MRR for SG15AUG196275.pdf

FOR OFFICIAL USE ONLY SOURCE SELECTION INFORMATION – SEE FAR 2.101 AND 3.104

Page 1 of 7 Pages

12 Dec 2019/Version 4

STRATEGIC MARKET RESEARCH REPORT (MRR)

For

Telecommunications Service Requests/Orders

SG15AUG196275

I. Requirement Information

Market Research effort accomplished by:

Name Title Office Telephone

Dale Rupright Contracting Officer (KO) PL8211 618-418-6616

Andrew Fernandez Contract Specialist (CS) PL8211 618-418-6194

Time frame in which the market research was updated: Dec 2019 to Dec 2020

Estimated Value: $ 184,718.60

Period of Performance: 31 Aug 20 - 30 Aug 23

Requirements Purpose: PROVIDE, INSTALL, AND MAINTAIN A 2.5GB ETHERNET WAVE

SERVICE BETWEEN BLDG: 919; ROOM: COMPUTER ROOM, 2ND FLOOR; 919 LANGLEY

STREET, JACKSONVILLE NAS, FL, 32212 AND BLDG 533; ROOM 128; FLOOR: 1, 1225

PERSHING PLACE, PATRICK AFB, FL, 32925.

A. Procurement History

The Defense Information Systems Agency has been procuring individual telecommunications circuits for the

Department of Defense via the Inquiry/Quote/Order (IQO) process for over 30 years. Thousands of circuits have been purchased during that timeframe.

The table below provides the DISA’s procurement history for new requirements and follow-on contracts awarded using the IQO process from June 2018 through June 2019 within the specific categories of requirements executed.

The information provides an insight into the types of requirements small businesses provided quotes for and were awarded. This assists the KO in identifying those requirements that provide reasonable expectation of receiving two or more small business quotations at a fair and reasonable price that can meet the Limitations on Subcontracting clause.

The acquisition strategies for FY20 are influenced by changes in the market space. The information in the chart below reflects strategies consistent with awards made to successful small companies that are no longer small businesses based on the current size standards, and also includes awards that were made to small businesses that later were terminated due to lack of performance. This increases the risk of receiving responsible small business offers and has affected the determinations below on which categories can be set-aside with the likelihood of receiving two or more responsible offers from small business that can meet the Limitation on Subcontracting clause.

Due to this, DISA’s Contracting Subject Matter Experts are not recommending set-asides in categories that have historically been set aside.

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B. Requirement Description

The Defense Information Systems Agency, Defense Information Technology Contracting Organization (DITCO) purchases telecommunication services for the Department of Defense. One method to procure these services is the

IQO process. The IQO process can only be used for the acquisition of telecommunication services. The IQO process is utilized when the services are not available or unobtainable under any other existing contract vehicle. It is utilized after all avenues of purchasing the telecommunication services have been exhausted and often competition is limited to a few contractors or a single Local Exchange Carrier (LEC). Under the IQO process, there is a wide range of service features and bandwidth.

II. Market Research

A. Authority

Market research is required in accordance with:

FAR 7.102, Acquisition Planning Policy

FAR 7.103(u)(1) and (2), Agency-Head Responsibilities

FAR 10.001, Market Research Policy

FAR 12.101, Policy and 12.202 Market research and description of agency need

FAR 19.202-2, Locating Small Business Sources

DFARS 210.001, Market Research Policy

DFARS 212.209, Determination of price reasonableness

DFARS 239.101, Policy

DARS 10.002, Market Research Procedures

B. Market Research Techniques and Sources

Mark if part of research

SOURCES USED IN MARKET

RESEARCH

Details of Research/Comments

☒ Acquisition history reviewed

Analyzed 605 awards made from 01 Jun 2018 to 30 Jun

2019. (Refer to table in Section A - Procurement

History).

Interviewed knowledgeable individuals in industry/Government

Spoke with multiple CSs and KOs in PL8211/8212 in regards to current small business trends in quoting and work performed for each type of requirement previously awarded.

Category # of Awards # Set Aside # SB Awards Reasonable

Expectation Set-Aside?

CBL/3KH Voice/DSL 200 2 13 NO NO

ISDN BRI/ISDN PRI 20 0 4 NO NO

DS-1/T-1/PRI 37 18 31 YES YES

DS-3 9 5 7 YES YES

Ethernet 244 133 169 NO NO

Diversity - - - NO NO

> OC-3 41 0 12 NO NO

Wave 54 4 17 NO NO

Total 605 157 253 - -

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Participated in DISA or DoD Small

Business Industry Outreach Sessions

Met with contractors periodically. In addition, conducted monthly small business orientation with telecommunication carriers.

Reviewed existing DISA-wide and DoD

Multiple-Award Contract Vehicles and

Other Government-Wide Acquisition

Contracts (GWACs)

The Provisioning Division determined no existing contract vehicles met the needs of the requirements received by IQO. Requirements were submitted to IQO if it was a requirement “outside of the box” and could not be acquired on an existing contract vehicle.

Sources Sought/Requests for Information

(RFI)

An RFI was posted to FBO from 13 Jun 2019 to 15 Jul

2019 with no contractor response.

Federal Supply Schedules http://www.gsa.gov/schedules

Services required were not on the Federal Supply

Schedules.

SBA Dynamic Small Business Database at:

http://dsbs.sba.gov/dsbs/search/dsp_dsbs.

cfm in accordance with DARS 210.001

Results identified in Section V below (at “Query of the

SBA Dynamic Small Business Search (DSBS) tool results”).

Mark if part of research

PRIORITY SOURCES REVIEWED

IAW FAR

Details of Research/Comments

Federal Prison Industries http://www.unicor.gov/ Not applicable for acquisition of services.

Procurement List maintained by the

Committee for Purchase from People who are Blind or Severely Disabled

(AbilityOne) http://www.abilityone.gov/index.html

This is an acquisition of telecom services, Ability One does not offer the type of services required.

III. Discuss the results of any Sources Sought/RFI data obtained.

An RFI was posted to FBO on 13 Jun 2019 with responses due 15 Jul 2019. No responses were received. It was determined that enough acquisition history was present to analyze for market research purposes.

IV. Consideration of Small Business Opportunities

DISA currently has 18 Basic Agreements with small businesses. See list below. These businesses range from mature telecommunications providers to single employee companies. DISA implemented a

Telecommunications/Small Business Orientation Workshop in order to prepare prospective new small businesses for doing business with the federal government. While the workshop has proven to be invaluable to the attendees, it has provided additional insight for the government into the level of capability many of these small businesses have to successfully perform on a government contract.

In reviewing the procurement history from 01 Jun 2018 to 30 Jun 2019, information for this FY20 IQO Market

Research Report was divided into eight distinct categories of service. Small business opportunities were examined for each of the categories and the following outlines which areas have the expectation of capable small businesses that meet the Limitations on Subcontracting at a fair and reasonable price. If there is not a reasonable expectation that the Government will receive two or more responsible offerors from small businesses, it is documented below.

1. CBL/3KH Voice/DSL: Will be advertised as full and open competition. This technology is outdated and going obsolete so very few vendors can provide it. These services are being phased out and historically, most solicitations receive a single proposal from a large business. The analysis of recent awards showed 13 out of 200 awards were made to small business with only two being set-aside for small business.

Moreover, while 13 awards were made, the majority were not within a set-aside and the Limitations of

Subcontracting clause would not apply in these cases. Based on the Subject Matter Expert’s opinion, the expectation of receiving two qualified proposals does not exist and therefore these requirements will not be http://www.gsa.gov/schedules http://dsbs.sba.gov/dsbs/search/dsp_dsbs.cfm http://dsbs.sba.gov/dsbs/search/dsp_dsbs.cfm http://www.unicor.gov/ http://www.abilityone.gov/index.html

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2. ISDN BRI/ISDN PRI: Will be advertised as full and open competition. This technology is outdated and going obsolete so very few vendors can provide it. These services are being phased out and historically, most solicitations receive a single proposal from a large business. In fact, the majority of the solicitations are sent directly to the Local Exchange Carrier (large business), as the only option to receive service in that area. The analysis of recent awards showed four out of 20 awards were made to small business with none being set-aside for small business. The four awards were re-competes and the circuit was already in existence. In addition, while four awards were made, none were where the Limitations of Subcontracting clause applied. Based on the Subject Matter Expert’s opinion, the expectation of receiving two qualified proposals does not exist and therefore these requirements will not be set aside.

3. DS-1/T-1/PRI: Will be advertised as small business set-asides. The expectations exists of receiving two or more quotes at a fair and reasonable price. (The current data is not accurate due to a crossover category of “PRI” a clarification added to the table).

4. DS-3: Will be advertised as small business set-asides. The expectation exists of receiving two or more quotes at a fair and reasonable price.

5. Ethernet: Will be advertised as full and open competition. This is a change from last year’s Strategic

Market Research Report due to a lack of small business quotes, technically unacceptable solutions or failure to meet the contract terms and conditions. One of every three solicitations in FY19 needed to be withdrawn as a small business set-aside and re-solicited as full and open competition because of the above.

This introduced unacceptable delays and resulted in the lack of timely service while incurring expenses by the Government. Recent data shows 55% of Ethernet circuits were set-aside; however, 20% of those circuits (to five different small businesses) were terminated after award due to non-performance. Based on the Subject Matter Expert’s opinion, the Government does not have reasonable expectation of receiving two or more qualified technical proposals at a fair market price and meeting the Limitations on

Subcontracting clause for Ethernet circuits. Therefore these requirements will not be set aside.

6. Diversity (new category): Will be advertised as full and open competition. These circuits are complex and require maps in order to prove diversity. Historically, the carriers are not willing to provide their proprietary maps to small industry partners, which renders their proposals technically unacceptable.

Additionally, many of the awards that were made to small businesses were terminated after award and had to be re-competed due to non-performance. Based on the Subject Matter Expert’s opinion, the expectation of receiving two qualified proposals does not exist and therefore these requirements will not be set aside.

7. > OC-3: Will be advertised as full and open competition. Analysis of recent awards does not reflect the expectation that two or more Small Business concerns would submit quotes at a fair market price while meeting the Limitations on Subcontracting Clause. Research showed only 12 out of 41 awards were made to small businesses who did not have to comply with the Limitations on Subcontracting Clause. Based on the Subject Matter Expert’s opinion, the expectation of receiving two qualified proposals does not exist and therefore these requirements will not be set aside.

8. Wave: Will be advertised as full and open competition. Analysis of recent awards does not reflect the expectation that two or more Small Business concerns would submit quotes at a fair market price. The trend shows that usually there is only one small business proposing on a requirement, or the price is determined not to be fair and reasonable. Research showed only 17 out of 54 awards were made to small businesses with four being set-aside. And while 17 awards were made, the majority were not within a set-aside and the Limitations of Subcontracting clause would not apply in these cases. Based on the Subject

Matter Expert’s opinion, the expectation of receiving two qualified proposals does not exist and therefore these requirements will not be set aside.

Query of the SBA Dynamic Small Business Search (DSBS) tool results

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A search of the Small Business Administration Dynamic Small Business Database was conducted and found the below small businesses with NAICS codes 517311and 517911 offered telecommunication services.

The total number of small business concerns in each of the individual socio-economic groups were:

40 8(a)

13 HUBZone

44 Service-Disabled Veteran-Owned

54 Woman Owned Small Business

The search parameters and keywords used were: NAICS Code: 517311

Keywords: “Telecommunications”

The total number of small business concerns in each of the individual socio-economic groups were:

54 8(a)

36 HUBZone

76 Service-Disabled Veteran-Owned

117 Woman Owned Small Business

The search parameters and keywords used were: NAICS Code: 517911

Keywords: “Telecommunications”

Based on the procurement history review and the query of the SBA Dynamic Small Business Search tool, it has been determined there is a sufficient quantity of qualified small businesses to warrant small business set-asides for two of the type services referenced in Section A (Procurement History).

V. Identify Sources with Basic Agreements

Vendor Name/Cage Code Business Category Vehicles Available

Cavalier Telephone, LLC - 1LKT5

Clarity Communications Group Inc. - 4FVL7

Cox Communications Hampton Roads, LLC - 4UBW6

Granite Telecommunications, LLC - 39NE4

GTT Global Telecom Government Services LLC - 7A5Z1

Level 3 Communications, LLC - 3A6U5

Michigan Bell Telephone Company - 3BWQ1

Qwest Government Services Inc. - 1XWZ7

Verizon Washington, DC Inc. - 1MRY1

Illinois Bell Telephone Company - 3EVY7

BellSouth Telecommunications, Inc. - 0N0N7

Verizon Maryland Inc. - 1MRY3

Verizon Pennsylvania Inc. - 1M2Q

Windstream Nuvox, Inc. - 35FS2

Windstream Iowa Communications, Inc. - 1VXF2

Windstream Communications LLC - 4HC08

Large business Basic Agreements

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Advanced Computers Inc. - 3SKL6

All Native Services - 4DBY6

Carroll Woods Inc. - 7HK58

Connections Wizard LLC - 7GSF2

DTMicro Inc. - 79BZ3

Federal Communications Solutions LLC - 7KT99

Iron-Shield Network Solutions LLC - 7SUT0

Manhattan Telecommunications Corporation - 35PG8

Microtechnologies LLC - 3TSJ0

Norfolk Fiber LLC - 83ET4

OneVoice Government Solutions LLC - 817S5

QXC Communications Inc. - 7PES8

RX3 Communications Inc. - 5NP03

Southern Light, LLC - 1WES1

T2 Technologies, Inc. - 3C232

Telecommunication Solutions Group Inc. - 1U7A8

Triune Solutions LLC - 6D3F9

Xspology Communications - 7FNN7

Small business Basic Agreements

VI. Contracting Officer’s Market Analysis Summary

Small Business concerns cannot meet all telecommunications procured by the IQO process as shown by the procurement history data presented in this document.

The market research and procurement history show there is not a reasonable expectation of two or more small businesses providing quotes for: CBL/3KH/Voice/DSL, ISDN BRI/PRI/ETHERNET/WAVE, >OC-3 and Diversity.

The market research and procurement history show there is a reasonable expectation of two or more small businesses providing quotes for: DS-1/T-1 and DS-3.

For the specific requirement listed on the top of page one, the market research and procurement history shows there is not a reasonable expectation of two or more small businesses providing qualified responsible quotes at a fair and reasonable price that can meet the Limitations on Subcontracting clause.

The specific requirement listed on the top of page one does not contain any consolidated or bundled task orders/requirements and no conflicts of interests were found while reviewing the procurement history.

Formal Acquisition Strategy approved: N/A

PSC and NAICS Code: PSC: D304 - NAICS Code: 517311/517911

Portfolio: Electronic and Communications Services.

Subcontracting: A subcontracting plan will be requested for any full and open requirement over

$700,000.00 FAR 19.702(a)(1).

VII. Description of the Commercial Marketplace and Prevalent Business Practices, and research to support a

Commercial Item Determination (CID)

The services being procured through this acquisition meet the commercial item definition in FAR 2.101.

Telecommunication circuits are used by the general public or by non-government entities for non-government purposes, and has been sold, licensed or offered for sale to the general public. DARS 239.7401 specifically defines telecommunications circuits as a commercially available off-the-shelf (COTS) item. Based on historical analysis of identical services being procured to meet telecommunications requirements the Government’s needs have been met

Page 7 of 7 Pages and will continue to be met by services customarily available in the commercial marketplace that meet the definition of a commercial item. IQO requirements are competed under FAR Part 12, Acquisition of Commercial Items.

VIII. Conclusion and Recommended Procurement Method

Based upon the market research conducted and the resulting analysis, adequate sources of supply for small business concerns were not obtained and the data does not support a Total Small Business set-aside. The acquisition strategy determined for this requirement is a full and open competition. This recommendation will stand alone as the sole acquisition approach for informal acquisition planning. This market research information is not more than 12 months old.

Signed _______________________________________ Date: 02 APRIL 2020

Contracting Officer