JA14-115_Mercury_redacted_Redacted.pdf

Continue Development of the Mercury Spectrum-JA14-115

JUSTIFICATION FOR OTHER THAN FULL AND

OPEN COMPETITION (OTFAOC)

FAR Part 6 Justification, Supporting Procurements under FAR Part 12, FAR Subpart 13.501, and FAR Part 15

Purchase Request Number: DOSMC4E019 Solicitation Number: HC1047-14-R-4039 Task/Delivery Order Number:

Procurement Title: Continue Development of the Mercury Spectrum Contracting Office: PL63 Estimated Value: $2.5M Statutory Authority: 10 U.S.C. 2304(d)(1)(B)

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION (OTFAOC)

Justification for OTFAOC Number: JA14-115

Upon the basis of the following justification, I, as the Procuring Activity Competition Advocate, hereby approve the use of other than full and open competition of the proposed contractual action pursuant to the authority of 10 U.S.C. 2304(d)(1)(B).

JUSTIFICATION

1. REQUIRING AGENCY AND CONTRACTING OFFICE:

Requiring Agency: Defense Spectrum Organization (DSO) 2004 Turbot Landing, Annapolis, MD 21402-5064.

Contracting Office: Defense Information Systems Agency Defense Information Technology Contracting Organization-National Capital Region (DITCO-NCR – PL63) P.O. Box 549, Ft.

Meade, MD 20755-0549.

2. NATURE/DESCRIPTION OF ACTION(S): The purpose of this action is to issue a new, sole source, Firm Fixed Price (FFP) contract to Dreamhammer Inc., 501 Colorado St., Ste 300, Santa Monica, CA 90401. The contract will be for one base year and four subsequent one year option periods . The contract will be funded using Research Development Test & Evaluation (RDT&E) funds for the development portion, and Operational and Maintenance (O&M) funds for the maintenance portion of the contract.

3. DESCRIPTION OF SUPPLIES/SERVICES: The contract is for the continued development and maintenance of the Mercury Spectrum Collaboration Application. Mercury enables organizations to request and receive frequency assignments in support of Humanitarian Assistance/Disaster Relief (HA/DR) events. Mercury represents a unique capability in the ability of the application to allow transnational coordination in an unclassified environment.

Page 1 of 6 Pages

USPACOM identified the inability to coordinate for frequency use during a HA/DR event as a capability gap. The Joint Spectrum Center identified Dreamhammer Inc as the most suitable option for developing a potential solution to mitigate USPACOM’s capability gap based on an existing open architecture software application that Dreamhammer had developed.

Dreamhammer was placed on a FFP contract and developed Mercury as a means for mitigating USPACOM’s identified gap. Mercury was demonstrated and used during USPACOM’s Pacific Endeavor exercise in AUG 2011 in Singapore.

Dreamhammer, Inc was subsequently placed on a second firm fixed price contract with a single option year to continue Mercury development following the successful demonstration of the applications utility during the Pacific Endeavor exercise. Mercury’s user base has since grown to more than 350 current account holders from geographic Combatant Command regions around the globe and has been used for international coordination of spectrum use in multiple multi-national exercises. Mercury is also being used in some instances for day-to-day activities of U.S.

forces for unclassified spectrum coordination needs. Mercury was recently used during typhoon relief efforts in the Philippines with great success. After action reports from USPACOM repeatedly called for the continued development of Mercury to further enhance the applications utility.

4. IDENTIFICATION OF STATUTORY AUTHORITY: 10 U.S.C. 2304(d)(1)(B), (FAR 6.302-1(a)(2)(iii) - Services may be deemed to be available only from the original source in the case of follow-on contracts for the continued provision of highly specialized services when it is likely that award to any other source would result in:

(A) Substantial duplication of cost to the Government that is not expected to be recovered through competition; or

(B) Unacceptable delays in fulfilling the agency’s requirements.

5. DEMONSTRATION OF CONTRACTOR’S UNIQUE QUALIFICATIONS: Dreamhammer is the original source of Mercury and the new FFP contract is for the continued development of a unique software application.

(a) Description of events - Dreamhammer developed Mercury using an evolutionary development process following an iterative development lifecycle. This process enables focus on current customer demands by using agile software development. There is not an explicit end result as customer requirements, feedback, and satisfaction are all considerations as iterations are designed, prototyped, tested, and implemented based entirely on user requirements. The iterative development lifecycle keeps long-term costs low by focusing on user feedback, requiring fewer changes following roll-out of a release while increasing functionality during the process. The evolutionary development process also supports continued use of Mercury throughout development, a critical feature for any application that may be used in HA/DR support.

The iterative development based on user feedback gathered through direct and indirect solicitation of hundreds of users has enabled Dreamhammer to gain a wealth of knowledge into the business processes of spectrum management, garnered through three years of development.

Insightful knowledge of user requirements coupled with an understanding of the spectrum

Page 2 of 6 Pages management regulatory and business processes empowers Dreamhammer with the requisite knowledge to meet user needs on a regular basis.

The use of an evolutionary development process, a requirement to maintain availability while continuing to make user identified enhancements, requires a significant amount of regression testing as changes in code to support new features and capabilities may unintentionally create unintended consequences elsewhere within the application. Dreamhammer possesses complete understanding of the development process to date, to include lessons learned, as well as maintaining the same coding process and style, is necessary to lessen development time and avoid unintentional flaws within the application, to include the introduction of software security vulnerabilities that may be exploited through a cyber-attack on the application or, worst, on the users. A successful cyber-attack against the application could render the application unavailable or be used to attack account holders directly, a significant risk given the ability to get behind multiple layers of network defense.

(b) Justification:

(1) Minimum government requirements- The government requires 24 hour a day, year around availability of Mercury except for planned scheduled outages for maintenance and software updates. There can be no delays in availability or user support for Mercury due to the unpredictability of HA/DR events. Multiple instances must be maintained for redundancy to ensure availability of the application at all times. Technical support must be capable of surging to 24 hour support for extended periods during HA/DR events.

(2) Proposed sole source contractor - Dreamhammer possesses intimate knowledge of the required spectrum management business processes. Contract award to another vendor would result in unacceptable project delays, and substantial duplicative government expense, as there will be a need to duplicate a large portion of the development work that has taken place over the past three years. Dreamhammer additionally has a thorough understanding of user requirements, honed through participation in multiple Combatant Command level exercises throughout the contract period. The experience gained cannot be duplicated by another vendor in a short time frame and will cause significant delays in development and program implementation. Additional costs may be incurred through development of iterations that do not meet user requirements attributable to a lack of experience in the spectrum management arena and the lack of understanding the user base. The costs the government incurs though development delays and re-learning of lessons would be a significant figure in Mercury development costs relative to funds expended. Changing vendors in the middle of the development process introduces cyber security risk associated with the hand-off of evolving code still in development, as well. Costs associated with cleansing a network following a cyber-attack caused by cyber vulnerabilities created in the Mercury application due to switching vendors during the development process could run into the millions of dollars for network administrators such as DISA. Contract award to any vendor other than Dreamhammer will result in unnecessary, and potentially harmful, delays in project development, potential inoperability during a HADR event, possible introduction of cyber security vulnerabilities, and cost increases based on duplicative effort. Duplicative effort costs associated with a new vendor needing to re-learn Dreamhammer’s acquired lessons can be estimated at $600,000 in developmental delays while clean-up costs associated with any created

Page 3 of 6 Pages cyber vulnerability could be millions of dollars. Possible inoperability of the application during a HA/DR event could have a human cost, which cannot be estimated.

(3) Discussion regarding the sole source situation – the sole source situation is for the purpose of a logical follow-on contract to allow the conclusion of development of a unique one-of-a-kind capability. Dreamhammer was selected to develop the application as an 8(a) small business. Dreamhammer has since graduated from the 8(a) category but remains a small business. The Small Business Administration has granted approval to remove Mercury development from the SBA 8(a) set aside program for the purpose of allowing the original developer to conclude development of the unique capability.

(4) Demonstration of unique source- Mercury was initially developed specifically to address USPACOM’s ability to coordinate response efforts during disaster relief. Mercury’s continued availability and enhancement is essential since the time and location of the next natural or man-made disaster cannot be predicted. There is no flexibility to allow a new vendor to experience a significant learning curve in the development process and the risk of introducing vulnerabilities to the application caused by changing vendor mid-development should not be assumed.

Dreamhammers experience and knowledge of Military Communications Electronics Board Publication 7 and the emerging Publication 8 are critical to the dynamic and iterative approach to the development of the Mercury application. Dreamhammer is, additionally, a copyright holder of Mercury.

(5) Procurement discussion – The purpose of the contract is to allow the original developer of the application to complete development. Allowing the original vendor to conclude development will avoid duplicative effort, avoid developmental delays, reduce the probability of the introduction of cyber security vulnerabilities and ensure availability of the application in the event of an unpredictable HA/DR event. No options will be exercised once development is complete so that the contract for maintenance of the application may be under full and open competition.

(6) Impact – the impact to not allowing the follow-on contract would be potential unavailability of the application during an HA/DR event, duplicative effort and developmental delays resulting in increased cost to the government, and the potential introduction of cyber security vulnerabilities that may introduce liabilities and significant clean-up and repair costs to government and non-government networks.

6. FEDBIZOPPS ANNOUNCEMENT/POTENTIAL SOURCES: A Sources Sought announcement was used to identify marketplace potential. The announcement returned only three replies, with one being the current contractor, Dreamhammer. Of the other two replies, one was deemed unsuitable based on a lack of developmental capability and skills in the operation and maintenance arena. The remaining responder had potential but lacks the background knowledge, experience in the problem space, and would be attempting to seamlessly continue development of a unique capability while maintaining complete availability of the application to support any potential HA/DR events. The second respondent may be able to perform but with potential developmental delays due to the environmental learning curve, which may increase developmental costs. There would be additional cyber security risks associated with changing

Page 4 of 6 Pages mid-development. In addition they also graduated from the 8(a) program approximately 15 May 2014.

7. DETERMINATION OF FAIR AND REASONABLE COST: The Contracting Officer will make a determine that the anticipated cost for this acquisition is fair and reasonable using market research and a comparison of the estimated cost with that found reasonable for the same or similar services.

8. MARKET RESEARCH: Dreamhammer is the original source of Mercury and the new FFP contract is for the continued development of a unique software application. Award of contract to another source would likely result in duplicative government expense unlikely to be recovered through competition due largely to the minimal cost associated with Mercury’s development as a unique, one-of-a-kind software application.

In addition to the Sources Sought, a review of more than 513 potential companies via the STARS II web portal was conducted and failed to identify any other possible vendors possessing Dreamhammers requisite knowledge of electromagnetic spectrum operations coupled with software application development capabilities. Dreamhammers experience and knowledge of Military Communications Electronics Board Publication 7 and the emerging Publication 8 are critical to the dynamic and iterative approach to the development of the Mercury application.

9. ANY OTHER SUPPORTING FACTS: None

10. LISTING OF INTERESTED SOURCES: The following contractors responded to the Sources Sought announcement: Dreamhammer Inc., the current contractor, Expression Networks, and DMI Mobile Enterprise Solutions

11. ACTIONS THE AGENCY MAY TAKE TO REMOVE OR OVERCOME BARRIERS

THAT LED TO THE EXCEPTION TO FULL AND OPEN COMPETITION: The contractor was placed on a one year firm fixed price contract for a proof of concept development of Mercury in February, 2011 after being selected following a market survey of available vendors.

The contractor was placed on a sole source, firm fixed price contract in February 2012 for one year with a single option year. The option was exercised and has since been extended six months until August, 2014.

The currently planned firm fixed price contract is for one year with four available option years to allow flexibility in a fiscally constrained environment to complete development. Once the application has all major capabilities developed, the options will not be exercised and full and open competition may be down to award the operational and maintenance contract for the application.

12. REFERENCE TO THE APPROVED ACQUISITION PLAN (AP): N/A

Page 5 of 6 Pages

TECHNICAL CERTIFICATION: I certify that the supporting data under my cognizance which are included in the J&A are accurate and complete to the best of my knowledge and belief.

NAME: ______________________ SIGNATURE:

(Print/Type)

TITLE/ORGANIZATION: ____________________

(Print/Type)

DATE: ________

REQUIREMENTS CERTIFICATION: I certify that the supporting data under my cognizance which are included in the J&A are accurate and complete to the best of my knowledge and belief.

NAME: Daniel McNamara SIGNATURE: _ (Print/Type)

TITLE/ORGANIZATION: Telecomm Special (Print/Ty

DATE:

CONTRACTING OFFICER CERTIFICATION: I ce complete to the best of my knowledge and belief.

NAME: Gary Klaff SIGNATURE: _______

(Print/Type)

TITLE/ORGANIZATION: Contracting Officer/PLDP (Print/Type)

DATE:

PROCURING ACTIVITY COMPETITION ADVOCATE APPROVAL: I have reviewed this justification and find it to be accurate and complete to the best of my knowledge and belief.

NAME: Gay Arnold SIGNATURE:

TITLE/ORGANIZATION: PACA/DISA/DITCO

PHONE: 618-229-9517 DATE: August 11, 2014

ALL QUESTIONS REGARDING THIS JUSTIFICATION ARE TO BE REFERRED TO GARY

KLAFF, 301-225-4525, gary.klaff.civ@mail.mil

Page 6 of 6 Pages

Daniel McNamara

Telecomm Specialist/DI

8/11/2014

8/11/2014

8/11/2014

M .E