FM Moderization JA Other than Full Open (Redacted).pdf

4. Statutory Authority Permitting Other Than Full and Open Competition.

10 U.S.C. 3204(b)(B) as implemented by FAR 6.302-1, Only one responsible source and no other supplies or services will satisfy agency requirements.

5. Rationale Justifying Use of Cited Statutory Authority.

In accordance with 10 USC 3201(b)(B) as implemented by FAR 6.302-1(a)(2)(iii), the award of these highly specialized services for continued modernization and transformation of the DCSA OCFO to a source other than the current contractor, KPMG, would likely result in unacceptable delays in fulfilling the agency’s requirement and substantial duplication of cost that is not expected to be recovered through competition.

DCSA’s OFCO requires mission-focused financial and analytical support with a broad understanding of both general and working capital fund expertise, DCSA’s FM Strategic Goals, and DCSA’s mission priorities. To effectively support OFCO, the contractor must have the capabilities to evaluate DCSA’s current “as-is” structure and processes, the Agency’s Strategic Goals, Mission Priorities, and develop and implement processes to support day to day operations as well as design new or modernize processes that are compliant with Department of War (DoW) general and working capital fund policies and guidance. KPMG is the only known entity that can satisfy the requirements of this effort at the level of quality required and is positioned to immediately provide this support.

Contract No FA701420D0009/ FA701424F0262 was originally competed as a task order under the Air Force enterprise-wide Business Transformation Multiple Award Indefinite Delivery/ Indefinite Quantity (IDIQ) using FAR 16.505 procedures and was awarded to KPMG, LLP on 20 July 2024. On 20 July 2025, the overarching IDIQ FA701420D0009 was terminated for convenience as part of the Air Force implementation of Executive Order 14222 and FA701424F0262 was required to end on 19 January 2026.

Under the prior competitively awarded task order, KPMG was found to have demonstrated extensive experience integrating its technical, financial, and operational expertise to support DOW FM process modernization. In KPMG’s proposal, it demonstrated its experience in evaluating problems, identifying driving factors contributing to the problem, devising innovative approaches to solving the problem, developing both human and software tools/processes to solve the problem, providing recommendations on implementation of the tools/processes developed, collecting relevant data to assess the implemented solution, performing thorough and timely assessments of the collected data and revising the solution as needed. This enabled KPMG to provide responsive evaluations of challenges and opportunities to inform Gov’t stakeholders of FM decisions.

Additionally, KPMG possesses in-depth knowledge and understanding of DOW and DCSA PPBE activities, external Agency audit findings and required remediation activities, and the executive level issues that DCSA faces from its support provided under Contract No FA701420D0009/ FA701424F0262. This highly specialized experience is not likely to be available from other contractors and is critical to the OFCO transformational activities to be provided by this effort.

The start-up time and extensive learning curve required to develop an equivalent understanding of the OCFO “as-is” state and its “to-be” state to be reached at the conclusion of the FM transformation/modernization activities by another contractor would likely result in unacceptable delays in fulfilling DCSA’s requirements.

The degradation of DCSA's product pricing and budgetary capabilities, stemming from the loss of the current vendor will trigger a series of cascading failures that will significantly compromise the agency's accuracy and accountability. DCSA's ability to recalibrate pricing for its products (CV, BI, etc) products and services will be impaired. This will result in a lack of transparency in pricing for all customers, diminished control over the WCF, and a substantial reduction in audit reliability. These deficiencies will directly impact DCSA's relationships with its customers and oversite and potentially lead to disputes over pricing and service levels.

DCSA's evaluation of its WCF operating range will become less analytically driven, drastically reducing the agency's ability to justify its cash balance to crucial oversight authorities, including Comptroller, this may result in reduced confidence to submit accurate and defensible data for Budget Estimate Submission (BES) 2028 to Comptroller (to submit August 2026) and President's Budget (PB) 2027 (to submit February-April 2026). As a result, DCSA risks facing significant challenges in securing adequate funding, potentially impacting its ability to sustain essential programs and services.

The loss of the vendor at this juncture will also cause significant impairment on the level of development, testing, internal control identification, representation, etc. of the ServiceNow capability in use and development; the loss of planned development and releases will halt forward progress and direct investment of ~$19M will in the product will be diminished. A single interruption to the current capability potentially results in delayed recognition and collection of $ in revenue (monthly). The team is currently working to address some existing revenue collection challenges, and the vendor's support is essential for implementing planned updates to resolve these issues ($ in uncollected revenue) Customer focused releases aimed for implementation early in Calendar Year 2026 are targeting the automation of manual processes and improving efficiency, which will be delayed or impacted without this continued vendor support. DCSA estimates AI automation of 80% for common customer interactions for the WCF Operations team, loss of the planned capabilities will reduce value of the prior investment over time (estimated at 6,500 hours per annum).

Development of data-driven updates to the Cost Allocation Model (CAM) assumptions will be less rigorous. Reduced rigor will negatively validity and overall value of CAM outputs, hindering DCSA's ability to make (informed) decisions related to resource allocation and workload. This will directly impact DCSA's ability to accurately plan for FY28 pricing activities, scheduled for February-April 2026, and will jeopardize the agency's ability to publish clear pricing to customers by July 2026.

Finally, the critical initiative to improve budget allocation through enhanced workload analysis will be paused due to competing priorities. This delay will directly lead to reduced execution performance and hinder overall mission execution, with potential negative impacts on crucial operational timelines such as field contract timeliness. Again, this pause directly hampers ability to submit accurate and defensible data for Budget Estimate Submission (BES) 2028 President's Budget (PB) 27 in April 2026.

6. Description of Efforts Made to Solicit Offers from as Many Offerors as Practicable.

The proposed contract was synopsized (Notice of Intent to Sole Source was posted) on the SAM website on 21 October 2025. A total of nine companies expressed initial interest in performing this effort and were provided with 6 questions to respond to in order to determine if the interested party had the minimum technical qualifications to warrant further consideration and potentially alter the Agency’s intent to award this effort to KPMG, LLP. Of the nine interested sources, 2 were only interested in subcontracting opportunities, 4 did not respond to all questions by the due date/time and 3 submitted responses to the questions which were reviewed by the OFCO requirement owner. Upon review of the supplemental information, the Program Office revalidated that it is not practicable, for the reasons discussed in paragraph 5 above, for any company other than KPMG to provide the required services.

7. Determination of Fair and Reasonable Cost.

A determination will be made by the Contracting Officer that the anticipated cost to the Government of the supplies/services covered by this Justification and Approval will be fair and reasonable.

8. Actions to Remove Barriers to Future Competition.

This is a one-time purchase to complete modernization work currently being performed under Air Force Contract No. FA701420D0009/ FA701424F0262. Any future work is expected to be competitively awarded.