JA_Gift_Card_Program_Final_Signed.pdf

Control Number: (HDEC05-14-04)

JUSTIFICATION REVIEW DOCUMENT

Description of Acquisition: Gift Card Program for the Defense Commissary Agency

Statutory Authority: 10 U.S.C. 2304(d)(1)(B)(i), as implemented by FAR 6.302-1(a)(2)(iii)(A), Substantial duplication of cost to the Government that is not expected to be recovered through competition.

Estimated Contract Amount: The estimated cost for the 12 month base period is $150,000.00 with four - 4 month option periods, a total contract value of $350,000.00.

Performance Period: 12 month base period of August 1, 2015 through July 31, 2016 with Four

– 4 month option periods which could extend performance to November 30, 2017.

Contract Specialist: Vanessa Walker Contract Specialist Phone : (804) 734-8000 X48531 Date/Initials:___________

Technical: None

Requirements: Robert Bunch Chief, Operations and Program Standardization Division Phone : (804) 734-8000 X86190 Date/Initials: __________

PCO: Loria Samples Hile Contracting Officer Phone : (804) 734-8000 X48630 Date/Initials: __________

Required Review Signatures: We have reviewed this J&A and find the justification adequate to support other than full and open competition.

Program Manager: N/A

Division Chief: Michael G. Shaffer Phone: 804-734-8000 x48681

Signature: _____________________ Date: _____________

Legal Counsel: Ralph Tremaglio Phone: 804-734-8000 x48116

Competition Ernie Favale Phone: 804-734-8000 x48548 Advocate:

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2/6/2015-RJB

2/6/2015 - LSH

SHAFFER.MICHA

EL.G.1044850571

Digitally signed by

SHAFFER.MICHAEL.G.1044850571

DN: c=US, o=U.S. Government, ou=DoD, ou=PKI, ou=DECA, cn=SHAFFER.MICHAEL.G.1044850571 Date: 2015.02.06 11:30:01 -05'00'

TREMAGLIO.RAL

PH.JOHN.III.10144

92310

Digitally signed by

TREMAGLIO.RALPH.JOHN.III.1014492310

DN: c=US, o=U.S. Government, ou=DoD, ou=PKI, ou=DECA, cn=TREMAGLIO.RALPH.JOHN.III.10144923 Date: 2015.02.06 13:03:12 -05'00'

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2/6/15

FAVALE.ERNIE

.A.1182175699

Digitally signed by

FAVALE.ERNIE.A.1182175699

DN: c=US, o=U.S. Government, ou=DoD, ou=PKI, ou=DECA, cn=FAVALE.ERNIE.A.1182175699 Date: 2015.02.06 14:43:18 -05'00'

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

1. Contracting Office – Defense Commissary Agency, Enterprise Acquisition Division, 1300 E Avenue, Fort Lee, VA 23801

2. Type of Contract Action – A new follow-on contract for DeCA’s gift card program. The contract will be a Firm Fixed Price contract using DWCF funds.

3. Description of Supplies/Services – Turn-key Gift Card Program, estimated total value $350,000.00 (base = $150,000.00 and Four – 4 month options at $50,000.00 each = $350,000.00)

4. Authority Cited - 10 U.S.C. 2304(d)(1)(B)(i), as implemented by FAR 6.302-1(a)(2)(iii)(A), Substantial duplication of cost to the Government that is not reasonably expected to be recovered through competition.

5. Reason for Authority Cited – a.) The use of the cited authority is necessary to ensure that the continuous availability of a reliable source for the commissary gift card program remains until such time as DeCA initiates its plan to bring the gift card process in-house under the Enterprise Business Solution (EBS) designated to replace current DeCA legacy systems, including the current point-of-sale (POS).

b.) The EBS is designed to modernize DeCA’ entire resale chain software applications and replace over seven aging legacy business systems that will be deployed over four separate and distinct phases. It will be fully integrated, grocery-specific, retail business suite based on commercial best practices.

c.) The current contract with the incumbent contractor SVM (GEO. Mijilem & Company, Incorporated DBA: SVM) located at 200 Howard Ave, Ste 220, Des Plaines, IL 60018 to provide a “full service” gift card program to the Defense Commissary Agency expires on 31 July 2015. The EBS contract has been awarded and allows for a phased approach to implement a gift card program. The incorporation of the gift card program into EBS is currently slated to begin 10/1/2016. The issuance of a follow-on “bridge” contract is needed in order to avoid a lapse in service until a replacement gift card program provided by EBS is in place. This follow-on gift card contract will only remain in effect until the EBS contract has the capability of performing the gift card program. The current gift card contractor presently provides DeCA with a turn-key program, comparable to retail supermarket programs to meet our customer’s requirements.

d.) Award to any other source would result in substantial duplicate expenditures to the

Government for a contract that would only be in place for 12-24 months before the Gift Card

Program is brought in-house under EBS. Awarding to other than the incumbent contractor would result in substantial duplication of cost to the Government that is not expected to be recovered through competition. Such a strategy would also cause a disruption in providing and redeeming gift cards to our customers. The agency looks to avoid the duplicative cost of transitioning from the current contract, to a new contract, and then pay again under EBS to transition from that short-lived contract to bringing gift cards in-house. When the current gift card contract began in August 2010, it took 11 months to get changes, modifications, and interfaces in place with our current POS provider in order to activate and redeem gift cards through the incumbent contractor. DeCA paid our POS provider approximately $450,000 for these changes. A substantial amount of this cost would be duplicated if DeCA were to award to other than the incumbent for this abbreviated period of performance. It is not a reasonable effort when the EBS contract will have the capability for a gift card program to replace the current contract.

e.) The gift card provider typically stipulates the data interchange specification because the provider does not want to accept multiple input types from the retailers’ point-of-sale (POS) systems. The DeCA POS system does support a limited number gift card interfaces “out of the box” but the SVM data exchange format was not one of those formats natively support by DeCA’s POS. After SVM/SVS provided their gift card data format, IBM used the DeCA POS system’s Data Interchange Facility (DIF) to ensure that the POS system exported data in compliance with the required format. There is no assurance that any other gift card provider will use the exact same data exchange format. The title page for the SVM/SVS data exchange format states: “The information furnished herein by Ceridian Stored Value Solutions is proprietary and confidential and is distributed to Ceridian SVS clients and authorized business partners for their exclusive use in operating Ceridian SVS Cash Card programs, and shall not be duplicated, published, or disclosed in whole or in part without the prior written permission of Ceridian SVS.” If the new data exchange format is different from what is currently programmed into CARTS, DeCA will have to pay IBM to support the system output format required by the new gift card provider. This will increase DeCA’s implementation costs to migrate to a new gift card provider.

6. Efforts to Obtain Competition – The previous contract was competed, however, the follow-on contract will not be competed under the above FAR reference. The future gift card program incorporated in EBS was competed as a part of that procurement. A notice of this follow-on contract award for gift cards will be posted to Fed Biz Opps.

7. Fair and Reasonable Cost Determination – As the contracting officer, I hereby determine that the anticipated cost to the Government will be fair and reasonable based on previous competition for this action under solicitation HDEC05-10-R-0005 and current proposed pricing submitted by SVM for a follow-on contract.

8. Market Research and Interested Sources – .DeCA gift cards are valid for five years. If DeCA substitutes a new gift card provider for SVM, the new provider will have to honor the redemption of DeCA gift cards which were activated through the SVM/SVS gift card process.

To meet this requirement, the new gift card contractor will have to import the SVM database of card numbers and associated remaining dollar balances. This will increase the level of effort for the new contractor; a higher level of effort usually equates to a higher implementation cost which will be passed on to DeCA. When EBS POS implements the new EBS gift card system in 2016, the new EBS POS system will have to accommodate two sets of activated gift cards: the original SVM cards and the cards activated by the intermediate provider. This will increase the level of effort required to configure EBS POS for deployment.

DeCA requires the gift card contractor to provision dedicated circuits to the two DeCA server centers to convey the bi-directional data required for activation and redemption of gift cards.

The new provider will provision new circuits but DeCA will be charged for the costs associated with provisioning of the new circuits. Start-up costs of any other contractor’s gift card program with DeCA’s POS system would far exceed the value of soliciting a short term 12-14 month contract with a new source which would incur substantial duplication of cost to DeCA that would not be recovered through competition.

9. Actions to Increase/Foster Competition – N/A The Gift Card Program will be brought in-house under EBS.

10. Other Factors - Only the incumbent contractor is being considered due to the reasons stated above. A substantial cost would be required for changes to our current (POS) system and since DeCA has pushed back the POS replacement to 2017 with implementation of EBS it is not cost effective to re-compete this requirement prior to implementation of EBS. The current contract, HDEC05-10-C-0006, was a competed action and was awarded to the lowest priced, technically acceptable proposal.

Technical Certification:

I certify that the supporting data under my cognizance, which are included in this justification, are accurate and complete to the best of my knowledge and belief.

Not Applicable

Requirements Certification:

I certify that the supporting data under my cognizance, which are included in this justification, are accurate and complete to the best of my knowledge and belief.

Name: Robert Bunch Signature: _______________________________ Title: Chief, Operations and Program Standardization Division Date: _________________________

Fair and Reasonable Price Determination and Contracting Officer Certification:

I hereby determine that the price for this contract action will be fair and reasonable. I certify that this J & A is accurate and complete to the best of my knowledge and belief.

BUNCH.ROBERT

.J.1082649618

Digitally signed by

BUNCH.ROBERT.J.1082649618

DN: c=US, o=U.S. Government, ou=DoD, ou=PKI, ou=DECA, cn=BUNCH.ROBERT.J.1082649618 Date: 2015.02.06 12:18:06 -05'00'

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Name: Loria Samples Hile Signature: _______________________________

Contracting Officer Date: __________________

2/6/2016

SAMPLES

HILE.LORIA.A.1202

014930

Digitally signed by SAMPLES

HILE.LORIA.A.1202014930

DN: c=US, o=U.S. Government, ou=DoD, ou=PKI, ou=DECA, cn=SAMPLES

HILE.LORIA.A.1202014930

Date: 2015.02.06 09:28:20 -05'00'

APPROVAL

Based on the foregoing justification, I hereby approved the procurement of a follow-on contract for the gift card program for the Defense Commissary Agency on an other than full and open competition basis pursuant to the authority of 10 U.S.C. 2304(d)(1)(B)(i), provided funds are available, or will be available, and provided that the services and products herein described have otherwise been authorized for acquisition.

APPROVED:

Signature: ______________________________ Date:_________________________ Ernie Favale DeCA Competition Advocate

FAVALE.ERNIE

.A.1182175699

Digitally signed by

FAVALE.ERNIE.A.1182175699

DN: c=US, o=U.S. Government, ou=DoD, ou=PKI, ou=DECA, cn=FAVALE.ERNIE.A.1182175699 Date: 2015.02.06 14:47:30 -05'00'

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