G1.2 FOE DCGS-N FINAL_Redacted.pdf

JUSTIFICATION for an EXCEPTION to FAIR OPPORTUNITY for the placement of an order >SAT under a Multiple Award Contract (MAC)

Upon the basis of the following justification, I, as Executive Director of Naval Information Warfare Center, Pacific, hereby approve the Exception to Fair Opportunity Pursuant to FAR 16.505(b)(2).

JUSTIFICATION

l. Agency and Contracting Activity. Department of the Navy, Naval Information Warfare Center Pacific (NIWC), Pacific.

2. Nature/Description of Action. This is a fair opportunity exception to place an order with Leidos Inc. under a multiple award contract N66001-19-D-3410. The task order number is TBD.

3. Description of Supplies/Services. This is a severable task order supporting the Distributed Common Ground System –Navy Increment 2 (DCGS-N Inc 2). The contractor will provide systems engineering; software development; enterprise engineering; software build management;

infrastructure integration; testing; technical writing services; system documentation; and cybersecurity engineering. The estimated value is

This task order is the continuation of three existing tasks awarded to Leidos Inc. These task orders are as follows:

N66001-16-D-0440 Task Order N6600117F0581 (Competitive) N66001-16-D-0440 Task Order N6600117F0870 (Sole Source) N68786-18-D-7254 Task Order N6878618F7125 (Competitive)

DCGS-N Inc 2 IOT&E is a critical event. This event is currently scheduled for the fourth quarter of FY 2021, with focused preparation beginning in the fourth quarter of FY 2020. FCR-2 is nearing completion and will be followed by two more FCR events, two Application Integration System Integration Test (AI SIT) events, and other prototype demonstrations and installations leading up to the IOT&E. IOT&E failure would endanger the entire program and harm the Navy’s ability to gather and disseminate vital intelligence information.

The period of performance is twenty-nine (29) months total, with one seventeen (17) month base period followed by one twelve (12) month option period. Leidos will continue to support RDT&E efforts for Fleet Capability Release 3 (FCR-3), FCR-4, FCR-5, and Initial Operational Test and Evaluation (IOT&E). This schedule allows for performance through the IOT&E, currently scheduled for fourth quarter of fiscal year (FY) 2021. This schedule also allows for post-test activities and reports currently scheduled for the first quarter of FY 2022. A summary of the estimated schedule and dollar value is below:

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Period Estimated Dates Estimated Total Base 15 August 2019 – 14 January 2021 Option 15 January 2021 – 14 January 2022

Estimated Grand Total

The value was estimated using historical cost information (i.e., costs incurred under existing Leidos task orders in support of DCGS-N Inc 2).

4. Identification of the Exception to Fair Opportunity. (FAR 16.505 (b)(2))

Identification/Justification for Exception:

a. The agency need for services is of such urgency that providing fair opportunity would result in unacceptable delays.

b. Only one such awardee is capable of providing such services required at the level of quality required because the services ordered are unique or highly specialized.

1. Leidos is uniquely capable based on the qualifications and experience of its current DCGS Inc 2 team.

DCGS-N Inc 2 is a highly virtualized and complex system with a myriad of internal interconnections; the program requires contractor personnel with unique expertise. DCGS-N Inc 2 operates in multiple environments and does not have a single management process. Contractor personnel must fully understand these multiple environments to be productive. Even a small change in one area can have significant negative effects in other areas. This risk can be mitigated by ensuring contract personnel have intimate familiarity with the systems and existing interconnections.

The Leidos personnel currently supporting DCGS-N are critical to maintaining the development, integration, and deployment velocities. Leidos’ team of developers, systems engineers, test engineers and technical writers are able to begin work immediately following task award. The Leidos SMEs are currently the only personnel who possess the required DCGS-N Inc 2 system knowledge for this tasking. This task can only be accomplished by a fully integrated and coordinated forty full-time-equivalent (40 FTE) effort across nine inter-related disciplines (systems engineering, software development, enterprise engineering, software build management, infrastructure integration, testing, technical writing services, system documentation, and cybersecurity engineering). Leidos is intimately familiar with supporting DCGS-N software development using the scaled AGILE framework process and is a critical part of the sprint teams.

Leidos has the advantage of possessing substantial program knowledge and a deep technical expertise from its history of continuous support virtually since DCGS-N Inc 2 program inception. Leidos personnel have provided critical support to the development of LSI processes and now hold significant knowledge of the systems and cloud environments. The Leidos team has made important contributions to the Lead System Integrator (LSI) efforts by supporting

(b) (9) previous AI SITs and Trident Warrior exercises. These contributions increased system maturity and reduced risk as necessary to meet programmatic milestone requirements.

2. Leidos is the only contractor that can perform this task without causing substantial delays.

Contracting with a company other than Leidos would cause an estimated six-month delay.

Based on past experience, new personnel who are unfamiliar with DCGS-N Inc 2 typically require six months before becoming fully productive. A new contractor would have to establish a workforce possessing the knowledge and experience in the disciplines listed above. Moreover, a new contractor would have to develop an in-depth understanding of the architecture. The current timelines and milestones established by the DCGS-N Inc 2 program do not allow for the steep learning curve associated with the architecture and its applications. The estimated six-month delay would cause the program to miss AI SIT 19-2 (scheduled in ), which in turn would cause failure to meet IOT&E on a shipboard platform.

3. Transitioning to a new contractor would require substantial duplication of costs which the program cannot afford.

The estimated cost of transitioning to a new contractor at this time is . The cost of a disruption to the continuity of the Government-contractor team is estimated based on the experience of NIWC Pacific SMEs. The Government SMEs considered the LSI software development processes and associated engineering learning curves, and estimated that a new contractor would:

a) Require at least six-eight months to obtain the technical proficiency equivalent to that of the Leidos developers;

b) Require a transition and turnover period with Leidos personnel to acquire the technical proficiency and knowledge transfer, effectively doubling the workforce during the cross-training period.

The knowledge transfer tasks detailed in the table below are critical for a new developer to successfully perform the tasking required without causing harm or degradation to the system.

The total estimate for transitioning Leidos’ current tasking is below:

TRANSITION TASK HOURS COST*

TRANSITION TASK HOURS COST*

Project Manager: Review all aspects of prior work, Integrated Master Schedule, Baseline, Architecture

Systems Engineering: The existing system is complicated and encompasses a myriad of processes that must be learned.

These include the architecture, system attributes, the modules, tech refresh techniques, system requirements analysis methodology, requirements traceability methodology, interface management, etc. We would expect a minimum team of twenty new contractors (one half of the forty-person engineering team) to study the system which, due to its

25,600 complexity, could reasonably take eight months to fully comprehend.

Additionally, a minimum of six months’ overlap with Leidos personnel would be required for a thorough knowledge transfer. Half the Leidos staff would perform knowledge transfer to the new contractor team. This is the best way to prevent degradation of the current system during turnover.

25,600

Systems Architecture: Personnel assigned to the systems architecture must review all aspects of the design, become familiar with existing enterprise services, become familiar with developed architecture model products, and become familiar with the current DoD Architecture Framework (DoDAF) in use. Government SME’s estimate a minimum of 2 Full Time Equivalents (FTE) for six months, with two months’ overlap with existing Leidos staff.

3,200

Test: Test engineers must review all aspects of test procedures and practices. Government SME’s estimate a minimum of 3 FTEs for six months, with six months’ overlap with existing Leidos staff.

5,760

Total cost of transition 61,080 *Costs are based on an average fully burdened hourly rate of $145.12 derived from historical costs and the Government SME’s Independent Government Cost Estimate.

The program cannot afford the substantial costs associated with transitioning to a new contractor.

Furthermore, given the magnitude of this estimate (roughly 36% of the total cost of the task), the Government does not expect to recover these savings through competition.

Conclusion: Leidos is the only contractor capable of providing such services required at the level of quality required because the services ordered are unique and highly specialized. Leidos is uniquely capable based on the qualifications and experience of its current DCGS Inc 2 team.

Leidos is the only contractor that can perform this task without causing substantial delays.

Furthermore, transitioning to a new contractor would require substantial duplication of costs, which the program cannot afford.

c. The order must be issued on a sole-source basis in the interest of economy and efficiency as a logical follow-on to an order already issued under the MAC, provided that all the awardees were given fair opportunity to be considered for the original order.

d. It is necessary to place an order to satisfy a minimum guarantee.

e. For orders exceeding the simplified acquisition threshold, a statute expressly authorizes or requires that the purchase be made from a specified source.

5. Determination of Fair and Reasonable Cost.

The contractor will submit a formal cost proposal with cost or pricing data and sufficient information to support the accuracy and reliability of the estimate. Leidos’ proposal will be reviewed by the technical customer, the contract specialist, and the contracting officer. Field pricing assistance will be requested from the Defense Contract Audit Agency (DCAA) and the Defense Contract Management Agency (DCMA). The cost or pricing data will be certified by Leidos at the conclusion of negotiations in accordance with FAR 15.403-4.

6. Any Other Facts Supporting the Justification.

None.

7. Actions Taken to Remove or Overcome Barriers that Led to the Exception to Fair Opportunity.

This task requires the continued support of the current Leidos team through IOT&E. As demonstrated above, only the Leidos team is capable of performing this task without undue cost, schedule, and performance impacts. However, as IOT&E approaches, the Government will reassess the staffing needs to meet future program milestones.

Furthermore, the DCGS-N Inc 2 program is supported by several contractors (large and small businesses), through several task orders. The Government will continuously assess the staffing needs as the program requirements evolve, and compete specific tasks to the maximum extent practicable. If the Government requires a surge in new contractor personnel, the Government will compete such staffing requirements.

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