HUMAN_RESOURCES_CONTRACT_SUPPORT_REDACTED_LSJ_4.24.18_Redacted.pdf

Justification and Approval for “Limited Source Justification”

FAR Part 8.405-6

1. Identification of the agency and contracting activity: This is a Limited Source Justification

(LSJ) for a Defense Health Agency (DHA), J-1 Administration & Management, Human

Resources Division (HRD) acquisition, under the authority of the Multiple Award Schedule

Program, pursuant to 8.402 of the Federal Acquisition Regulation (FAR), Limited Sources, pursuant to 8.405-6 of the FAR. The Contracting Activity responsible for this action is the

Defense Health Agency, Contracting Office – Falls Church (CO-FC).

2. Nature and/or description of action being approved: The government intends to negotiate a new Firm Fixed Price sole source task order with Deloitte Consulting, LLC via the GSA

Professional Services Schedule. This short term task order will provide continuance of highly specialized human resource support services required by the Defense Health Agency (DHA) to meet Section 702 of the National Defense Authorization Act for Fiscal Year 2017 (Public Law

114-328). The current contract number W81XWH-08-D-0028-0050, expires 24 April 2018.

Deloitte Consulting, LLC is the incumbent contractor.

3. A description of supplies or services required to meet the agency’s needs: Section 702 of the National Defense Authorization Act for Fiscal Year 2017 (Public Law 114-328) concerning

“Reform of Administration of the Defense Health Agency and Military Treatment Facilities” mandates a major transformation of the Military Health System including the transfer of certain authorities and control from the Military Departments to the Defense Health Agency. Beginning

October 1, 2018, the DHA will take full responsibility for the health care operations at each of the 400 military treatment facilities worldwide.

Substantial challenges are inherent in implementing major reform such as that required by the legislation, to include reshaping the human resources portfolio of the Defense Health Agency.

NDAA Section 702 requires the establishment of a professional staff within the Defense Health

Agency to provide policy, oversight, and direction. This staff will consist of the DHA Assistant

Director for Health Care Administration; and four deputies, all of which are members of the senior executive service. In addition, the DHA must recruit and retain essential personnel required to support the effective and efficient administration of the MTFs.

The current support contractor is playing a significant role in assisting the DHA’s Human

Resources Division redesign its recruitment process with a goal of reducing the civilian hiring process by 65 days. This will enable the DHA to onboard the required professional staff prior to October 1, 2018 so that the DHA can ensure the continuity of operations at each of the 400 military treatment facilities.

The current contracting agency is uniquely qualified because of their current insight and involvement with DHA processes. The services being acquired under this sole source task order are provided to over 3,800 DHA employees. In the past six months HRD has seen a 28 percent increase in the number of civil service members supported by the DHA. The contractor, in addition to enabling the DHA to onboard the required professional staff prior to October 1, 2018, is providing critical human resource management support to a sudden and dramatic increase in staff including hiring and orientation of new personnel; payroll of all civilian personnel; performance and evaluation; classification of position descriptions; and career and development training.

The projected cost for this sole source task order, with a period of performance of 25 April

2018 to , is The resulting task order will include the FAR 52.217-8 Option to Extend Services Clause for 6 additional one month options periods of services, . The total period of performance including exercise of the 52.217-8 clause is 12 months; estimated at a total value of . The resulting task order will be funded using 2018 Operations and

Maintenance Funds.

4. Identification of the authority and supporting rationale (see FAR 8.405-6(a)(1)(i) and

(b)(1)) and, if applicable, a demonstration of the proposed contractor’s unique qualification to provide the required supply or service.

FAR 8.405-6(a)(1)(i)(B) – Only one source is capable of providing the services required at the level of quality required because the services are unique or highly specialized.

Beginning October 1, 2018, the DHA will take full responsibility for the health care operations at each of the 400 military treatment facilities worldwide.

The contractor is supporting the Defense Health Agency during a time of historic transformation. The current support contractor is playing a significant role in assisting the

DHA’s Human Resources Division redesign its recruitment process with a goal of reducing the civilian hiring process by 65 days. This will enable the DHA to onboard the required professional staff prior to October 1, 2018 so that the DHA can ensure the continuity of operations at each of the 400 military treatment facilities.

The current contracting agency is uniquely qualified because of their current insight and involvement with DHA processes. The services being acquired under this sole source task order are provided to over 3,800 DHA employees. In the past six months HRD has seen a 28 percent increase in the number of civil service members supported by the DHA. The incumbent contractor, in addition to enabling the DHA to onboard the required professional staff prior to

October 1, 2018, is providing critical human resource management support to a sudden and dramatic increase in staff including hiring and orientation of new personnel; payroll of all civilian personnel; performance and evaluation; classification of position descriptions; and career and development training. The incumbent contractor is highly qualified and positioned to accomplish all the HRD support required by the new sole source contract without interruption.

At this juncture no other contractor could replace the incumbent contractor to successfully complete this work without significant delay and increase in administrative cost incurred by both the Government and the contractor while awaiting award of a new contract. Acquiring the services of another contractor at this point will adversely impact and interrupt the services currently provided by the incumbent contractor as well as negatively impact the DHA’s ability to meet the mandates of the NDAA and fulfill agency requirements. Incumbent contractor personnel tasked to support this effort are well versed on the administrative and programmatic aspects of the tasks to be accomplished. Based on their expertise and thorough knowledge of the programs, procedures and processes associated with this requirement, the incumbent contractor is the only company that can implement and execute the necessary actions to facilitate uninterrupted support pending award of a new contract.

Given the level of experience and in-depth knowledge required to perform the PWS tasks, it would take the Government four (4) months to acclimate any new contractor to the day-to-day operations, processes and procedures currently used by incumbent contractor staff. Based on the cost to provide a new contractor with the DHA background, knowledge and tools necessary to complete the work required would be approximately This does not include the expense of time to review, edit, instruct, and provide response to queries that would be largely unknown to a new contractor. Thus, it is neither reasonable nor realistic to select any other contractor while awaiting award of a new contract.

5. A determination by the ordering activity contracting officer that the order represents the best value consistent with FAR 8.404(d): The Contracting Officer hereby determines that this action represents the best value to the Government in accordance with FAR 8.404(d). The anticipated costs to the Government for this sole source contract will be determined fair and reasonable using comparison to previous historical acquisitions and 2018 labor rates in accordance with the GSA Schedule rates which have already been determined fair and reasonable. Additionally, the Government will thoroughly evaluate and negotiate (if necessary) the proposed level of effort and the labor mix to ensure the best value is obtained. The past performance of this firm has been satisfactory or better, the firm has experience in this area, and current personnel are qualified.

6. A description of the market research conducted among schedule holders and the results or a statement of the reason market research was not conducted: Market research conducted from November 27, 2017 to December 18, 2017 was gathered from several sources. Websites were the primary resource such as the General Services Administration, contractor websites, FedBizOpps, and System for Award Management. Contracting Officer Representatives around

DHA were also contacted as a point-of-reference about contractors. Market research indicates there are numerous businesses that can fulfill human resource support services. However, only

Deloitte can continue to provide the services and support required during this short term task order without a loss of efficiency and negative impact to the HRD and DHA’s short term goals.

7. Any other facts supporting the justification: In addition to jeopardizing the DHA’s ability to meet the NDAA requirements and support the recent 28% increase in DHA personnel, there are other programs that may be affected if there are interruptions to the current contract. Those include:

1) The Workforce Planning and Analysis Branch has recently been given the responsibility to manually upload military and civilian personnel records into the

Defense Medical Human Resource System – Internet (DMHRSi) to document the total force manpower requirements at headquarters and subordinate activities that report to the DHA Director. HRD must validate the data for DHA leadership and maintain the data on the HRD SharePoint site. All DHA activities, to include MTFs newly aligned to the DHA as a result of the NDAA, will be included in DMHRSi.

The HRD will be responsible for developing and maintaining reports to keep leadership apprised of accountability and provide transparency throughout the agency. Any interruptions will have a significant impact on the ability of HRD to provide reports, support the hiring process, manage the organization's end strength, analyze employee engagement and satisfaction survey results, react to taskers, and support process improvement initiatives.

2) The HRD is driving significant process improvement initiatives, priorities of the

DHA Director. This includes transactional items such as hiring actions, reassignments, realignments, and personnel details. Any interruptions will have immediate and direct consequences on hiring timelines and appropriately aligning

DHA personnel to support requirements of the NDAA.

3) HRD is supporting the logistics of civilian pay, awards and performance management. Any interruptions of current contractor support will adversely affect these processes and increase the risk of civilian pay errors or lapses, reduction in customer support, and lengthy processing time for the DHA Director’s Awards

Program.

8. A statement of the action, if any, the agency may take to remove or overcome any barriers that lead to the restricted consideration before any subsequent acquisition for the supplies or services is made:

(a) Efforts to Obtain Competition.

The anticipated solicitation release date is in the third quarter of FY18. The anticipated contract is for a twelve (12) month base period and four (4) twelve (12) month option periods.

(b) Actions to Increase Competition. A competitive award is anticipated

(c) Follow-on Order. A competitive award is anticipated

Review/Approval Requirements are based on dollar threshold (also refer to Procurement

Directive (PD) 06-01, Enclosure 4)

Note: A&PPD is responsible for assigning J&A tracking numbers which will consist of a review for content/format before any tracking number is assigned.

Coordination:

9. Technical/Functional Representative: I certify that the supporting data under my cognizance which are included in the justification is accurate and complete to the best of my knowledge and belief.

Typed Name: Date:

Title: Signature:

10. Requirements Certification:

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

11. Legal Review:

I have reviewed this J&A and it is deemed to be legally sufficient.

Title:

Signature:

12. Contracting Officer:

I certify that this justification is accurate and complete to the best of my knowledge and belief.

Approval:

13. Competition Advocate (CA): Based on the foregoing justification, I hereby approve the procurement of human resource support services on an other than full and open competition basis pursuant to the authority of 41 U.S.C. 152(3) FAR 8.405-6(a)(1)(i)(B), subject to availability of funds, and provided that the supplies and/or services herein described have otherwise been authorized for acquisition.

Title:

Signature: