JA Minimum Award_AI Pilot Teams 2 _One Phoenix_Final Redacted_Redacted.pdf

AI Pilot Teams 2 Control Number VA-25-00074319

JUSTIFICATION

FOR AN EXCEPTION TO FAIR OPPORTUNITY

1. Contracting Activity: Department of Veterans Affairs (VA)

Office of Procurement, Acquisition, and Logistics Technology Acquisition Center 23 Christopher Way Eatontown, NJ 07724

2. Description of Action: This proposed action is for a firm-fixed-price task order that will be issued under the Secure, Performant, Reliable, and User-Centered Experiences (SPRUCE), indefinite delivery, indefinite quantity (IDIQ) Contract Number 36C10B25D0009 with One Phoenix Solutions, LLC for the procurement of a dedicated pilot team to rapidly prototype and test Artificial Intelligence (AI)-enabled solutions that improve the delivery of benefits and services to Veterans.

3. Description of the Supplies or Services: VA Office of Information & Technology, Office of the Chief Technology Officer (OCTO), Office of the Chief AI Officer (OCAIO) has a requirement for a team to design and manage a scalable, secure, and reusable cloud environment optimized for AI and data science workflows. This includes: streamlining onboarding, access control, environment provisioning, and operation support for model development and deployment. This infrastructure will not only support pilots within OCAIO, but will also serve as a reusable service layer for AI/Machine Learning (ML) initiatives across VA, addressing existing difficulties for engineers and data scientists seeking to test and operationalize models within compliant environments. For the first 3 months of the PoP, the Contractor shall develop an Infrastructure and Delivery Framework. Specifically, the contractor shall design and deploy cloud-native infrastructure, secure access controls, continuous integration/continuous delivery (CI/CD) pipelines, and reusable AI development workflows. This phase includes documentation for onboarding, governance, and compliance-aligned deployment. Months 3 to 9 shall focus on developing a Pilot Build and Framework. The contractor shall deliver a real-world AI pilot using the developed framework. The pilot shall serve to test and refine the infrastructure, processes, and documentation. Final outputs shall include a validated playbook and recommendations for sustaining future AI pilot delivery at scale. The remaining PoP will focus on refining the frameworks, maturing the initial pilot, and supporting additional AI pilots as requested by OCAIO. The Period of Performance for this effort shall be a 12-month base period, with one 12-month option period, and one Optional Task for additional iterations. The total estimated price of the proposed action is , inclusive of all options.

4. Statutory Authority: The statutory authority permitting an exception to fair opportunity is Section 41 U.S.C. 4106(c)(4) as implemented by the Federal Acquisition Regulation (FAR) Subpart 16.505(b)(2)(i)(D), entitled "It is necessary to place an order to satisfy a minimum guarantee."

5. Rationale Supporting Use of Authority Cited Above: The proposed source for this effort is One Phoenix Solutions, LLC, 732 East Evans Rd., Suite B, Scottsdale, AZ 85260. Solicitation 36C10B24R0005 was issued competitively, utilizing the SAM.gov website on November 29, 2023. The solicitation closing date was December 21, 2023. As a result of the competition, ten (10) awards were made in accordance with the criteria set forth in the Basis for Award of the solicitation, on October 1, 2024. Included in the solicitation was FAR clause 52.216-22, Indefinite Quantity, which stated there is a minimum guaranteed award for each resultant contract award under the SPRUCE contract. To date, eight (8) of the 10 Offerors have received at least one task order to fill the minimum guarantee. This order is being issued to One Phoenix, LLC to satisfy the minimum guarantee. One Phoenix has been determined by the Government's technical experts to provide all aforementioned required services.

The determination included a review of the selected awardee's technical capabilities.

An option period is included in this effort due to complexity of the requirement.

Given the nature of the AI Pilots this Task Order is intended to support, it is imperative that the same contractor is available throughout the period of performance to ensure no loss of context or institutional knowledge between the base period, when much of the work will be in researching and designing Minimum Viable Products and pilots, and the Option Period where those pilots will be further developed and validated.

A minimum guaranteed order under an IDIQ contract must be placed during the same fiscal year (FY) as the IDIQ is awarded to avoid a bona fide need violation and until it is placed, there is no enforceable contract. Once the IDIQ contract has been awarded, an obligation is created. Given the time remaining in the FY, it is not possible to compete the orders with an expectation that each remaining SPRUCE contractor not meeting the minimum will be awarded one.

6. Efforts to Obtain Competition: In accordance with FAR 5.301 and

16.505(b)(2)(ii)(D), this action will be synopsized at award on SAM.gov and the justification will be made publicly available within 14 days after the award. In addition, this justification will be posted with the solicitation to notify all the SPRUCE vendors.

7. Actions to Increase Competition: There is no competition anticipated for this action as it is being issued to meet the mandatory minimum guaranteed value for this IDIQ contract. It is expected that any future requirements will be awarded on a competitive basis.

8. Market Research: VA attempted to satisfy the minimum guarantees through competitive requirements under SPRUCE throughout the FY. However with 10 awardees under Spruce, not all minimum guarantees have been met as a result of the competitive process. As we enter the 4th quarter of the FY we are awarding this action under the authority stated above to avoid a bona fide need violation as previously discussed. Market research was conducted by requesting a technical capability statement from One Phoenix Solutions, LLC and the Government’s Technical representatives have deemed them capable of meeting the requirements of the Performance Work Statement.

9. Other Facts: None.

10. Technical/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.

11. Fair and Reasonable Cost Determination I hereby determine that the anticipated price to the Government for this contract action will be fair and reasonable based on comparing the proposed rates to current industry published rates. Additionally, if necessary, the successful quote will be compared to the Independent Government Cost Estimate.

12. Contracting Officer Certification/Approval I certify that this justification is accurate and complete to the best of my knowledge and belief.

Advocate for Competition Approval

In my role as procuring activity Advocate for Competition, based on the foregoing justification, I hereby approve the acquisition of a scalable, secure, and reusable cloud environment optimized for AI and data science workflows, for the procurement of a dedicated pilot team to rapidly prototype and test AI-enabled solutions that improve the delivery of benefits and services to Veterans on an other than fair opportunity basis pursuant to the authority cited in Section 4 above, subject to availability of funds, and provided that the property and services herein described have otherwise been authorized for acquisition.