I_7_l SF1007_ConsolidationDetermin_v6_24_20241125 POSTING DOC.pdf

Treasury Standard Form 1007 (Rev 5/24)

Prescribed by Treasury: DTAP 1007.107

CONSOLIDATION DETERMINATION

Procurement Title: Treasury-Wide (ServiceNow) Core Low Code Licenses Date: 21 November 2024

EXECUTIVE SUMMARY

The US Department of the Treasury (Treasury), Departmental Offices analyzed the benefits of consolidating two separate contracts into one acquisition for Treasury-Wide ServiceNow Core Low Code Licenses. The existing orders are for discreet licenses that are a part of the Core licenses sought for procurement under this acquisition. Treasury found consolidation is necessary and justified for this acquisition as it will result in substantial monetary benefits estimated at 55% or $634,526,297.23 over the four-year life of the order. In addition, it offers other non-monetarized benefits such as expanded capability, accessibility, enhanced technological performance, and standardization across the enterprise. The benefits of this consolidation exceed the threshold contained within FAR 7.107-2(d); for savings greater than 5% of the estimated contract value of a contract greater than $94M. Ultimately, under this proposed acquisition, Treasury will benefit from a suite of licenses that build upon existing infrastructure and software licenses in use, provide new functionality, enhance current capabilities of Treasury systems, and will provide an unprecedented mechanism for intra-agency data sharing. The cost savings coupled with the organizational benefits described can most efficiently be realized through this consolidation. And, while this proposed acquisition will be competed as full and open under NASA SEWP, Group A includes a collection of small and large businesses that may fulfill this order.

Table 1: Executive Summary

Project Title: Treasury-Wide Core Low Code Licenses

Contracting Office: (include Region) IRS, OCPO, Treasury Acquisition Division

Total Estimated Contract Value: Above $94 million X At or Below $94 million

Contract Requirements: Construction Supplies and Services

X Supplies only Services only

NAICS Code: 334111 Period of Performance: 16 December 2024 15 December 2028.

Deviations Applicable? No Business Case Applicable? No.

Program Initiative? IRA Intended Contract Structure: - Order under NASA SEWP

- Single award

- Firm-Fixed-Price

- Unrestricted

Previous Contract Structure: - BPA and orders under GSA Schedule

- Single awards

- Firm-Fixed-Price

- Unrestricted

Substantial Benefits Expected: 77.86%

Prescribed by Treasury: DTAP 1007.107

ACQUISITION HISTORY

Products/Services This requirement will support the entire Treasury and provide a low code solution through ServiceNow Core licenses. These licenses will support existing and new applications, continue to create efficiencies across the organization by optimizing workforce efforts by shifting resources to higher value work and reducing duplication across agencies, and unleash the full capability of ServiceNow tools (data analysis, workflows, and communication across the organization that is stymied and difficult now). The place of performance is the contractor s site these are commercial licenses to be delivered to the government site only. The product service code (PSC) for this acquisition is DA10 and the North American Industry Classification System (NAICS) code is 334111, and the small business size standard is 1,250 employees.

The requirement is for unrestricted user access of 1450,000 licenses, with all entitlements, of the following ServiceNow software application packages. These together make up the Core license offering:

App Engine Enterprise: a tool to simplify work processes to help solve business problems.

IT Service Management Enterprise (ITSM): a tool to manage access and availability of services, fulfill services requests, and streamline services.

Integrated Risk Management (IRM) Enterprise: a data tool enabling risk-informed decisions and increased efficiency.

Security Operations (SecOps) Security Incident Response (SIR) Enterprise; t tool that enables a collaborative response to critical security incidents such as ransomware, data breaches, and other targeted attacks.

Security Operations (SecOps) Vulnerability Response (VR): a tool enabling prioritization of vulnerability management with visibility into asset, risk, and threat intelligence. Provides a mechanism to quickly and efficiently respond to threats.

Human Resources Service Delivery (HRSD) Enterprise: a tool that can improve productivity by making it easy for employees to get the help and guidance they need all in one place. Reduces costs with the availability of self-services and streamlines case resolution.

Employee Document Management: a tool enabling the management of employee documents more efficiently and increases HR productivity and security.

Strategic Portfolio Management (SPM): a tool facilitating cross-functional collaboration and aligns stakeholders around strategic portfolio objectives, leading to better business outcomes. This tool can proactively identify, assess, and mitigate risks, reducing risk exposure.

Customers This requirement will support the Treasury Enterprise - Treasury Departmental Offices and all Bureaus and Offices.

Prescribed by Treasury: DTAP 1007.107

Existing Contracts This is a first- licenses. However, Treasury previously procured other ServiceNow products, including Fulfiller, Professional, and singular Enterprise versions of licenses included in the Core package, as shown in Table 2 below. These licenses were procured via the contracts noted in Table 3, and the two contracts represented in this table are the ones proposed to be consolidated for this procurement.

Table 2: Recent ServiceNow License Purchases

SKU Description PROD19352 App Engine Enterprise Unrestricted User PROD16955 Strategic Portfolio Management Professional Unrestricted User PROD16744 Security Operations Professional SIR v2 Unrestricted Users PROD17269 IT Service Management Enterprise Unrestricted User v3 PROD12490 Integrated Risk Management Professional IRM Operator PROD11370 Employee Document Management PROD22476 Customer HR Service Delivery Lifecycle Fulfiller User PROD11370 Employee Document Management PROD17238-120 HR Service Delivery Enterprise HR User v4

Table 3: Existing Contracts

Contract Number Contract Type

Company Company Size

NAICS

Code

Period of Performance

Total Contract Value

2032H5-20-A-00026 FFP Carahsoft Technology Corp.

Large 511210 Base + 4 one year options.

$110,000,000.00

2032H5-18-F-00862 FFP Carahsoft Technology Corp.

Large 511210 Base + 4 one year options

$20,767,817.14

Total $130,767,817.14

Estimated Small Business Cost for Existing Contractors The original software manufacturer is ServiceNow and their licenses are officially available only through authorized resellers. The price for these licenses fluctuate from published list prices and those available on established contracts based upon the package(s) and quantity procured.

In addition, small businesses also have fluctuating overheads normally based upon the previous year business volume. There is no market research that could be completed to reasonably determine what a small business would have priced the licenses at the time the previous contracts were awarded.

New Requirements This requirement has been expanded to include licenses for Core ServiceNow platform licenses and to include all Treasury bureaus instead of individual orders by bureau. By quantity, the existing contracts cover less than 20% of the licenses that are needed in this new requirement. In terms of functionality, the enterprise license types purchased contain instance hopping abilities for Treasury-wide flexibility and collaboration, which have not been procured previously. Enterprise versions for the Core licenses have only been procured for three of the eight license types.

MARKET RESEARCH OVERVIEW

The D&F for Consolidation will be posted in accordance with FAR 7.107-5(c) with the draft solicitation for industry questions and comments.

Prescribed by Treasury: DTAP 1007.107

Market research was primarily completed through reviews of available commercially available products, one-one-one meetings, and informal requests for information during the months of October and November 2024 by the program team. One-on-one meetings were held with ServiceNow to identify authorized resellers. In addition, discussions were held with select small businesses from the pool of authorized resellers to ensure capacity and willingness to compete for the work and identify the vehicle(s) by which the licenses could be procured. Consistently, the small businesses contacted confirmed NASA SEWP as the preferred vehicle.

To reap the savings offered by the original software manufacturer (ServiceNow), this acquisition must be executed by the 16th of December. The program and procurement teams:

reviewed the previous acquisitions for ServiceNow licenses; surveyed available Best-In-Class (BIC) vehicles (and confirmed Treasury contract inventories did not offer the required licenses);

and analyzed vendors who could provide the needed items on BICs. Treasury considered GSA and NASA SEWP. Based on Market Research, it was determined only a single large business was identified as a reseller whereas NASA SEWP demonstrated several small and large businesses as resellers.

Under NASA SEWP, there are two NAICS codes (334111 and 541519) are available for ServiceNow. Since the requirement is primarily for the Core Licenses, it does not include at least 15% value added services in accordance with FAR 19.505(b)(1)(ii) and therefore NAICS code 334111 is the best fit. Based on this determination, this requirement may only be met utilizing NASA SEWP Group A which is a combination of small and large businesses with 3 viable small businesses and 6 large business resellers. As a result of those activities, the teams confirmed NASA SEWP was an existing and viable vehicle under which to compete the work under a full and open solicitation with a preference for small business.

ALTERNATIVES INVOLVING A LESSER DEGREE OF

CONSOLIDATION

The only alternative to meet this requirement, if consolidation is not approved, is to maintain the status quo; and it should be noted this alternative would not provide the comprehensive solution sought after through this acquisition. If the Treasury were to maintain the status quo they would need to pursue a new procurement(s) for the licenses that make up the totality of the Core license package. However, this approach would not provide the significant savings currently available, nor reduce enterprise level administrative costs (to manage multiple orders for pieces and parts of the solution) or enable the achievement of operational efficiencies available through procurement of these Core licenses. Maintaining the status quo would effectually divest the Treasury of the multiple benefits, and reason for pursuing this acquisition.

CONTRACTING APPROACH SELECTED

Through market research performed it was determined only NASA SEWP, a best-in-class vehicle, afforded small and large businesses the opportunity to directly compete for this requirement. NASA SEWP offers the federal government the ability to procure commercially available products and services at already negotiated prices with relevant terms and conditions for federal customers. This approach may add to Treasury s ability to meet their small business commitments if awarded to a small business in addition to achieving significant cost savings for needed products and operational efficiencies.

Prescribed by Treasury: DTAP 1007.107

NEGATIVE IMPACT TO SMALL BUSINESS

There is no expected negative impact to small businesses with this proposed consolidation as it will be either awarded to a small business or utilize a small business subcontracting plan as all SEWP large businesses have either a commercial subcontract plan or a SEWP Contract specific subcontract plan as part of the basic Contract. There are 3 small businesses and 6 large businesses identified who are authorized resellers per NASA SEWP that can provide the requested ServiceNow core licenses. This requirement will be competed amongst the small and large businesses under NASA SEWP with emphasis on Treasury s preference for a small business award. ServiceNow confirmed they have authorized small business resellers and there is minimal risk this requirement cannot be met through a small business entity or to a large business entity with an established subcontracting plan.

STEPS TAKEN TO INCLUDE SMALL BUSINESS

This procurement will be competed amongst small and large business with a preference for a small business. Large businesses will be required to provide a copy of their subcontracting plan(s).

SUBSTANTIAL BENEFITS EXPECTED

The acquisition team examined several areas for potential benefits including cost, quality, acquisition cycle, and contract terms and conditions based on historic and current data. This proposed consolidated acquisition is anticipated to result in substantial benefits as follows:

Table 4: Total Substantial Benefits Expected Substantial Benefits Expected Percent Savings

(Based on Total Estimated Contract Value) Savings Amount

Contract Cost Savings 76% $634,526,297.23

Government Administrative Savings 1.86% $11,802,189.13 Total 77.86% $646,328,486.36

Total Estimated Contract Value (Including Options) $197,473,702.77

The anticipated Contract Cost Savings takes into consideration the promoted original software and that will be driven by negotiations between the resellers and original software manufacture, after the procurement team reviews the quotes received and begins their price analysis.

There will be Government Administrative Savings through the reduction in procurement and administrative activities, due to the processing of less procurement actions. However, most savings expected in this area will be achieved through the users of the ServiceNow licenses in the post award environment. Through full implementation of the Core licenses efficiencies will be realized two-fold; the rapidity of data generation, collection, and analysis and the optimization of the workforce by allowing personnel to shift resources to higher value work.

Further, the capability these licenses will provide for interagency sharing, long sought after, and reducing the need for basic functions to be duplicated across the Agency adds to the savings advantage. The total value of these savings is difficult to quantify at this time but will be possible ret.

Prescribed by Treasury: DTAP 1007.107

APPROVALS

Based on the above, I hereby determine that in accordance with FAR 7.107, that consolidation is necessary and justified.

Concur:

Kathleen A. Guyther Date Contracting Officer

Concur:

Donna Ragucci Date Director, Office of Small and Disadvantaged Business Utilization

Reviewed By:

George L. Bonds, Jr. Date Director, Procurement Operations

Approval:

Dottie Romo Date Acting Deputy Chief Procurement Officer Internal Revenue Service