JandA_Redacted.doc

Control Number 20-52972 ServiceNow Software-as-a-Service (SaaS) License Entitlements Control Number 20-52972

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: The proposed action is for a firm-fixed-priced Task Order (TO) issued under the National Aeronautics and Space Administration (NASA) Solutions for Enterprise-Wide Procurement (SEWP) V Government-Wide Acquisition Contract (GWAC) for brand name ServiceNow software subscriptions and Customer Success Package.

3. Description of the Supplies or Services: VA, Office of Information and Technology (OIT), Development, Security, Operations, Service Management Office (SMO) has a requirement to renew and expand upon existing ServiceNow software subscriptions for license entitlements currently in production, and procure additional ServiceNow license entitlements to provide additional functionality within the currently deployed Enterprise Resource Planning (ERP) tool, which consists of an integrated suite of ServiceNow license entitlements. ServiceNow is a multi-instance architecture Platform-as-a-Service (PaaS) with software delivered via the internet through a subscription service delivery model, commonly referred to as Software-as-a-Service (SaaS). The integrated suite of brand name ServiceNow license entitlements that make up VA’s ERP tool have been configured to support VA service desk operations across the entire enterprise and provides event and incident management for early warning and detection of system degradations and service interruptions to prevent outages to critical VA business systems. In addition, the ServiceNow license entitlements are used to provision all new devices and provide immediate clinical application access for staff as VA continues to add clinicians, support staff, and volunteers to meet the needs of increased patient care. The ServiceNow platform ensures system availability by monitoring potential deficiencies in more than 30 Veterans Health Information Systems and Technology Architecture applications, including those that will be subsequently migrating to the new Electronic Health Record Management (EHRM) platform. ServiceNow triages IT-related issues that surface in VA medical devices used by clinicians, and to support burgeoning telehealth needs, the VA uses ServiceNow for clinician credentialing and for immediate system password reset across the enterprise for all VA applications, including performing specific application capacity monitoring in support of telehealth. Further, ServiceNow monitors VA network health for the entire remote workforce and can report and triage issues that could disable telehealth workers or otherwise negatively impact all other IT services provided to Veterans and their families.

In addition to the aforementioned capabilities provided through VA’s existing ERP tool, VA requires the continued expansion of its existing platform to perform all manner of hardware and software management, enabling the VA to proactively address cybersecurity matters. This procurement will provide for additional ServiceNow license entitlements to allow VA OIT staff to expand the auditing and compliance capabilities for approval of access and desktop/laptop requests in addition to meeting Office of Inspector General requirements for automated critical system monitoring.

In order to maintain the existing footprint and meet the growing business demand for utilization of the ERP tool across the enterprise over the next several years, VA is proposing to enter into a Modified Unlimited License Agreement referred to as the Core Bundle Subscription which will consolidate all VA’s existing entitlements into one annual subscription package with not to exceed (NTE) license quantities that will accommodate anticipated growth in usage of existing functionality over the next five years. In addition, the proposed action will include optional contract line items within the base period and each option period for additional license entitlements not included within the Core Bundle subscription to support the growing demand for increased functionality and capabilities available within the existing ERP tool, but which are required to be licensed separately. The proposed action will also include optional contract line items within the base period and each option period for additional license entitlements for those components of the Core Bundle that could potentially exceed the Core Bundle maximum quantities. The Core Bundle subscription will consist of the following not to exceed (NTE) license entitlements: Government Data Center Production and Non-Production Instances, Quantity (QTY) 20; IT Service Management Professional – Unrestricted User with Unlimited Virtual Agent Conversation Transactions, QTY 600,000; IT Business Management Professional, QTY 7,500; IT Operations Management Enterprise, QTY 70,000; IntergrationHub Enterprise with 5 Million IntegrationHub Transactions annually, QTY 1; IntegrationHub Transaction Pack with 100 Million transactions annually, QTY 10; Software Asset Management Professional, QTY 1,400,000; and Now Platform App Engine, QTY 50,000. Optional line items will include the following: Enterprise Asset Management for Clinical Software, NTE QTY 2,400; Medical Device Cyber Add-on, NTE QTY 2,400; Nuvolo Project Management Add-on, NTE QTY 2,400; Application Portfolio Management - User, NTE QTY 400; Modeling Engine Module, NTE QTY 1, HR Service Delivery Enterprise v2 with Performance Analytics, NTE QTY 40,000; Security Operations Enterprise – Devices, NTE QTY 1,800,000; Customer Service Management v4 Standard, NTE QTY 480; Customer Service Management v4 Professional, NTE QTY 480, Now Platform App Engine – Platform User, NTE QTY 100,000; DevOps Module Standard, NTE QTY 6,000; Integrated Risk Management Enterprise, NTE 10,000; Vendor Risk Management Module, NTE QTY 1; Vendor Risk Management – Vendors, NTE QTY 9,950; Integrated Workplace Management System (IWMS) Facilities Operational Technology (OT) Asset Management, NTE QTY 11,475; IWMS Capital Project Management Add-on, NTE 13,003; IWMS Space Management Add-on NTE QTY 13,003; Government Data Center Production Instances, NTE QTY 4; Government Data Center Non-Production Instances, NTE QTY 4; IT Service Management Professional – Fulfiller User, NTE QTY 6,000; IT Business Management Professional, NTE QTY 7,500; IT Operations Management Enterprise, NTE QTY 7,000; IntegrationHub Transaction Pack with 100 Million transactions annually, NTE QTY 2; and Software Asset Management Professional – Computer v3, NTE QTY 140,000. An additional optional line item within the base period and each option period will also be included for 12 months of ServiceNow’s Customer Success package. The Customer Success package provides customized strategic, architectural and operational support specific to the ongoing expansion of VA’s ServiceNow platform to include 24x7x365 technical support. The Period of Performance (PoP) for the Core Bundle Subscription will be 12 months from September 22, 2020 through September 21, 2021 along with four 12-month option periods for subscription renewal. The PoP for each optional line item will be up to 12 months to be co-termed with the annual Core Bundle Subscription. As discussed in Section 5 below, the ServiceNow tool was selected via a competitive procurement under the NASA SEWP V GWAC in September of 2017 and currently represents nearly three years of configuration and implementation work to provide the aforementioned services across the VA enterprise. Therefore, while VA will continue to conduct market research prior to the exercise of each option period, it is anticipated that the renewal and expansion of the existing ServiceNow platform will be required for the next five years and beyond to effectively support VA service desk and resource management operations.

4. Statutory Authority: Pursuant to Federal Acquisition Regulation (FAR) 16.505(a)(4), the following brand name requirement is being justified and approved as an exception to fair opportunity under the statutory authority of Section 41 U.S.C. 4106(c)(2) as implemented by FAR 16.505(b)(2)(i)(B), entitled “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”.

5. Rationale Supporting Use of Authority Cited Above: Based on market research, as described in Section 8 of this document, it was determined that limited competition is available among resellers of the aforementioned brand name ServiceNow software subscriptions and Customer Success package. The ServiceNow tool was selected via a competitive procurement under the NASA SEWP V GWAC in September of 2017 and is comprised of an integrated suite of ServiceNow license entitlements that are built upon ServiceNow’s proprietary platform. VA’s existing ERP tool represents nearly three years of licensing, configuration and implementation work for the ServiceNow entitlements to operate in VA’s production environment and across the enterprise costing over $130M to date. As stated in Section 3, the existing suite of ServiceNow license entitlements that make up VA’s ERP tool provide a wide array of critical service management capabilities across the enterprise and VA requires an annual renewal of its existing licenses which will be consolidated into a base Core Bundle Subscription Package along with optional CLINs for additional license entitlements to effectively support growth and expansion over the next five years. Replacing the existing suite of license entitlements with any other brand software would require a complete replacement of VA’s existing service management platform estimated to take 36 months to implement at an initial cost in excess of $130M just to replicate comparable capabilities already provided through the existing ERP tool. This estimate is based on historical data of the cost and implementation timeframe of the current platform. Aside from the cost to license other brand software, implementing any other brand ERP tool to operate in VA’s production environment would involve extensive configuration, human centered design and testing to support VA workflows, dashboards and reporting requirements, as well as the need to train system administrators and end users while also updating existing process documentation, standard operating procedures and knowledge documents. This would lead to duplicated costs that would not be recovered or justified through competition as the same functionality would have to be reconfigured on the new platform all while still retaining the critical functionality provided through VA’s existing ServiceNow-based ERP tool at an additional cost of XXXX annually until the new platform is fully operational. The additional estimate is based on historical data for licensing and sustainment costs of the ServiceNow ERP tool. This would also lead to extensive delivery delays of ongoing and planned functionality releases that are necessary to enhance VA’s existing tool to provide additional critical capabilities that will enable VA to more proactively address cybersecurity matters and address Office of Inspector General requirements for automated critical system monitoring. A failure to renew and expand upon the existing ERP tool will bring VA’s automated system monitoring capabilities and VA service desk operations to an immediate halt thereby negatively impacting VA’s ability to provide critical Veteran patient care.

Additionally, brand name ServiceNow license entitlements are the only software that can continue to build upon VA’s existing ERP tool. ServiceNow is an eco-system of service management, operations management, and business management modules that build upon one another to provide for holistic analysis, dashboards and reporting. The new license entitlements included as optional line items under this effort are required for VA to utilize additional capabilities that are already available within ServiceNow’s existing platform but must be licensed separately and configured to operate within VA’s production environment. VA has a large and complex enterprise and as such, requires a myriad of people, processes, and tools to manage its critical business infrastructure and service operations. The additional applications and/or capabilities for which licenses will be included as optional line items will be integrated into VA’s existing environment to provide two-way communication with all other areas of the platform. Two-way communication is needed to maintain data integrity. Managing multiple applications for disparate service and business management functions across the enterprise would not be possible nor would the VA gain the visibility necessary to measure and improve its business processes. The brand name ServiceNow SaaS license entitlements are uniquely poised to meet VA’s requirements for a single service management console because of their ability to integrate disparate business functions. All applications in the ServiceNow Portfolio are built on the ServiceNow Platform, and therefore all metrics, tasks, services, assets, people, locations, and information are stored together, creating a single system of record and a single system of engagement for the enterprise. For example, the human resources module is fully integrated with the asset management database to accomplish role-based provisioning, and the facilities module, asset database and governance risk and compliance module are all integrated to enable VA to pinpoint the location of a biomedical or IT asset at a field location with a zero-day security vulnerability. Obtaining the required capabilities through disparate, incompatible systems will result in duplicated costs and effort as the same functionality would have to be implemented and configured on a new and separate platform thereby creating multiple systems of record and service management dashboards. This will significantly degrade the efficiency of VA’s service management operations, as well as compromise data integrity, thereby disrupting critical service to Veterans. As noted above, the use of any other software would require a complete replacement of the existing platform which is estimated to take at least 36 months at a cost in excess of $130M based on historical data of the installation of the current platform. This would result in extensive delivery delays and duplicated costs that would not be recovered through competition. No other brand name software can communicate seamlessly with the existing ERP tool consisting of brand name ServiceNow SaaS license entitlements that are implemented and configured within VA’s production environment.

Furthermore, ServiceNow’s Customer Success package will be included as an optional line item within the base and each option period under this effort. The ServiceNow Customer Success package is a proprietary engagement that utilizes ServiceNow proprietary tools to include ServiceNow Health Scan Scripts and Sprint Scan Scripts which provide for a comprehensive and unique analysis of the platform. Access to these proprietary tools is required in order to provide the customer success support, and no other vendor can access ServiceNow’s proprietary tools in order to provide the Customer Success package.

In summary, only brand name ServiceNow SaaS license entitlements can meet VA’s requirements to renew existing software licenses, and expand the existing environment for increased functionality while maintaining a single service management console without the requirement for a complete replacement of the existing platform, which would result in associated risks, extensive delivery delays, and significant costs that would not be recouped through competition.

6. Efforts to Obtain Competition: Market research was conducted, the details of which are in the market research section of this document. This effort did not yield any additional solutions that can meet the Government’s requirements. It was determined that limited competition is available among resellers for the required subscriptions to brand name ServiceNow SaaS license entitlements. In accordance with FAR 16.505(a)(4)(iii)(A)(1), this justification will be provided with the solicitation to all appropriate NASA SEWP V GWAC holders. Furthermore, in accordance with FAR 5.301, 16.505(b)(2)(ii)(D), and 16.505(a)(4)(iii), the award notice for this action will be synopsized on the Federal Business Opportunities website and this justification will be made publicly available within 14 days of award.

7. Actions to Increase Competition: The Government will continue to conduct market research to ascertain if there are changes in the marketplace that would enable future actions to be competed. Specifically, OIT will continue to monitor market trends, new/emerging products, looking for compatible and more advanced technologies to meet VA needs.

8. Market Research: The Government’s technical experts have conducted market research by reviewing similar SaaS and PaaS service management software and associated support services. Most recently, in May 2020, similar products reviewed included BMC, Computer Associates Inc, ChangeGear and Salesforce. Based on the review of these similar products by the Government’s technical experts, it was determined that none of these products or associated services can meet the Government’s interoperability and compatibility requirements previously discussed in Section 5 of this justification. Specifically, no other software products can communicate seamlessly with ServiceNow, and therefore, none of these products can be implemented enterprise-wide to provide the service management capabilities within VA’s existing ERP tool which consists of an integrated suite of ServiceNow license entitlements. Further, no other vendor can access ServiceNow’s proprietary tools in order to provide the Customer Success package. Based on this market research, it was determined that only brand name ServiceNow SaaS license entitlements and Customer Success package can meet all of VA’s needs to retain and expand its existing ERP tool.

The Government’s strategic sourcing experts, in coordination with the VA Program Manager, conducted additional market research in April 2020 via a Request for Information (RFI) on NASA SEWP as well as direct communication with ServiceNow representatives from April 2020 through June 2020 to understand potential resellers and the current pricing for subscriptions to brand name ServiceNow SaaS license entitlements. The results of the RFI and additional discussions confirmed multiple NASA SEWP GWAC holders are capable of reselling the required ServiceNow license entitlements and further revealed the possibility and cost benefits of licensing an annual Core Bundle Subscription package consisting of the NTE license entitlements identified in Section 3.

Additional market research was conducted in July 2020 by utilizing the NASA SEWP Provider Lookup tool to determine if brand name ServiceNow software and support packages were available from NASA SEWP V GWAC holders. The search resulted in multiple NASA SEWP GWAC holders that are resellers of brand name ServiceNow products including multiple SDVOSB concerns in Group B(2). Therefore, adequate competition among SDVOSBs is anticipated.

9. Other Facts: None.