r_ERP SAP LSJ 4-12-18.pdf

DEPARTMENT OF THE NAVY

SPACE AND NAVAL WARFARE SYSTEMS COMMAND

4301 PACIFIC HIGHWAY

SAN DIEGO, CA 92110-3127

IN REPLY REFER TO

J&A No: 18,422 Code: 2.1E7

LIMITED SOURCES JUSTIFICATION AND APPROVAL

UNDER FEDERAL SUPPLY SCHEDULES (GSA ORDERS)

This acquisition is being conducted under the authority of the Multiple-Award Schedule Program (40 U.S.C. 501 and 41 U.S.C. 152(3))

Upon the basis of the following justification, I, as the approving official for Space and Naval Warfare Systems Command pursuant to FAR 8.405-6(d), hereby approve the use of other than full and open competition for the proposed contractual action pursuant to the authority of FAR 8.405-6(b) the item is peculiar to one manufacturer (e.g., 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.

JUSTIFICATION

1. Identification of Agency and Contracting Activity.

Department of the Navy, Space and Naval Warfare Systems Command (SPAWAR) Headquarters (HQ)

2. Description of Supplies/Services required to meet agency needs, and estimated value.

Navy Enterprise Business Solutions (PMW 220) is responsible for sustaining the Navy Enterprise Resource Planning (Navy ERP) system. Navy ERP completed deployment in November 2014 and provides enterprise financial management, supply chain, procurement, labor accounting, and asset management capabilities to the Navy’s major weapons system acquisition commands (NAVAIR, NAVSEA, SPAWAR, NAVSUP, SSP, and ONR). The Navy ERP program office has been tasked to perform a technical refresh of the system, including a transition of the SAP Business Suite from its current Oracle Relational Database Management System (RDBMS) to the more integrated High performance ANalytical Appliance (HANA) Platform and columnar database structure as well as a migration of the entire system from on-premises hosting to SAP cloud hosting. Additional SAP-specific technology will be inserted during this transition to provide more efficient long-term sustainment of the new cloud-based Suite on HANA solution. The Government has a brand name requirement for SAP cloud hosting and SAP support services to assist with platform configuration development on the Government’s existing SAP software for Enterprise Core Component (ECC on HANA), Supply Chain Management (SCM on HANA), Supplier Relationship Management (SRM on HANA), Business Warehouse (BW on HANA), and other SAP-unique support software.

The requirement for SAP cloud hosting and support services for the transition of its current SAP business suite to the SAP HANA platform while also migrating the system to cloud services will also include several areas of direct training and knowledge transfer to the government sustainment resources at NAVSUP Business Systems Center (BSC), located in Mechanicsburg, PA. The associated labor for this contract action represents about one third of the overall Navy ERP migration effort. The more significant

DISTRIBUTION STATEMENT A: Approved for public release, distribution is unlimited (10 JULY 2018) part of this migration project will be provided by Navy ERP’s service providers (NAVSUP Business Systems Center and SPAWAR Systems Center – Atlantic) and their industry partners via full and open competition as the nature of those services are not exclusive to SAP. The scope of this effort is constrained to only those efforts necessary to deploy new SAP software products within the SAP National Security 2 (NS2) Cloud.

The proposed action is for a competed General Services Administration (GSA) firm fixed price order of SAP Public Services, Inc. software license subscriptions and support services among Department of Defense (DoD) Enterprise Software Initiative (ESI) Blanket Purchase Agreement (BPA) holders. The period of performance is three years, one base year and two one-year options with an estimated total value of

Services Estimated Cost SAP Services Cloud Hosting/Managed Services Software License Subscriptions

TOTAL

3. Demonstration of the Contractor's Unique Qualifications or Demonstration That the Nature of the

Acquisition Requires Use of the Statutory Authority Cited.

This acquisition is conducted under the authority of the Multiple Award Schedule Program. Restriction of sources is justified in accordance with FAR 8.405-6. This requirement is being conducted in accordance with FAR 8.405-6(b), items peculiar to one manufacturer. A brand name item, whether available on one or more schedule contracts, is an item peculiar to one manufacturer. SAP cloud hosting and support services are required for the configuration of existing SAP software products being used in the Navy ERP lifecycle refresh. Navy has utilized SAP products for more than 10 years and has invested over $2 billion dollars in SAP software, maintenance, training, and enterprise operations. Given the existing SAP infrastructure, the new SAP products to be installed as part of this effort are essential for Navy ERP to support Navy’s evolving business needs. In addition, support services provided by any other manufacturer would not meet the Government’s service requirement and would not be authorized by SAP as it is a proprietary platform. SAP Public Services Inc. and its authorized service providers are the only companies that are certified and have the required training and expertise to provide specialized information technology support services on SAP software modules.

4. Determination of Fair and Reasonable Cost.

GSA has already determined the prices of supplies and fixed-price services, and rates for services offered at hourly rates, under schedule contracts to be fair and reasonable. In accordance with FAR 8.404 (d) DEVIATION, GSA’s determination does not relieve the ordering activity contracting officer from the responsibility of making a determination of fair and reasonable pricing for individual orders, BPAs, and orders under BPAs, using the proposal analysis techniques at 15.404-1. This requirement will be solicited among the DoD ESI BPA holders for SAP Public Services Inc. ESI BPAs offer additional discounts on GSA’s negotiated price lists. The Government anticipates, through competition among the DoD ESI BPA holders, the ability to make a fair and reasonable determination based on adequate competition.

5. Description of (market) survey/contracts considered.

In accordance with DFARS 208.7402, departments and agencies shall fulfill requirements for commercial software and related services in accordance with the DoD ESI. ESI promotes the use of

(b)(5) enterprise software agreements with contractors that allow DoD to obtain favorable terms and pricing for commercial software and related services. The DoD ESI was reviewed and it was determined that the three ESI BPA holders for SAP Public Services Inc., Advantaged Solutions Inc., offer the SAP cloud hosting and professional information technology support services on their ESI BPAs against their GSA Schedules. The specifics for each of these contracts are outlined below. No other vendors on this ESI vehicle offer services that meet the Navy’s requirements for this effort as this effort requires proprietary data.

SAP Public Services Inc.

DoD ESI BPA Holders

Business Type NAICS Code 518210

Advantaged Solutions, Inc.

Cage Code: 37NY3 1300 Pennsylvania Ave., NW Suite 700 Washington, DC 20004-3024 GSA Schedule: GS-35F-0926R DoD ESI BPA #: N00104-08-A-ZF42

Large Business

6. Any other Supporting Facts

PMW 220 has limited the support services (scope) of this effort to only those services required to initiate the cloud services and install the unique SAP software components. All other services required to test, migrate, and cut over customers from the current Navy ERP solution to the refreshed solution are to be provided using contract services acquired through full and open competition via NAVSUP BSC and SSC- ATLANTIC. Support services for this part of the migration effort (cloud services and installation) is exclusive to setup and installation of the SAP system in the cloud and is estimated at $6M per year ($18M total) – whereas the support services to be acquired via Navy ERP Service Providers (NAVSUP BSC and SSC-ATLANTIC) under other, competitive actions is estimated at ~$20M per year ($60M total). PMW 220 and its service providers have proactively and aggressively constrained the scope of this effort to maximize competition for the overall Navy ERP Tech Refresh initiative. The best value determination will be made by the Contracting Officer for the order.

(b)(6)

(b)(6) (b)(6)

(b)(6)

(b)(6)

(b)(6)