Final_Limited_Source_Justification.pdf

UNITED STATES ENVIRONMENT AL PROTECTION AGENCY

1200 Pennsylvania Ave, NW

Washington, DC 20460

LIMITED-SOURCES JUSTIFICATION

FEDERAL ACQUISITION REGULATION 8.405-6

l. Agency/Contracting Activity

Contracting Officer:

Program Office:

Project Officer:

Address:

Mail Code:

Email:

Tielephone No.:

Patrice Cunningham, Contracting Officer Headquarters Procurement Operations Division Office of Acquisition Management

Office of Environmental Information (OEl)

Cherie Saliby Office of Information Technology Operations Service and Business Management Division

US Environmental Protection Agency (EPA) 109 T.W. Alexander Drive Research Triangle Park, NC 27709

N276-0l sal i by .cherie@epa.gov

919-541-3805

Prnject Identification: Microsoft Software Licenses Blanket Purchase Agreement (BP A)

Contract: EP-BPA-l 6-H-0025

2. Nature and/or Description of Action to be Approved

The purpose of this Limited-Sources Justification is to increase the current BPA ceiling by $16 million for the Microsoft Software Licenses BPA number EP-BPA-16-H-0025 with Insight · Public Sector, Inc. (Insight). An urgent and compelling need exists for the capacity of this BPA to be increased so ordering by EPA under the BPA can continue for the final year of the BPA, after which it will expire, and following the procedures to obtain a new award at this point would result in unacceptable delays (FAR 8.405-6(a)(l)(i)(A)). However, EPA is currently in the planning phase of the procurement process for a competitive acquisition to place a new contract/ordering vehicle at the end of this BPA, which expires on 30 June 2019.

In June of 2016, EPA entered into a competitive three (3)-year (one base year with two option pe:riods) Enterprise License Agreement (ELA) with Insight Public Sector in accordance with the procedures in FAR 8.405-3 for establishing a BPA against a Federal Supply Schedule (FSS).

This ELA was established to provide EPA with a streamlined4ay to purchase all Microsoft software products, Premier support and consulting to support software including but not limited to Windows, Office, Project, Visio, Visual Studio, Server, SharePoint, and Core CAL for the Agency including use of the Microsoft Cloud for backing up work for the Agency. This BPA was also identified by the Agency as a Strategic Sourcing Vehicle in accordance with the Memorandum issued by the Office of Management and Budget (0MB), December 2012, Improved Acquisition through Strategic Sourcing (M-1 3-02). EPA has established certain contract vehicles as mandatory sources of supply for the Agency in accordance with EPA Acquisition Interim Policy Notice (IPN)#l 7-04 Requirements for Use of Other Mandatory Contract Solutions (November 2017), EPA Acquisition Guide (EP AAG) Subsection 8.0. l 00 Requirements for Use of Strategic Sourced Solutions (Feb 2016), EPA Administrator Memo EPA's Strategic Sourcing Program (January 2015), EPA Administrator Memo - Implementing Strategic Sourcing at the United States Environmental Protection Agency (May 2013), and the Office of Administration and Resources Management (OARM) Assistant Administrator Memo ..

Implementing Strategic Sourcing at the United States Environmental Protection Agency (May 2013).

During the first two (2) years of the strategically sourced BP A, Insight was able to provide the Agency with a quick turnaround streamlined process to procuring Microsoft software that allowed the Agency to do the work it needed to help meet its mission and had resulted in over $ 1.5 million in savings for EPA. Originally when the BPA was first established, it was envisioned that the Agency would only need to spend an estimated $12 million for the base year and an additional estimated $2 million per each option year over the life of the BP A. However, during the life of the BP A, it was realized that EPA did not have accurate historical data to base the estimate and BP A ceiling amount on. There was no tracking mechanism to account for software purchases that were completed by purchase cards and there were other Microsoft ELA~;

in EPA Regions that preceded and coexisted with this BP A ELA and which were unknown to the BP A' s Administrative Contracting Officer and Contracting Officer's Representative during performance. Since these ELAs were not in conflict with the ELA related to this BP A or in conflict with the strategic sourcing guidelines mentioned above, having multiple Microsoft ELAs in place at the same time did not pose a problem. However, when existing ELAs expire, it is preferable to consolidate the contracts/agreements into a single ordering vehicle, which in this case was this Microsoft BPA, to comply with the aforementioned 0MB Memorandum and ultimately to realize efficiencies in acquisition and cost savings. In accordance with Agency policy and direction, when multiple, other ELAs expired, they were rolled into the existing Microsoft BPA, which resulted in an increase of cost under the BPA of over $2 million per year.

This increase had not been expected nor accounted for when the BP A was awarded, and as a result, no consideration was given to the impact that the consolidation of additional ELAs and Microsoft ordering vehicles at EPA would have on the ceiling of this BPA. Additionally, OEI had Premier Services needs that were not originally envisioned or accounted for under the BP A, but was still within scope to be ordered under the BP A. When the BP A was first established, the amount of Premier Services that would be needed was estimated to be much lower than what OEI ended up using. OE! ordered Premier Services under the BPA at a cost of over $1 million a year. Additionally, the annual payments needed to keep licenses for the entire Agency to use Microsoft Products, such as Outlook and Word, cost about $7 million a year. These additional costs were not accounted for in the original Government estimate nor were they reflected in the BPA estimate or ordering capacity. These omissions resulted in an unrealistically low BPA estimated ceiling amount of$ I 6 million.

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The current, unrealistically low ordering capacity of the BP A is insufficient for EPA to order items and related services in the last performance period of the BP A and has the Agency in a situation where it is unable to make its required, annual license payments to continue its annual subscription licenses. Ordering these items and services and making annual license payments is critical for EPA to meet its mission to protect human health and the environment. Microsoft products and licenses are used throughout the Agency and are critical for each office to operate effectively. For example, EPA provides emergencY, response support to address chemical spills, contaminated site remediation and to quickly. and effectively address environmental disasters.

Microsoft products procured under this BP A provide the offices that perform these and other critical functions the means to operate and communicate effectively. Without access to items and services procured under this BPA, such ,s Outlook, offices that rely heavily on timely and critical communications would not be able to perform adequately, which would have a direct adverse impact on EPA's ability to protect h~an health and the environment. Emergencies and disasters would not be addressed immediately and\further preventable damage would be incurred. Additionally, without the items and seiwices provided to all of EPA under this BPA, EPA would not be able to adeq~ately address emergency response efforts, remediate contaminated sites, conducts chemical spill and clean-up efforts or respond as needed to environmental disasters.

The Agency currently has a $7 million annual payment that needs to be paid to keep Microsoft software products, such as Outlook, Word and Excel, functional for all Agency offices and employees after 30 June 2018. There is also an anticipated need of $4 million in Premier Microsoft services, $2 million in option years on existing BPA calls orders that need to be exercised, and another $3 million in ongoing support needed by the Agency. The ceiling increase of $16 million will allow the Agency to pay its annual subscription payment of $7 million, exercise the last option year on all existing BP A call orders in the amount of $2 million, continue with the Premier Support Services that OEI needs for $4 million, as well as an additional $3 million to cover new or additional items/services needed by the EPA during the last year of performance and to ensure that no additional increases to the BPA's capacity will be needed.

Since the required Microsoft products have been previously purchased under this ELA, and since these products are critical for the Agency to operate effectively and to meet its mission, EPA must continue to purchase the required items, services and licenses under this ELA. ELAs require that all software that is listed as a part of the agreement must only be purchased under that particular agreemt;nt for the term of that agreement and may not to be purchased outside out the agreement unless the agreement is cancelled and a new ELA is established.

Due to the fact that the ELA requires all software that is listed as part of that agreement to be purchased under the agreement, any purchases of those identified software from another source w.:>uld not only make the current ELA null and void but would also be noncompliant with EPA acquisition policy (EPA Acquisition Guide (EPAAG) 8.0.100.5 Mandatory Requirements for Use of Common Contract Solutions (May 2018) and in violation of Federal Acquisition Regulation (FAR) 8.002 - Priorities for Use of Mandatory Government Sources and FAR 8.003 - Use of Other Mandatory Sources. Without pre-empting these requirements and except as provided in EPAAG 8.0. l 00.5(b ), EPA employees shall obtain products and services from strategically sourced contract vehicles as a required first source. New requirements should not b~: obtained through a separate contract action if they are available through a strategically

Page 3 of9 sourced contract. EPA employees shall check the current suite of EPA strategic sourcing contract vehicles at: http://oamintra.epa.gov/node/667 to determine if the requirement is covered by a strategically sourced contract vehicle. If a requirement is essentially the same in fit, form and function as offered by a strategically sourced contract vehicle, then the strategically sourced contract vehicle must be used unless an exception applies or a waiver is obtained.

If EPA opted to not increase the estimated capacity and ceiling of this BP A by the aforementioned amount, then the BPA would be maxed out and would effectively expire at the end of the current performance period on 30 June 2018. EPA not having access to items and services provided under this BP A would cause a critical disruption in the Agency' s ability to meet its mission since the items and services procured under this BPA are used Agency-wide to support mission-critical functions. This BP A is needed so EPA personnel has access to email, calendars as well as critical documents and document-writing programs. Additionally, if the current ELA was voided and if the BP A expired, the Agency would need to pay additional, considerable start-up fees in order to acquire new software licenses for the entire Agency under a new ELA. Also, Microsoft Premier Services needed by OEI to implement Agency environmental information infrastructure, including information security-related concerns which are critical since these services help to ensure the safety of Agency documents in an online environment, would have to be put on hold until a new award was made. Placing a new award and following the.competitive acquisition process will up to one year to complete, which is significantly more time than available to meet the current need. The acquisition cycle of this BP A is three years, i.e., base and two option periods, and since the BP A is only two years into performance, EPA is not at the point in the acquisition to make a new, competitive award;

however, as noted earlier, EPA is on schedule with the competitive procurement, which it intends to have awarded by the end of this BP A no later than the end of June 2019. An urgent and compelling need exists to increase the current BPA capacity and ceiling amount to provide EPA the support it needs, and following required, competitive acquisition procedures would result in unacceptable delays. Without the items and services provided to all of EPA under this BP A, EPA would not be able to adequately address emergency response efforts, remediate contaminated sites, conducts chemical spill and clean-up efforts or respond as n'eeded to environmental disasters.

3. Description of Supplies or Services Required (including the estimated value)

This Limited-Sources Justification is needed to increase the capacity of the Microsoft Software License BPA by $16 million. The additional capacity will allow the Agency to continue to provide mission critical Microsoft software licenses and other related support items/services as well as Premier Services to the entire Agency consistent with the current ELA with Insight. This ELA was established to provide EPA with a streamlined way to purchase all Microsoft software products, Premier support and consulting to support software including but not limited to Windows, Office, Project, Visio, Visual Studio, Server, SharePoint, and Core CAL for the Agency including use of the Microsoft Cloud for backing up work for the Agency. This BP A also serves as one of the Agency's Strategic Sourcing Vehicles to obtain software for the entire Agency.

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4. Authority and Supporting Rationale

This acquisition is conducted under the authority of the Multiple Award Schedule Program as defined in FAR 8.401 . An urgent and compelling need exists for the BP A capacity to be increased to allow use of the BPA by EPA for the next year, and following the standard acquisition procedures to place a new award at this point and with inadequate lead time would result in unacceptable delays (FAR 8.405-6(a)(l )(i)(A)). Also, continuing EPA's use of a strategically sourced contract vehicle for this Information Technology-related acquisition ensures that EPA complies with the 0MB mandate dated 5 December 2012 titled, Improving Acquisition through Strategic Sourcing. Additional I y, the current BP A is in compliance with the following Agency strategic sourcing mandates: Improved Acquisition through Strategic Sourcing (M-1 3-

02) in which the EPA has established certain contract vehicles as mandatory sources of supply for the Agency in accordance with the IPN#l 7-04 Requirements for Use of Other Mandatory Contract Solutions (November 2017), EPAAG Subsection 8.0.100 Mandatory Requirements for Use of Common Contract Solutions (May 2018) (formerly Requirements for Use of Strategic Sourced Solutions (Feb 2016)), EPA Administrator Memo - EPA's Strategic Sourcing Program (January 2015), EPA Administrator Memo - Implementing Strategic Sourcing at the United States Environmental Protection Agency (May 2013), and the OARM Assistant Administrator Memo - Implementing Strategic Sourcing at the United States Environmental Protection Agency (May 2013).

A disruption in support with regard to the items and services provided to EPA under this BPA would result in significant and harmful disruption in Microsoft software-related support that would be felt Agency-wide. This disruption would have a harmful impact on human health and the environment and would prevent EPA from meeting its mission for essential services such as emergency response. Following competitive acquisition procedures would result in unacceptable delays and would cause a critical failure for EPA to communicate effectively internally and externally to the effect stakeholders. Additionally, allowing the current BP A to expire prior to its full maturation and three-year term would cost EPA avoidable additional fees associated with cancelling the current ELA prematurely and needing to enter into a new ELA prior to the expiration of the BP A. The result of the BP A expiring early and the ELA being cancelled would render EPA unable to act and respond quickly, communicate effectively and protect information and documentation within the Agency. Without the items and services provided to all of EPA under this BP A, EPA would not be able to adequately address emergency response efforts, remediate contaminated sites, conducts chemical spill and clean-up efforts or respond as needed to environmental disasters.

5. A Statement Demonstrating the Unique Qualifications of the Proposed Contractor or Nature of the Acquisition Requiring the Use of the Authority Cited.

Since EPA has an ELA with Insight, whereby the contractor must provide EPA with Microsoft items and services under this BP A, Insight is uniquely qualified and the only contractor that can continue that support to EPA with no disruption or lapse. Insight, as an authorized Microsoft Reseller and General Service Administration (GSA) Schedule 70 Contract holder, is qualified to handle the additional increase to the BPA ceiling. Continuing with the existing ELA and increasing the BP A ceiling will ensure the following:

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• The Agency will not have any disruption or lapse in support to mission critical Agency-wide services due to a lapse of software licenses and other related support;

• The Agency will have the requisite lead time to work with more realistic historical data needed to conduct a new, competitive strategically sourced procurement in fisca l year (FY) 2019. This data was critical information that was omitted when the curren1 BPA was competed and awarded in FY2016. Given the additional information and time needed to competitively procure a new award in FY2019, EPA will be in a better suited position to award a strategic sourcing vehicle more advantageous to the Agency. Currently, the related competitive procurement is in the acquisition planning phase; and

• The Agency will be able to continue using a strategic sourcing vehicle, without needing a waiver or exception, which has been mandated by 0MB and by EPA policy, to provide the items and services under this BPA to the Agency.

6. Determination of Best Value

The Contracting Officer has determined that this action represents the best value to EPA consistent with FAR 8.404(d). The current BPA rates and prices were determined fair and reasonable based on a price analysis at time of award. Additionally, GSA determined the prices of supplies and fixed-price services, and rates for services offered at hourly rates under the contract from which this BPA was issued against to be fair and reasonable per FAR 8.404(d).

The prices of items/services under this BP A for work provided during the last performance period and under this ceiling increase will not change from the original award and pricing received was at a discount from its established GSA prices.

7. Market Research

A review of the relevant GSA FSS, Schedule 70 General Purpose Commercial Information Technology Equipment, Software, and Services, shows that there are other vendors that can provide the same items and services as Insight. However, due to the ELA that the Agency is under with Insight, obtaining licenses from another vendor would result in EPA having to cancel all existing software licenses and start up a new ELA. This would result in employees Agency wide not having access to any Microsoft software products until a new BP A was awarded, whic·n is scheduled to take up to one year with award projected by the end of June 2019. EPA cannot award a new BPA prior to the current need, and EPA staff and offices not having access to Microsoft software would adversely affect EPA's ability to meet it mission. The ceiling increase will build-in enough capacity under the BPA to allow the next and final option period to be exercised by 30 June 2018. The additional time will provide EPA the requisite time to conduct a new competitive acquisition in accordance with applicable, competitive procedures in FAR Part 8 as well as 0MB and Agency mandated use of strategic sourcing vehicles.

8. Any Other Facts Supporting the Justification

No other source can provide the items and services to EPA when and as needed without causing harm to the Agency and major disruption to its day-to-day operations. If the ceiling of this BPA is not increased or if the BPA expired without having another ordering vehicle in place, all

Microsoft software product licenses at EPA would cease to be available until a new ELA and ordering vehicle were put into place.

otice of this Limited-Sources Justification will be published to the Government Point of Entry (GPE), on the Agency website and in Fed Biz Ops in accordance with the posting requirements set forth in FAR 5.201 and as implemented in FAR 6.305. The original BPA was awarded competitively in FY2016. Since this Limited Sources Justification is for an extension on an existing contract vehicle rather than a new procurement, offers will not be solicited from any additional sources for these services per the authority in FAR 8.405-6(a)(l )(i)(A).

9. Proposed Actions to Overcome Barriers to Competition

Once this Limited-Sources Justification is publicized in accordance with FAR 8.405- 6(a)(l )(i)(A), if/when responses are received, a listing of interested sources will be added to EPA's market research and list of prospective sources for the new, competitive acquisition expected to be awarded in FY2019.

The competitive, strategically sourced acquisition, to follow the current BPA with Insight will comply with all the requirements of a competitive acquisition. The new procurement is expected to be similar in size, scope and complexity of this BPA after the estimated ceiling increase.

EPA's acquisition strategy for the new procurement will be a competitive acquisition, but other variables such as setting the procurement aside to small business concerns has yet to be determined.

PART Ill - PROGRAM OFFICE CERTIFICATION

The undersigned Oflice ofErwironmental lnfonnation (OE!) Contracting Otlicer·s Rcprcsl.!nlali\'c (COR) and Program Oflicc Di\'ision Director certify that all supponing data whid1 fomia basis for this Limited-Sources Justification is complete and accurate.

Ch~t.

Cherie Salihy COR. OEI. Onice or Information Technology Operations (OITO )

----~ (2.a/:J 018 Date

,,_ ~J"~E1 - -~~_::,;_1_ __ Dale

PART IV - CONTRACTING OFFICER'S CERTfflCATION

I herchy certify that this justification is accurate and complete to the best of my knowledge and he lief.

{u#,~v~ Patrice Cunningham /' .=---:

Contracting Officer

PART V - REVIEWS & APPROVALS

.;ltJ. 'j_y__LlL_ ;;t:J_1_ i Date

L ct_c:_3> Keith Stewart Date Headquarters Procurement Operations Division Director

Head of Contracting Activity

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