N0003916MP00410_MFR_JA_Redacted.pdf

Memo for Record - Justification & Approval Subject:

The following paragraphs, in accordance with Federal Acquisition Regulation Part 13.106-1(b)(1)(i), are provided to support sole source limited source justification for proposed orders exceeding the micro-purchase threshold, but not exceeding the simplified acquisition threshold.

The purpose of this procurement is to procure brand-name software support for Ariel Systems, Applications and Products (SAP) Environmental Health and Safety (EH&S) Integration Data/ Staging Area/Ariel Data Manager (ADM) ESHAP in support of the Navy Enterprise Resource Planning (ERP) Program Office. The total estimated contract cost is The estimated period of performance is date of award through one year, with an estimated start date of June 15, 2016. Fiscal year 2016 funds were provided under Military Interdepartmental Purchase Request (MIPR) The applicable North American Industrial Classification System Code (NAICS) is 541519, software support and maintenance, with a size standard of $27.5 million. This requirement is follow-on to contract number , which expires June 14, 2016.

Navy ERP is a 24x7 mission critical business system currently managed by a 600 plus government and contractor support staff which supports 71,650 end users across the Navy supporting multiple Navy commands: Naval Air System Command (NAVAIR), Naval Supply Systems Command (NAVSUP), Naval Sea Systems Command (NAVSEA), and Space & Naval Warfare Systems Command (SPAWAR). Navy ERP is considered the Navy’s financial system of record and as such must meet Earned Value Management (EVM) reporting requirements required by the Office of Management and Budget (OMB) Circular A-11 and the Department of Defense (DoD).

Navy ERP purchases a yearly subscription of the 3E company Environmental, Ecological and Engineering its subsidiaries (3E Company) Ariel EH&S regulatory databases to ensure Navy compliance with environmental laws and regulations. The EH&S module is the specifications database that houses all federal, state and local regulatory requirements:

Environmental Protection Agency (EPA), Occupational Safety and Health Administration (OSHA), etc. The specification database also maintains health and safety data found on a Material Safety Data Sheet (MSDS). The SAP EH&S module uses the EH&S database to support compliance with statutory environmental, health and safety requirements that regulate Navy maintenance and logistic processes.

Without Ariel EH&S regulatory database software support, the necessary regulatory and reference data will not be available to ensure proper shipping and handling of materiel, thereby placing materiel handlers and recipients at greater risk of hazard. The EH&S regulatory database provides for hazard communications, new chemical notification, and the reporting of the restriction on use of hazardous substances. This includes creating compliant multi-language MSDSs, labels, and other related documents as part of the shipping and receiving processes. The government has invested in Ariel Systems software support since May of 2005, which will not recouped through competition.

In March and April 2016, market research was conducted by the government. Market research was conducted through the use of websites, contractor brochures, hands-on knowledge of available software, and discussions with Government and Contractor.

3E Company continues to be the sole source provider of software support for Ariel licenses. Navy ERP will continue to diligently search the market for replacement software which is compatible with the Navy ERP server environment. Market research confirms that this support is not available on the General Services Administration Federal Supply Schedule or the National Aeronautics pace and Administration contract vehicle. As the software publisher, only 3E Company has access to the software source code that is being supported. Product upgrades, maintenance releases, patches, and troubleshooting support require access to the software source code. Without access to the software source code, no other firm can provide the required support.

Based on the justification provided by the Navy, a determination has been made to procure this brand name requirement utilizing open market procedures.