JA_TFA3_IBM__Redacted.pdf

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SOURCE SELECTION INFORMATION -SEE FAR 2. !01 AND 3.104

Justification for Other than Full and Open Competition Trusted Foundry Access 3

Contractor: IBM Global Services

I. Agency and Contracting Activity:

Defense Microelectronics Activity (DMEA) Contracting Division/MEC 4234 54" Street McClellan, CA 95652

II. Nature and/or Description of the Action Being Approved:

DMEA 22-17

The purpose of this action is to renew the Trusted Foundry Access (TFA) Microelectronics Manufacturing Security component of the overall TFA program as a sole source to IBM Global Business Services (IBM-GBS) as a component of the Trusted Foundry Access 3 (TFA3) Program.

This will enable the Government lo continue to source fabrication of Trusted, leading-edge Application Specific Integrated Circuits (ASICs) through Fiscal Year 2033.

The TFA program continues to push the technological limits of the integrated circuit manufacturing processes towards smaller technology nodes and the reduction of operating power consumption. The overall total cost of the TFA program is comprised of the general access fees and purchase order volume of the individual elements utilizing this vehicle (Department of Defense (DoD), DoD Contractors (via Department of Energy/National Nuclear Security Administration (NNSA)), and other Government Agencies). The TFA program is funded through DMEA for base contract costs with individual orders funded by individual element users. The TFA Program consists of three (3) separate components, the first component is Microelectronics Manufacturing, the second component is Manufacturing Security, and the third component is NNSA support services.

The sole purpose of the Manufacturing Security component is to provide Trusted (Classified and Unclassified) security surveillance protection, control of secure infrastructure maintenance, security, program management, engineering services, and IT licenses and is justified in this Justification and Approval (J&A). The first component, Microelectronics Manufacturing, providing fabrication of Trusted ASIC wafers, and is detailed in a separate J&A. This J&A addresses Manufacturing Security.

Without this component, Microelectronics Manufacturing would be incapable of delivering the Trust aspect of the fabrication process ofleading-edge ASICs that are critical to NNSA, DoD, and Intelligence Community. A ten (10) year IDIQ with a minimum guarantee of$500.00. This IDIQ is required as the security element for the trusted program should mirror the manufacturing effort.

DMEA intends to award a sole source IDIQ contract to IBM-GBS for Manufacturing Security with a ceiling of$576 million, which would be shared across any other subsequent manufacturing security vendors for other on-ramped manufacturers. If market research for a subsequent award for the Component 1 manufacturing effort reveals that there is a second microelectronics manufacturer capable and willing to perform Component l, if that second source for Component I requires a different entity to perform Component 2, security support, and proposes a plan that is determined to be sufficient for providing that support, a second security services vendor will be added to Component 2.

III. Description of the Supplies/Services Required To Meet the Agency's Needs (including the total estimated value, including options, if any):

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FAR 6.302-1, only one responsible source and no other supplies or services will satisfy agency requirements under the authority of IO U.S.C. 3204(a)( I).

V. Reason for authority cited:

GFUS2 provides semiconductor or wafer production services to numerous DoD Government and industry partners through DMEA on the Marquesas Program. This program minimizes vulnerability risks of tampering, design modifications, data insertion or extraction, kill switch, and hidden backdoors, which are vulnerabilities associated with wafer manufacturing at a non-USG facility.

IBM-GBS is the only contractor with deep understanding of the Marquesas Program, DMEA Trusted procedures, and GFUS2 process at multiple facilities within and out of the USA. For this requirement, it is mandatory that the contractor understands the requirements of GFUS2 design process and wafer manufacturing, as well as DMEA Trusted procedures. It is also required to have access to GFUS2 IP for design kits. Establishment of the legal enablement (agreements) with GFUS2 is lengthy, and likely impossible, and it would not meet the DoD's immediate needs to wait for a company to go through the process due to the immediate need of this requirement. Award to any other contractor than IBM-GBS will not meet the Do D's requirement, as it would take years and is likely impossible for another contractor to acquire the necessary skills and expertise to participate in the Marquesas Program. Such a delay would effectively end the Marquesas Program. GFUS2 will only allow IBM GBS to perform these services as per the CFIUS agreement. GFUS2 is a former IBM Corporation entity and all the major foundry processes were developed by IBM. Any other vendor would be considered a competitor and not permit to have unfettered access to the fab and production control.

The incumbent contractor, IBM-GBS has provided maintenance and sustainment services support of the Microelectronics Manufacturing Security for the Trusted Foundry program, which includes highly specialized ASIC design and release system, testing, and semiconductor packaging facility for the past twelve (12) years. IBM-GBS has the unique skills required and the personnel in place to sustain this highly specialized systems and security process.

A ten (10) year IDIQ contract is required as the manufacturing element of the Trusted Foundry III program is anticipated to be a ten ( IO) year IDIQ as well. When IBM divested their foundries to Globalfoundries, IBM continued to maintain and leverage their existing business relationship with GlobalFoundries. Due to the proprietary and confidential nature of fabrication process flow GlobalFoundries will only work with IBM as the security element between United States Government and GlobalFoundries. GlobalFoundries is a commercial entity they process commercial and government products in the same facility.

Having multiple contractors providing security oversight services creates the potential for significant gaps and miscommunications, which jeopardizes the entire purpose of the program. An inability to maintain constant Trusted oversight of the manufacturing contract makes both that contract and the security contract entirely unable to achieve their mission. By awarding an IDIQ contract to a single contractor, we will ensure a consistency in knowledge, security oversight methodology, and interaction with the GlobalFoundries. This will allow the government to more effectively complete its mission of providing Trusted manufacturing flows in the GlobalFoundries' fabrication facilities, to enable a wide-range of associated leading edge semiconductor technologies/services, and to create a Trusted supply chain with the Contractor, fully certified and accredited, to deliver classified and Trusted mask and wafer fabrication within an "open" commercial environment.

Additionally. award to any other source would result in unacceptable delays in fulfilling the DoD's requirements due to the unique engineering skill and security requirements as well as significant additional costs associated with awarding to a new contractor, including obtaining Defense cm

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Counterintelligence and Security Agency (DCSA) support to provide facility clearances for the new contractor at each of the covered GFUS2 sites. These costs would not be recovered through the competition process. Award to any other contract would require entire assets of equipment to be removed, new systems built in, entirely new accreditations, replacement of authorized and knowledgeable personnel. and security program restart, causing catastrophic (unacceptable) delays to the production workflow for Government's secure parts. IBM-GBS is the only supplier accredited by DMEA with the capability to support GFUS2 AS[C design and release and provide functional die testing up to the Secret level. In addition, IBM-GBS is the only contractor with Non-Disclosure Agreement (NOA), Letter of Liability (LOL), and legal documents to utilize GFUS2's state of the art electronic design automation (EDA) software tools, design Intellectual Property (IP), and Process Design Kit (POK) within GFUS2 facilities. Since the acquisition oflBM Microelectronics Division (IBMMD) by GFUS2. the IBM-GBS work force has been embedded within GFUS2 facilities, hidden in plain sight. Upon divestiture of its manufacturing facilities to GlobalFoundries, IBM-GBS was mandated by the Committee on Foreign Investment in the United Stated (CFIUS) to provide these exact security services in order to protect US Government production within its foundries. GFUS2 is the only semiconductor manufacturer in the United States of America (USA) capable of producing mass quantities of wafers from 65nm to 14nm technology, which are required by Government design requirements. for the US Government.

VI, Description of the Efforts Made to Ensure that Offers are Solicited from as Many Potential Sources as is Practicable, including Whether A Notice Was or Will be Publicized as required by FAR Subpart 5,2 and, if not, Whi&:h Exception Under FAR 5.202 Applies.

A redacted copy of this Justification and Authority along with the Request For Proposal (RFP) will be posted to Sam.gov for thirty (30) days. Anytime that Defense Microelectronics Activity (DMEA) on ramps vendor(s) the solicitation will be posted to sam.gov for thirty (30) days.

VII. Fair and Reasonable Cost Determination

IBM-GBS labor rates for this contract will be based off their General Services Administration (GSA) schedule rates, which have already been determined to be fair and reasonable. DMEA will attempt to negotiate lower GSA schedule rates following the regulation at DF ARS 208.404, Use of Federal Supply Schedules and the direction in DoD Class Deviation 2014-0001 l � Determination of Fair and Reasonable Prices when Using Federal Supply Schedule Contracts, dated March 13, 2014.

As a result, I hereby determine that the anticipated price to the Government for this contract will be fair and reasonable.

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Robert Crandell Contracting Officer/Chief. Operational Contracting Branch

VIII. Additional Facts Supporting this Justification:

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Date:

The IBM-Manufacturing was transferred to Global Foundries during the divestiture in 2015. This includes a wide variety ofIP, tools, software, patents, and transistor geometry sizes. GlobalFoundries is utilizing the same wafer manufacturing process as lBM-Manufacturing with minor updates. As a result. there is no other contractor aside from IBM-GBS that understands GlobalFoundries technology and wafer manufacturing methodologies. Every producer of microelectronics develops their own

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GAHOON IA.AMA ����°':'...% s 13'!&a02•1 N.S.1386292414 iia1e 2022 122207:3J 52-0B'Ocr

Aman Gahoonia Program Director, Trusted Access Program Office

XIV. REVIEW AND APPROVALS

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Aman Gahoonia Program Director, Trusted Access Program Office

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Robert Crandell Chief, Operational Contracting Branch

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Anna Ricci C. Madden Chief, Acquisition Policy and Analysis Branch

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Ryan Friedl General Counsel

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Adrienne E. Strickland Chief, Contracting Division and Competition Advocate

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Dr. Nicholas Martin Director, DMEA Head of Contracting Activity

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