Justification Restricted Competition FAR 8_Redacted.pdf

United States Department of Agriculture Justification to Restrict Competition under FAR Part 8

Over the Simplified Acquisition Threshold Identification Number: 1171939

Rev. 2/26/26

In accordance with the Federal Acquisition Regulation (FAR) 8.4 and General Services Administration Acquisition Manual (GSAM) 538.7104-3 (b), the following justification documents the decision to restrict competition for this acquisition.

(1) Mission Area and Contracting Activity.

Requisition Number: 1171939

Requesting Activity Agency: United State Department of Agriculture (USDA), Agricultural Marketing Services (AMS), Livestock, Poultry, and Grain Market News Division

Contracting Activity: USDA, Procurement Operations Division (POD)

(2) Nature and/or description of the action being approved.

This J&A authorizes and approves the award of a new, sole-source, firm-fixed price contract for the continued development and deployment of USDA’s Artificial Intelligence (AI) based feeder cattle assessment capability. The new contract will be built on the Phase II foundation established under contract 12639525C0060 by advancing the prototype into a fully scalable, production ready system capable of operating reliably in real auction environments.

These services are commercial in nature and will be procured utilizing the procedures listed in FAR Part 8 and GSAM 538.71.

The suggested contractor is:

Ensemble Government Services, LLC 4005 Buchanan St Hyattsville MD 20781-2117

UEI: NVLTL4MUE6J4

(3) A description of the supplies or services required to meet the agency’s needs (including the estimated value).

This contract will provide all supplies and services necessary to complete Phase III, including final AI model development, full software integration, hardware configuration, performance validation, and deployment activities required to deliver a fully functional, field ready feeder cattle grading system. It will supply the advanced model accuracy improvements, expanded dataset integration, enhanced real time inference features, comprehensive system level testing, operational documentation, and end user training essential for nationwide implementation. These services are critical to maturing the prototype into a scalable production system capable of reliable operation in real auction environments. Because Phase III must build directly on the proprietary architecture, datasets, calibration methods, and model pipelines created under Phase II, continuity of technical approach and vendor specific knowledge is necessary to meet the agency’s mission needs and ensure successful completion of this effort.

It is anticipated that one (1) contract will include a twelve-month base period from August 12, 2026, to August 11, 2027, with an option to extend for up to six (6) additional months to support development and hardware/software requirements. The estimated total value for the base period,

(4) Identify the statutory authority permitting other than full and open competition.

The statutory authority supporting the placement of an order or establishment of a Federal Supply Schedule Blanket Purchase Agreement (BPA) that exceeds the Simplified Acquisition Threshold (SAT) on a sole source basis is: GSAM 538.7104-3 (b)(ii) - Only one source is capable of providing the products, services, or solution required at the level of quality required because the products, services, or solutions are unique or highly specialized.

(5) Demonstrate that the proposed contractor's unique qualifications or the nature of the acquisition requires using the authority cited.

The statutory authority permitting other than full and open competition for this procurement applies due to the unique qualifications of the proposed contractor and the nature of the acquisition. The contractor, having provided the developmental services under the previous Phase II contract 12639525C0060, possesses proprietary technologies and specialized expertise. The contractor possesses a uniquely strong combination of deep expertise in advanced AI development and a thorough, practical understanding of livestock production and agricultural operations.

The incumbent vendor developed the full end to end data pipelines, hardware integration approach, camera configurations, synchronization methods, and initial AI models for frame size, muscle, and flesh scoring during Phase II. These components are proprietary and deeply interdependent.

Transitioning to a new vendor would require reconstruction or reverse engineering of established models, code repositories, and data workflows, resulting in significant delays and duplication of effort.

Phase II generated unique, annotated datasets, customized AI architectures, and specific calibration methods for LiDAR, OCR, and multi camera synchronization. These deliverables form the technical foundation of Phase III, and only the incumbent vendor possesses the knowledge required to efficiently extend and finalize them. Changing vendors would compromise the value of investments already made.

During Phase II, the vendor successfully delivered key milestones, including:

Operation of multi angle HD and LiDAR hardware configurations Creation of annotated datasets for over 400 head of cattle Development of multiple AI models showing sufficient accuracy to advance to Phase III Establishment of the incremental development, sprint review, and USDA collaborative workflow outlined in the SOO This demonstrated capability reduces performance risk for Phase III.

Moreover, the delay in transitioning to another contractor is estimated at 24 months, derived from historical data on onboarding and system familiarization periods. Such a delay is unacceptable as it would critically hamper the program’s effectiveness, risking equipment failures and increased operational costs. This procurement will ensure that the government avoids unnecessary expense and delays.

(6) A determination by the Contracting Officer that the order represents a fair and reasonable price.

The Contracting Officer reviewed the proposed order pricing against the contractor’s GSA Schedule rates, as well as historical pricing, and confirmed that the proposed labor categories, quantities, and discounts are consistent with the requirement. Although GSAM 538.7102-2(d) waives a formal determination, an appropriate price evaluation was completed. Based on this review, the anticipated cost is considered fair and reasonable.

The Contracting Officer will ensure the final price remains fair and reasonable by verifying labor category alignment, confirming any applicable discounts, and reviewing the final pricing prior to award.

(7) A description of the market research conducted among schedule holders and the results, or a statement of the reason Market Research was not conducted.

Market research was conducted among GSA Schedule holders by reviewing the available contractors and capabilities in GSA eLibrary and GSA Advantage. This research confirmed that the required supplies/services are available under the Federal Supply Schedule; however, only one Schedule contractor was identified as capable of meeting the specific technical requirements of this acquisition. No other Schedule holders provided comparable capabilities or solutions that satisfied the Government’s minimum needs.

On June 25, 2024, the USDA posted a solicitation on SAM.gov for the initial Proof of Concept (POC), receiving 22 responses and determining through detailed technical evaluation that only two vendors were capable of meeting all critical requirements; and Ensemble Government Services, LLC. Since that competitive POC, the USDA has continued extensive, ongoing market research throughout Phase II and into Phase III, including monitoring emerging AI, imaging, and LiDAR technologies; evaluating industry advancements; assessing new market entrants; and engaging directly with livestock associations, auction markets, and major feedyards to validate industry needs and survey available commercial solutions. This continued research confirms that no commercially available technology can meet USDA’s feeder-cattle grading standards or replicate the multi-camera, LiDAR-based, and AI-driven capabilities developed under prior phases. Stakeholder outreach reinforced strong demand for improved price discovery tools while consistently revealing the absence of any vendor, other than the incumbent, capable of integrating Phase II’s proprietary datasets, calibration methods, synchronization techniques, and model architectures into a production-ready system. As a result, ongoing market research up to this day supports a sole-source award, as replacing the incumbent would require redevelopment of Phase II deliverables, significantly increase cost, and delay achievement of a fully operational Phase III solution.

(8) Any other facts supporting use of other than full and open competition, such as:

deliverables, including datasets, annotations, software code, model architectures, calibration methods, and multi-camera/LiDAR synchronization processes, were delivered to the Government with the appropriate data rights as documented in the prior award, ensuring USDA retains full ownership and continued access to all technical artifacts. However, even with Government ownership of the data and code, the incumbent vendor retains unique, non-transferable proprietary knowledge regarding how these components were engineered, refined, and validated, as well as the internal methodologies used to train and optimize the AI models. This specialized expertise is inseparable from the system’s performance and cannot be replicated by another vendor without extensive reverse-engineering and redevelopment. Transitioning to a new contractor would therefore require rebuilding data pipelines, re-annotating thousands of images, reconstructing calibration methods, and training all AI models, efforts that would significantly delay the program, duplicate cost, and increase performance risk. Market research conducted from the POC through capability, agricu -specific knowledge required to carry the documentation to support future competition, at this stage the incumbent’s proprietary methods and integrated technical approach remain essential to progressing the system without disruption, making a sole-source award the only practical and cost-effective solution.

(9) A statement of the actions, if any, the agency may take to remove or overcome any barriers to competition before any subsequent acquisition of the supplies or services required.

To remove barriers to competition for future acquisitions, the agency and contractor will take deliberate steps to ensure that the system developed in Phase III can be maintained, enhanced, and competed by multiple vendors. This includes fully documenting technical specifications, data workflows, system architecture, and integration requirements so that no component remains vendor-dependent; developing transferable datasets, calibration processes, and performance standards; and ensuring all code, models, and interfaces are structured for long-term government ownership and interoperability. The agency will also continue proactive market research to monitor emerging AI, imaging, and livestock-technology innovations; conduct pre-solicitation technical exchanges to broaden industry understanding of USDA requirements; and refine Statements of Work to eliminate reliance on proprietary methods or tools. As the project transitions from development into a stable Operations and Maintenance (O&M) environment, these actions will create a competitive landscape where multiple qualified vendors can bid without risk of disruption, duplication of cost, or degradation of service quality, thereby ensuring full and open competition in future phases.

(10) Certifications & Approvals

Technical / Requirements Personnel Certification I certify this requirement meets the Government’s minimum need and that the supporting data, which forms a basis for this justification, is complete and accurate.

(11) Contracting Officer’s Certification I certify that the data supporting the recommended use of other than full and open competition accurate and complete to the best of my knowledge and belief.

(12) Competition Advocate (greater than $900,000 but not exceeding $20M).

I have reviewed this justification and find it to be accurate and complete to the best of my knowledge and belief. Therefore, unless additional approvals are required as prescribed below, as advocate for competition for the procuring activity, I hereby approve this justification. If required, my approval constitutes clearance for submission to the Head of the Contracting Activity (HCA).