Redacted_JA.docx

J&A - Microsoft CSA for Windows XP

JUSTIFICATION FOR OTHER THAN FULL AND

OPEN COMPETITION (OTFAOC)

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

Purchase Request Number: MIPR0010695662 Contract Number: To Be Determined (TBD) Task/Delivery Order Number: TBD Procurement Title: Microsoft Custom Support Agreement (CSA) for Windows XP Contracting Office: Defense Information Systems Agency (DISA) / Defense Information Technology Contracting Organization (DITCO)-Scott / PL8321 Statutory Authority: 10 U.S.C.§2304 (c)(1) and FAR 6.302-1

JUSTIFICATION FOR OTFAOC

Justification for OTFAOC Number:

Upon the basis of the following justification, I, as Procuring Activity Competition Advocate (PACA), hereby approve the use of other than full and open competition of the proposed contractual action, pursuant to the statutory authority of 10 U.S.C.§2304 (c)(1). The regulatory authority that applies to the requirement is FAR Part 6.302-1, only one responsible source and no other supplies or services will satisfy agency requirements.

JUSTIFICATION

1. REQUIRING AGENCY AND CONTRACTING OFFICE:

a. Requiring Agency:

United States Army, Chief Information Office (CIO)/G-6 107 Army Pentagon Washington, District of Columbia 20310-0107

b. Contracting Office:

DISA/DITCO-Scott Software Section - PL8321 2300 East Drive, Building 3600 Scott Air Force Base, Illinois 62225-5406

2. NATURE/DESCRIPTION OF ACTION(S):

a. The nature of this action is to procure extended support for Microsoft Windows XP as an Army-wide CSA. On April 8, 2014, Microsoft ended public support for Windows XP, so this CSA will allow for the continued support of Microsoft Windows XP in the form of patches and hotfixes. This requirement will be awarded as a firm-fixed-price (FFP) contract to the original equipment manufacturer (OEM) and sole source provider, Microsoft Corporation, using open market procedures. The acquisition will involve perpetuating annual support for the products currently being provided under contratc number HC1028-14-P-0056.

b. The period of performance will be from date of award through one full year. The applicable North American Industry Classification System code is 541519, Other Computer-Related Services, with a sales size standard of $27.5 million. Fiscal year 2015 Army funds will be used to fund this effort and are provided on a Military Interdepartmental Purchase Request.

3. DESCRIPTION OF SUPPLIES/SERVICES:

a. The objective of this CSA is to provide continuous support to the Army for Microsoft Windows XP for one more year. The CSA will provide the Army with necessary patches and hotfixes on over 8,000 devices, while the Army works to migrate off Windows XP over the next year. This procurement will ensure the Army has continued extended support to avoid security vulnerabilities on the existing licenses. The security updates for vulnerabilities rated “critical” will be provided at no additional charge, but per hotfix, fees apply for security hotfixes rated “important.” Non-security hotfixes are not available.

b. This acquisition will continue to provide support for the entire Army enterprise, to include, but not limited, to Army Service Component Commands, Direct Reporting Units, Army Reserve Commands, Army National Guard, and any joint organizations where the Army is the Executive Agent defined by the Office of the Administrative Assistant to the Secretary of the Army. The coverage of this requirement applies to all Continental United States (CONUS) and Outside CONUS. Included in these categories are military, civilian, and contractor personnel. The scope of the proposed CSA is to provide 100 percent continued coverage for all Army devices still running Windows XP. The CSA will provide continuous support and technical assistance on Windows XP, due to Microsoft’s termination of public support on April 8, 2014.

c. The following is a description and estimated value of the required support:

4. IDENTIFICATION OF STATUTORY AUTHORITY:

This acquisition is conducted under the statutory authority of 10 U.S.C§2304(c)(1) and the regulatory authority of FAR 6.302-1/ Defense FAR Supplement 206.302-1, only one responsible source and no other supplies or services will satisfy agency requirements. The support is peculiar to a specific brand name. Only Microsoft can satisfy the requirement.

5. DEMONSTRATION OF CONTRACTOR’S UNIQUE QUALIFICATIONS:

a. Description of events:

(1) Microsoft has ended more than 11 years of support for Windows XP Operating System (OS), leaving organizations to choose between migrating to newer technology or endure outdated OSs and potential network security vulnerabilities. According to Microsoft, technical assistance for Windows XP will no longer be commercially available, including automatic updates that help protect personal computers (PCs) and Microsoft Security Essentials for downloads on Windows XP. Currently, installed Microsoft Security Essentials will continue receiving anti-malware signature updates for a limited time, but this does not mean that PCs will be secure in the absence of security updates to help protect the PC.

(2) The Army has published guidance in preparation for the Windows XP support end of life. The United States 2nd Army/Army Cyber Command directed all Army organizations that currently own and operate servers and desktop OSs on the Non-Secure and Secret Internet Protocol Router Networks to migrate to supported OSs defined in Operations Order 2013-111, Reducing Computer Systems Vulnerability on the Land Warrior Network (LWN) in order to prevent vulnerabilities, standardize network resources, increase flexibility, and achieve effective defense in depth across the LWN. Although Army organizations have begun migration to an approved Windows baseline, not all were able to achieve compliance by the deadline. The Army requires continued support in order to maintain operational effectiveness and prevent security threats while transitioning to newer OSs. Therefore, the Army is executing a single year contract to assist those that were not able to migrate.

b. Justification:

(1) Minimum government requirements: This minimum requirement is to provide a CSA for extended support on Windows XP for the Army. Microsoft has discontinued public support on the Windows XP product. The Army requires continued support on more than 8,000 devices in order to maintain operational effectiveness and prevent security threats while transitioning to newer OSs.

(2) Proposed sole source contractor: Microsoft Corporation. Only Microsoft, the OEM, can distribute patches and hotfixes for Windows XP.

(3) Discussion regarding cause of the sole source situation: Microsoft Corporation maintains strict control over its proprietary source code and has not licensed any other contractor to have access to this information or to work on the software products. Currently, the Army has invested over $1 billion in Microsoft software, which is used extensively throughout the Army and all other organizations where the Army is the Executive Agent. The use of Microsoft software ranges from the office environment (desktops and laptops) to the tactical mission systems. Microsoft, the OEM, is the only provider of source code modifications to their product.

(4) Demonstration of unique source: Microsoft is the only entity that will create patches and resolve hotfix situations for Microsoft Windows XP. Microsoft maintains strict control over its proprietary source code and does not license any other contractor to work on the software products. Therefore, Microsoft Corporation is the only source to provide direct and unique access to the Microsoft patches, trouble-shooting, and hotfix type issues.

(5) Procurement discussion: The Microsoft CSA for Windows XP is required for the Army. After 11 years, Microsoft Corporation has announced public support on Windows XP has retired. The Army requires continued support of Windows XP, so a CSA with Microsoft is needed,

(6) Impact: Microsoft software is essential for the government to meet requirements. The lack of support for devices still using Windows XP will prevent the Army from downloading necessary patches, which will create major security issues and cause a direct mission impact to the warfighter. This will cause the Army to be more vulnerable to security threats, since patches and hotfixes are no longer publicly available for Windows XP.

6. FEDERAL BUSINESS OPPORTUNITIES (FBO) ANNOUNCEMENT/POTENTIAL SOURCES:

A notice of proposed contract action will be synopsized on the FBO website with the intention to award a sole source contract to Microsoft Corporation. A copy of the redacted J&A will be posted with the synopsis. A sources sought notice was published to FBO on April 10, 2015 prior to the issuance of the solicitation or contract award as required by FAR 5.2.

7. DETERMINATION OF FAIR AND REASONABLE COST:

The government will perform an evaluation of the offeror’s proposal and proposed costs to ensure the costs are fair and reasonable. The Contracting Officer will determine that the resulting contract’s costs or prices will be fair and reasonable based on comparison with the cost or prices outlined below. The Contracting Officer will also determine the pricing information valid for comparative purposes. Certified cost or pricing data is not required for this acquisition, in accordance with FAR 15.403-1(b)(3). Proposal pricing of the sole source provider will be compared with the following pricing information: published price list or published market prices for the same or similar items and the independent government cost estimate pricing for the required support renewal.

8. MARKET RESEARCH:

a. Market research was conducted by the Army CIO/G6 team from March 2015 to present. Market research included gathering data from previous acquisitions by contacting the current contract provider (Microsoft), gathering data from the internet, reviewing catalogs and other contractor literature, holding exchanges with Microsoft, reviewing publications of external information from technology research firms, reviewing existing DISA-wide contract vehicles, and determining potential sources. The purpose of the market research was to verify that possible resellers were not available. Web searches identified that Microsoft, the OEM, is the only source capable of providing the patches and hotfixes. Microsoft will be required to provide 100% of the product and technical services required to execute the CSA. Market research also revealed that the Microsoft software is commercially available to properly support the operating environment and is not available on existing government contract vehicles, to include Enterprise Software Initiative, General Services Administration, and National Aeronautics and Space Administration Solutions for Enterprise Wide Procurement.

b. Based on the results of market research, a solicitation will be issued to Microsoft Corporation, a large business, soliciting an open market quote for the continued software support.

9. ANY OTHER SUPPORTING FACTS:

None.

10. LISTING OF INTERESTED SOURCES:

Microsoft Corporation.

11. ACTIONS THE AGENCY MAY TAKE TO REMOVE OR OVERCOME BARRIERS THAT LED TO THE EXCEPTION TO FULL AND OPEN COMPETITION.

a. The previous procurement history of the Microsoft CSA for Windows XP in support of the Army is outlined below:

Contract Number: HC1028-14-P-0056 Contractor: Microsoft Corporation Contract Period: April 9, 2014 through April 8, 2015 Total Contract Value: $400,000 Contract Type: FFP Objective: Microsoft CSA for Windows XP

b. At this time, it is deemed that only this Microsoft software support would be able to function with the current products that are already in place. If Microsoft Corporation elects to surrender their legal ownership, copyright, and/or intellectual property software rights and move toward a complete open-source solution, then DISA will seek open competition. Regardless, the government will continue to search the marketplace, and alternative software solutions will continually be researched to determine if they will function with currently used products. If the government determines that Microsoft software is no longer required or other software meets the government’s needs, then the government will seek full and open competition for the required functionality. If similar requirements arise, every effort will be made to compete, to the maximum extent practicable.

Page 1 of 5 Pages