LAN-WLAN Consolidation Memo.pdf

DEFENSE HEALTH AGENCY

DETERMINATION AND FINDINGS FOR

CONSOLIDATION PROCUREMENT

I have reviewed this requirement for the Defense Health Agency (DHA), Infrastructure and Operations Division (IOD) variety of highly technical Services including Tier I/ Tier II/ Tier III Local Area Network (LAN) and Wireless Area Network (WLAN) Engineers. The Contract Operations Branch - Professional Services Contracting Division, (PS-CD) proposes to solicit this requirement as a consolidated procurement action under 15 U.S.C. § 657q(c)(2)(B) and 7.107- 2(e)(2)(i). The review resulted in the following findings:

FINDINGS

1. Agency/Requiring Activity/Contracting Activity: DHA/IOD/Network Modernization Branch (NMB)

2. Nature and/or Description of Action being approved: This contract consolidates contract support for 3 capabilities within IOD NMB and the Global Network Operation Branch (GNOB) encompassed in the contracts shown in the following table.

Requirement Existing Contract Period of Performance Ends Guest Wireless HT0015-19-F-0003 14 May 2023 HBSS HT0015-18-C-0002 30 Oct 2022 LAN/WLAN HT0015-18-F-0098 07 Sept 2022

The 3 contracts supporting these 2 branches will combine into one single award contract with a base period of 12 months and 4 option periods that are 12 months each. The Guest Wireless contract will be added in as an optional CLIN which can be exercised when the period of performance for the current contract (HT0015-19-F-0003) ends.

The capabilities supported and services provided within this contract are:

The DHA IOD supports Wireless (WLAN) and Local Area Network (LAN) capability to support network connectivity for all Information Technology systems located in the Military Medical Treatment Facilities (MTFs) throughout the Department of Defense (DoD). This includes engineering, deployment, and sustainment activities for Guest Wireless, WLAN, and LAN capabilities.

The Guest Wireless capability is provided for all MTFs throughout the MHS. The Guest Wireless contract provides sustainment support for the Guest Wireless configurations, patch maintenance, and other troubleshooting efforts to provide wireless capabilities to patients and guests in DHA clinics and hospitals. The WLAN capability provides wireless capabilities to include wireless access controllers, access points, cabling, and encryption of all user traffic in accordance with DISA STIG requirements and RMF ATO accreditation baselines. The LAN capability provides for physical network access via cable drops/plants, switch infrastructure throughout the facilities and the baseline configuration of that switch infrastructure.

The scope of work includes supporting the worldwide sustainment of the Guest Wireless, WLAN, and LAN capability to include design, develop, modify, upgrade, test, troubleshoot, implement, support, and sustain.

The tasks on the HBSS contract no longer HBSS specific. The remaining tasks on this contract support Network Automation. The Network Automation tasks include analysis of Network Hardware and Software management tools. The Hardware in the DHA enterprise includes but not limited to Cisco, Juniper, Comscope (Brocade). The software tools currently being utilized include but not limited to Micro Focus NA and CheckMK.

3. Citation of the appropriate statute and/or regulation upon which the determination and findings (D&F) is based: Applicable Statutes/Regulations are 15 United States Code (U.S.C.) § 657q(c)(2)(B) and 7.107-2(e)(2)(i).

4. Findings that detail the particular circumstances: The objective of this consolidated contract is to provide technical support that includes expertise to design, engineer, develop, modify, upgrade, test, troubleshoot, implement, support, administer, sustain, maintain security, and/or conduct change management practices for all modules within each product as identified within the Performance Work Statement (PWS), and prepare and conduct product decommissioning activities, where applicable.

a. This contract has a 12-month base period and four 12-month options. The FAR 52.217-8 extension of services clause enables extension up 6 months, if needed.

b. Market research was conducted in February 20222, by researching the following databases: GSA eBuy, DSBS database, SBA Quick Market Research, and Ability One to determine if there were any significant market changes (i.e. technological advancements) or economic indicators that either affects price or the requirement itself, and there were none. Market Research showed that small business is capable of performing the services required on the consolidated contract.

c. The below table reflects information on the 3 current contracts feeding into the consolidation.

Contract Set-Aside Contractor FTE Place of Performance

HT0015-19-F-0003 (Guest Wireless) 8(a) VENTECH Solutions 4 San Antonio, TX

HT0015-18-C-0002 (HBSS) Small Business ASRC Federal Data Solutions, LLC 6 San Antonio, TX

HT0015-18-F-0098

(LAN/WLAN) Small Business

Technology, Automation & Management, Inc

(TEAM)

San Antonio, TX

New Contract SB TBD 32 San Antonio, TX

d. The following North American Industry Classification System (NAICS) codes were used for these efforts:

Contract NAICS NAICS Description HT0015-19-F-0003 541512 Computer Systems Design Services HT0015-18-C-0002 541513 Computer Facilities Management Services HT0015-18-F-0098 541519 Other Computer Related Services

e. The DHA PS-CD Contracting Activity intends to consolidate three contracts and compete the consolidated requirement as an 8(a) set aside. The primary place of performance with be the Joint Base San Antonio, although some FTEs are based at other CONUS and OCONUS locations. The contract is estimated at approximately $5.2M per year for a total cost of $30,198,630.

Estimated Total Contract Value:

5. Alternative Contracting Approaches Involving a Lesser Degree of Consolidation, and Rationale for Rejection: An analysis of alternatives was performed in support of the DHA decision to consolidate these three contracts within IOD to a single contract.

a. Alternative #1: The only other viable alternative would be to award three separate smaller contracts. This approach would not allow realization of cost savings with acquisition and contract administration, estimated to be $3,873,000. Additionally, this would increase risk and costs to the government by eliminating the flexibility to share resources across branches in support of the overall IOD mission.

6. Circumstances, Facts, Reasoning Supporting the Determination:

b. Cost Savings: Consolidation provides the opportunity for the Contractor to support the

DHA as a whole rather than many Contractors supporting separate sections.

Consolidation provides potential cost savings and will permit dollars to be reprogrammed or budgeted elsewhere. In an effort to implement efficiencies in acquisition, the DHA is taking action to identify and implement efficiencies in its contracts. The consolidation of these three efforts do not delay or reduce needed services, allow for the same level of support where needed, and allow for flexible de-scoping activities to account for schedule variances. The Government would also realize reduced administrative cost associated with post award administration through deliverable review, although it is understood that this reason by itself does not justify consolidation.

c. In an effort to quantify the potential cost savings for the proposed consolidation the below table is provided. It shows the cost of the current three contracts that each have one COR, one Contracting Officer (KO), one Contracting Specialist (KS), and one

Guest Wireless (Global Network Operations Support) 9/1/23 – 2/28/29 5,920,731 HBSS (Engineering and Automation) 9/1/23 – 2/28/29 $9,120,171

LAN/WLAN 9/1/23 – 2/28/29 15,157,728

TOTAL $30,198,630

Product Manager (PM) processing and managing each contract. If awarded separately, 3 sets of these personnel would be required to process and manage these contracts, as opposed to only one set of these personnel when these contracts are consolidated. The following assumptions are made: CORs are on the GS-11 or GS-12 pay scale with an average annual salary in the San Antonio, Texas area of $84,564. KOs are on the GS13 pay scale with an average annual salary in the San Antonio, Texas area of $109,639. KS are on the GS-12 pay scale with an average annual salary in the San Antonio, Texas area of $92,205. PMs are on the GS-12 or GS-13 pay scale with an average annual salary in the San Antonio, Texas area of $100,922.

While there is no requirement for these personnel to hold the assumed grades, this is the norm for the San Antonio Area and the DHA. If the proposed consolidation is approved only one of each personnel type would be assigned to process and manage the contract as well as provide quality assurance and surveillance of the effort. In addition, a consolidated contract would require only 1 program manager and one set of monthly reports. This reduction in contractor overheard is estimated to save the government $160,000.

Potential Contract Savings is computed by converting the annual potential savings and multiplying it by 5 years (12 mo base plus four 12 mo options). Consolidation equals potential contract term savings of $3,873,300.

Table 1: Savings for CORs Personnel Annual Cost for 3 Annual Cost for 1 Annual Potential

Savings Potential Contract Savings

COR $126,846 $42,282 $84,564 $422,820

KO $32,892 $10,964 $21,927 $109,635

KS $276,615 $92,205 $184,410 $922,050

COR PM $151,383 $50,461 $100,922 $504,610

TOTALS $587,736 $387,330 $391,823 $3,873,300

*Information derived from the GS Pay Scale for the San Antonio-New Braunfels-Pearsall, TX on the opm.gov website. https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2022/SO.pdf

7. Assertion of Measurably Substantial Benefits:

a. IAW with the Small Business Jobs Act of 2010, bundling means, “consolidating two or more procurement requirements for goods or services previously provided or performed under separate smaller contracts into a solicitation of offers for a single contract that is likely to be unsuitable for award to a small business concern.” The NAICS code 541519 – Other Computer Related Services will be used for this requirement and, therefore, will be suitable for small business concerns. This industry comprises establishments primarily engaged in Computer Related Services.

This requirement would not meet the definition of bundling as defined in FAR 2.101 because the consolidated requirement will be competed as a Small Business set-aside.

b. IAW the Small Business Jobs Act of 2010, consolidation means, “the use of a solicitation to obtain offers for a single contract or a multiple award to satisfy two or more requirements of an agency for services that have been provided to or performed for the agency under two or more separate contracts lower in cost than the total cost of the contract for which the offers are solicited.” The Act does not preclude agencies from consolidating requirements. However, the Act states an agency may not use an acquisition strategy that consolidates contract requirements with a total value of more than $2 million, unless the agency’s senior procurement executive or chief acquisition officer takes the following steps: 1) conduct market research; 2) identify any alternative contracting approaches that would involve a lesser degree of consolidation of contract requirements; 3) make a written determination that the consolidation of contract requirements is necessary and justified; and 4) ensure that steps will be taken to include small business concerns in the acquisition strategy.

c. The cost of continuing the 3 separate contracts vice consolidating into a single contract is shown in the table below. Estimates for awarding 3 separate contracts are based on the cost of the current contracts at their end, and increased yearly at the same rate as the new contract. The same term of a 12-month base, 4 options of 12 months each, and a 6-month extension (total contract cost) is applied to all contract calculations.

Total contract value of the 3 separate contracts increased at the same rate used for the consolidation

$30,198,630.04

Total Savings from reduced contractor overhead

$480,000

Potential contract savings of administrative burden

$3,873,300

Substantial benefit to the Government $4,353,300

d. Market research was conducted, alternative contracting approaches were addressed, and a written determination was made in the form of this determination and findings.

There are 3 companies that hold the 3 feeder contracts, all of which are Small Business and one of which is 8(a). All incumbent companies hold separate contracts in rough magnitude as the others, and any of them are expected to be capable of handling a contract of this size. No adverse impact to any of the incumbent companies is expected since they’ve held contracts for enough time to build an income base not dependent solely on this effort. In order to ensure fair opportunity to compete for this contract, the DHA PS-CD Contracting activity intends to consolidate the three contracts and negotiate a single contract after competition within Small Business 8(a) program as a Small Business 8(a) set-aside. A DD Form 2579, Small Business Coordination Record, has been completed and approved by the Small Business Administration (SBA) on ______20230322______________.

8. A Determination, based on the findings: Upon the basis of the findings above I hereby determine, pursuant to the authority of 15 U.S.C. § 657q(c)(2)(B) and 7.107-2(e)(2)(i), that the proposed consolidation of the requirements for Data Science is necessary and justified.

9. Expiration date of the D&F (refer to FAR 1.706): An expiration date is not applicable as this determination and finding is not for a class of contracts.

10. Signature of official authorized to sign the D&F:

James E. Watkins

Senior Procurement Executive

Attachments

1. Market Research Report

2. DD 2579

a. Alternative #1: The only other viable alternative would be to award three separate smaller contracts. This approach would not allow realization of cost savings with acquisition and contract administration, estimated to be $3,873,000. Additionally...