JA18-086_AMD_01_KCS_JA_OTFAOC_for_HCA_Redacted.pdf

AMENDMENT (AMD) JUSTIFICATION FOR OTHER THAN FULL

AND OPEN COMPETITION (OTFAOC)

Federal Acquisition Regulation (FAR) Part 6 Justification & Approval (J&A), Supporting Procurements under FAR Part 12 and FAR Part 15

Telecommunications Service Request (TSR) Number: WP09APR185926 Contract Number: CSA # to be assigned / Original CSA # USBN W 75235 Task/Delivery Order Number: Not Applicable Procurement Title: Kwajalein Cable System (KCS) Indefeasible Right of Use (IRU) Estimated Value:

Statutory Authority: 10 U.S.C. 2304 (c)(1) & FAR 6.302-1

JUSTIFICATION FOR OTFAOC

NUMBER: JA18-086 AMD 01

Upon the basis of the following justification, I, as Head of the Contracting Activity, 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) and FAR 6.302-1/Defense FAR Supplement

(DFARS) 206.302-1.

1. REQUIRING AGENCY AND CONTRACTING OFFICE:

a) The requirements office is:

US Army Space and Missile Defense Command/Army Strategic Command (USASMDC/ARSTRAT) Reagan Test Site (RTS)

ATTN: SMDC-TCR

P.O. Box 1500 Huntsville, AL 35807

b) The contracting office is:

Defense Information Systems Agency (DISA) Defense Information Technology Contracting Organization (DITCO) Pacific (PAC) 477 Essex St., Ste 180, Bldg 77 Pearl Harbor, HI 96860-5815

2. NATURE/DESCRIPTION OF ACTION(S):

AMD 01: This J&A amendment is to substantiate the variance of between the initial Independent Government Cost Estimate (IGCE) and the contractors final price proposal.

KCS 25 Year IRU Follow-on Extension for Years 11 thru 20-JA18-086 AMD 01

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Based on the new information the Government received it was apparent that the IGCE did not take into account the unique situation of the KCS and did not estimate all costs for the continued Operation, Administration, Maintenance, and Repair (OAM&R) for this effort. The contractor’s proposal is considered complete and can be used as a baseline to negotiate from. The customer is in the process of amending their Telecommunications Service Request (TSR) to increase the funding based on the contractor’s proposal.

This procurement is to provide a sole source 10-year follow-on extension for continued Operation, Administration, Maintenance, and Repair (OAM&R) services for the existing SMDC property lease contract awarded to Truestone, LLC (previously TKC Technology Solutions, LLC) under an IRU for a 25-Year term. The 10-year base term for OAM&R support services will expire on 10 Jun 2018. However, the IRU Property lease acquired by SMDC with RDT&E funds under a sole source 8(a) award will not expire until 10 Jun 2033. The sole source 8(a) Inquiry/Quote/Order (IQO) award included the following: “The vendor agrees that the Government shall have the unequivocal right to enter into a follow-on contract with the vendor for the remaining 15 years in the form of one 10-year period and one 5-year period following completion of this contract.”

The original 25-Year IRU Property Lease procurement included an O&M provision for the initial 10-Years which will reach its 10-year O&M statutory limit on 10 Jun 2018. This follow-on OAM&R extension is the lowest cost alternative and necessary for the Government to obtain continued O&M support for additional 10-years which will coincide with the aforementioned IRU Property lease.

The extension will be awarded as a Firm-Fixed-Price (FFP) contract, inclusive of all taxes and fees, with a 10-Year term from 11 Jun 2018 through 10 Jun 2028. The estimated lifecycle cost of the 10-Year OAM&R extension is . The contract will utilize Research Development Test and Evaluate (RDT&E) funding authority to provide for these services.

3. DESCRIPTION OF SUPPLIES/SERVICES:

The extension of telecommunications services required via this acquisition entail Operation, Administration, Maintenance, and Repair (OAM&R) support for the existing SMDC KCS IRU Property Lease. This IRU provides SMDC with command and control survivable, robust, flexible, and sustained communications for the Department of Defense Information Network (DODIN) optical transport of DoD mission traffic between U.S. Army facilities on

. The KCS provides the DODIN

Page 3 of 8 Pages with an end-to-end optical transport backbone trunk from . The KCS IRU OAM&R services required are specified in the “Fiber Based Transmission Services between over the Kwajalein Cable System” Performance Work Statement (KCS PWS) and includes but is not limited to, the following:

Operation and Maintenance Service - The contractor shall provide operation, administration, maintenance, and repair of the Fiber Optic Cable System(s), facilities, infrastructure, and access of the end-to-end transmission as per the PWS, on a 24 hour basis, 7 days a week, and 365 days a year throughout the entire life of the contract. The contractor shall immediately notify (within one hour), by telephone, the Kwajalein Government Network Operational Centers (NOCs) when there is a disruption or outage to the KCS Transmission Service. Daily summary reports of all network events, outages and maintenance shall be provided electronically (i.e., email) to the Kwajalein Government NOC until the disruption or outage has been restored. The contractor shall ensure any planned maintenance presenting a risk of impacting KCS services is properly coordinated 21 days in advance with the designated representative of the

Terrestrial segments shall be repaired within 8 hours. In the event of an ocean/submarine cable cut, the contractor shall provide the Government with a proposed cost for the Spot Market response for the wet plant repair. In addition, the contractor shall provide and adhere to the following:

• Network Management Requirements - The KCS O&M contractor shall provide Toll Free direct access phone numbers (primary and alternate). The KCS O&M contractor shall dispatch personnel to the troubled area when required. The Toll Free number shall be manned 24 hours, 7 days a week, 365 days a year. The contractor shall open a trouble ticket based upon discovery or notification of any fault, outage or impairment to the cable system or any assets dedicated to USAKA, and shall notify the contracting officer and the Program Manager of the nature of the event and corrective action and schedule to be taken. The KCS O&M contractor shall provide hourly updates to the Government NOCs via phone until the problem is resolved and the trouble ticket is closed.

• Survivability - The transmission and support infrastructure shall be maintained to provide survivability and provide denial of service protection. Survivability refers to the ability of a telecommunications network to maintain service to all priority users during adverse conditions (e.g. limited network damage). The contractor shall design to ensure that KCS is not vulnerable to denial of service attacks resulting from additional wet plant components such as branching units to support other customers on the cable system. The KCS infrastructure shall be designed for survivability to ensure operation during adverse conditions. Terrestrial circuits shall be buried in conduit (or directly, if armored wrap and with United States Army Kwajalein Atoll (USAKA) approval) to maximum extent possible.

• Performance and Availability – The KCS O&M contractor shall maintain and ensure all KCS circuits such that they are continually in accordance with the PWS and its Performance Specification (e.g. KSC PWS Table 8.1.3.3.6.1-1).

The original IQO award included the following: “The vendor agrees that the Government shall have the unequivocal right to enter into a follow-on contract with the vendor for the remaining 15 years in the form of one 10-year period and one 5-year period following completion of this

Page 4 of 8 Pages contract.” Therefore, the requested action is for approval of a 10-year extension of OAM&R support to coincide with the next 10 years (of a remaining 15 year) IRU property lease term.

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). (FAR 6.302-1/DFARS 206.302-1).

5. DEMONSTRATION OF CONTRACTOR’S UNIQUE QUALIFICATIONS:

TKC Technology Solutions, LLC, who later became Truestone LLC, was the 8(a) vendor for the Governments KCS acquisition of an IRU for a 25-Year property lease. Truestone supplies the end-to-end fiber, optical communications and electrical equipment, and facilities associated with Government IRU awarded for the KCS requirement. Only the provider of this infrastructure can supply the OAM&R support necessary for the IRUs continued use, operation and maintenance. The cost to construct and provide the KCS IRU route was distributed across the initial year procurement price of the acquisition plus the initial 10-year OAM&R term. The Government obtained its first contract price reduction in year 2010. The Government is now poised to obtain additional price reductions with this extension of OAM&R services. The Government would not obtain its full benefits of the 25-year IRU property lease should it not execute this extension for the continuation of OAM&R. The Government would also have to incur duplication of costs to recreate the necessary KCS circuit should it not execute this extension for continued operation of KCS IRU. It is for these reasons that the Government implemented the 25-Year IRU property lease and included provisions for an initial 10-Year OAM&R term plus the unequivocal right to enter into a follow-on OAM&R extension for the balance of the 25-Year term.

(a) Description of events.

Truestone, LLC provides the end-to-end infrastructure, equipment, and facilities necessary for the IRU property lease for the Government’s KCS requirement. The initial 10-Years of OAM&R services will conclude on 10 Jun 2018. The requested follow-on extension requirement for this J&A is to exercise the Government’s unequivocal right and issue a sole source follow-on OAM&R extension for KCS with a period of performance of 11 Jun 2018 through 10 Jun 2028 for years 11 through 20 of the 25-Year term.

(b) Justification:

(1) Minimum Government requirements.

The minimum Government requirement is for 10-Years of continued OAM&R support services for the KCS IRU property lease. This OAM&R support must commence on 11 Jun 2018 and will continue through 10 Jun 2028.

(2) Proposed sole source contractor.

The proposed sole source contractor for this requirement is Truestone, LLC.

Truestone, LLC was awarded the KCS requirements on 11 Jun 2008. KCS consists of an IRU property lease for a 25-year term, with an initial 10-year

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OAM&R period plus an unequivocal right to enter into a follow-on extension for OAM&R. Truestone, LLC provides the end-to-end fiber, optical and electrical equipment, and facilities necessary for the Government IRU obtained via the KCS acquisition. Only this supplier can provide the required OAM&R for continuation of the IRUs operation. There are no provisions or allowances that would enable the Government to direct Truestone, LLC to have another carrier or contractor perform OAM&R for any part of the KCS IRU. Therefore, the only means for the Government to obtain continuation operation of the IRU property lease is to execute this follow-on extension contract with Truestone, LLC for OAM&R services under a sole source basis.

(3) Discussion regarding cause of the sole source situation.

The contract was awarded as a sole source 8(a) set-aside. The original award specified a requirement for a 25-Year IRU property lease and also stipulated provisions for an initial 10-year OAM&R period plus that all parties agree the Government has the unequivocal right to enter into a follow-on contract for continued OAM&R services for the remaining 15 years of the IRU at conclusion of the initial 10-Year OAM&R term.

(4) Impact:

If the sole source action is not approved the Government would incur substantial duplication of costs that would not be recovered through completion. Neither will the Government be able to obtain its full benefits of the 25-year IRU property lease should it not execute this extension for the continuation of OAM&R. The Government would also have to incur duplication of costs to recreate the necessary KCS IRU route should it not execute this extension for continued OAM&R of the KCS.

Additionally, if the KCS requirement is not fulfilled the Government would lose its ability to provide assured transmission of

This would cause significant negative impact to the defense and national security interests of the United States and its ability to respond to and provide for mission support, safety of life and humanitarian operations on Kwajalein atoll.

6. FEDBIZOPPS ANNOUNCEMENT/POTENTIAL SOURCES:

This is a telecommunications requirement which was awarded as a sole source 8(a) set-a-side on June 11, 2008. Continuation of services can only be provided by Truestone, LLC on the 25 year

IRU.

7. DETERMINATION OF FAIR AND REASONABLE COST:

A market research summary was completed for this requirement. The prices offered by the supplier have been determined to be fair and reasonable based on market research.

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The physical undersea fiber optic cable system along with the optical communications and electrical equipment and supporting facilities were installed under the initial contract award to support SMDC with its critical need for increased reliable bandwidth in the form of a 25 year IRU. This IRU is the only undersea cable system between and as such there is no historical pricing other than the current OAM&R which was negotiated and determined fair and reasonable for the initial 10-year period.

Other commercial leased pricing (non-IRU) under the DTS-P II ID/IQ contract with Verizon for similar size bandwidth (10 Gbps) between

This pricing does not include costs for equivalent expansive supporting facilities and communications equipment that KCS has on both .

PL842 Contract Price/Cost Analyst is supporting this effort and assisting with the evaluation of the price proposal. Additionally, the SMDC Program Manager and his support team are providing technical review and evaluation support.

8. MARKET RESEARCH (MR):

Based on market research and the continuing need for the continued OAM&R services for the KCS IRU, USASMDC/ARSTRAT-RTS has made the determination that it is in the best interest of the Government to exercise its unequivocal right to enter into a 10-Year follow-on extension for CSA USBN W 75235, Kwajalein Cable System (KSC). The 10-Year total cost for continued KCS IRU OAM&R is whereas the total cost for an IRU replacement alternative is , based on initial KCS costs. Thus, the cost savings to the Government for the KCS IRU contract action is approximately over the 10-Year period. This action enables the Government to avoid in substantial duplicative costs associated with a new IRU build alternative replacement for the KCS IRU. Additional supporting information can be found in the MR report.

9. ANY OTHER SUPPORTING FACTS: None

10. LISTING OF INTERESTED SOURCES: None, as this is an extension of an existing IRU and services can only be provided by Truestone LLC.

11. ACTIONS THE AGENCY MAY TAKE TO REMOVE OR OVERCOME BARRIERS

THAT LED TO THE EXCEPTION TO FULL AND OPEN COMPETITION:

(a) Procurement History.

The KCS IRU was awarded as a sole source 8(a) set-a-side on June 11, 2008.

This acquisition included the below contract term stipulations. The below clause was fully disclosed during the original KCS contract negotiation to stipulate the entire term and performance of this effort

• Service period: The period of the performance of this contract is 25 years for the KCS IRU

Page 7 of 8 Pages property lease and the initial 10 years/120 months for the operation and maintenance of the KCS IRU facilities. The contract includes the following: “Notwithstanding this contract time limit, the parties agree that for the prices specified, the Government shall receive this IRU for a total period of 25 years. Accordingly, the vendor agrees that the Government shall have the unequivocal right to enter into a follow-on contract with the vendor for the remaining 15 years in the form of one 10-year period and one 5-year period following completion of this contract. During the follow-on contract(s), additional nonrecurring charges for the IRU shall not be allowed. The follow-on contract would allow only monthly recurring charges for OAM&R services as well as continued access, e.g., rights of way/easements.”

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

In accordance with the exceptions under DISA Acquisition Regulation Supplement 7.103 (S-91) (1) (vii), an AP is not required.

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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.

NAME: SIGNATURE: TSR provided

TITLE/ORGANIZATION: Program Manager, USASMDC/ARSTRAT-RTS

PHONE: DATE: June 01, 2018

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.

NAME: SIGNATURE: TSR provided

TITLE/ORGANIZATION: Deputy Director, USASMDC/ARSTRAT-RTS

PHONE: DATE: June 01, 2018

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

NAME: Marla C. Ferrer SIGNATURE:

TITLE/ORGANIZATION: Chief, GIG Transport Branch, DITCO-PAC/PL71

PHONE: 808-472-2733 DATE: 01 JUN 2018

HEAD OF THE CONTRACTING ACTIVITY (HCA) APROVAL: I have reviewed this justification and find it to be accurate and complete to the best of my knowledge and belief.

Since this justification does not exceed $93M, this review serves as approval.

NAME: Douglas W. Packard SIGNATURE:

TITLE/ORGANIZATION: HCA/Procurement Services Directorate

PHONE: DATE: