JA23-072 - WMOS (Japan Region) and Replenishment Module - Redacted_Redacted.pdf

CUI

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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

Purchase Request Number: HQCAAA350596, HQCAAA350601, HQCAA350603 Contract Number: To be determined Procurement Title: Warehouse Management Operating System (WMOS) Japan Region and Replenishment Module Estimated Value:

Statutory and Regulatory Authority: 10 United States Code (U.S.C) §3204(a)(1) and FAR 6.302-1

Justification for OTFAOC Number: JA23-072

Upon the basis of the following justification, I, as the Head of the Contracting Activity (HCA), 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. §3204(a)(1) and regulatory authority of FAR 6.302-1, only one responsible source and no other supplies or services will satisfy Agency requirements.

1. REQUIRING AGENCY AND CONTRACTING ACTIVITY:

Requiring Agency:

Defense Commissary Agency (DeCA) Headquarters 1300 E Avenue Fort Gregg-Adams, Virginia 23801

Contracting Activity:

Defense Information Systems Agency (DISA) /Defense Information Technology Contracting Organization (DITCO)/PL8413 2300 East Drive Scott Air Force Base, Illinois 62225

2. NATURE/DESCRIPTION OF ACTION(S):

a. This requirement is to procure Manhattan Associates’ WMOS replenishment module for the remaining DeCA central distributions centers (CDCs) and to provide a sustainment support and services solution for all DeCA CDCs. This requirement will allow DeCA to implement the software as a solution (SaaS) Federal Risk and Authorization Management Program (FedRAMP) authorized environment into the remaining DeCA CDCs, provide maintenance for those already implemented, and will include the replenishment module and voice picking capabilities. Once full implementation has occurred, the same level of support is required across all the CDCs within the SaaS environment. As directed by Department of Defense Software Modernization Strategy (Feb 1, 2022), Cloud services and data are fundamental to software modernization. Software must smartly utilize cloud services and incorporate data

WMOS Follow-On, Japan Region -JA23-072

Page 2 of 10 Pages best practices to ultimately deliver impactful capabilities. To achieve and comply with that strategy, DeCA requires the solution to be hosted within a FedRAMP authorized environment. Currently, DeCA has deployed this automated, commercial off-the-shelf (COTS) warehouse management system to the Kaiserslautern, Germersheim, and Guam CDCs. This requirement is for implementation into both Korean CDCs (Osan and Camp Humphreys). To ensure the service provided by Manhattan Associates’ WMOS to these two CDCs is compatible with that of the existing locations, this brand-name solution and support is required.

b. This procurement will be awarded as a firm-fixed-price (FFP) contract to the sole source provider and original equipment manufacturer (OEM), Manhattan Associates, Inc. The period of performance will consist of a 1-year base period, and four 1-year option periods.

The estimated lifecycle cost of this requirement is . Funds have been provided via Military Interdepartmental Purchase Requests HQCAAA350596, HQCAAA350601, and HQCAA350603. The applicable North American Industry Classification System code is 513210, Software Publishers, with a sales size standard of $47M.

3. DESCRIPTION OF SUPPLIES/SERVICES:

a. To date, DeCA has deployed Manhattan’s COTS WMOS solutions into three CDCs. DeCA is underway to implement a modernized warehouse solution that is standardized across all the CDCs to provide a common application supporting warehouse operations. To continue to achieve DeCA’s goal to provide a 21st century shopping experience and to deliver a vital benefit of the military compensation package that improves quality of life and readiness by providing grocery items at significant savings, DeCA’s CDCs must operate like its commercial counterparts, which includes the use of a warehouse management solution.

b. The WMOS system currently processes all incoming shipments, verifies order accuracy, manages warehouse operations, optimizes picking, and provides pallet size, weight, and cube routing information. Also included in the system are software licenses, software configuration, development, and delivery; system and data conversion; documentation;

installation, de-installation, and disposal of old equipment; testing; training; disaster preparedness and business continuity; hardware and software maintenance; system administration; 24x7 help desk (excluding Tier 1); consulting services; and program management. The WMOS directly affects every commissary that relies on a CDC to keep its shelves stocked. It incorporates grocery industry best practices to read and process European

Page 3 of 10 Pages and Japanese article numbers and voice picking technology. This WMOS solution performs five primary business functions described below within the CDC:

(1) CDC Replenishment - CDC must have the capability to create suggested orders to replenish items for the CDC. The suggested ordering will need to take into consideration historical ordering data, promotional, seasonal/holiday items, and past bulk ordering for Sales.

i. The solution shall generate a suggested order and allow the user to modify ordering based on required projected needs.

ii. The solution shall have the capability to separate warehouse orders and promotional orders in due-in quantity.

iii. The solution shall have the capability to differentiate orders from warehouse due-ins such as promotions, cross dock, and store special requests.

iv. The solution shall provide the capability to have adjustable lead times by CDC locations.

v. The solution shall provide the capability to account for and provide consumption history.

vi. The solution shall provide item level flagging:

1. Prioritize and review problematic items/swap, replacement item links/new items, and high interest items.

2. Flag items for ordering as case, layer, pallet, and source load.

Recommended/pending order rounded to nearest location.

3. Shelf-life/salvage caution flags per item.

4. Order filtering: commodity, regular and special location assignments, flag items as regular order and do not order.

vii. Build order lists options by sorting delivery frequency, commodity code, vendor, and warehouse items vs non-warehouse items.

viii. The solution shall have the capability to import and export data to text or spreadsheet format.

ix. The solution shall allow generation of reports.

x. The solution shall provide capability to display status and history of orders and it shall be able to be sorted.

xi. The solution shall provide projected Balance on Hand (BOH) at the time of order arrival for current order build.

xii. The solution shall provide projected pending order quantity sustainment in weeks or days at the time of arrival.

xiii. The solution shall provide item by item product turnover ratio.

xiv. The solutions order unit of issue (UI) shall display resale code (RSL) code, delivery frequency (DF) code, warehouse location, tie/tier and vendor.

(2) Inbound Management

i. Receiving - CDC workers use radio frequency (RF) handhelds to inventory inbound shipments.

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ii. Put away - CDC workers store palletized products, input product location, and manage the internal operations of the CDC, using RF handhelds.

(3) Inventory Management

i. Physical and Cyclic Inventory - CDC workers physically count all products in each warehouse location. Cyclic inventories are performed under normal warehouse operations without freezing locations. CDC workers cycle count inventory by checking product locations to identify and correct discrepancies between current inventory in the WMOS and actual physical inventory.

ii. Quality Control - CDC workers inspect merchandise being received or shipped to ensure that it is of adequate quality and that the license plate number (LPN) context specification is accurate.

(4) Task Management – The warehouse management solution generates warehouse worker tasks and enables management to prioritize the sequence of CDC activities in English, German, Japanese, or Korean to optimize workload efficiency.

(5) Outbound Distribution

i. Replenishment - CDC workers move item inventory from a reserve storage location to the primary picking location or to another mode of storage from which picking is performed.

ii. Picking & Shipping – Voice picking directs CDC workers in English, German, Japanese, or Korean to identify product locations in the warehouse, pick inventory against store orders, and ship the picked inventory to requesting stores.

(6) Supply Chain Intelligence - Equips warehouse managers and supervisors with analytic reporting tool in a set of pre-configured reports; the tool allows managers and supervisors to create their own reports and queries.

c. WMOS is a multi-platform, multi-tier software solution that integrates with VoCollect

(voice picking software and hardware) to enable voice picking, utilizes Supply Chain Intelligence to generate customized reports, utilizes Message queuing, and utilizes Manhattan’s integration framework to process data and interface with other applications and functions within the WMOS. This solution interfaces with DeCA’s supply chain to provide accurate inbound and outbound shipping requirements and inventory management.

d. To achieve DeCA’s goal and to leverage industry best practices, DeCA requires the procurement of the brand-name COTS WMOS solution that has been customized to interface with DeCA’s business systems. Support will include implementation and support of the WMOS SaaS solution into DeCA’s remaining two CDCs.

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4. IDENTIFICATION OF STATUTORY AUTHORITY:

This acquisition is conducted under the statutory authority of 10 U.S.C. §3204(a)(1) and the regulatory authority of FAR 6.302-1/Defense FAR Supplement 206.302-1, only one responsible source and no other supplies or services will satisfy Agency requirements. The software and support are peculiar to a specific brand-name, Manhattan Associates’ WMOS solution.

5. A DETERMINATION FOR THE USE OF A SOLE SOURCE IS IN THE BEST INTEREST

OF THE AGENCY CONCERN:

(a) Description of events.

The DeCA CDCs used DeCA Interactive Business System (DIBS) to manage CDC and commissary backroom warehouse operations. Realizing that this legacy system was not capable of optimizing warehouse operations or leveraging commercial best practices in 2015, DeCA awarded a contract to Manhattan Associates, Inc., to customize its proprietary COTS WMOS solution and deploy it to two CDCs. The Manhattan Associates’ WMOS solution was customized to interface with DeCA’s business systems and was successfully deployed at two CDCs. Manhattan also developed a propriety interface to the existing software that allows DeCA to utilize an automated voice picking system. Recently, Manhattan Associates deployed the solution into the Guam CDC. After the successful deployment of the WMOS SaaS solution into the Pacific theater, DeCA determined the WMOS SaaS solution needs to be deployed across all CDCs to include potential geographically separated warehouses.

Incorporating the replenishment module would eliminate the need for DIBS in any CDC or commissary backroom warehouse operations and software as an integrated solution supporting DeCA’s CDC warehouse operations.

(b) Justification.

(1) Minimum Government requirements.

See paragraph 3 above.

(2) Proposed sole source contractor.

Manhattan Associates, Inc. is the proposed sole source contractor. Manhattan Associates, Inc. is the developer of the COTS WMOS solution that has been customized to interface with DeCA’s legacy systems and is currently operational at three of DeCA’s CDCs. As the manufacturer, Manhattan Associates, Inc. does not authorize any other entities to support or resell their solutions. A sole source contract will allow the Government to continue to utilize this existing comprehensive solution to include voice picking software and supporting hardware interfaces. Warehouse management is mission critical to DeCA’s mission.

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

The original contract was awarded to Manhattan Associates in 2010 through full and open competition. Under that contract, DeCA deployed Manhattan Associates’ proprietary COTS solution with DeCA-unique customizations to effectively interface with legacy systems into two of DeCA’s CDCs. In 2015, a follow-on contract was awarded to Manhattan Associates through full and open competition to implement the WMOS 2015 version. In 2021, a new contract was awarded to Manhattan Associates, as a sole source procurement for the implementation of the FedRAMP SaaS solution.

Through the current contract, this software has now been deployed to three DeCA CDCs.

Manhattan Associates, Inc. is developer of, and the only entity that can provide this proprietary COTS WMOS software solution and the WMOS solution is the only solution that can interface with the existing architecture. Therefore, the WMOS solution, manufactured by Manhattan Associates, is the only solution that can provide DeCA the required operational support and stability required for CDC services.

(4) Impact.

This follow-on contract will allow for the continued operational support of the CDCs already utilizing the WMOS solution, permit implementation of the solution, replenishment and voice picking capabilities, and will remove the aging legacy DIBS solution from CDC operations. The warehouse distribution function of WMOS is critical to DeCA’s mission to deliver groceries to military members in an outside the contiguous United States (OCONUS) environment. A lapse in this functionality would result in mission failure for DeCA.

Procurement of a new COTS warehouse management solution increases the risk of mission failure to deliver a vital benefit of the military pay system that sells grocery items at cost while enhancing quality of life and readiness for DECA’s OCONUS patrons. If this contract for full WMOS and replenishment across all DeCA warehouse operations location is not awarded, DeCA would be greatly hindered in execution of its vison and mission of being “THE grocery provider of choice for our eligible patrons – delivering a vital benefit exclusively for our military community and their families” and would have to sustain the DIBS aging legacy and force several warehouses to manually conduct operations.

The current COTS WMOS solution has been highly customized for DeCA and utilizing a follow-on contract ensures continuity of operational support services. Full and open competition would result in substantial duplication of costs and effort to the Government that are not likely to be recovered through competition.

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6. CONTRACT OPPORTUNITIES ANNOUNCEMENT/POTENTIAL SOURCES:

A notice of the proposed contract action, along with a redacted justification for OTFAOC, will be published on SAM.gov website, as required by FAR 5.2, with the intention to award a sole source contract to Manhattan Associates, Inc.

7. DETERMINATION OF FAIR AND REASONABLE COST:

A determination will be made by the contracting officer that the order represents the best value to the Government, as defined in FAR 2.101, and results in the lowest overall cost alternative (considering price, special features, and administrative costs) to meet the Government's needs. The contracting officer will determine that the resulting contract prices will be fair and reasonable, based on comparison with the prices outlined below. The contracting officer will also determine the pricing information valid for comparative purposes. Certified cost and price data is not required for this commercial item acquisition, in accordance with FAR 15.403-1(b)(3). The contracting officer will determine whether the price is fair and reasonable based on:

a. Comparison of the proposed prices to historical and existing prices paid, whether by the Government or other than the Government, for the same or similar items.

b. Comparison with competitive published price list and published market prices of the same commodities.

c. Comparison of proposed prices with the independent Government cost estimate.

8. MARKET RESEARCH:

Market research was conducted from July 2022 through June 2023 and included gathering data from the developer and from the review of previous acquisitions. The results of the market research revealed and validated the current WMOS software is proprietary to Manhattan Associates and cannot be supported by any other contractor.

The first step taken in conducting market research, was to determine if another brand-name solution could meet the Government’s need. There are no other competing products that meet DeCA’s minimum requirement. The next step in conducting market research was to determine a method of procurement. Market research revealed Manhattan’s WMOS solution is not available through the DoD Enterprise Software Initiative or via a General Services Administration contract vehicle. Market research also confirmed the WMOS solution can only be procured directly through Manhattan Associates.

Based on the market research concluded in June 2023, it has been determined that only the brand-name product and product support, WMOS, provided by Manhattan Associates, can fully support the Government’s need. Currently, there are no other replacement products in the FedRAMP marketplace that are compatible with the existing environment. The Government

Page 8 of 10 Pages will continue to conduct market research to determine if there are changes in the marketplace that would enable future competitive actions, for instance, there are similar products and product support in the marketplace that provide the same functionality, Manhattan Associates, the OEM releases ownership rights of products and, or it is economically feasible to procure a new system.

9. ANY OTHER SUPPORTING FACTS: None

10. LISTING OF INTERESTED SOURCES: None

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

LED TO THE EXCEPTION TO FULL AND OPEN COMPETITION:

a. During the market research conducted, only Manhattan Associates was found to have capabilities to provide this requirement. No other sources have expressed interest in this requirement. In addition, current market research indicates that only Manhattan Associates sell or can support this proprietary solution. If Manhattan Associates elects to surrender their legal ownership, copyright, and/or intellectual property rights and move toward a complete open-source solution, DISA will seek a competitive acquisition approach. Regardless, the Government will continue to search the marketplace. If the Government should determine that the WMOS products are no longer required, the Government will seek competition for the required functionality.

b. Procurement History:

Contract Number: HC1084-21-C-0007 Contractor: Manhattan Associates, Inc.

Basis for Award: Brand-Name, Sole Source Contract Period: September 30, 2021 – September 29, 2023 Contract Value:

Contract Type: FFP

Contract Number: HC1084-20-P-0003 Contractor: Manhattan Associates, Inc.

Basis for Award: Brand-Name, Sole Source Contract Period September 30, 2020 – September 29, 2021 Contract Value:

Contract Type: FFP

Contract Number: HC1028-15-C-0006 Contractor: Manhattan Associates, Inc.

Basis for Award: Brand-Name, Full & Open Contract Period: April 1, 2015 – September 29, 2020 Contract Value:

Contract Type: FFP

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Contract Number: HC1028-10-C-2008 Contractor: Manhattan Associates, Inc.

Basis for Award: Brand-Name, Full & Open Contract Period: March 22, 2010 – March 21, 2015 Contract Value:

Contract Type: FFP

Contract Number: HC1028-12-P-0056 Contractor: Manhattan Associates, Inc.

Basis for Award: Brand Name, Sole Source Contract Period: April 5, 2012 – March 21, 2015 Contract Value:

Contract Type: FFP

Contract Number: W91RUS-06-F-0038 Contractor: Manhattan Associates, Inc.

Basis for Award: Full & Open Contract Period: February 28, 2006 – February 27, 2011 Total Contract Value:

Contract Type: FFP

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ALL QUESTIONS REGARDING THIS JUSTIFICATION ARE TO BE REFERRED TO Madelyn L. Rozycke, 618-418-6804, madelyn.l.rozycke.civ@mail.mil, or Terri L. Rollins, 618-418-6671, terri.l.rollins.civ@mail.mil.