FAR 13 Sole Source Justification VMware Delivery Order 2 Open Market.pdf

Justification for a Sole Source Acquisition FAR Part 13

1. Identification of the agency and contracting activity.

a. Federal agency and contracting activity. Department of Health and Human Services, Assistant Secretary for Administration, Office of Acquisition Management Services

b. Requiring activity. Office of the Chief Information Officer (OCIO)/Vender Management Office (VMO)

2. Nature and/or description of the action being approved

As described in FAR 8.402(f), HHS is adding items not on the Federal Supply Schedule (open market items) to Federal Supply Schedule Blanket Purchase Agreement (BPA) 75P00123A00006/delivery order 75P00123F37002 for administrative convenience.

3. Description of the supplies or services required to meet the agency’s needs (including the estimated value).

a. Project title. HHS/OCIO VMware Subscription Licensing – Delivery Order 2

b. Project description.

This acquisition is a brand name requirement to obtain VMware subscription licensing through BPA 75P00123A00006, under the General Services Administration (GSA) Multiple Award Schedule (MAS) 511210 - Software Licenses. These are commercially available software products.

After receipt of quotes from GSA MAS holders, it was determined that no GSA contractors had all needed SKUs for the products required on their MAS. This sole source justification is to address 10 SKUs (out of 24 total SKUs), which are considered open market for this Delivery Order.

c. Proposed contract/order type. Firm Fixed Price

d. Total estimated dollar value and performance/delivery period.

Total Estimated Dollar Value: $210,887,29

Period of Performance: 04/01/2023 – 01/31/2024

e. Name and address of the proposed contractor.

DELL FEDERAL SYSTEMS L.P.

1 DELL WAY

ROUND ROCK, TX 78682-7000

4. Proposed contractor’s unique qualifications or nature of the acquisition requires use of the authority cited.

Due to the nature of this acquisition and for administrative convenience, the Contracting Officer has determined there is one reasonable source available because specific open market items are part of the acquisition’s complete solution. Since January of 2020, HHS OCIO’s VMO has provided a centralized Enterprise License Agreement (ELA) for VMware product licenses. The ELA allows HHS to increase products and support while maintaining the current spend on renewal costs. The ELA also allows for license sharing across the Department by having a single unified user account that services the entire Department. HHS must continue to centralize the acquisition of VMware licensing, which this justification allows by including these 10 SKUs on the GSA Delivery Order. Additionally, HHS can track Software Assets and manage licenses more effectively on one centralized vehicle (i.e., the single-award BPA with Dell Federal). Centralization of software purchasing allows compliance with the policies as set for in OMB Circular A-130 with regards to information governance, acquisitions, and records management. Finally, with limited time left before the expiration of the prior contracts/orders, HHS cannot separately solicit and award another order and maintain the critical use of these subscription licensing without a break in service. This sole source is not due to a lack of planning, but unforeseen circumstances that market research did not uncover.

5. Description of efforts made to ensure that offers are solicited from as many potential sources as is practicable, including whether a notice was or will be publicized as required by FAR subpart 5.2 and, if not, which exception under 5.202 applies.

A Request for Information was posted on February 9, 2020, for one week under GSA MAS 511210 before the solicitation was issued on February 24, 2023, to March 09, 2023, through GSA E-buy under MAS 511210 - Software Licenses.

There are a total of 1064 contractors holding this MAS category. A notice was publicized regarding the intent to sole source as further described below.

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

More than one GSA contractor provided pricing for these SKUs despite being open market. The CO has determined that pricing for these products is fair and reasonable through price competition.

7. Description of the market research conducted (see FAR Part 10) and the results, or a statement of the reasons market research was not conducted.

HHS performed extensive market research for the BPA and its initial two Delivery Orders that included consultation with the GSA Enterprise Agreement Coordinators, IT experts, and Virtual Machine user community. Additionally, market research was done by performing Internet searches for VMware and virtualization projects. More specific market research targeted at VMware and availability of products was done by searching and reviewing data from the GSA Advantage and GSA eLibrary websites. HHS also conducted several discussions with industry to streamline this acquisition and obtain industry input.

In February 2023, HHS posted a draft solicitation to GSA eBuy and requested comments from MAS schedule holders. Unfortunately, none of this market research established that HHS’s requirements for these SKUs were not available through the MAS’s, e.g., no draft solicitation comments were received regarding this matter from either GSA contractors or VMware. Market research was able to confirm no other collection of competitor products offers the full breadth of products and functionality that VMWare software delivers.

9. Any other facts supporting the justification.

As required by FAR 8.402(f), the CO has ensured:

(1) All applicable acquisition regulations pertaining to the purchase of the items not on the Federal Supply Schedule have been followed (e.g., publicizing (part 5), competition requirements (part 6), acquisition of commercial products or commercial services (part 12), contracting methods (parts 13, 14, and 15), and small business programs (part 19));

(2) The ordering activity contracting officer has determined the price for the items not on the Federal Supply Schedule is fair and reasonable;

(3) The items are clearly labeled on the order as items not on the Federal Supply Schedule and they conform to the rules for numbering line items at subpart 4.10; and

(4) All clauses applicable to items not on the Federal Supply Schedule are included in the order.

8. Listing of sources, if any, that expressed, in writing, an interest in the acquisition.

Three quotes were received in response to the solicitation posted on GSA eBuy.

An additional large business expressed interest in the acquisition but decided to not submit a quote. No responses were received in response to the posting of intent to sole source required under FAR Part 5.

11. Statement of the actions, if any, the agency may take to remove or overcome any barriers to competition before any subsequent acquisition for the required supplies or services.

HHS’s award 75P00123A00006_75P00123F37002, includes two, one-year Option Periods. These Open Market SKUs are not being included within the awardee’s Option Periods. If these SKUs cannot be added to the MAS holder’s contract before execution of Option Period 1, a separate competitive acquisition may be required.