Controlled Unclassified Information (CUI) Source Selection Sensitive Information - See FAR 2.101 & 3.104

CUI

DEFENSE LOGISTICS AGENCY

CONTRACTING SERVICES OFFICE - PHILADELPHIA

700 ROBBINS AVENUE

PHILADELPHIA, PENNSYLVANIA 19111-5092

(SAP Platform) WMS Disposition Services Software Development Lifecycle Support Services

JUSTIFICATION FOR AN EXCEPTION TO FAIR OPPORTUNITY

UNDER FEDERAL ACQUISITION REGULATION (FAR) SUBPART 16.5

Multiple Award Schedule/Multiple Award Contract (MAC) Orders under MAC/Fair Opportunity, FAR 16.507-6

1. IDENTIFICATION OF THE AGENCY AND CONTRACTING ACTIVITY:

Requesting Agency:

Defense Logistics Agency HQ Information Operations, SAP Platform (J62X) 8725 John J. Kingman Road Fort Belvoir, VA 22060-6221

Contracting Activity:

DLA Contracting Service Office – Philadelphia (DCSO-P) 700 Robbins Avenue Philadelphia, PA 19111

2. NATURE AND/OR DESCRIPTION OF THE ACTION BEING APPROVED

Pursuant to FAR 16.507-6(b)(3), the action being approved is an exception to the fair opportunity process. This justification authorizes the use of other than full and open competition to award a firm-fixed-price task order for the SAP Platform requirement.

CUI / Source Selection Sensitive Information - See FAR 2.101 & 3.104

This acquisition will be a sole source award in accordance with the terms of the SAP Platform Core Task Orders (SP4709-26-F-0019 / SP4709-26-F-0020), which were competitively awarded under the JETS 2.0 contract vehicle. This task order will provide highly specialized program management, requirements integration, application development, testing, and business process reengineering (BPR) services to sustain and modernize the Warehouse Management System (WMS) supporting DLA Disposition Services.

With the award of this task order, the J62X program will retain essential technical expertise of the existing DLA production baseline. This is required to execute the full software development lifecycle and modernize core processes to Original Equipment Manufacturer (OEM) standards without causing operational disruption to active disposition and demilitarization missions.

3. A DESCRIPTION OF THE SUPPLIES OR SERVICES REQUIRED TO MEET

THE AGENCY’S NEEDS, INCLUDING THE ESTIMATED VALUE:

The Defense Logistics Agency (DLA) Disposition Services relies on the Warehouse Management System (WMS) as its enterprise platform for inventory accountability, warehouse execution, material tracking, and transportation coordination. DLA has a critical need for uninterrupted operational, developmental, and sustainment support for WMS capabilities supporting enterprise disposition operations.

The scope encompasses the core WMS technology stack, including SAP S/4HANA, Extended Warehouse Management (EWM), and Transportation Management (TM). It requires continuity in sustaining existing capabilities and implementing modernization initiatives to reduce technical debt and increase utilization of standard OEM functionality.

Required Supplies/Services:

Activity Description

Task 1: Task Order PM Support

Program management, Agile execution, risk management, and reporting.

Task 2: Requirements & Integration

Translating operational requirements into technical specifications; supporting Agile sprint planning; integrating with EBS, DAAS, and FLIS.

Task 3: Design Developing detailed solution architectures, functional/technical designs, and prioritizing COTS functionality over custom development.

Task 4: Application Development

SAP WMS configuration, ABAP enhancements, API development, and DevSecOps CI/CD pipeline support.

Task 5: Testing Automated and manual testing (unit, integration, regression, UAT), defect tracking, and audit readiness validation.

Task 6: Enterprise Support & Strategy

Operational assessments, roadmap development, and strategic guidance for SAP S/4 capabilities.

Task 7: Transition Support

Continuity of operations planning, knowledge transfer, and development of standard operating procedures.

Tasks 8-11: Optional BPR to OEM Standards

As-Is/To-Be process mapping, OEM capability assessments, and application rationalization across core processes and functions.

The total estimated value for this proposed firm-fixed-price (FFP) requirement is $ for a 36-month period of performance (inclusive of all Core and Optional tasks).

Period of Performance Calendar Dates Core Sustainment (Tasks 1-7) Optional BPR (Tasks 8-11) Total Estimated Cost 12-Month Base Period September 30, 2026 – September 29, 2027 Option Year 1 September 30, 2027 – September 29, 2028 Option Year 2 September 30, 2028 – September 29, 2029 Grand Total

4. IDENTIFICATION OF THE EXCEPTION TO FAIR OPPORTUNITY AND

SUPPORTING RATIONALE, INCLUDING A DEMONSTRATION OF THE

PROPOSED CONTRACTOR’S UNIQUE QUALIFICATIONS OR THAT THE

NATURE OF THE ACQUISITION REQUIRES USE OF THE EXCEPTION

CITED:

Pursuant to FAR 16.507-6(b)(3), an exception to the fair opportunity process is justified in the interest of economy and efficiency because this effort is a logical follow-on to orders already issued under the JETS 2.0 contract vehicle (SP4709-24-D-0079/SP4709- 26-F-0019 to Accenture Federal Services, and SP4709-24-D-0039/SP4709-26-F-0020 to C5MI Insight LLC), where all awardees were given a fair opportunity to be considered for the original orders.

The relationship between the existing Core Task Orders and this follow-on is logical in terms of scope and continuity of effort. The active WMS baseline currently managed and sustained by the core platform contractors serves as the direct structural prerequisite for the continuous Agile development, system integration, and complex Business Process Reengineering (BPR) required in this action.

The core platform contractors possess preexisting institutional, hands-on knowledge of the highly complex, as-implemented DLA SAP WMS architecture. This includes an intimate understanding of DLA's:

Specific warehouse execution workflows for reutilization, demilitarization, and hazardous material management;

Customized integrations with the Defense Automatic Addressing System (DAAS) and Defense Logistics Management Standards (DLMS); and Existing technical debt and the strategic roadmap to migrate these custom workflows to standard SAP S/4HANA OEM capabilities.

Awarding this requirement to an outside contractor lacking this system-specific context would require a lengthy and costly discovery phase. This would introduce unacceptable risks of desynchronizing the development pipeline, misaligning integration interfaces, and potentially causing catastrophic disruptions to DLA Disposition Services' ability to process material worldwide.

Because the underlying JETS 2.0 SAP Platform contracts were competitively awarded, source selection events have already been rigorously conducted. Transitioning this requirement to an outside contractor would require a substantial and unacceptable outlay of Government resources to duplicate this baseline knowledge.

5. DETERMINATION BY THE CONTRACTING OFFICER THAT THE

ANTICIPATED COST TO THE GOVERNMENT WILL BE FAIR AND

REASONABLE:

The determination that the anticipated cost for this Task Order will be fair and reasonable will be made in accordance with FAR 15.404-1. The primary basis for this determination is the use of the pre-negotiated labor rates established in the competitively awarded SAP Platform contract (SP4709-24-D-0079) with Accenture Federal Services and (SP4709- 24-D-0039) with C5MI Insight LLC, which have already been determined to be fair and reasonable.

The Contracting Officer will perform a price analysis using the following techniques:

1. The Government will develop an Independent Government Cost Estimate (IGCE) based on the specific tasks outlined in the Performance Work Statement (PWS) and the pre-negotiated labor rates from the base contract.

2. The contractor's proposal will be evaluated to ensure that the proposed labor categories and rates are in accordance with the established rates in the base contract.

3. The contractor's proposed level of effort (labor hours) will be compared to the IGCE and reviewed for reasonableness by the technical evaluation team to ensure it is appropriate for the work required.

This combination of using pre-negotiated, competitive labor rates and conducting a thorough analysis of the proposed level of effort will ensure the final price is fair and reasonable to the Government.

6. ANY OTHER FACTS SUPPORTING THE JUSTIFICATION:

The DLA J62X SAP platform executes highly complex technical operations to support warfighter logistics. DLA Disposition Services handles the worldwide management of hazardous, excess, and end-of-life DoD property.

Attempting to bring in an outside contractor to execute the WMS software development lifecycle and business process reengineering would result in an unacceptable duplication of cost and schedule delays:

Disruption to Modernization Velocity: A new vendor would require an estimated three to six months of technical discovery just to understand DLA’s custom configurations and integration architectures. This would halt ongoing modernization efforts to reduce technical debt and transition to OEM standards.

Operational Risks: Developing and deploying updates to WMS without deep institutional system knowledge introduces an unacceptably high risk of supply chain workflow failure. Errors in inventory accountability, scrap processing, or demilitarization workflows could result in compliance violations or operational standstills at DLA field activities globally.

Duplication of Costs: Bringing in a new contractor would require the Government to pay for a redundant onboarding phase while simultaneously delaying critical enterprise software releases.

7. A STATEMENT OF THE ACTIONS, IF ANY, THE AGENCY MAY TAKE TO

REMOVE OR OVERCOME ANY BARRIERS THAT LED TO THE EXCEPTION

TO FAIR OPPORTUNITY BEFORE ANY SUBSEQUENT ACQUISITION FOR

THE SUPPLIES OR SERVICES IS MADE:

The core JETS 2.0 SAP Platform contractors have cultivated hard-won, experiential insight into DLA's live production baseline, custom workflows, and system integrations.

To actively remove these technical knowledge barriers and pave the way for open competition in future cycles, DLA is taking several concrete actions within this task order:

1. Mandated Knowledge Transfer and Documentation (Task 7): Under Task 7

(Transition Support), the contractor is explicitly mandated to execute Transition-Out Plans, conduct Knowledge Transfer sessions, and deliver robust Standard Operating Procedures (SOPs), Operations Manuals, and Sustainment Documentation (Deliverables 7.1 - 7.7). This ensures that system-specific expertise is captured and made available internally.

2. As-Is and To-Be Process Mapping: Through Optional Tasks 8-11, the contractor is required to rigorously document the current-state (“As-Is”) customizations and develop comprehensive (“To-Be”) process models aligned to industry best practices.

This mapping demystifies the customized environment for future competitors.

3. Retention of Government Data Rights: The Government retains sole ownership of all technical artifacts generated, including functional design documents, technical design documents, system architecture diagrams, and custom code repositories (Task 3 and Task 4 deliverables). This ensures a complete technical package is available to support full and open competition in future solicitations.

DLA has and continues to exercise competition as often as possible and conducts ongoing reviews to keep abreast of new technology. DLA will continue its practice of surveying the market to ensure full and open competition whenever practicable

8. CERTIFICATIONS:

TECHNICAL/REQUIREMENTS CERTIFICATION

I hereby certify that the supporting data provided for which I am responsible, and which forms a basis for this justification is complete and accurate.

CONTRACTING OFFICER CERTIFICATION

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

Pursuant to FAR 16.507-6(d)(2)(x) and FAR 16.507-6(e)(3)(i), I have determined that FAR 16.507-6(b)(3) applies to this procurement and I approve this justification.