JA DREN Bridge Final 14 Dec 11 OGC Rev

Purchase Request Number: Letter of Intent to Fund dated 27 Oct 11

JUSTIFICATION FOR

OTHER THAN FULL AND OPEN COMPETITION

Justification for OTFAOC Number:

Upon the basis of the following justification, I, David G. Simpson, RADM, as Senior

Procurement Executive, 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(c)(1): The services required are available from only one responsible source, and no other type of supplies or services will satisfy agency requirements.

JUSTIFICATION

1. REQUIRING AGENCY AND CONTRACTING OFFICE:

a. Requiring Agency:

DoD High Performance Computing Modernization Program (HPCMP)

DoD High Performance Computing Modernization Office (HPCMO)

10501 Furnace Road, Suite 101

Lorton, VA 22079-2624

b. Contracting Activity:

Defense Information Systems Agency (DISA)

Defense Information Technology Contracting Organization (DITCO)

2300 East Drive

Scott Air Force Base, IL 62225-5406

2. NATURE/DESCRIPTION OF ACTION(S): This action is to award a bridge contract (an extension of the current contract) to the incumbent contractor in order to continue acquiring services identical to those currently being acquired under contract DCA200-02-D-5003 while the current full and open competition for a follow-on acquisition is completed. The bridge contract will be an indefinite-delivery, indefinite quantity (ID/IQ) contract, awarded on a sole-source basis to the incumbent, for services to be acquired under firm-fixed-price task orders. Task orders shall be funded with RDT&E appropriations that are available for obligation at the time each task order is issued.

3. DESCRIPTION OF SUPPLIES/SERVICES: The services are required to sustain, maintain, manage, and support, the Defense Research Engineering Network (DREN), which is a robust, high speed network that provides connectivity among the High Performance Computing Program geographically dispersed user sites and shared resource centers. The networking services of

DREN are provided by means of a virtual wide area network (WAN) built on a public communications network. The sites connected by DREN services may be at virtually any point in the Continental United States (CONUS), Alaska, or Hawaii.

The specific contract requirements are for commercial state-of-the-art WAN digital data transfer services and related management and support services, as listed below:

a) Concurrent digital data transfer service between and among service delivery points

(SDPs);

b) Work required to implement changes to the set of active SDPs; and

c) Technical support (such as engineering technical support, technical studies, and technology insertion) and instructional service related to the customers’ present or future operational environment that is being supported by contractor-provided services.

An SDP is a combination of physical, functional, procedural, and service characteristics that establish an interface between the Contractor’s network and Government-designated customer premise equipment (CPE). A single SDP is deployed for each DREN site. For a given SDP the

Government chooses the hardware interfaces between the SDP and the Government site CPE, and then selects data transfer rates for all user traffic to reach the DREN. Each SDP is capable of supporting multiple protocols and services (e.g., ATM, IP). SDPs located at Network Access

Points, Metropolitan Area Exchanges, and GigaPOPs also provide network gateway services.

The delivery schedule (ordering period of performance) shall consist of a one-year base period, and two six-month option periods, with their respective estimated costs, as follows:

June 19, 2012 – June 18, 2013 ($23 million);

June 19, 2013 – December 18, 2013 ($11.8 million); and

December 19, 2013 – June 18, 2014 ($11.8 million).

TOTAL EXTENSION COST: $46.6 million

4. IDENTIFICATION OF STATUTORY AUTHORITY: Only one responsible source and no other supplies or services will satisfy agency requirements, 10 U.S.C. 2304(c)(1).

5. DEMONSTRATION OF CONTRACTOR’S UNIQUE QUALIFICATIONS OR NATURE

OF THE ACQUISITION REQUIRES THE USE OF THE AUTHORITY CITED ABOVE:

The nature of this acquisition requires the use of the cited exception to the general requirement for full and open competition. The current contract must be extended in order to acquire services from the incumbent contractor pending the award of the DREN III replacement contract. The replacement contract will be awarded after full and open competition. The Acquisition Plan for the replacement contract provided for award eighteen (18) months prior to the expiration of the current contract, but the acquisition process has been delayed for good reasons, and not due to inadequate acquisition planning. The full 18 month transition period is necessary because more than 200 service delivery points must transition to the competitive follow-on, and this transition makes a competitive bridge unfeasible. All reasonably available acquisition resources are now being employed to complete the replacement acquisition. Conducting a separate competition for a short-term bridge contract would dramatically delay the current DREN III competition and, more importantly, would delay even more the implementation of a more complex network that will exploit the most up-to-date technology for speed, volume, reliability, and security due to the required transition period. It is therefore impracticable to conduct a separate competition to cover the interim period between the expiration of the current contract and the award and transition to the follow-on contract without a tremendous expenditure of additional resources to accomplish what would be, in essence, a duplicative, and far inferior, acquisition. For the reasons set forth below, no responsible sources under other Government task and delivery order contract vehicles are available to meet the needs of the HPCMO during the time frame necessary to complete and transition to the follow-on award. Currently, award of the follow-on contract is anticipated to be late March of 2012.

The following paragraphs support the applicability of 10 U.S.C. § 2304(c)(1) to the extension of the current contract. Specifically, they will explain why only the current contractor can provide the services required during the transition period between the end of the current contract and a date eighteen (18) months after the award of the replacement contract. In addition, they will explain why only the current contract can satisfy HPCMP requirements for DREN. They will also demonstrate that the loss of the availability of the current contract, and the continued provision of the services it provides, would be detrimental to the HPCMP mission. Finally, they will explain why the delay in awarding the replacement contract was not the result of lack of advance planning.

A. General Background

The HPCMP was initiated in FY 1993 in response to congressional direction to modernize the

Department of Defense HPC capabilities. Early on, senior leaders recognized the unique potential of this emerging technology as critical to our nation’s future defense. The HPCMO, which is staffed with representatives from each military department, was established in fiscal year (FY) 1994 to perform life cycle management and acquisition oversight needed to ensure that the program supports the HPC needs of the defense science and technology (S&T) and developmental test and evaluation (DT&E) communities. Since FY 1996, the program has fielded a world-class HPC infrastructure, available to the DoD technology communities in the

Continental United States (CONUS), Alaska, and Hawaii. In August of 2000 the DoD Research and Engineering Network (DREN) was officially recognized. Previous telecommunications awarded to effect DREN were:

Contract Number: DAHC94-96-D-0009

Contract Name: DREN Intersite Service Contract (DISC)

Contractor: AT&T

Contract Period: July 12, 1996 – July 11, 2001

Contract Type: Firm Fixed Price, ID/IQ

Geographical Scope: CONUS, Hawaii, and Alaska

Significant Contract Features: Provides transmission services and equipment to meet telecommunications end-to-end requirements.

Contract Number: DCA200-02-D-5003

Contract Name: DREN-II

Contractor: Verizon

Contract Period: June 19, 2002 – June 18, 2012*

Contract Type: Firm Fixed Price, ID/IQ

Geographical Scope: CONUS, Hawaii, and Alaska

Significant Contract Features: Provides transmission services and equipment to meet telecommunications end-to-end requirements.

*The period of performance is June 19, 2002 to June 18, 2012, and FAR 52.217-8, Option to Extend Services, was included. The contract was awarded on 04 Apr 2002, but implementation was delayed due to protests received. The United States Code under which this contract was issued strictly limits the period of performance to 10 years from date of implementation, eliminating the ability to exercise FAR 52.217-8 and extend the term of the basic contract six additional months at the end of the 10th year.

The DREN II contract is due to expire on June 19, 2012. The replacement contract, which is currently being negotiated under full and open competition, is expected to be awarded in late

March 2012, but a planned transitional overlap of eighteen (18) months must also be included.

B. Planning For The DREN III Replacement Contract

Initial acquisition planning began with a request for information that was posted to the Federal

Business Opportunities website on August 3, 2009, to assess the current capabilities in the market for a cutting-edge network that could meet the rapidly increasing demand of the DREN.

This was followed by the publication of the DREN III Acquisition Strategy, dated August 29, 2009. The acquisition process continued, as follows:

Industry Days Conducted September 22-24, 2009

GiG Waiver resolved March 10, 2010

Single Award D&F signed June 30, 2010

Synopsis Posted November 29, 2010

RFP Released January 4, 2011

Amend 1 to Extend the Due Date February 18 to March 25, 2011

Amend 2 to Extend the Due Date March 25 to April 15, 2011

Amend 4 to Extend the Due Date April 15 to April 22, 2011

Proposals Received April 22, 2011

Five Rounds of Discussions/Negotiations April 22 to September 21, 2011

Final Proposal Revisions (FPRs) received September 21, 2011

Evaluation of FPRs September 21 to October 28, 2011

Amend 8 and Discussions Reopened October 28, 2011

During the Industry Days and subsequent discussions with potential offerors, HPCMO learned that a cutting-edge fiber optic telecommunications technology known as “Lambda Transport” was reaching maturity. To ensure that the DREN III contract would be able to perform at the highest levels possible, it was determined that Lambda Transport could and should be made a part of the acquisition. This decision proved to be sound, but the time required to translate the requirement into a contract solicitation was time-consuming, and contributed to the delays experienced during this acquisition.

The HPCMO and DREN exist to ensure that cutting-edge research and development is available to and within DoD and across its supporting research and development centers. To fulfill their purpose, the Government turned to the private sector to obtain additional highly trained scientists and engineers to augment the DoD workforce. This augmentation was accomplished under the

Intergovernmental Personnel Act (IPA) (5 U.S.C. §§ 3371-3376), but it has also resulted in turmoil in the case of this acquisition because, for example, the Source Selection Evaluation

Team has been chaired by several IPA appointees. In addition, and separate from the effect of

IPA appointments, one chair had to resign due to a family emergency. The unexpected turnover of leadership was not anticipated and caused considerable delay as important decisions relevant to this acquisition had to be put off during periods of leadership transition. One turnover occurred in the midst of a major modification to the PWS, which probably added several months to the process. The lead position was vacant for almost two months during that period, and the new lead had to be briefed on the history and status of the acquisition before he could be effective.

During the ten-year time frame of the current DREN II contract, the Defense Information System

Network (DISN) operated by DISA matured rapidly. The DISN became closely regulated to ensure the availability, reliability, and security of the DoD Global Information Grid.

Consequently, the acquisition team discovered that the DREN may be subject to that governance, which would dramatically change the acquisition strategy, and a waiver to the DISN governing regulations was sought. After six months of consideration by DISA officials, it was determined that a waiver was unnecessary, and the DREN would not be subject to the DISN rules. The acquisition team did not suspend its work completely during the six-month period, but activities were slowed considerably to avoid wasting resources in the event the DREN III acquisition had to be cancelled.

One specific action that was delayed for quite some time while awaiting the outcome of the

DISN waiver process was the preparation and execution of a Determination and Finding for a single-award ID/IQ, which was required under the DREN III acquisition strategy. For good reason, the acquisition team was forced to put important work on hold until the DISN waiver process was complete.

Several amendments were made to the RFP at the behest of one or more offerors to extend the due date to submit proposals. This resulted in a delay of just over two months, which was solely for the benefit of the offerors. After the offerors submitted their proposals, the acquisition team engaged in extensive negotiations and discussions with the offerors that lasted five months, which was much longer than anticipated. The result, however, was quite beneficial to the acquisition process because it ensured clarity and a positive evolution of all proposals.

Most recently, it was brought to light for the entire team that the DREN II ID/IQ contract had not been awarded solely under the authority of 10 U.S.C. § 2304a. Although such contracts are generally limited to ten years, the statute and regulations issued thereunder provide sufficient flexibility to extend the period of performance beyond ten years by exercising FAR 52.217-8, which was included in the basic contract. While the acquisition team was aware of the 10 year statutory limit for telecom contracts, they believed the Government could exercise the option to extend services and extend the basic contract and services thereunder through December 18, 2012. The DREN II contract was, however, also awarded under and subject to the authority of

40 U.S.C. § 501, which strictly limits the period of performance of long-haul telecommunications contracts to ten years, thereby making further extensions under FAR 52.217-

8 unavailable. When this was realized in late October of 2011, the team immediately initiated the process to request approval for this bridge contract. The limitation under 40 U.S.C. § 501 has reduced the amount time the acquisition team believed was available to complete the current acquisition. It is also important to note that adequate acquisition planning does not require perfect acquisition planning, and an error such as this, which involved an esoteric rule of law, does not constitute inadequate acquisition planning as interpreted in GAO decisions that address bridge contracts.

C. No Reasonable Alternative to a Sole-Source Extension Contract with the Incumbent

The DREN is a highly specialize network with critical design specifications that are not easy (or perhaps even possible) to meet using task orders issued under existing ID/IQ contracts. More importantly, it would be impossible, as a practical matter, to use any existing ID/IQ contracts, especially fair opportunity contracts more commonly used in support of point-to-point services, because of the requirement to issue task orders on a competitive basis among all contract holders.

All contracts in support of the DREN have been (and will be) single-award ID/IQ contracts precisely because of the nature of the network. The use of alternative sources during the interim period leading up to the completion of the DREN III acquisition process presents an unacceptable risk of reducing the level of availability, reliability, and security under the current

DREN II contract.

The DREN was not designed merely to provide generic connectivity between research centers, but to facilitate timely, controlled, and consistent sharing of research and development data across the DoD enterprise as required by statutes, regulations, and policies. The current DREN

II contracting vehicle is a vital part of the solution to meet and implement those statutory, regulatory, and policy requirements for high performance computing for the DoD research community. The replacement DREN III contract will continue to meet the initial requirement, but at a higher level of performance and expanded scope of functionality.

D. Conclusion

The HPCMP and DITCO require an extension to the DREN II contract to avoid a gap in critical mission coverage until the DREN III contract is awarded. It is impracticable to obtain the required services through a full competition among responsible sources at fair and reasonable prices at this late date. Moreover, the time and resources that would have to be expended to engage in a separate acquisition of these highly specialized long-haul telecommunications services for the period of the bridge contract would be an unnecessary duplication of the efforts that are already underway in the DREN III replacement acquisition. In fact, practically speaking, there would be no resources available to effect such a competition without bringing the current competition for the DREN III contract to a virtual halt. In addition, there are no other established sources of supply that have the requisite capacity to ensure the continuity of the established means to network DoD’s most important research operations and partners. And finally, as already clearly established above, it is important to reiterate that the delays in the

DREN III replacement acquisition were not the result of inadequate acquisition planning, but rather were required to accommodate new technology, unexpected turmoil, and a misunderstanding regarding the legal rules that govern the current contract.

6. FEDBIZOPPS ANNOUNCEMENT/POTENTIAL SOURCES: The modification resulting from this action will be synopsized on the Federal Business Opportunities website. The approval authority will be advised of any responses to the synopsis.

7. DETERMINATION OF FAIR AND REASONABLE COST: The current contract has been in place for almost ten years. The task orders are firm-fixed-price and the technologies are well established in the market place. The contracting officer shall compare proposed prices with current prices and the prices for similar telecommunications services. Extensive price analysis is not anticipated because of the nature of the services, though a technical evaluation and an audit of the incumbent’s costs may be used if the proposed prices appear to be unreasonable.

8. MARKET RESEARCH:

A review of the commercial market and experience on the DREN contract indicates that the required services could be provided by several vendors, given sufficient time.

As part of the research in support of the approved acquisition plan for the competitive follow-on, a Request for Information (RFI) was issued and Industry Days were held on 16 September 2009.

Seven large businesses and two small businesses attended. The two small businesses indicated they were only interested in subcontracting opportunities. As a result, a small business set aside was not considered. At least three of the large businesses who participated are known to have the capability to provide the services required under DREN III as they either have experience on the current or a past DREN contract, or they are known to have the necessary infrastructure to provide these services.

More recent market research involves the response to the follow-on Request for Proposal (RFP).

Several proposals were submitted on April 22, 2011. While evaluations are still on-going, it is assumptive that each of the vendors could potentially provide DREN services. However, the

RFP calls for an 18-month transition time, to allow for transition from the current network, to the new network. This would also include the potential building of new infrastructure for this new network. Therefore, due to the required transition time, the DREN II incumbent is the only feasible source who can support the continued mission needs of the HPCMPO at current levels via a bridge effort without unacceptable delays.

9. ANY OTHER SUPPORTING FACTS: None.

10. LISTING OF INTERESTED SOURCES: None.

11. ACTIONS TAKEN TO REMOVE BARRIERS TO COMPEITION: This contracting action is considered an interim solution to allow DREN II to continue to provide uninterrupted support until all sites have transitioned to the follow-on contract. The HPCMO and DITCO are currently engaged in a full and open competition for a replacement contract. The current contract was also awarded on April 4, 2001 after a full and open competition.

12. REFERENCE TO THE APPROVED ACQUISITION PLAN (AP) PROGRAM PLAN (PP):

The Acquisition Plan (AP) for the contract bridge extension (DCA200-02-D-5003) will be routed as soon as practical.

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.” (FAR Subpart 6.303-1(c) and DARS Subpart 6.303-1(b))

NAME: Roy L. Campbell, Jr., PhD SIGNATURE: _______________________

TITLE: DREN Program Mgr 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.” (FAR Subpart 6.303-1(c) and DARS Subpart 6.303-1(b))

NAME: Roy L. Campbell, Jr., PhD SIGNATURE: _______________________

TITLE: DREN Program Mgr DATE: ________

CONTRACTING OFFICER CERTIFICATION: Include the following determination: (FAR

6.303-2(b)(7))

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

NAME: Deborah A. Benscoter SIGNATURE: _______________________

TITLE: Contracting Officer DATE: ________

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

Signature:

NAME: ______________________ SIGNATURE: _______________________

TITLE: ______________________ DATE: ________

HEAD OF THE CONTRACTING ACTIVITY:

I have reviewed this justification and find it to be accurate and complete to the best of my knowledge and belief.

APPROVED BY: (FAR 6.304(a)(3))

SENIOR PROCUREMENT EXECUTIVE APPROVAL

“I have reviewed this justification and find it to be accurate and complete to the best of my knowledge and belief. Since this justification for OTFAOC exceeds $85.5M, this review serves as approval.”

APPROVED BY:

Signature:

ALL QUESTIONS REGARDING THIS JUSTIFICATION FOR OTFAOC ARE TO BE

REFERRED TO THE CONTRACTING OFFICER.