Justication and Approval 842166096.pdf

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: HQCAAA117978/HQCAAA117980/HQCAAA117982 Contract Number: To be Determined Procurement Title: Warehouse Management Operating System (WMOS) Upgrade Estimated Value:

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

Justification for OTFAOC Number: JA21-095

Upon the basis of the following justification, I, as Procuring Activity Competition Advocate (PACA), hereby approve the use of other than full and open competition of the proposed contractual action pursuant to the statutory authority of 10 U.S.C§2304(c)(1) and the regulatory authority of FAR 6.302-1 and Defense FAR Supplement (DFARS) 206.302-1, only one responsible source and no other supplies or services will satisfy Agency requirements.

1. REQUIRING AGENCY AND CONTRACTING OFFICE:

Requiring Agency Defense Commissary Agency (DeCA) HQ 1300 E Avenue Fort Lee, Virginia 23801

Contracting Office Defense Information Systems Agency (DISA) Defense Information Technology Contracting Organization (DITCO)/PL8413 2300 East Drive, Building 3600 Scott AFB, Illinois 62225

2. NATURE/DESCRIPTION OF ACTION(S):

a. The Government has a need to sustain the current operational capabilities for DeCA’s two European Central Distribution Centers (CDCs), to include interfaces with other DeCA systems and key peripheral devices being utilized to ensure continuity of operations is maintained, through the current DeCA Warehouse Management System (WMS). In addition, the Government has a need to procure an upgrade as the current software version reached end-of-life (EOL) in April 2020 which support and maintenance to of the current solution supporting DeCA WMS for the two Central Distribution Centers (CDCs) located in Europe. 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., for continued operational support of the current WMS 2015 solution, to include upgrade to WMOS 2020 version and migration into a Software as a Solution (SaaS) FedRAMP environment while maintaining the current

WMOS Follow-On-JA21-095 environment until migration is implemented. Once the full upgrade and migration occurs, the same level of support is required within the SaaS environment until the replacement solution is fielded within both CDCs in Europe. The current SaaS environments will continue to use the WMS to include processes associated with receiving inventory into the Distribution Center, tracking, and shipping to the overseas Commissary locations.

Currently, DeCA has deployed this automated warehouse management system Commercial Off the Shelf (COTS), WMS, package to Kaiserslautern and Germersheim CDCs. In order to maintain the services provided by WMS to the two CDCs, continued support from Manhattan Associates is required due its ownership of the software and licensing rights. This follow-on upgrade and support contract will enable DeCA to ensure continued support for the current WMS system and maintenance until the replacement solution is able to be deployed. This requirement will perpetuate the existing support under contract HC1084-20-P-0003 which expires on September 30, 2021.

b. The period of performance will consist of a one-year base period, beginning on September 30, 2021, with one, 1-year option period. The estimated lifecycle cost is

. Fiscal year 2021 funds will be used under Military Interdepartmental Purchase Requests HQCAAA117978, HQCAAA117980, and HQCAAA117982. The applicable North American Industry Classification System code is 511210, Software Publishers, with sales size standard of $38,500,000.

3. DESCRIPTION OF SUPPLIES/SERVICES:

a. To date, DeCA has deployed Manhattan’s COTS WMOS in two CDCs. DeCA is in the midst of upgrading DeCA’s Resale supply chain by deploying the Enterprise Business Solution (EBS) into all of DeCA’s CDCs. The Agency was scheduled to deploy the last increment, the warehouse replacement solution in March 2020; however, COVID-19 created an initial delay in deploying the EBS solution and continues to delay deployment.

While issue resolutions to mitigate COVID-19 impacts are on-going, DeCA must delay the deployment until the EBS solution is ready to replace the current Manhattan solution.

DeCA’s CDCs must be sustained, which requires the use of Manhattan’s COTS warehouse management solution.

b. The current solution enables critical capabilities that enable DeCA to meet its mission in the European theater. WMOS 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 license, 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. WMOS directly affects every commissary that relies on a CDC to keep its shelves stocked. WMOS incorporates grocery industry best practices in reading and processing European Article Numbers and Japanese Article

Numbers and voice picking technology. DeCA’s WMOS solution performs five primary business functions described below within the CDC:

(1) Inbound Management

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

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

(2) Inventory Management

i. Physical and Cyclic Inventory - CDC workers physically count all of the 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 content specification is accurate.

(3) Task Management – 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.

(4) 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.

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

c. This contract will allow to upgrade of the software which has reached end of life while maintaining the current version until upgrade is accomplished. Manhattan’s 2020 WMOS is a multi-platform, multi-tier software solution that integrates with VoCollect (voice picking software and hardware) to enable voice picking, Supply Chain Intelligence to generate customized reports, utilizes message queuing (such as application-specific licenses, International Business Machines message queuing), and Manhattan integration framework to process data and interface with other applications and functions within WMOS. The current Manhattan 2015 solution reached End of Life (EOL) in April 2020 and Manhattan has been able to provide sustainment of the 2015 WMOS with DeCA’s acceptance of security risks. The upgrade to Manhattan’s WMOS 2020 solution and migration to the Manhattan SaaS environment will resolve several security risks and improve DeCA’s security posture.

d. To achieve the Agency’s goal and leverage industry best practices, DeCA requires the upgrade of the COTS WMOS solution that has been customized to interface with DeCA’s business systems at the two CDCs in Germany and the migration to the Manhattan SaaS FedRAMP environment. The contractor’s support shall include ongoing support as written in the provided Performance Work Statement document.

4. IDENTIFICATION OF STATUTORY AUTHORITY:

This acquisition is conducted under the statutory authority of 10 U.S.C§2304(c)(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, WMS.

5. DEMONSTRATION OF CONTRACTOR’S UNIQUE QUALIFICATIONS:

(a) Description of events.

CDCs are a critical part of DeCA’s overseas supply chain and the capabilities the WMOS system provides and in 2015, DeCA awarded a contract to Manhattan Associates, Inc., to customize its proprietary WMOS solution. The Manhattan WMOS was customized to interface with DeCA’s business systems and was successfully deployed at two CDCs.

Manhattan also developed a propriety interface to VoCollect software that allows DeCA to utilize an automated voice picking system. The WMOS solution initially fielded under the 2015 contract, reached EOL in April 2020 and requires an upgrade to allow for the continued support for CDC operations. The 2015 solution will be decommissioned once the migration and upgrade of the solution occurs within the Manhattan WMOS FedRAMP SaaS environment. Customization of the COTS package shall be implemented within the Manhattan WMOS 2020 application residing, which will reside in the FedRAMP SaaS environment.

(b) Justification.

(1) Minimum Government requirements.

The Government requires continued operational support of the WMOS software that is currently in use at two CDCs, upgrade the software to the most current version of the software, to include all customized capabilities, and migration of operationally required data into the Manhattan FedRAMP SaaS Environment. The required software solution must be compatible with the current operating environment and seamlessly integrate with the current architecture. Additionally, once the WMOS solution is successfully upgraded, the Government requires the same level of continued support for the new environment.

(2) Proposed sole source contractor.

Manhattan Associates, Inc. is the proposed sole source contractor. Manhattan Associates, Inc. is the developer of the WMOS solution that was customized to interface with DeCA’s legacy systems and is currently operational at two CDCs.

Manhattan Associates, Inc. does not authorize other entities to support or resell their solutions. A sole source contract allows the Government to continue to use the existing full solution, to include voice picking software and supporting hardware (e.g., RF handhelds) interfaces. This drives the Government’s current need for sustainment.

DeCA has already procured a replacement system; however, due to the COVID-19 pandemic and other factors, the deployment of the replacement has been delayed.

DeCA has been unable to deploy the replacement system due to external factors and requires the functionality and capability provided by the WMOS solution. Sustaining the current WMOS software and hardware solution, upgrading to a new version due to EOL of the current WMOS application, and migrating the total WMOS solution to the Manhattan SaaS will enable the CDCs to c support operations in the European Theater. Warehouse Management is mission critical to DeCA; therefore, the current system is required to be maintained until the new replacement system, EBS, is deployed. No other vendor can meet the Government’s need to maintain the current system that is in place.

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

The original 2015 contract was awarded to Manhattan through full and open competition. Under this contract, DeCA deployed Manhattan’s 2015 proprietary COTS solution with DeCA unique customizations to interface with legacy systems.

This software has been deployed to two DeCA CDCs through the 2015 contract.

Initial customization, interface development, software configuration, and testing were required prior to deployment to the two CDCs in Europe. Manhattan Associates, Inc.

is the only entity that provides its 2015 and 2020 proprietary COTS WMOS software solution. Therefore, the Manhattan’s WMOS solution is the only solution that will provide DeCA with the required operational support and stability needed for their CDC services until EBS implementation in fiscal year 2022 occurs that replaces the existing warehouse management solution.

(4) Impact.

This follow-on contract allows for continued operational support of the current customized COTS warehouse management solution until the upgrade to new version and migration of the customization and data into the off-premise Manhattan SaaS environment and continued support occurs. The two CDCs are utilizing the Manhattan WMOS solution, which was due to be replaced in fiscal year 2021. Due to factors affecting the replacement, the functionality of the Manhattan solution supporting the CDC operations must remain until a viable solution can be deployed as its replacement. The warehouse distribution function of WMOS is critical to DeCA’s mission to deliver groceries to military members in an outside the continental United

States (OCONUS) environment. A lapse in this function would result in mission failure.

6. BETA.SAM.GOV ANNOUNCEMENT/POTENTIAL SOURCES:

In accordance with FAR 5.2, a sources sought announcement was posted to beta.SAM on August 26, 2021. A notice of the proposed contract action will be synopsized on beta.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 contract 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 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 comparison of the proposed prices to historical prices paid, the commercial price list, and the independent Government cost estimate.

8. MARKET RESEARCH:

a. Market research was conducted in July 2021. Market research included discussions with knowledgeable individuals in Government/industry (to include the OEM), reviewing historically similar acquisitions, and reviewing existing Government-wide acquisition contracts. In addition, a sources sought announcement was issued on beta.SAM. No respondents of the sources sought were able to meet DeCA’s requirements. Based on current market research, it has been determined that only the aforementioned brand name software and support can fully meet the Government’s needs.

b. The first step in conducting market research was to determine if another brand name solution could meet the Government’s requirements. Market research confirmed that while there are similar products available on the market, it has been determined that only Manhattan Associates, Inc. with the COTS WMOS software and support can fully meet the Government’s needs. Manhattan Associates, Inc. is the only entity that provides its proprietary COTS WMOS software solution. Therefore, procuring the Manhattan’s WMOS solution will meet the Government’s need.

c. The second step in conducting market research was to determine a method of procurement. Market research concluded that the software and support are not available on existing Government contract vehicles, to include Enterprise Software Initiative, General Services Administration, and National Aeronautics and Space Administration Solutions for Enterprise-Wide Procurement. Based on the results of market research, a notice of the Government’s intent to issue a sole source award will be published to FBO, and a solicitation will be issued directly to Manhattan Associates, Inc., a large business, and the sole provider of the WMOS software and support.

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) Procurement History.

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

Contract Period: February 28, 2006 – February 27, 2011 Total Contract Value:

Contract Type: FFP

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

Contract Period: April 5, 2012 – March 21, 2015 Total Contract Value:

Contract Type: FFP

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

Contract Period: March 22, 2010 – March 21, 2015 Total Contract Value:

Contract Type: FFP

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

Contract Period: April 1, 2015 – September 30, 2020 Total Contract Value:

Contract Type: FFP

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

Contract Period: September 29, 2020 – September 30, 2021 Total Contract Value:

Contract Type: FFP

(b) Current market research indicates that neither large nor small businesses resell or support Manhattan Associate’s solution, other than Manhattan Associates.

ALL QUESTIONS REGARDING THIS JUSTIFICATION ARE TO BE REFERRED TO:

Michael H. Jacobs, (618) 418-6706, michael.h.jacobs1.civ@mail.mil.