Microsoft_MSS_FAR_6_Justification_and_Approval___Redacted.pdf

Justification and Approval (J&A) for Other Than Full and Open Competition

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NOTE: If a Justification and Approval was approved for the preceding acquisition, a copy of the approved J&A for the predecessor action must be included in the staff package for approval of the instant J&A. This applies to J&A staff packages that are submitted for review and approval at a level above the contracting officer. The predecessor J&A will be used as a reference document by the approving official.

Is this a new or amended J&A Document? New Amended ( Prior to Award Only! )

Funding level for this acquisition: >

Contracting Activity: Air Force Materiel Command/Air Force Test Center, Eglin AFB FL PZIOA

Purchase Request / Local ID Number: FA282318C8004

Program / Project (and PE, if applicable): Microsoft Support Services (MSS)

Program Type (PEO or Other Contracting): Other Contracting

Authority: 6.302-1 – 10 USC 2304(c)(1), Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements

Estimated Contract Cost (including options): J&A Type: Class Individual

COORDINATION (AFFARS 5306.304(a) )

Date

26 Apr 2018

Project Lead / Program Mgr / Requiring Activity

Signature

Date

01 May 2018

Contracting Officer

May 2018

Local Legal Reviewer

F

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I. Contracting Activity.

The contracting activity is the USAF Operational Contracting Flight, AFTC/PZIOA, Eglin AFB, FL 32542. The Procuring . This action falls under a Justification for Other than Full and Open Competition.

II. Nature and/or description of the action being processed.

This requirement will be accomplished by a new sole sourced Firm-Fixed Price contract to provide Microsoft Support Services (MSS). The contract will be a direct award to Microsoft Corporation, One Microsoft Way, Redmond, WA 98052.

III. Description of supplies/services required to meet agency needs.

The Microsoft Support Services contract will provide the distinctive Microsoft expertise required for continued integration and optimization of Microsoft products purchased under the MS Joint Enterprise License Agreement (JELA) between the Army, Air Force, and DISA. The services will support the architecture, integration, and deployment of Microsoft software products for the Combined Air Forces Network (CAFNET) and other Services, Agencies, and Combatant Commands requiring 53d Wing services. The 53d Wing need is for services that enable the continued migration to a single network, improves security, and reduce operational costs by eliminating redundant services, and results in standardized training, common training procedures, and operations/maintenance across 53d Wing managed networks. The Microsoft Support services will meet the agencies needs by providing the required access to Microsoft's Enterprise Technology Adoption Program (TAP) and the Enterprise Patch Validation Program (PVP). MSS is required to assist the 53d Wing with setting up and troubleshooting the CAFNET's portfolio of Microsoft products. This architecture includes, but is not limited to, the service infrastructure, security architecture, and maintenance and troubleshooting during deployment and operation. Failure to have MSS available would significantly and adversely impact the 53d Wing's ability to field quality service to the warfighter in a timely and cost conscious manner.

Deployment of these services requires access to closed-source code changes, and MSS is the only means of obtaining the required modification of Microsoft products after release.

The 53d Wing will leverage these services to provide a secure, reliable, consistent operational cyberspace force across 53d Wing managed networks. The specific skills that are required/will be provided are:

A.) Microsoft System Center Operations Manager. Provide the 53d Wing direction with Envision, Design, Deploy, Stabilize and review System Center Operations Manager, PowerShell technologies and data automation.

B.) Microsoft Private Cloud Infrastructure. Provide the 53d Wing assistance with Envisioning, Designing, Implementing and migration recommendations for distributed systems, applications, and services based on Microsoft Private Cloud Infrastructure to include Hyper-V and System Center Virtual Machine Manager (VMM) platforms, System Center Data Protection Manager, Windows Server, Active Directory and Active Directory Federation Services (ADFS).

C.) SharePoint Infrastructure. Assist the 53d Wing by providing Microsoft SharePoint Enterprise Edition technology and knowledge that will assist the 53d Wing in being able to: interface with third party data labeling software; attend working groups to support third party labeling software integration; attend working groups to support SharePoint Enterprise and Social integration; support development of SharePoint technologies from laboratory to full enterprise deployment; validate data migration from legacy systems into current versions of SharePoint Enterprise software;

provide the 53d Wing access to a portfolio of strategic Microsoft technical services; and provide on-site resources specializing in SharePoint Enterprise IT architecture and planning.

D.) SharePoint Enterprise and Social Solutions. Assist the 53d Wing with Envisioning, Designing, Implementing and migration recommendations for SharePoint solutions that address 53d Wing operational requirements and issues. This may include identifying possible benefit areas, validating objective architectures and strategies, and assisting with the definition of a high-level, long-term roadmap and program for strategic SharePoint initiatives based on technology drivers, initiatives, and current IT strategy.

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E.) Secure SharePoint Deployments. Assist the 53d Wing with the SharePoint Envisioning, Designing, Implementing and migration recommendations for secure environments to allow Microsoft based systems to connect to the classified networks and operate securely. MSS will assist the 53d Wing with the SharePoint Envision, Design, Deploy, Stabilize and review SharePoint Enterprise sites for data sharing/testing purposes.

F.) Microsoft Dynamics Customer Relations Management (CRM). Assist the 53d Wing with Envisioning, Designing, Implementing and migration recommendations for Microsoft Dynamics CRM. MSS will assist the 53d Wing in preparing for the integration of third party plug ins for Microsoft Dynamics CRM.

G.) Microsoft SQL Server. Assist the 53d Wing with Envisioning, Designing, Implementation and migration recommendations for Microsoft SQL Server.

This contract will be awarded on a firm fixed price basis. The estimated value of this requirement is with a 36 month period of performance. The base period of performance will be 1 June 2018 thru 31 May 2019, option period 1 from 1 June 2019 thru 31 May 2020, option period 2 from 1 June 2020 thru 31 May 2021. Funding for this effort will be made incrementally using 3400 FY 18-20 funds. Inclusion of the options will allow the Government to fulfill the requirement by exercise of the option as opposed to a time-consuming new acquisition cycle and avoid the potential detriment of disrupted support.

IV. Statutory authority permitting other than full and open competition.

10 USC 2304(c)(1), as implemented by FAR 6.302-1(a)(2)(iii)(B), required by FAR 6.303-2(b)(4), Only One Source Will Satisfy Agency Requirements.

V. Demonstration that the contractor's unique qualifications or nature of the acquisition requires the use of the authority cited above (applicability of authority).

Microsoft's Operating System software code is required to meet the Government's requirements. Access to proprietary Microsoft Intellectual Property (IP) which includes Microsoft's Operating System software code is required for all of the MSS services, and this is only available to Microsoft employees who are direct hires of Microsoft Corporation. All Microsoft partners and other Microsoft specialty trained support members associated with outside companies do not have direct access to Microsoft source codes as Microsoft does not allow this. Only Microsoft employees have the required access to proprietary Microsoft source code, tools, processes and knowledge to provide the required level of

MSS.

A. Microsoft is the Original Equipment Manufacturer (OEM) for the existing DoD and AF Windows operating systems known as DoD Secure Host Baseline (SHB) framework and other widely used Microsoft products. The Microsoft employees have direct access to Microsoft software developers for proprietary information and source code, speeding the resolution of the most vexing technical problems the 53d Wing can face. This is essential in the development of CAFNet solutions/capabilities which are based on 53d Wing infrastructure of Microsoft products. The Microsoft products/solutions, as modified by the 53d Wing, have resulted in improved enterprise security posture, better problem resolution, and centralized configuration management for 53d Wing Network IT personnel. Microsoft maintains strict control over its proprietary source code and has not licensed any other contractor and or Microsoft Gold/Silver Certified partners to have access to this information or to work on the software products. Therefore Microsoft Corporation is the only source to provide direct and unique access to the various Microsoft product teams, software developers, and source code for current and future products enabling (a) specialized insight into the architecture of current solutions that can facilitate smooth migration to existing and future unreleased products/ versions; (b) quick and comprehensive resolution of product support, trouble-shooting and hot-fix type issues; and (c) immediate and focused technology feedback link between our customers and the product development teams to help shape the direction, features, and functionality of future products.

B. MSS personnel provide a technology feedback link between the 53d Wing and Microsoft product development teams to help shape the future direction, features, and functionality of forthcoming products, while providing the 53d Wing with knowledge to ensure interoperability and compatibility of these products with AF network operations.

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Participation allows the 53d Wing to receive early access to core products and direct access to support from Microsoft product teams. The Technology Adoption Program (TAP) requires a MSS resource on contract with the customer working as the TAP liaison to the Microsoft Product Group. This one-to-one relationship has led to product enhancements and fixes that can be seen today in many of the Microsoft products deployed in the AF. Third party vendors such as Microsoft Gold Certified Partners can participate in pilot testing of new products, but they cannot sponsor the AF's participation in the program.

C. MSS has the ability to provide the 53d Wing with timely information relating to the latest known security vulnerabilities within Microsoft products deployed and their impact. This provides the opportunity for the 53d Wing to test patches and/or workarounds to minimize the security vulnerability window for the 53d Wing networks. Microsoft is the only source that can provide versions of software, patches, and updates for test and evaluation. Timely testing is a key enabler for the 53d Wing's ability to patch and update the network within six hours of a release by Microsoft.

Having to request reach back to Microsoft employees via an outside company or partner, would not allow for a time efficient result without adding undue cost to the government and risk of failure to the testing mission time line.

Microsoft Gold Certified Partners can participate in this capability but cannot sponsor the AF as Microsoft employees can do.

Current Microsoft Services Support is directly provided by Microsoft Corp. Not having an MSS contract via Microsoft would diminish the 53d Wing's ability to properly build, maintain and sustain products deployed throughout 53d Wing managed networks. Access to proprietary information and intellectual property would be lost along with other knowledge that is a result of having a direct link to Microsoft as stated above.

Impacts include, but are not limited to, millions of dollars in redevelopment/duplications costs if the 53d Wing were required to use an alternate solution. Over the past 8 years, the 53 CSS (and DoD) has spent ~ in Microsoft direct labor costs, ~ in other direct (non-Microsoft) labor costs assisting with implementation and maintenance of the fielded Microsoft product and ~ in hardware/software costs. If other technical solutions had been chosen the estimated costs to produce a non-windows product capability would have exceeded based on cost data we have available from similar systems. This does not take into consideration the impact to field users that do not have non-windows expertise at the unit level which would have added an additional cost of per year in support costs.

Mandatory security Assessment and Authorization (A&A) events are scheduled months in advance and include the latest Microsoft technologies currently being provided by MSS. These events require multiple organizations/services to conduct and cost ~ per event. In preparation for A&A events MSS is required to fully integrate/test products.

Any interruptions/impacts to these events delays providing the capability to the warfighter.

VI. Description of efforts made to ensure that offers are solicited from as many potential sources as practicable.

The summary of market research conducted is included in Paragraph VIII of this document. None of these efforts resulted in finding additional potential sources. Market conditions have not changed since GSA awarded the current 53d Wing MSS contract in 2013. There are no competing companies currently available that can provide all the services needed to support the AF requirements for Microsoft services.

VII. Determination by the Contracting Officer that the anticipated cost to the Government will be fair and reasonable.

Microsoft Support Services are determined to be commercial, therefore certified cost or pricing data is not required.

The Contracting Officer anticipates the price will be considered fair and reasonable based on price analysis IAW FAR 15.404-1(b)(2). The Air Force objective will be based upon the following analysis: comparisons to current and historical pricing data, Microsoft published public sector pricing, and the Independent Government Estimate. A thorough market analysis shows there are multiple current and previous contracts awarded to Microsoft utilizing their published public sector pricing. This information substantiates that price fair and reasonable can be based on current and previous sole source contracts for like services.

VIII. Description of the market research conducted and the results, or a statement of the reasons market research was not conducted.

To meet FAR 7.102 and FAR 10 requirements, market research was conducted using the following methods:

1) Market research was conducted on the Air Force mandatory use NetCents II contract vehicle. An RFI was sent out via

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NetCents contract listings to both large and small businesses on February 8, 2018. Four responses were received;

however, the vendors stated they could only provide Microsoft Support Services and not certified Microsoft personnel.

Three other responses were received from vendors stating they could not meet the requirement. An out of scope determination was issued via NetCents II engineers as a result. 2) A review of General Services Administration (GSA) schedule 70 Information Technology (IT) Professional Services. This search resulted in no GSA vendors able to supply Microsoft Support Services personnel with access to the Microsoft product source code library. The questions asked about their current partnering arrangement with Microsoft Corp., the type of services they provide and their process for arranging for these services, how they handle issues involving Microsoft source code, what security clearances their employees possessed, and what their process is to escalate Microsoft software problems confirmed they did not provide direct Microsoft support. It is clear that these companies do not have access to Microsoft source code for commercially available MS products. Access to Microsoft source code is a key requirement and necessary to provide the level of support needed to accomplish the 53d Wing mission which is to provide Microsoft Support Services to the CAFNet enterprise. The current 53d Wing MSS contract was awarded in 2013 by GSA (solicitation ID 04150001), but was awarded outside of any GSA schedule as no vendors on their schedule at that time were able to meet the specific requirements either. Furthermore, the 53d Wing is currently paying an individual markup estimated to be between 8-10% profit to the base commercial price provided by Microsoft and also an additional 4.0% GSA administrative fee.

The GSA administrative fee is based off of the “Summary of GSA Rates and Fees” provided on the GSA website. Thus, there is no true competition between resellers and Microsoft. Additionally, choosing to have these services provided by companies that are not able to perform all required services, and charge an additional fee to get the services for the 53d Wing, is not cost effective or efficient, as the government is paying for no added value from having done so.

Several similar contracting acquisitions and existing contracts were identified through searching the FedBizOpps website and direct calls and e-mails to Air Force and other DoD contracting and acquisition program offices.

Microsoft Enterprise Technical Support Services II (METSS II) contract (HC1028-17-D-0001) - DISA Indefinite Delivery/ Indefinite Quantity (IDIQ) contract vehicle for both Microsoft Premier and Consulting support services was found. A review of the METSS I and II contract Justification and Approval (J&A) documents revealed that their market research also found that Microsoft maintains strict control over its proprietary source code and does not license any other contractor to work on the software products. Therefore, Microsoft Corporation is the only source to provide direct and unique access to the various Microsoft product teams, software developers and source code necessary to provide their MS Premier and support services requirements. In addition, using the METSS II contract would require paying their administration fees of roughly 2.5%.

The Department of the Treasury and the Internal Revenue Service posted an urgent and compelling sole-source solicitation TIRNO-17-R-00021 for a Microsoft Premier and Consulting Support Services + BPA using a General Services Administration (GSA) vendor. A comparison of our requirement with their solicitation confirmed they were both similar in scale and scope with the main difference being that this BPA utilized GSA and paid pass through and fees. One of their statements on their justification and approval (J&A) document was "The Microsoft Corp. support is a mandatory requirement because multiple applications require data and source code information. As a result, the resources need to be Microsoft Corp. as corporate reach-back capability is required to obtain this information and resolve Microsoft related infrastructure issues that affect mission critical applications."

Further substantiating the above regarding GSA, a Justification and Approval (J&A) for a sole source firm fixed price

FY17 award to Microsoft, Inc. for Microsoft Premier Services (MPS) was provided to us by the Air Force Enterprise Configuration Management Office. The following comments were included in their J&A: “Microsoft maintains strict control over its proprietary source code and has not licensed any other contractor to have access to this information or to work on the software products. MPS services are available through five General Services Administration (GSA) contract schedule holders/resellers. However, the authorized resellers lack the capability to perform MPS services with their own employees, as they are not authorized access to source codes. As a result of only Microsoft being allowed to make source code changes, a portion of the costs in any MS Premier contract awarded to an authorized reseller were “pass through” fees added to the Microsoft labor and fees".

Conclusion:

After conducting market research pursuant to this acquisition effort, it is determined that there was no significant changes in the market place relative to how Microsoft conducts its business model with other vendors, based on the inability of other vendors to provide direct access to the services such as TAP, Microsoft IP, source code, and other proprietary information and resources. Additionally, Microsoft is the only known source that possesses all of the required technical competencies and can provide the level of service necessary to adequately and consistently support

Page 6 of 614 Nov 2017 an enterprise operation as complex and time critical as what exists in the USAF. Consequently, based on the above Market Research results and the overwhelming advantages of acquiring services directly from the Microsoft Corporation, we recommend award of a “sole source” contract to Microsoft Corporation to fulfill current AF Microsoft Support Services requirements.

IX. Any other facts supporting the use of Other Than Full and Open Competition.

Microsoft Corporation keeps its consultants abreast of state of the art product information. The fact that they are Microsoft personnel allows them the opportunity to communicate with the internal development teams, obtain access to source code, access to reach back capabilities to Microsoft on staff corporate technical teams and thus gain Microsoft corporate knowledge that cannot be duplicated or accessed by any other company, to include any Microsoft Certified Partners. Based on all information known at the present time, the opportunity for competition does not exist.

X. List of any sources that expressed, in writing, an interest in the acquisition.

None.

XI. A statement of the actions, if any, the agency may take to remove or overcome any barriers to competition before making subsequent acquisitions for the supplies or services required.

This contract action will maintain the consistency of the support already in place which provides for the continued development of standardized AF/53d Wing procedures and processes to deploy hardware, software and security patches. The 53d Wing will continue to conduct market research to determine vendor capabilities in an effort to foster competition and seek to find vendors who can support all of the 53d Wing requirements. In addition, the 53d Wing will research and analyze the cost, security, and efficiency of alternatives such as web services, cloud services, and other operating systems (Linux, Apple, etc.) as projects/deployments move forward.

XII. Certification by the Contracting Officer.

As evidenced by my signature above, I have determined this document to be both accurate and complete to the best of my knowledge and belief.

XIII. Certification by the technical/requirements personnel.

As evidenced by my (our) signature(s) above, I (we) certify that any supporting data contained herein, which is my (our) responsibility, is both accurate and complete.