertaking that fails to meet the Government's schedule needs.

Substantial Duplication of Costs- The Government incurred costs associated with initial contract award, program-specific training, and security integration. Executing an on-ramp would duplicate approximately $350,000 in administrative and technical sunk costs. This estimate is based on 1,852 hours of work at an average rate of $189 per hour, and these costs are not expected to be recovered through competition.

The responses from the NOI will be leveraged as valuable market research for the ongoing ESS VIII acquisition to ensure maximum competition for that future requirement.

The current MATOC pool also was queried to determine any impact to contractor participation and ability to execute additional ESS requirements that are a result of the increase in capacity in this J&A. There were no negative responses received, and all responses indicate the current contractor pool is positioned to successfully execute additional ESS requirements without any reduction in competition.

Based upon the foregoing, the likelihood of increased competition via an on-ramp is limited given the small number of NOI responses, unacceptable delays and duplicative costs. As a result, the 23 incumbent contractors are the only sources possessing the existing contractual infrastructure and program-specific qualifications to perform the work within the required timeline and without causing the Government to incur a substantial duplication of cost and time. Therefore, pursuant to FAR 6.302-1, the ESS VII MATOC holders are the only responsible sources available to satisfy these requirements.

9. Interested Sources: As a result of the Notice of Intent (NOI), three (3) firms not currently on the ESS VII MATOC submitted responses expressing interest. As detailed in the Market Research section, it was determined that these firms could not be added to the ESS VII MATOC for this requirement without causing unacceptable delays and a substantial duplication of costs. All interested sources have been encouraged to compete for the upcoming full-and-open competition for the ESS VII MATOC.

10. Other Facts:

a. Procurement History:

Location: CONUS & OCONUS

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(Source Selection Information - See FAR 2.101 and 3.104-4)

Control Number: CEHNC-25-0009

(1) Current IDIQ Contract: ESS VII MATOC (26 September 2022 – 25 September 2029) is the seventh generation MATOC for ESS services, with a total shared contract capacity of $675,000,000 ($675M). ESS VII consists of 11 small businesses and 12 other than small businesses and currently has $41,986,987 remaining in capacity, see Table 2.)

(2) Previous IDIQ Contract: ESS VI MATOC (06 April 2017 – 05 October 2022) is the sixth generation MATOC for ESS services, it was originally awarded with a total shared contract capacity of $450,000,000 ($450M). ESS VI was subsequently modified to increase its capacity by $95,000,000 ($95M) bringing the total shared capacity to $545,000,000 ($545M). ESS VI consisted of seven small businesses and eight other than small businesses.

(3) Previous IDIQ Contract: ESS V MATOC (20 May 2010 – 30 March 2017), is the fifth generation MATOC for ESS services, with a total shared contract capacity of $650,000,000 ($650M). It consisted of six small businesses and five other than small businesses.

(4) Previous IDIQ Contract: ESS IV MATOC (13 December 2005 – 12 December 2010) is the fourth generation MATOC for ESS services, with a total shared contract capacity of $500,000,000 ($500M). It consisted of six small businesses and four other than small businesses.

b. The competitive status of these actions: The ESS IV, V, VI, and VII MATOCs shown above were solicited and awarded under full and open competition with portions of the capacity reserved for small business competition. ESS VI was subsequently non-competitively modified to increase the ordering capacity to support unanticipated requirements that were not considered in the original contract capacity calculation.

c. Authority Previously Used for Other Than Full and Open Competition: The ESS VI MATOC capacity was increased by $95,000,000, from $450,000,000 to $545,000,000, without competition, pursuant to FAR 6.302-1(a)(2)(iii)(B), “Only one responsible source and no other supplies or services will satisfy agency requirements.”

d. If any prior contract action for this requirement was accomplished using full and open competition, include a detailed explanation of the changed circumstances causing this action to now limit the sources: As outlined in Section 6.b, ESS VII capacity projections relied on pre-pandemic pricing and demand data. However, the actual capacity burn rate for ESS VII has significantly surpassed the planned rate. The basis for this J&A is the determination that the pipeline of projects projected for the remainder of the available ESS VII ordering period, are deemed only satisfiable from the sources available in the ESS VII MATOC pool as it is likely that award to any other source would result in unacceptable delays in fulfilling the agency’s requirements. Reference the alternative described in paragraph 6.c above.

e. An explanation of any unusual patterns that may be revealed by the history: As noted in Section 6.b, increased demand and higher-than-expected inflation have driven an accelerated burn rate for ESS VII. In FY24, the Army National Guard accounted for three task orders (TOs) totaling $81.1M to meet its ESS requirements. Additionally, the ESS program issued a $18.5M TO for a TRADOC requirement and a $24.7M TO for an IMCOM requirement. Collectively, these five TOs represented 44% of ESS VII’s capacity usage in FY24.

f. An explanation of protests received: Not applicable

g. Other Pertinent Facts:

1) The initial planning for the replacement of the ESS VIII MATOC began in December 2024 and received approval from the CEHNC Acquisition Board of Directors in January 2025.

2) The Command Services Executive memorandum for the ESS VIII MATOC was approved on 8 May 2025.

3) The market research report for the ESS VIII MATOC was completed on 12 June 2025.

Location: CONUS & OCONUS

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(Source Selection Information - See FAR 2.101 and 3.104-4)

Control Number: CEHNC-25-0009

Approval

Based on the foregoing justification, I hereby approve the capacity increase of $450,513,013 for the Electronic Security System VII MATOC on an other than full and open competition basis pursuant to the authority of 10 United States Code 3204(a)(1) as implemented in RFO 6.103-1(c)(2)(ii), “Only one responsible source and no other supplies or services will satisfy agency requirements.” The capacity of the ESS VII MATOC will now be $1,125,513,013. The approval is subject to availability of funds, and provided that the supplies and/or services herein described have otherwise been authorized for this acquisition.