JA__17_219_to_post_with_intent.pdf

UNITED STATES MARINE CORPS

MARINE CORPS SYSTEMS COMMAND

2200 LESTER STREET

QUANTICO, VIRGINIA 22134-6050

IN REPLY REFER TO

CT2.4/CLW

J&A No. 17219

JUSTIFICATION AND APPROVAL

FOR USE OF OTHER THAN FULL AND OPEN COMPETITION

1. Contracting Activity.

Marine Corps Systems Command (MARCORSYSCOM) Information Systems and Infrastructure Contracts Group (CT 2.4) 2200 Lester Street Quantico, VA 22134-6050

2. Description of the Action Being Approved.

The use of other than full and open competition to award a sole source contract to Microsoft, Inc. for Microsoft Premier Support and Microsoft Consulting Services. This action will serve as a twelve-month contract and will allow continued services between the current Microsoft Premier Support Task Order against contract W91QUZ-09-D-0038 which expires 29 September 2013 and a Department of Defense Enterprise Software Initiative (DoD ESI) service contract which is planned for award by Space and Naval Warfare Systems (SPAWAR) Center Pacific (SSC PAC) on a sole-source basis to Microsoft in the 2nd quarter of fiscal year 2014. Consulting services are not included on the current Task Order. These services are required during the planned contract period of performance and will also transition to the planned DoD ESI contract.

3. Description of Supplies/Services.

The United States Marine Corps (USMC) intends to procure Microsoft Premier Support and Microsoft Consulting Services.

The required services include the following:

• Planning and Coordination Support

• Risk Assessments and Support Consulting

• 24/7 Problem Resolution Assistance

• Field Engineering Support

• Dedicated Engineering Support

• Architectural Consulting Services

The proposed 12-month contract will allow time for the Marine Corps to transition to the DoD ESI services contract and provide flexibility and continuity of service during a critical period of transition to the Next Generation Enterprise Network (NGEN) architecture. The total estimated ceiling of this Justification and Approval (J&A) is $66.4M. Note that an estimated $18.3M will be applied in FY13 and $48.1M will be applied in FY14. The period of performance for the proposed effort will be twelve

(12) months from contract award.

Estimated Dollar Value – FY 13/FY 14 O&M Funds

Major Units Consulting Premier Support Subtotals

HQMC $4,200,000 $229,445 $4,429,445

MARCORSYSCOM $2,700,000 $4,000,000 $6,700,000

MCSELMS $4,500,000 $4,500,000

MCEITS $2,000,000 $2,000,000

LOGCOM $2,200,000 $2,200,000

MCI- EAST,

WEST,

MARFORRES,

and PAC $10,700,000 $580,000 $11,280,000 I, II, and

III MEF $7,900,000 $2,380,300 $10,280,300

MCNOSC $3,500,000 $8,088,000 $11,588,000

MARFOR's $3,450,000 $721,106 $4,171,106

TSO $1,200,000 $800,000 $2,000,000

BIC $450,000 $450,000

MCB KB $1,200,000 $1,200,000

MCAS Iwakuni $1,200,000 $1,200,000

MCRC $1,500,000 $1,500,000

TECOM $1,200,000 $249,556 $1,449,556

MCCS $900,000 $337,000 $1,237,000

MARCENT $200,000 $200,000

TOTALS: $42,300,000 $24,085,407 $66,385,407

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

The statutory authority permitting other than full and open competition is 10 U.S.C. 2304(c)(1) as implemented in the Federal Acquisition Regulation (FAR) 6.302-1, only one responsible source and no other supplies or services will satisfy agency requirements.

5. Rationale Justifying Use of Cited Statutory Authority.

In accordance with DFARS 208.7402, departments and agencies shall fulfill requirements for commercial software and related services, such as software maintenance, in accordance with the DoD ESI (see website at http://www.esi.mil/). ESI promotes the use of enterprise software and service agreements with contractors that allow the DoD to obtain favorable terms and pricing for commercial software and related services. The DoD ESI contract for these services expired and there is currently no DoD ESI contract available.

DoD ESI, through SPAWAR SSC PAC, is planning to award a new DoD-wide Indefinite Delivery Indefinite Quantity (IDIQ) contract directly to Microsoft for these services at a significant discount to DoD users. The Marine Corps will transition to that contract once it is awarded. The rationale for authority throughout fiscal year 2014 is to allow time for the Marine Corps to transition to the DoD ESI service contract and provide flexibility and continuity of service during a critical period of transition to the NGEN architecture. SSC PAC currently plans to award the DoD ESI contract in the second quarter of FY14.

This will provide for a six-month transition period from the Marine Corps contract to the DoD ESI contract.

Secretary of the Navy Instruction 5230.15, dated 10 April 2009, states that all commercial off–the-shelf software to be used across the Department of Navy shall be vendor supported. This effort provides additional support capability to Microsoft products being centrally purchased through the DON Microsoft Enterprise Software Licensing (ESL) agreement, which is currently managed by Marine Corps Software Enterprise Licensing Management System (MCSELMS) through MARCORSYSCOM Information Systems and Infrastructure Program Manager.

History:

The DoD ESI contract on which the current Marine Corps Premier Support Services Task Order is based, W91QUZ-09-D-0038 order MU60, was a sole source contract awarded to Microsoft in April 2009, with a base plus four option years. J&A 13188.0 for $11,500,000.00 was approved for our requirement to award the task order. The contract ended two years early in 2012 because the ceiling of the J&A was reached by DoD.

http://www.esi.mil/

MARCORSYSCOM Legal determined that the above Marine Corps Task Order against the DOD ESI contract could continue through September 2013, but would require an amendment to the local J&A to update the ceiling. An updated J&A 13188.1 was completed and approved in July 2012 to increase the ceiling in the amount of $15,600,000.00 to continue services through 29 September 2013.

Since 2011, several requests were received from Marine Corps commands to initiate a contract line item for Microsoft Consulting Services (MCS). The DOD ESI contract had added this line item in June 2011 to provide a vehicle for these services for the DOD. However, the Marine Corps task order was not updated to include this requirement because those services were not included in the scope of the Marine Corps J&A. In August 2012 during the review of the requirements for the new award, however, that requirement was added, and included in the market research effort.

Subsequently, HQMC C4 requested that a Microsoft Consulting Services contract vehicle be established through MCSELMs.

HQMC’s current requirement is to engage Microsoft to ensure that the Marine Corps Enterprise Network’s (MCEN) underlying Active Directory Infrastructure would be able to support the current information environment as well as be flexible enough to implement the Microsoft enterprise level software suite that the Marine Corps currently owns. No other current vehicle exists to engage Microsoft directly to perform these services.

Rationale:

The current Microsoft field engineers and account managers have provided Microsoft Premier Support Services to Marine Corps network administrators and program managers continuously since 2008 and have served as a subcontractor to HP Enterprise Services (HPES) for over ten years during the tenure of the NMCI contract. Microsoft has also provided Microsoft Consulting Services to multiple organizations with the Marine Corps outside of the enterprise contract. These engineers and account managers understand the Marine Corps environment, Information Technology (IT) strategy, network infrastructure and transition plans, product inventory and evolution of features, as well as the current objectives of the various network transitions. A 12-month change to a third party GSA-schedule vendor would allow for new projects to start, but would result in critical knowledge gaps and a delay in services that are already underway.

This support is required to protect the investment of over $177M in Microsoft products purchased through the Marine Corps enterprise agreements and product support task orders with Microsoft and its resellers since July 2005. The current support provided by Microsoft includes significant involvement in the transition of the NGEN to the Government-owned/Government-Operated environment, the development and support of the Marine Corps Enterprise Network (MCEN), the transition of the Marine Corps Enterprise Services (MCES) Enterprise Information Services SharePoint portal environment, the Windows 7 Operating System transition from the Windows XP, and the development of the Token Based Activation process to assist Marine Corps programs and tactical units in activating software without network connections.

In October 2013, the USMC will take ownership of the network that is currently operated via the Continuity of Services Contract (COSC) by HP Enterprise Services (HPES). HPES has relied heavily on Microsoft to initially develop and sustain the NMCI network as a result of multiple software compatibility and security requirements. The transition of this network over to a Government Owned/Government Operated environment through requires experienced support to assure that these same issues do not develop and/or are mitigated early in the transition process. Switching support teams during this critical time would introduce significant and unnecessary risk to the transition.

The Navy and Marine Corps have not experienced such a task since migrating to NMCI more than a decade ago. Microsoft’s knowledge and experience gained through its partnership with HPES will continue to be a critical factor in successfully transitioning this network to the Marine Corps.

Currently, the DoD requires all systems on the MCEN to have an Authority to Operate (ATO) [reference: SECNAV M-5239 - Department of the Navy Information Assurance (IA) Workforce Management Manual, (b) OPNAVINST 5239.1C – Navy Information Assurance Program, and (c) DoDD 8500.1E – Information Assurance (IA). In order to obtain an ATO, all security vulnerabilities must be mitigated. Microsoft is the only contractor with the ability to adjust Microsoft software code to mitigate critical IA security issues that could be due to incompatibility among the various vendor software used on Marine Corps networks.

Microsoft’s IA experience that results from its Trustworthy Computing Initiative and Cyber Crime Unit is of vital importance to Marine Corps network security and its transition to Windows 7 and future Microsoft operating system versions.

Microsoft has provided ongoing server consolidation and transition support for the Marine Corps Technical Services Organization (TSO) data center transfer from Kansas City to Indianapolis. The consolidation efforts will continue through the implementation and deployment of new Microsoft products until full transition in FY14 and needs to continue with the same expertise that began that transfer. Data center (server) consolidation is part of a larger effort within the Department to find efficiencies and cut spending in business information technology.

For the past 18 months, Microsoft has provided a full-time Microsoft engineer on-site at Camp Leatherneck in Afghanistan to help support the infrastructure transition between the Marine Expeditionary Forces, to maintain Active Directory and Windows 7 platforms, mitigate critical downtime issues, and perform risk assessments associated with the Windows servers and client licenses installed on the Marine Corps Hardware Suite hardware.

Although this support has been halted at this time, additional requests for on-site deployment support in theatre - which only Microsoft can provide – are anticipated.

Marine Corps Enterprise Information Technology Services (MCEITS) and Marine Corps Network Operations and Security Center (MCNOSC) have several support tasks currently in-process that will need to continue into FY14. Since Microsoft has been an active partner in the development and maturation of these tasks, an extensive knowledge transfer process would need to occur prior to contract expiration in September 2013. However, the experienced Microsoft engineers may not be available for further transfer of information to the new vendor or for subcontract support during the next phase of the tasks in FY14. This introduces a risk of significant disruption in planned transition services.

In addition to the Microsoft Consulting Services request received from HQMC for Active Directory, HQMC C4 also has a requirement for Microsoft to develop a hybrid solution for operating system activation to include Key Management Server (KMS), Multiple Access Key (MAK), and Token Based Activation (TBA). I Marine Expeditionary Force (I MEF) has identified a requirement for Microsoft to replicate its IT architecture over multiple sites. Other commands have established requirements, bringing the total estimate for Marine Corps architectural and design services to over $42M over the next 12 months alone.

Microsoft has provided ongoing 365/24/7 Problem Resolution Support since 2009 by phone and in-person to resolve critical network downtime issues that affect security and ongoing operations around the globe. This support is available as an alternative to phone help-desk support provided by representatives who do not have specific experience with Marine Corps issues. Experience has shown that the immediate availability of Marine Corps dedicated Microsoft professionals is far superior to phone help desk representatives that deal with commercial companies or other vendors who may not have the experience or ability to quickly respond in person when these issues develop. For example, Microsoft was able to respond within 12 hours to an underway community served by the 15th Marine Expeditionary Unit (MEU) to provide critical on-site resolution of a SharePoint portal outage that was caused by an improper design developed by another vendor. As a follow-up to this situation, I MEF and the Information Management Office (IMO) is requesting experienced Microsoft engineering platform support to avoid similar issues arising in the future. I MEF currently requires an analysis of their Secure Internet Protocol Router (SIPR) SharePoint environment and development of a plan to stand up additional SharePoint site collections on behalf of MSCs/MEUs. From I MEF IMO perspective, the knowledge gained by Microsoft from the 15th MEU problem resolution will help scope I MEF's full requirement when it comes to SIPR SharePoint support vice the current ad hoc approach to procuring licenses and replication software.

6. Description of Efforts Made to Solicit Offers from as Many Offerors as Practicable.

A Request for Information (RFI) was published in September 2012 to solicit information from industry on how potential vendors could provide support services to enable and improve the execution of Microsoft software installation and implementation.

In the RFI responses, it was discovered that all General Services Administration (GSA)-schedule vendors would have to subcontract services to Microsoft when a task requires direct access to software source code, which includes addressing security and compatibility issues between different software manufacturers. It was also discovered that only Microsoft has direct, untethered access across all software product groups, software developers, existing and future source code, and cyber security databases to provide immediate and on-site critical support for network upgrades, transitions, outages and security concerns. Because a third party vendor cannot provide all of the support tasks specified in the RFI without subcontracting critical tasks to Microsoft, it was determined that a sole source contract to Microsoft was justified.

In the RFI responses, it was discovered that all GSA-schedule vendors would have to subcontract services to Microsoft when a task requires direct access to software source code, which includes addressing security and compatibility issues between different software manufacturers. It was also discovered that only Microsoft has direct, untethered access across all software product groups, software developers, existing and future source code, and cyber security databases to provide immediate and on-site critical support for network upgrades, transitions, outages and security concerns. Because a third party vendor cannot provide all of the support tasks specified in the RFI without subcontracting critical tasks to Microsoft, it was determined that a sole source contract to Microsoft was justified.

Further market research was conducted to determine the capabilities of various companies that provide Microsoft support and architectural consulting services. After a review of technical journals and reports, the project officer contacted customers throughout the Marine Corps, DoD, and other agencies in the Federal Government to gather data on their respective experiences with each prospective contractor. The market research determined that the proactive technical support provided by Microsoft on the Premier Support task order is very specific and unique to Marine Corps’ requirements and infrastructure and that the experience of the Microsoft engineers is of significant value in the transition of our major networks. Therefore, while there is evidence that several companies have demonstrated capability in providing support for some of the requirements identified in the RFI, only Microsoft has the capability to provide the entire scope of work required.

In order to take advantage of lower pricing that may be available on a task from a GSA-schedule vendor that does not require the expertise provided by Microsoft engineers, MCSELMs will continue the process for a competition among GSA-schedule vendors for the following:

• Microsoft application training (such as Office, Project, Visio, Server development)

• Business process training (such as Information Technology Information Library (ITIL) or Lean Six Sigma)

• SharePoint portal development, software upgrades, or platform support ( where source code access is not required)

7. Determination of Fair and Reasonable Cost.

The Contracting Officer will ensure the cost to the Government for the proposed services will be fair and reasonable. This assessment will be based on the pricing documented by other Microsoft software support vendors for similar services as well as prices on the recently ended DOD ESI contract. However, negotiations will include requesting price reductions in account management services, such as unneeded management and marketing services that Microsoft tends to include in its site-visit pricing.

In accordance with the Undersecretary of Defense Acquisition and Technology and Logistics Memorandum, "Better Buying Power 2.0" dated 13 November 2012, this sole source contract will deliver value to both the Warfighter and to the taxpayer. Through this enterprise-wide effort, this contract serves the Warfighter's requirements by allowing superior performance, while simultaneously achieving affordability. This economy of scale spreads costs for superior performance across the Marine Corps Enterprise. Furthermore, this contract helps to strengthen the partnerships with the requirements community by addressing a viable need specified by HQMC C4. Finally, by separating tasks which can be performed by third party vendors into a separate competitive contract, this action will promote effective competition.

8. Actions to Remove Barriers to Future Competition.

The proposed action will serve as a twelve-month contract to ensure continuity of existing Microsoft services in support of the NGEN and MCEN transitions through FY14 until the DoD ESI IDIQ award to Microsoft is in place. At the end of this twelve-month contract, the Marine Corps will award its service requirements via the DoD ESI contract. Furthermore, the Marine Corps will foster competition in this field by awarding a set of related tasks in a separate competitive contract in order to facilitate the growth and development of third party vendors in the knowledge and experience in this area. The Marine Corps will actively seek future opportunities to continually foster competition in this industry.