JA_6_month_extension_-_redacted.pdf

JUSTIFICATION FOR OTHER THAN FULL AND

OPEN COMPETITION (OTFAOC)

Federal Acquisition Regulation (FAR) Part 6 Justification, Supporting Procurements under FAR Part 12, FAR Subpart 13.501, and FAR Part 15

Purchase Request Number: To Be Determined Contract Number: HC1028-12-C-0034 Procurement Title: Army Cisco SMARTnet Support Contracting Office: Defense Information Systems Agency (DISA) - Defense Information Technology Organization (DITCO) Estimated Value: TBD Statutory Authority: 10 U.S.C. §2304(c)(1), FAR 6.302-1

JUSTIFICATION FOR OTFAOC

Justification for OTFAOC Number: JA14-090

Upon the basis of the following justification, I, as the Head of the Contracting Activity, hereby approve the use of other than full and open competition of the proposed contractual action pursuant to the authority of FAR 6.302-1 - Only one responsible source and no other supplies or services will satisfy agency requirements, 10 U.S.C. §2304(c)(1).

JUSTIFICATION

1. REQUIRING AGENCY AND CONTRACTING OFFICE:

Requiring Agency: United States Army Chief Information Office (CIO)/G-6

Pentagon Washington, DC 20310

Contracting Office: DITCO 2300 East Drive Scott Air Force Base, Illinois 62225-5406

2. NATURE/DESCRIPTION OF ACTION(S):

(a) The purpose of this action is to extend the period of performance under contract HC1028- 12-C-0034, as performed by Red River Computing Company (Red River), for a period of 6 months in accordance with FAR 52.217-8 “OPTION TO EXTEND SERVICES (NOV 1999).”

The purpose of exercising this clause is to provide a 6-month transition period between the incumbent contractor and the awardee of the anticipated follow-on, which is currently in the pre-solicitation stage. The transition period will be a 6-month period of performance beginning on June 29, 2014 through December 29, 2014. The extension will be funded for a full 6 months through the Operations and Maintenance appropriation. This modification will be firm fixed price (FFP).

(b) The government did not include FAR 52.217-8 in the initial request for proposal and pricing was not specifically requested or evaluated for the 6-month extension of services prior to

6-month Extension of SMARTnet Support-JA14-090 award of the current contract, thus necessitating this justification and approval. A bilateral modification to the contract to include FAR 52.217-8 “OPTION TO EXTEND SERVICES (NOV 1999).” was executed on June 18, 2014. This extension will be in accordance with the terms and conditions of the current contract and in keeping with FAR 52.217-8, which requires “continued performance of any services within the limits and at the rates specified in the contract. These rates may be adjusted only as a result of revisions to prevailing labor rates provided by the Secretary of Labor.”

(c) The current contract includes a base year and four 1-year options. Current SMARTnet support is being provided under option year 1, which expires on June 28, 2014. Due to Size Determination NO. 1-SD-2013-12, issued by the United States (U.S.) Small Business Administration (SBA) Office of Government Contracting on May 24, 2013, the remaining option years on the current contract cannot be exercised.

3. DESCRIPTION OF SUPPLIES/SERVICES:

(a) The current SMARTnet contract provides the flexibility to meet current and future Cisco SMARTnet workloads, security, and modernization requirements, while ensuring the Army receives uninterrupted, continuous access to their applications and data. The Army has made a significant investment in the currently installed Cisco infrastructure to ensure the network’s security posture remains accredited. The current contract provides brand-name SMARTnet support for the entire Army enterprise, excluding Army Medical Command (which is supported by Military Health Services) and Army Special Operations Command (which is supported by Special Operations Command).

(b) The scope of the current contract addresses SMARTnet through an authorized Cisco Gold Partner that provides the known baseline inventory of Cisco products. Cisco SMARTnet consists of software support, updates, revisions, error detection and correction, and rights to new releases and/or versions. In addition, software that is eligible for SMARTnet is entitled to major and minor upgrades. SMARTnet support provides advanced hardware replacement, minimizing the potential for network downtime as well as covering the licensed internal operating system.

This allows the Army to extend the useful life of its investment by increasing current functionality and ensuring compliance with network security policies and regulations.

SMARTnet support also provides telephone and email access via the technical assistance center which provides engineering support through certified Cisco network experts in voice, video, and data communications networking technology. The Army also has access to Cisco’s website, which provides 24-hour online product and technology information, interactive network management, and troubleshooting tools.

4. IDENTIFICATION OF STATUTORY AUTHORITY:

Only one responsible source and no other supplies or services will satisfy agency requirements, 10 U.S.C. §2304(c)(1). (FAR 6.302-1/DFARS 206.302-1)

5. DEMONSTRATION OF CONTRACTOR’S UNIQUE QUALIFICATIONS:

(a) Description of events. On December 18, 2012, the Director of the SBA’s Office of Government Contracting filed a size protest in response to the award of the current contract to

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Red River. The protest was sustained, and on May 24, 2013, Size Determination NO. 1-SD- 2013-12 was issued by the U.S. SBA Office of Government Contracting. In its decision, the U.S. SBA stated that the incumbent contractor was to carry-out performance through the end of the first option year only. Upon completion of the first option year, the remaining option years will not be exercised, and Red River will cease to provide the Army the required SMARTnet support, thus leaving the Army systems vulnerable and at risk.

Currently, DITCO is working a brand-name limited source requirement for a Joint Enterprise License Agreement (JELA) for SMARTnet support, under which the Army and other Department of Defense (DoD) agencies will procure SMARTnet support. On April 28, 2014, DITCO posted on Fed Biz Opps a notice of its intention to issue a sole source award to Cisco Systems, Inc. for SMARTnet support for users across the DoD.

On May 2, 2014, Red River filed a bid protest relating to the sole source notification. The bid protest was submitted to the Government Accountability Office (GAO) in a timely manner to trigger an automatic suspension of performance of the SMARTnet JELA effort pending resolution of the protest. After reviewing the protestor’s allegations, and without conceding the merit or admitting any of the allegations, and without waiving any procedural or substantive defenses to the protest, DISA-DITCO took corrective action by withdrawing its sole source notification. Although the GAO dismissed the protest on May 12, 2014, due to the bid protest and corrective action, DISA-DITCO must re-solicit the SMARTnet JELA. As a result, award of the SMARTnet JELA will not occur before the first option year will expire under HC1028-12-C- 0034.

To ensure the Army continues to receive the required SMARTnet support until the SMARTnet JELA effort can be awarded, the contracting officer will utilize FAR Clause 52.217-8 “Option to Extend Services,” which will extend the current Army SMARTnet support contract from June 29, 2014 to December 29, 2014.

Cisco SMARTnet software is fully implemented and integrated into the Army’s architecture and has been for more than 10 years. Army’s Information Assurance regulations require each device operating on the Army’s network to have the latest software updates to defend against potential security threats, and functional areas require software and hardware replacement in the event a device fails. The purchase of proprietary software licenses and maintenance, as well as hardware maintenance for the products, is required to meet the Army regulation. To duplicate another functional replacement initiative through full and open competition is not in the best interest of the Government at this time in terms of both costs and efficiency. The Army relies almost exclusively on the fully implemented Cisco software and hardware to provide its network routing and switching capability. To procure and rewrite applications to function with replacement products throughout the Army at this time would result in substantial work interruptions, creating unnecessary obstacles, restraints, and losses in efficiency. If the Government is required to replace the existing Cisco architecture, the Government would lose its current investment in the existing Cisco products and as a result, would have to fund the required installation and deployment of a new system, which would be cost prohibitive. Not only would the money invested be lost, but time and resources would be strained, as outlined below.

The proposed acquisition is for continued brand-name support in order to maintain uniformity and common troubleshooting and service techniques. Introducing a new manufacturer to service

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Cisco hardware will not only void the warranties associated with Cisco products currently in place, but it will create an unacceptable security environment for the network by eliminating security updates to essential Cisco network components, placing the reliability of the network at high risk.

In order to ensure the Army’s secured network is not comprised, it is critical for Cisco devices to be kept current with the latest software available, which is only available through the Cisco SMARTnet maintenance support. Nearly all Cisco hardware is operated by an Internetwork Operating System (IOS), which allows the user to configure the equipment and to control flow of information and establish security protocols. The IOS updates are mandatory for ensuring Army’s security posture. As with most IT equipment, the Cisco equipment currently installed requires frequent updates to patch security vulnerabilities. The devices cannot be legally patched without SMARTnet or the purchase of individual updates from Cisco or its resellers, which would be much more expensive and cost prohibitive given the size of the Army’s network. All Critical Information Assurance Vulnerability Assessments (IAVA) require immediate remediation; and lack of SMARTnet would prevent the Army from applying the necessary patches, creating significant security implications in a timely manner. Access to additional resources for problem troubleshooting will minimize network outages and ensure security of the data being transmitted. The cost to remediate a single network compromise on an individual basis would not provide timely incident resolution. While federal security breaches are classified, there are many public examples including the recent attacks on Sony and Citibank.

Successful attacks on un-patched software have caused billions of dollars in damage, in both private and public sectors. The IAVA policy requires Department of Defense Components to register with the IAVA database and report compliance to IAVA notifications. The compliance information must be reported by stating the number of assets affected, in compliance, and with waivers. Failure to properly patch affected systems will violate Army policy in accordance with Army Regulation 25-2 as well as other related polices and could result in service disruption and/or breaches in network security. Purchase of Cisco SMARTnet support is the only option for meeting these requirements.

SMARTnet support is also critical to maintaining the Army Global Network Enterprise (GNE).

The GNE integrates several ongoing network enterprise programs and new initiatives into a single strategy to ensure global connectivity under one network manager. Using GNE to organize the Army's information will make it globally accessible and useful to soldiers world-wide. The GNE is an Army-wide strategy to operationalize LandWarNet as an Army enterprise activity. The GNE is an integrating construct to bring LandWarNet and battle command programs and initiatives into theater-based alignment with this enterprise objective. The GNE similarly relies upon existing Cisco architecture. As a result, the same costs and security risks discussed above apply to the GNE if other than Cisco SMARTnet support is provided.

(b) Justification:

(1) Minimum Government requirements. See paragraph 3(b) above.

(2) Proposed sole-source contractor. Due to the bid protest, Red River is the only source that can fulfill this requirement without risk of a substantial break in support to the Army. Red River is currently providing the required SMARTnet support and has done so since contract award in June 2012. Red River has the capability and in-depth

Page 4 of 6 Pages knowledge of the Army’s systems to perform the continuation of this effort in an efficient and economical manner. Award to any other source at this time would result in an Army lapse in coverage as well as a substantial duplication of cost to the government that is not expected to be recovered through competition, as stated in 5(a) above.

(3) Discussion regarding cause of the sole-source situation. This sole-source justification is a result of the events discussed in 5(a) above. If a bid protest had not been received, this extension would not be necessary.

(4) Demonstration of unique source. This sole-source justification is a result of the events discussed in 5(a) above. If a bid protest had not been received, this extension would not be necessary.

(5) Procurement discussion. The current SMARTnet support is provided via contract HC1028-12-C-0034. The original requirement for the support was set aside and competed amongst certified Cisco gold partners. The original government solicitation did not include nor request pricing, in accordance with FAR 52.217-8; therefore, it was not evaluated. This clause stipulates the “option provision may be exercised more than once, but the total extension of performance hereunder shall not exceed 6 months.” This justification and approval (J&A) provides for a total extension of 6 months.

(6) Impact: Failure to extend the current contract for a period of 6 months, in accordance with FAR 52.217-8, “OPTION TO EXTEND SERVICES,” will result in significant security threats and vulnerability of the Army’s software and hardware infrastructure.

In order to ensure the Army’s secured network is not comprised, it is critical for Cisco devices to be kept current with the latest software updates, which are only available through the Cisco SMARTnet support.

Due to the critical nature of the equipment, as security threats are identified, updates to the IOS must be made. If the network was to fail due to software or hardware failure, all day-to-day work functions, online collaboration, VTC capability, and Command and Control of forces in the field would be severely degraded. Only Red River can maintain the Cisco equipment in order to preserve the integrity of the Army’s network architecture and the associated warranties through their current contract.

6. FEDBIZOPPS ANNOUNCEMENT/POTENTIAL SOURCES:

This J&A will be posted to FedBizOpps in accordance with FAR 6.305(c).

7. DETERMINATION OF FAIR AND REASONABLE COST:

This original effort was a competitive FFP effort, and the original costs were determined fair and reasonable based upon adequate price competition. IAW FAR 52.217-8, the pricing for the 6-month extension shall not exceed the rates currently under contract. The contractor’s proposal

Page 5 of 6 Pages for this extension will be analyzed by the contracting officer, and the substantiation of the government’s determination of fair and reasonable pricing will be detailed in a price negotiation memorandum.

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