JA_SIRCE_Ceiling_Increase.pdf

Justification for an Exception to Fair Opportunity

1. Agency: Food and Drug Administration (FDA), Department of Health and Human Services (HHS)

a. Federal agency and contracting activity:

HHS/FDA, Office of Acquisitions and Grants Services (OAGS)

b. Sponsoring organization:

HHS/FDA, Office of Information Management and Technology (OIMT) for Office of Regulatory Affairs

c. Project Officer Information:

Jeffrey Solar Supervisory IT Specialist 3WFN Room 12D18 11601 Landsdown Street North Bethesda, MD 20852 jeffrey.solar@fda.hhs.gov

2. Nature of Action Being Proposed for Approval:

The subject acquisition is a sole source modification to the Mission Accomplishments and Regulatory Compliance Systems (MARCS) task order awarded under the FDA Enterprise System Life Cycle Management Support (ELMS) contract (HHSF2232009500071/HHSF22301001T). The contract is for the Operations and Maintenance (O&M) and Development, Modernization, and Enhancement (DME) of over 25 Information Technology (IT) systems for Office of Regulatory Affairs (ORA). The acquisition is to extend the period of performance by 12 months to include Operations and Maintenance and Program Management and to increase the ceiling for DME work from $108 million by $42 million to $150 million. These systems provide mission-critical IT functions to the Office of Regulatory Affairs (ORA), including processing of products submitted for import into the United States, inspection of FDA-regulated facilities, initiating and tracking recalls, and the tasks necessary to carry out compliance actions necessary to maintain public health and safety.

3. Title and Description of Supplies or Services and Estimated Value:

a. Project Title:

ORA MARCS ELMS Task Order mailto:jeffrey.solar@fda.hhs.gov

b. Description of Requirement:

The scope of work includes software operations and maintenance and Development, Modernization, and Enhancement (DME) to support ORA business needs related to Imports and SIRCE systems, formerly "MARCS".

c. Total estimated dollar value and performance/delivery period:

The sole source action will:

• Extend the period of performance for the Task Order for 12 months

• Authorize an Operations and Maintenance (O&M) task and a Program

Management task at a negotiated price (not to exceed $6.1 million and $1.2 million, respectively)

• Increase the ceiling for DME from $108 million to $150 million

• Overall increase value of task order by approximately $50 million

4. Statutory Authority and Supporting Rationale:

The statutory authority justifying this exception to fair opportunity is FAR 16.505(b)(2)(i)(B), only one awardee is capable of providing the supplies or services required at the level of quality required because the supplies or services ordered are unique or highly specialized.

a. Name and address of the proposed contractor:

Leidos, Inc.

b. Nature of the acquisition and rational supporting the justification:

Under Contract Task Order HHSF2232009500071/HHSF22301001T, Leidos provides for the Operations and Maintenance (O&M) and Development, Modernization, and Enhancement (DME) of over 25 Information Technology (IT) systems. These systems provide mission-critical IT functions to the Office of Regulatory Affairs (ORA) and all FDA Center and Office personnel and include the systems required to support the entry processing of products submitted for import into the United States, inspecting FDA-regulated facilities, initiating and tracking recalls, and performing tasks necessary to carry out compliance actions to protect and maintain public health and safety. The systems supported by the task order are critical to agency operations, and FDA cannot fulfill its mission in the absence of said systems.

The current task order was issued in 2013 through a competitive procurement with a 5-year (base and options) period of performance through September 2018. In the fall of 2016, ORA and OIMT began working with OAGS to acquire a new contract as a re-compete of the current task order. Due to the size and complexity of the IT requirements, the FDA is requesting a 7-year contract with a total value of approximately $400 million. FDA has prepared a Determination and Finding (D&F) for an exception to exceed the $112 million limit on a single-award task order contract and a period of performance for 7 years for the new contract action. These D&Fs were submitted to the Department of Health and Human Services for approval in mid-March 2018, and have not been approved as of early July. Due to the time required to obtain concurrence and approval for the D&Fs, FDA will not be able to award the new contract before the end of the current period of performance (September 2018).

The services provided under the current contract are essential to the ORA and FDA mission and to meeting Congressional mandates, including those related to the Food Safety Modernization Act (FSMA). Operations and Maintenance services are necessary to continue business operations including processing of imports, facility inspections, compliance actions, and recalls. Failure of the IT systems supported under this contract would present a high risk to public health and the safety of American consumers of FDA regulated products, negatively impact firms manufacturing FDA-regulated goods and would stifle commerce as importers offering products for entry into the United States (i.e. Trade) would not be able to secure admissibility into the United States. Assuming the importer submits accurate and complete information at the time of entry, the electronic entry review process expedites the entry review process. ORA processes 40 million lines of goods offered for entry into the United States per year. Loss of electronic processing for imports would pose a potential loss of hundreds of thousands of dollars to trade per day resulting from delays as manual processing of imported and often perishable goods into the U.S. Market is no longer a viable option. In addition, Section 801 of the FD&C Act was amended by the Bioterrorism Act of 2002 to require that the FDA receive prior notice (PN) of food imported or offered for import into the U.S. FDA proposed a regulation to implement the PN requirements of the Act, which provides FDA with new authority for protecting the nation’s food supply against terrorist acts and other public health threats. The PN provision in the Act gives FDA advance information of imported food shipments, allowing FDA to target inspections more effectively and to help ensure the safety of imported food products before they enter domestic commerce. Under the Act, an article of food imported or offered for import without submission of such notice shall be refused admission under 801m of the Act.

Currently, the processing of imported lines through the 801a authorities is dependent upon the functioning of FDA import system and the CBP IWS interface. Without these systems, FDA would be required to revert to a paper based system which may not be possible as CBP has retired the forms needed to support paper based entries.

Additional risks would be borne by the American consumer as ORA would be unable to apply its computer-generated logic and rules to determine overall risk of products introduced to the U.S. market as well as firms manufacturing products domestically potentially increasing the risk of foodborne illness and/or harm resulting from poorly manufactured or counterfeit drugs and devices. Finally, loss of O&M services would also pose a security risk as contractor support is critical to the implementation of system patches and resolution of security vulnerabilities.

The continued need for DME work is the result of three significant mandates that necessitate extensive updates to the IT systems: the Food Safety Modernization Act (FSMA), Food and Drug Administration Safety and Innovation Act (FDASIA), the implementation of the Automated Commercial Environment (ACE) by Customs and Border Protection (CBP), and enhancements to systems supporting review of imported drugs at the International Mail Facilities (IMFs). Any interruption in the services provided will result in delays to these critical initiatives as described below.

FSMA is resulting in extensive changes to the way FDA, State regulatory authorities, and the Trade interact to ensure the safety of the food supply. As the FSMA rules are being established, FDA systems are being enhanced to support new inspection protocols, recording and tracking of corrective actions, safety plans, and import programs. Many additional enhancements remain to be developed and these updates must be completed prior to implementation of the new rules. Per the attached FSMA Operational Milestone document, 2019 and 2020 has milestones for implementation of five new programs supporting FSMA to include full implementation of Preventive Controls. To reach these milestones which are in the regulation and published in guidance documents, ORA must work to identify requirements, develop, test and implement the functionality to support these new programs. Per the economic impact analysis for the Section 103 of the FSMA regulation, the estimated cost to the United States public of not implementing the rules include a measure of lost health as measured by morbidity and mortality effects of foodborne illnesses as attributable under the scope of the rule, and an economic burden to the public of illnesses attributable to FDA-regulated foods under the scope of the rule.

Prior to August 2015, FDA received all data on regulated imports from CBP through an interface to their legacy Automated Commercial System (ACS). To complete the implementation of a modern replacement for ACS, an Executive Order "Streamlining the Export/Import Process for America's Businesses" was issued in February 2014.

Among other provisions, the Order required participating Agencies (including FDA) to utilize ACE by December 31, 2016. To meet these requirements, FDA has developed software to interface with ACE and to utilize the new capabilities and data made available. FDA has undertaken an extensive effort to update ORA systems and respond to changing capabilities introduced by CBP development team. Although the new interface is now in use, CBP continues to enhance ACE, and FDA is continuing to expand the use of the new data to support implementation of a few of the FSMA programs referred to in the previous paragraph. The increase in the task order ceiling for DME work will allow the FDA to continue to update and develop the mission-critical systems to enable implementation of FSMA programs as well as support the transmission of import entry data from CBP to FDA through a bilateral web service that allows for communication of entry data to FDA and the communication of the FDA disposition decision to the filer via CBP’s system interface. These enhancements will provide for faster turn-around for processing of importer’s entries and more consistent and uniform response to discovered violations and import alerts.

This improved screening will likely result in discovery of violations, thereby improving FDA’s ability to protect the public health.

https://www.managementconcepts.com/Course-Search-Results/dom/Project%20-%20Program%20Managementhttps:/www.fda.gov/downloads/Food/GuidanceRegulation/FSMA/UCM334117.pdf https://www.managementconcepts.com/Course-Search-Results/dom/Project%20-%20Program%20Managementhttps:/www.fda.gov/downloads/Food/GuidanceRegulation/FSMA/UCM334117.pdf

Enhancements to support ORA operations at the IMFs are a key element in the Commissioner’s priority to address the opioid crisis. FDA has received funding to increase staff at these facilities. System enhancements are needed to enable the staff to work efficiently and to increase their ability to identify questionable shipments.

Additionally, the work will enable us to meet the Commissioner’s goal to “get a better understanding of just what’s entering the country through the IMFs”.

Due to the complexity of the systems, only the incumbent contractor is capable of providing the services required without delay at the required level of quality. Based on prior experience, the FDA estimates that a successful transition to a new contractor would require an estimated six months of overlap in support with the incumbent contractor to be brought up to speed enough to continue work on these systems at an acceptable level of quality. No other contractor is immediately qualified to perform the O&M and DME work at the required level of quality without the transition in period to give them time to acquire the specialized system-specific knowledge. The DME work will require the Contractor to make changes to several complex systems that utilize different technologies (Cold Fusion, .NET, Java). The work requires a detailed understanding of the current system architecture and coding, as well as multiple interfaces to other systems. FDA staff does not possess the expertise in software development to perform the work in-house.

5. Determination by the Contracting Officer that the Anticipated Cost to the

Government will be Fair and Reasonable:

The unit labor rates were determined to be fair and reasonable at the time of award of the IDIQ.

Moreover, FDA complied with fair opportunity procedures prior of the award of the subject task order. Prior to modifying the order for O&M or definitizing any requirements for DME work, FDA will perform an additional analysis to ensure that the labor mix and level of effort are appropriate for the completion of the work, resulting in a fair and reasonable price.

6. Any other facts supporting the justification:

A lapse in O&M support would jeopardize the Agency’s ongoing business operations. O&M support addresses approximately 100 user requests (Help Desk calls) each week, verifies system availability after patching (2-3 times/month), resolves software defects (~90 releases/year), and provides ongoing troubleshooting to maintain system availability on a 24x7 basis. Loss of function in any of these systems will have a significant impact on the ability of ORA staff to perform their job functions and on the flow of the estimated 25% of Gross Domestic Product (GDP) regulated by FDA.

A lapse in DME efforts would jeopardize the Agency's ability to implement FSMA initiatives in the time frames required by regulation and communicated to industry. FDA has several key FSMA initiatives that have been partially developed as well as additional programs scheduled for implementation in FY 2018, including the enhancements to the Operational Corrective Actions Report (OCAR) and the Voluntary Qualified Importer Program (VQIP). If additional work cannot be funded, or if a new contractor was selected to perform the work without system-specific knowledge and appropriate transition, the delivery of the software updates to support these changes will be delayed, negatively impacting FDA's ability to protect public health and incurring a loss of confidence from Industry. A lapse in DME efforts would delay implementation of enhancements to utilize ACE data, hampering FDA's ability to conduct risk-based screening of imports and increasing the risk to public health and safety. FDA uses the data received from CBP to assess the risk of products offered for import before making a decision to allow admission into commerce and to protect the public from an attempt to import an intentionally adulterated food product, meeting FDA's responsibility under the Bioterrorism Act.

New ACE data elements are scheduled to be accepted and screening developed to utilize those elements as part of the enhancements in FY 19. If additional work cannot be funded, or if a new contractor was selected to do the work without system-specific knowledge and appropriate transition, the delivery of the software updates to support these changes will·be delayed, negatively impacting FDA's ability to protect public health.

A lapse in DME efforts would also jeopardize the Agency’s ability to expand its interdiction of illegal drugs entering through the IMFs as per the Commissioner’s priority to develop additional approached or strategies to combat the opioid crisis. Without system improvements to improve efficiency, FDA staff will not be able to review the necessary volume of suspicious packages, risking the further introduction of dangerous or counterfeit drugs into the US.

7. A statement of the actions, if any, the agency may take to remove or overcome any barriers that led to the exception to fair opportunity before any subsequent acquisition for the supplies or services is made:

The FDA is an advocate of competition. As mentioned above, FDA is pursuing competitive action to fulfill its long-term needs for DME and O&M services. The actions requested in this justification are essential to maintain operations and protect health and safety while a full and open acquisition and an orderly and thorough transition is completed.

Certification and Signatures:

Program Office Certification:

This is to certify that the data supporting this justification is the responsibility of the undersigned program office personnel, including verifying the Government's minimum needs or schedule requirements or other rationale for limited sources (pursuant to 8.405-6(e)(2)) or for other than full and open competition justification (pursuant to 6.303-2(b)) or for an exception to fair opportunity (pursuant to 16.505(b)(2)(i)(B)) which form a basis for this justification, and that such data and rationale are accurate and complete.

Jeffrey Solar Date Contracting Officer’s Representative

William Stevenson Date Contracting Officer Representative’s Supervisor

Lisa Creason Date

ORA ADCIO

Craig Taylor Date Acting Chief Information Officer, FDA

Contracting Officer Certification:

I certify, to the best of my knowledge and belief, that this submission is accurate and contains complete data necessary to support the recommendations for approval. The contracting officer further certifies that an award of this contract action from this requirement will be made only if the price or cost to the Government is determined to be fair and reasonable.

Sherry Solodkova Date Contracting Officer

Reviewed and Concur:

Sandra Bellinger Date Director – Division of IT Acquisitions

Approving Official Determination:

Having reviewed the justification for exemption to fair opportunity, I determine that the circumstance described in section 16.505(b)(2)(i)(B) applies to this order.

Approved:

Leonard Grant Date Head of Contracting Activity

Jim Sigg Date Competition Advocate

LGRANT

Typewritten Text 7/16/18

LGRANT

Typewritten Text