Leidos Justification - Post OCC CA signed.v1_Redacted.pdf

JUSTIFICATION AND APPROVAL FOR OTHER THAN FULL AND OPEN COMPETITION

Authority: 41 U.S.C. 3304(a)(7)

Pursuant to the requirements of the Competition in Contracting Act (CICA) as implemented by the Federal Acquisition Regulation (FAR) Subpart 6.3 and in accordance with the requirements of FAR 6.303-1, the use of the statutory authority under FAR Subpart 6.3 is justified by the following facts and rationale required under FAR 6.303-2:

1. Agency and Contracting Activity.

The Department of Homeland Security (DHS), U.S. Customs and Border Protection (CBP), Office of Information and Technology (OIT), Enterprise Infrastructure and Operations Directorate (EIOD), Integrated Logistics Division (ILD), and CBP Office of Acquisition (OA), Procurement Directorate (PD), Information Technology Contracting Division (ITCD) prepared this Justification and Approval for Other than Full and Open Competition.

2. Nature and/or Description of the Action being Approved.

(a) Nature of action: CBP utilizes Radiation Detection Equipment (RDE) as well as Large Scale (LS) Non-Intrusive Inspection

(NII) equipment at various CBP locations within the Continental U.S. (CONUS) and outside of the Continental U.S.

(OCONUS) to intercept and disrupt the flow of contraband. The equipment includes CBP’s fixed position and mobile RDE and LS imaging and X-ray equipment. CBP intends to award a new contract with Leidos Incorporated (Leidos) for continued maintenance support and on demand services on a sole source basis.

(b) Name and address of the contractor: Leidos, Incorporated, 2985 Scott Street, Vista, California 92081.

(c) Contract type: Firm Fixed Price

(d) Estimated total value (including options). Provide breakdown as shown below:

Base Period 8/30/24 to 5/30/25

Option Period 1 5/31/25 to 5/30/26

Option Period 2 5/31/26 to 5/30/27

Option Period 3 5/31/27 to 8/31/27

TEPV

(e) Type of funding: Operations and Support (O&S)

(f) Year of funding: Fiscal Year 2024 (annual)

(g) Solicitation number: To be determined.

(h) Background information about the requirement:

The Leidos RDE and LS NII equipment is a part of the CBP RDE/NII portfolio deployed to CONUS, OCONUS and mission-related locations to detect illicit material entering or exiting the United States and OCONUS locations. Leidos is the original equipment manufacturer (OEM) of RDE and LS NII equipment, and they are the only entity capable of performing the entirety of the sustainment services that the equipment requires.

3. Description of Supplies/Services.

CBP utilizes RDE and NII equipment at various CBP locations to intercept and disrupt the flow of contraband. To maintain this equipment CBP has purchased systems from Leidos to deploy and maintain specialized equipment as the Original Equipment Manufacturer.

EIOD has a requirement to procure maintenance support and on-demand services in support of existing Leidos security technology equipment.

The Leidos equipment is comprised of fielded equipment. The services required include scheduled preventive and corrective maintenance, as well as other on-demand services that may be needed throughout the term of this contract, such as relocations, engineering, installation, disposal, and other activities that are peculiar to the equipment or may be required on short notice.

4. Identification of Statutory Authority Permitting Other Than Full and Open Competition.

The statutory authority permitting other than full and open competition for this effort is 41 U.S.C. 3304(a)(1) implemented by FAR 6.302-1: "Only One Responsible Source and No Other Supplies or Services Can Satisfy the Agency’s Requirements.”

5. Identification of Exception to the Buy American Statute

The services, equipment, and software described above will be provided in the United States and OCONUS sites by an American firm. Exceptions to the Buy American Act are inapplicable.

6. Demonstration that the proposed contractor’s unique qualifications or the nature of the acquisition requires use of the authority cited.

The equipment to be maintained (1453) individual pieces of equipment deployed, both CONUS and OCONUS, is comprised of fielded RDE and NII equipment. These systems detect illicit material as well as radiological threats that are attempting to enter or exit the borders. The systems must be operational 24x7x365 to ensure people, cargo, mail and transportation continue to move safely and securely with minimal or no delays in service. A lapse in services to the Leidos systems will adversely impact the mission of CBP to keep America safe. Without this equipment being deployed and functional, the nation's border security would be compromised.

Leidos provides technically complex and high-value inspection, detection equipment systems, currently being used by CBP/ILD to assist in securing the land border crossings, airports, seaports, rail crossings, mail handling, and express cargo consignment facilities within the United States and participating countries. Under the proposed new contract, Leidos will continue to provide the necessary supplies, parts, maintenance services, and subject matter expertise to fully sustain and transition RDE and NII equipment under the RDE/ NII Program, currently operational at CBP land, sea, air, and rail ports of entry. This support includes, at a minimum, program management, configuration management, warranty transitions, preventative maintenance, trouble call handling, corrective maintenance, and other requested services. Other requested services shall include engineering, site surveys, parts provisioning, retrofits, relocations, corrosion control, source change outs, disposal, maintenance training, operator refresher training, special event support, and emergency services on a case-by- case basis. In addition, the contractor may be required as on-demand services to repair damage resulting from accidents, incidents, natural disasters, and weather events, regardless of warranty status.

(a) Rationale for using the authority cited in section 4 of the J&A:

The Government must acquire these services from Leidos on a sole-source basis. As the original equipment manufacturer, Leidos can provide the maintenance services needed by the Government. As the current provider of these services under Contract 70B04C22C00000102, Leidos is also the only responsible source capable of meeting the requirement.

The existence of limited rights in data, patent rights, copyrights, and trade secrets make a subset of the requirement available only from Leidos. They develop and are the only company that has access to the source code and programming information for the ZBV/ ZBF model x-ray systems and the newly installed medium energy portal (MEP) and low energy portal (LEP) systems. Neither their proprietary manuals, nor their maintenance training on equipment are commercially available to other vendors. No other vendor has access to Leidos’s proprietary capabilities. Their technical data and software for CBP’s detection systems are proprietary information. The OEM will not sell data rights, maintenance training, technical manuals, drawings, schematics, or special tools associated with their equipment. It does not provide spare parts outside a maintenance plan.

Without Leidos’s unique capabilities, this equipment could not be maintained or fixed in the field.

(b) Details covering what events lead the situation requiring use of other than fully and open competition procedures including whether any portion of the work can be segregated for competition:

Corrective and preventative maintenance services for CBP’s NII equipment portfolio has historically been executed through sole source awards to the various OEMs.

CBP published a request for information on SAM.gov on November 2, 2020, to determine the extent to which small businesses might be capable of handling the maintenance requirements as an integrator. CBP received six (6) responses from industry, four (4) of which were from small businesses. Based on these responses, CBP initially determined that the entire requirement could be competed as a small-business set-aside through the GSA MAS. It had appeared that the interested small businesses had the requisite partnerships in place with current OEMs to support the CBP requirement to satisfy the entirety of the requirement.

A competitive solicitation was released for the award of two (2) separate Blanket Purchase Agreements (one for RDE and one for NII LS and SS) on December 22, 2022. Despite the attempt to compete the requirement, however, the solicitation was ultimately canceled when CBP determined that it would not yield a viable awardee for either of the BPAs, based, in part, on discovery that, in fact, the interested small businesses lacked partnerships with the OEMs as well as the depth and breadth of experience to satisfy the entirety of the requirements described in the RFQ.

(c) Summary of alternatives considered and why they will not work:

CBP’s market research and its subsequent attempt to compete the requirement has not provided an alternative to a sole source contract. CBP reviewed the DHS Strategic Sourcing Vehicles, and none were deemed appropriate for this requirement. CBP received a response from the DHS Strategic Sourcing Office that they had no contract vehicle that could satisfy this requirement.

(d) Impact to the mission that would result if the J&A is not approved and, consequently, the product or service not provided:

Non approval of the requested J&A will adversely affect the ability of agency personnel to fulfill their critical detection and law enforcement responsibilities and the agency’s operational mission Failure to continuously maintain the current fleet of Leidos RDE and NII equipment will cause service disruptions to international trade, increasing the threat of undetected weapons and other threats.

7. Description of Efforts Made to Ensure that Offers are Solicited from as Many Potential Sources as is Practicable.

No additional sources have been solicited for a potential contract considering the unique capabilities of the OEM, and past RFI and RFP release results.

8. Determination by the Contracting Officer that the Anticipated Cost to the Government will be Fair and Reasonable.

CBP has developed an independent government cost estimate (IGCE) and will conduct a thorough price analysis of the proposed price to form the basis for the Contracting Officer's determination of fair and reasonable prices. The Contracting Officer will work with the OIT EIOD ILD to review historical pricing information.

9. Description of Market Research.

As stated in Section 6, market research has been conducted to determine if a competition could be conducted for the requirement.

CBP has also done market research with other DHS component agencies on how they have acquired similar services in the past.

CBP has also met with multiple vendors to determine if a competition was viable. The current market research does not support a competition that will yield a contractor that could meet the requirement.

10. Any Other Facts Supporting the Use of Other Than Full and Open Competition.

There are no other facts supporting the use of other than full and open competition.

11. A Listing of the Sources, if Any That Expressed, in Writing, an Interest in the Acquisition.

No sources, other than Leidos, have expressed an interest in this requirement.

12. A Statement of the Actions, if Any, the Agency May Take to Remove or Overcome Any Barriers to Competition Before

Any Subsequent Acquisition for Supplies or Services Required.

In the absence of partnerships with OEMs, other sources will continue to be unable to meet CBP’s requirements. CBP will continue to monitor the capabilities of non-OEM NII industry service providers with the hope of identifying feasible ways to remove the current barriers to competition without jeopardizing CBP’s critical mission.