limited_sources_J_and_A SN_Redacted.pdf

Limited Sources Justification and Approval (J&A)

CONTROLLED UNCLASSIFIED INFORMATION

April 2021 CONTROLLED UNCLASSIFIED INFORMATION Page 4 of 7April 2021 CONTROLLED UNCLASSIFIED INFORMATION Page 4 of 7 remediation, and optimized cloud spend.

- IT Asset Management is a suite of applications that work together to help the organization manage hardware and software assets better. Core capabilities include the ability to evaluate license compliance, over/under spend and opportunities to reduce and save money.

- Security Operations is a suite of applications that identify, track and notify IT Security teams of known vulnerabilities across any hardware and software assets within an organizations Service Now Configuration Master Database.

Human Resources Service Delivery (HRSD) is a suite of workflows tailored to implementing efficient, secure, and comprehensive processes for on-boarding, off-boarding, transferring and creating integration with best of breed industry HR tools.

- Non-Production Instances provide Kessel Run Service Implementation teams three layers of Development, Test, and Production instances to safely and efficiently share ServiceNow data sets from SaaS to on-premises environments to support Kessel Run’s operational environments in IL6.

- Automation Engine provides a suite of automatic integrations between ServiceNow and other SaaS capabilities used at Kessel Run such as AWS, Okta, and Gitlab.

- Customer Support Management is a suite of applications that allow external customers to submit support requests. This suite will be leveraged by Kessel Run's ITSM teams to support users that do not have internal methods of accessing support.

- Business Stakeholder User licenses will allow Kessel Run to expand the number of users in the ITSM approval chain with a less expensive option. This type of license will be used to give leaders and approvers access to conduct certain functions, without requiring a full ITSM fulfiller license.

- Strategic Portfolio Management will allow Kessel Run ServiceNow Implementation teams to track their project development and implementation progress from a portfolio management level. This will reduce friction caused by switching between KR's other project management tools and ServiceNow specific tools.

IV. Identification of the justification/rationale for limiting sources and demonstration of the contractor's unique qualifications to provide the required supply/service.

FAR 8.405-6(b)(1) Items peculiar to one manufacturer. An item peculiar to one manufacturer can be a particular brand name, product, or a feature of a product, peculiar to one manufacturer. A brand name item, whether available on one or more schedule contracts, is an item peculiar to one manufacturer.

Kessel Run has a requirement to renew 8,168 existing ServiceNow licenses currently in production as well as 240 additional ServiceNow brand name software licenses to provide additional functionality within the current deployed information Technology Service Management Tool (ITSM), which consists of ServiceNow commercial software. The estimated cost of this acquisition (including all options) is . This is not a performance-based service, the government only requires software licenses on this contract. The implementation of specific ServiceNow capabilities shall be the responsibilities of various Implementation teams sourced via other contracts. The government has determined ServiceNow to be the only Information Technology Suite that meets the government's current requirements. ServiceNow software licenses are essential to the Government’s requirements, and market research indicates other companies’ similar products, or products lacking the particular features, do not meet, or cannot be modified to meet, the agency’s needs.

As described in the Market Research Section (Section VI), the government determined there was no competition among resellers of the aforementioned brand name software licenses. Carahsoft, Technology Corp was competitively selected by the Naval Information Warfare Systems Command via GSA e-Buy Schedule 70 and awarded a contract on DoD ESI. DFARS

208.7402 Enterprise Software Agreements states that Departments and agencies shall fulfill requirements for commercial software and related services, such as software maintenance, in accordance with the DoD Enterprise Software Initiative (ESI) (see website at http://www.esi.mil/). ESI promotes the use of enterprise software agreements (ESAs) with contractors that allow DoD to obtain favorable terms and pricing for commercial software and related services. Carahsoft Technology, Corp is established as the only ServiceNow reseller on DoD ESI. The PCO, therefore, proposes awarding the anticipated task order, April 2021 CONTROLLED UNCLASSIFIED INFORMATION Page 5 of 7April 2021 CONTROLLED UNCLASSIFIED INFORMATION Page 5 of 7 pursuant to the DoD ESI BPA, which was issued against the underlying GSA Federal Supply Schedule.

The ServiceNow tool is comprised of an integrated suite of ServiceNow applications that are built upon ServiceNow's proprietary platform. Kessel Run's existing platform represents over three (3) years of configuration and implementation work for the licensed applications to operate Kessel Run's production environment and across the enterprise costing about

. The current environment supports daily operations for 420 Kessel Run users and implementation staff of 20 developers.

Kessel Run requires an annual renewal of these licenses to support the increasing user base as the platform expands or there will be costly and unacceptable delays to its mission. No other brand or software is compatible or interoperable with the existing ServiceNow Platform due to the propriety and integrated nature of the platform. Replacing the existing software licenses with any other brand software would require a complete replacement of existing platform estimated to take at least 12 months and up to 24 months to implement. Such an action will also cost approximately just to replicate the existing environment along with unknown associated renewal and enhancement costs that would exceed the estimated costs of this proposed action.

Additionally, ServiceNow brand software is the only software that can continue to build upon Kessel Run's existing ServiceNow platform. ServiceNow is an eco-system of service management and business management modules that build upon one another to provide for holistic analysis, dashboards and reporting. The new licenses being included as optional line items under this effort are required for Kessel Run to utilize additional capabilities that are already available within ServiceNow’s existing platform, but must be licensed separately and configured to operate within Kessel Run's production environment. Managing multiple applications for disparate service and business management functions across the enterprise would not be possible nor would Kessel Run gain the visibility necessary to measure and improve its ServiceNow Software Licenses business processes. The ServiceNow SaaS offering is uniquely poised to meet Kessel Run's requirements for a single service management console because of its ability to integrate disparate business functions. All applications in the ServiceNow Portfolio are built on the ServiceNow Platform, and therefore all metrics, tasks, services, assets, people, locations, and information are stored together, creating a single system of record and a single system of engagement for the enterprise.

ServiceNow is the only platform on the market that can collect these disparate data points within a single management dashboard and turn them into information to drives timely actions and decisions across the enterprise. Obtaining the required capabilities through disparate, incompatible systems will result in duplicated costs and effort as the same functionality would have to be implemented and configured on a new and separate platform, thereby, creating multiple systems of record and service management dashboards. This will significantly degrade the efficiency of Kessel Run's service management operations, as well as compromise data integrity, thereby disrupting critical service to the war fighter. No other brand name software can communicate with the existing ServiceNow software and applications already in production on Kessel Run's ServiceNow platform.

In summary, only brand name ServiceNow software can meet Kessel Run's requirements to renew existing software licenses and expand the existing environment for increased functionality while maintaining a single service management console without the requirement for a complete replacement of the existing platform, which would result in additional risks, delivery delays, and costs.

V. Determination by the ordering activity Contracting Officer that the order represents the best value consistent with

FAR 8.404(d).

Supplies offered on the schedule are listed at fixed prices. GSA has already determined the prices of supplies and fixed-price services under schedule contracts to be fair and reasonable.The anticipated task order will be awarded pursuant to the DoD ESI BPA, which was issued against the underlying GSA Federal Supply Schedule. For the purpose of establishing the schedule contract, the schedule price has already been determined to be fair and reasonable. However, in accordance with FAR 8.404(d)(DEVIATION) (Class Deviation 2014-O0011), “it does not relieve the order activity from the responsibility of making a determination of fair and reasonable pricing for orders under BPA using the proposal analysis techniques at 15.404-1”. As such, the ordering officer will conduct the necessary price analysis at FAR 15.404-1 to make a determination of fair and reasonable pricing prior to placing the order. Using this Blanket Purchase Agreement also serves to induce great savings through economies of scale and increased visibility, which adds value to future procurement decisions. Based on the circumstances described herein, placing an order against the DOD ESI BPA represents the best value and results in the lowest overall cost alternative to meet the Government’s needs.

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Per the DoD ESI BPA FAQ page the majority of ESI vehicles are Blanket Purchase Agreements (BPA’s) based off the Government Service Agency (GSA) Federal Supply Schedule contracts. DoD ESI further discounts the GSA quantity one pricing and enhances the Terms and Conditions (T&Cs) to meet the DoD ESI best practice standards where possible.

VI. Description of the market research conducted and the results, or explain why market research was not conducted.

Market research was conducted in accordance with FAR Part 10. Market research was conducted, the details of which are in the market research section of this document. This effort did not yield any additional solutions that can meet the Government’s requirements. ServiceNow does not hold a GSA Schedule 70 contract. ServiceNow sells its products and services through authorized resellers.

a. In 2020, the Department of the Navy (Naval Information Warfare Systems Command) competitively awarded a GSA MAS BPA via DoD ESI to Carahsoft Technology, Corp for ServiceNow products and services. This BPA has a Master Dollar Limit of $820,000,000 and a BPA call limit of $50,000,000. The BPA will expire on 14 July 2029.

a. ESIs are DoD-wide agreements utilizing best practices, which includes strategic vendor management and is a self-sustaining fee-for-service operation. ESI agreements reduce prices and have pre-negotiated terms and conditions that have been deemed favorable to the government.

b. DFARS 208.7402 Enterprise Software Agreements states that Departments and agencies shall fulfill requirements for commercial software and related services, such as software maintenance, in accordance with the DoD Enterprise Software Initiative (ESI) (see website at http://www.esi.mil/). ESI promotes the use of enterprise software agreements (ESAs) with contractors that allow DoD to obtain favorable terms and pricing for commercial software and related services.

c. DOD Instruction 5000.02 7 Jan 2015: Operation of the Defense Acquisition System states that when acquiring IT, Program Managers must consider the DOD ESI, Federal Sourcing Initiative procurement vehicles, and Defense Component level Enterprise Software Licenses.

d. DOD Instruction 5000.74 5 Jan 2016: Defense Acquisition of Services directs that when acquiring IT, PMs or FSMs must consider the DOD Enterprise Software Initiative, Federal Strategic Sourcing Initiative procurement vehicles, DOD-wide joint enterprise license agreements, and Defense Component-level Enterprise Software Licenses.

e. The Government’s technical experts have conducted market research by reviewing similar service management software and associated support services. Similar products reviewed included BMC, Ivanti, and Atlassian. Although these products are similar, based on the review of these similar products by the Government’s technical experts, it was determined that none of these products or associated services can meet the Government’s interoperability and compatibility requirements previously discussed in Section IV of this justification. Specifically, no other software products can communicate with ServiceNow’s proprietary code, and therefore, none of these products can be implemented enterprise-wide to continue and increase the service management capabilities within Kessel Run’s existing ServiceNow platform. Further, no other vendor can access ServiceNow’s proprietary tools in order to provide the Customer Success package. Based on this market research, it was determined that only ServiceNow brand name software licenses and Customer Success package can meet all of Kessel Run’s needs to retain and expand the existing platform. Adopting a competing product would set-back Kessel Run 12-24 months to achieve similar capabilities that KR currently has with ServiceNow. Switching to a competing product would mean a loss of 18 months of implementation work by a staff of 20 developers. Kessel Run has already spent on ServiceNow Licenses and Implementation.

Additionally, none of the service management software examined met the government's minimum requirements. For example, BMC is not FedRAMP HIGH approved (it is FedRAMP MODERATE). A key component of the government's requirement is to have a FedRAMP HIGH approved software tool. The technical team also noticed that BMC's current ITSM/ HR/Assets/Ops are not fully developed and would severely degrade Kessel Run's current level of performance. Ivanti is classified FedRAMP Moderate, which again, does not meet the government's requirement for a FedRAMP HIGH approved system. Atlassian is not FedRAMP approved (it'll achieve FedRAMP moderate in Q1 of 2025). The government's technical

April 2021 CONTROLLED UNCLASSIFIED INFORMATION Page 7 of 7April 2021 CONTROLLED UNCLASSIFIED INFORMATION Page 7 of 7 experts also noticed that Atlassian does not offer ITAM/ITOM/SecOps/HR specific workflows, which, again are all critical portions of the government's requirement.

ServiceNow has been implemented as the main platform for Kessel Run's information technology cloud-based and on-premise Enterprise Service Management (ESM) software solution. The team found in its market research that if Kessel Run doesn't purchase ServiceNow, it would have to procure multiple software solutions to cover the wide range of capabilities that ServiceNow offers. This strategy won't be efficient and does not present a good economic value - it would not be a good business practice and certainly will not be in the best interest of the government.

VII. Other facts supporting the justification.

N/A

VIII. Actions the agency may take to remove or overcome any barriers that led to the restricted consideration before any subsequent acquisition for the supplies or services.

Kessel Run will continue to obtain industry standard ITSM training and broaden and deepen its understanding of IT Service Management best practices. Kessel Run will continue to evaluate its organizational maturity and continue to seek out tools and process improvements that enable the program to meet its mission needs. The procuring activity (NAVWARSYSCOM) has indicated it has no plans to compete future contracts for the types of supplies/services covered in its BPA. Kessel Run will conduct market research prior to renewing licenses on a new contract to see if any other potential sources for ServiceNow will emerge on DOD ESI. Kessel Run will also continue to seek and retain actionable insights from top industry IT consulting services and additionally rely on industry knowledge to ensure the program applies the right technical solutions to meet its organizational needs. During the course of the performance of this contract, Kessel Run will issue RFIs to determine there are any other industry partners that can resell ServiceNow license products and is willing to get a contract on DoD ESI.

IX. Certification by the Contracting Officer.

As evidenced by my signature above, I have determined this document to be both accurate and complete to the best of my knowledge and belief.

X. Certification by the technical/requirements personnel.

As evidenced by my (our) signature(s) above, I (we) certify that any supporting data contained herein, which is my (our) responsibility, is both accurate and complete.