K8943 Sole Source Justification.docx

Sole Source CONTRACT Filing Justification Template

Use the following justification template for preparing to file sole source contracts in the Sole Source Contracts Database (SSCD). Once completed, copy and paste the answers into the corresponding SSCD question and answer fields. You will also need to include a copy of this completed form in the documents you post to your agency website and in WEBS.

What is a sole source contract?

"Sole source" means a contractor providing goods or services of such a unique nature or sole availability at the location required that the contractor is clearly and justifiably the only practicable source to provide the goods or services. (RCW 39.26.010)

Unique qualifications or services are those which are highly specialized or one-of-a-kind.

Other factors which may be considered include past performance, cost-effectiveness (learning curve), and/or follow-up nature of the required goods and/or services. Past performance alone does not provide adequate justification for a sole source contract. Time constraints may be considered as a contributing factor in a sole source justification however will not be on its own a sufficient justification.

Why is a sole source justification required?

The State of Washington, by policy and law, believes competition is the best strategy to obtain the best value for the goods and services it purchases, and to ensure that all interested vendors have a fair and transparent opportunity to sell goods and services to the state.

A sole source contract does not benefit from competition. Thus the state, through RCW 39.26.010, has determined it is important to evaluate whether the conditions, costs and risks related to the proposal of a sole source contract truly outweigh forgoing the benefits of a competitive contract.

Providing compelling answers to the following questions will facilitate the evaluation.

Specific Problem or Need

· What is the business need or problem that requires this contract?

DES currently contracts with Periscope for the use of the NIGP codes that are used for solicitations to be posted in WEBS. All Agencies are required by RCW 39.26 to post solicitations using the WEBS system.

Sole Source Criteria

· Describe the unique features, qualifications, abilities or expertise of the contractor proposed for this sole source contract.

NIGP codes are used as the universal tool in order for the vendor community to access opportunities that apply to their business. NIGP codes are the nationally used codes and are universal in knowledge to the vendor community. Periscope is the only vendor that is eligible to provide the list of codes, including the 11 digit code, because Periscope is the sole custodian and marketer of the NIGP codes based on an ongoing agreement with NIGP.

· What kind of market research did the agency conduct to conclude that alternative sources were inappropriate or unavailable? Provide a narrative description of the agency’s due diligence in determining the basis for the sole source contract, including methods used by the agency to conduct a review of available sources such as researching trade publications, industry newsletters and the internet; contacting similar service providers; and reviewing statewide pricing trends and/or agreements. Include a list of businesses contacted (if you state that no other businesses were contacted, explain why not), date of contact, method of contact (telephone, mail, e-mail, other), and documentation demonstrating an explanation of why those businesses could not or would not, under any circumstances, perform the contract; or an explanation of why the agency has determined that no businesses other than the prospective contractor can perform the contract.

Internet searches, online trade newsletters and similar services were investigated. However, Periscope’s product is unique; as the NIGP codes are a proprietary product that is copyrighted and has no equivalent substitutes in the marketplace. Thus, there were no other businesses that could be contacted for this service. Periscope effectively has a monopoly on this service.

We have considered using the NAICS codes primarily; however, NAICS codes drill down as far as a 6 digit code, NIGP codes go down to 11 digits, this allows procurement professionals and vendors to more clearly isolate what work they can do or are requesting. NAICS is a federally maintained classification, we currently contract with Periscope to have a crosswalk between NIGP codes and NAICS codes. NAICS codes are recommended more to businesses to improve their business such as expanding or promoting and to gain data. NIGP codes are used as a procurement method.

Resources: NAICS, NIGP

· What considerations were given to providing opportunities in this contract for small business, including but not limited to unbundling the goods and/or services acquired.

The list is maintained by Periscope and is not licensed to any other vendor to obtain the list from. Thus, there were no opportunities for unbundling or small vendors.

· Provide a detailed and compelling description that includes quantification of the costs and risks mitigated by contracting with this contractor (i.e. learning curve, follow-up nature).

Without this list, agencies and vendors will not be able to conduct procurement processed required by RCW in order to perform fair and competitive contracts. The risk is high by not obtaining the list, misuse of the list would be unwanted as all contracting business by agencies mut be done in WEBS. The DES site-wide license covers all state agencies, departments, authorities, boards, commissions, offices, State colleges and universities, and other authorized participants in the WEBS electronic procurement solution. The cost is a savings to the state by DES purchasing on its behalf rather than each agency having to obtain the list which would be more than double the amount to the tax payer. Since the Periscope contract on offer averages $37,269.60 a year, this would result in a total cost of approximately $74,539.20 a year.

Learning curve is not applicable here, since there are no other contractors offering this service.

· Is the agency proposing this sole source contract because of special circumstances such as confidential investigations, copyright restrictions, etc.? If so, please describe.

Periscope Holdings, Inc holds the exclusive license from the NIGP to maintain, enhance, and market the NIGP Code. The current list that all postings have been made in WEBS has used the NIGP codes. Periscope also provides a crosswalk file of Merchant Classification Codes (MCC) codes to NIGP codes, a crosswalk file of North American Industry Classification System (NAICS) codes to NIGP codes and a crosswalk file of United Nations Standard Products and Services Code (UNSPC) codes to NIGP codes. The OneWa project has decided to use NIGP codes which are only contracted through Periscope. Periscope has an exclusive copyright to supply the NIGP Code.

· Is the agency proposing this sole source contract because of unavoidable, critical time delays or issues that prevented the agency from completing this acquisition using a competitive process? If so, please describe. For example, if time constraints are applicable, identify when the agency was on notice of the need for the goods and/or service, the entity that imposed the constraints, explain the authority of that entity to impose them, and provide the timelines within which work must be accomplished.

This is not a time constraint; this is regular business we do in order to continue use of the list for the system.

· Is the agency proposing this sole source contract because of a geographic limitation? If the proposed contractor is the only source available in the geographical area, state the basis for this conclusion and the rationale for limiting the size of the geographical area selected.

N/A

· What are the consequences of not having this sole source filing approved? Describe in detail the impact to the agency and to services it provides if this sole source filing is not approved.

WEBS will not have approved access to the list for all agencies to post solicitations. We would be unable to fulfill our core function of developing, posting, and conducting competitive solicitations.

Sole Source Posting

· Provide the date in which the sole source posting, the draft contract, and a copy of the Sole Source Contract Justification Template were published in WEBS.

Date: April 15, 2024

· If exempt from posting in WEBS, please provide which exemption.

· If failed to post, please explain why.

N/A

· Were responses received to the sole source posting in WEBS?

· If one or more responses are received, list name of entities responding and explain how the agency concluded the contract is appropriate for sole source award.

Reasonableness of Cost

Since competition was not used as the means for procurement, how did the agency conclude that the costs, fees, or rates negotiated are fair and reasonable? Please make a comparison with comparable contracts, use the results of a market survey, or employ some other appropriate means calculated to make such a determination.

Sole Source filings are by their nature unique. The price of the Periscope subscription listed in this Sole Source filing will average $37,269.60 per year.

However, the following contracts for online subscription type services can be used for comparison.

K6428: $83,819.16 for a one year subscription for Adobe Sign for electronic signature services.

K8665: $46,703.36 for a one year subscription for Cohesity DataProtect for data backup and recovery services.

K8163: $159,148.94 for the first year subscription for Insight Public Sector Enterprise software.

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