Justification_and_Approval_SPO_Renewal_Final_Signed_Redacted.pdf

DEPARTMENT OF THE NAVY

NAVSUP FLEET LOGISTICS CENTER NORFOLK

1968 GILBERT STREET SUITE 600

NORFOLK VA 23511-3392

IN REPLY REFER

TO

Control Number: 18113

JUSTIFICATION AND APPROVAL FOR USE OF OTHER THAN FULL AND OPEN

COMPETITION

SPO Renewal

1. IDENTIFICATION OF REQUESTING AGENCY AND CONTRACTING ACTIVITY:

Requiring Activity: Naval Supply Systems Command (NAVSUP) Business Systems Center (BSC) 5450 Carlisle Pike, Building 409 Mechanicsburg, PA 17055-0787

Contracting Activity: NAVSUP Fleet Logistics Center (FLC) Norfolk 5450 Carlisle Pike, Building 407 Mechanicsburg, PA 17055-0787

2. NATURE AND/OR DESCRIPTION OF ACTION:

This acquisition is conducted under the authority of the Multiple Award Schedule Program (Title III of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 251, et seq.) and Title 40 U.S.C.

501, Services for Executive Agencies). This is a Limited Source Justification for the negotiation and issuance of a competitive acquisition to be awarded to a reseller of the large business identified in paragraph 3 below. The placement of a firm, fixed price order is anticipated.

3. DESCRIPTION OF REQUIRED SUPPLIES/SERVICES:

The proposed acquisition is to obtain Commercial-Off-The-Shelf (COTS) Service Planning and Optimization (SPO)/ Servigistics Service Parts Management (SSPM) as detailed in the table below:

; Period of Performance:

5/1/18 – 4/30/19. Fiscal Year 2018 Navy Working Capital (NWC) funds will be utilized.

Manufacturer: PTC 140 Kendrick St Needham, MA 02494 Manufacturer POC: Kerstin Messer

(781) 370-5124

4. IDENTIFICATION OF STATUTORY AUTHORITY:

The statutory authority permitting other than full and open competition is 41 USC 1901(e)(2) - a sole source acquisition under the authority of the test program for certain commercial items, as implemented by FAR 13.501(a).

OEM Part Number

Description Quantity Price

MNT-94076F-T2 Servigistics Service Parts Management

12 mo.

5. RATIONALE JUSTIFYING USE OF CITED STATUTORY AUTHORITY:

PTC Inc. is the software publisher of the SPO/ SSPM software for which maintenance is required. SPO is a web-based suite of advanced inventory planning, forecasting and execution solutions that gives companies the ability to manage and monitor inventory levels of mission-critical materials. It meets the demanding requirement of the service parts planning process, reduces operating costs and provides global, real-time visibility throughout the extended service supply chain. The first commercial software to optimize assets in a multi-echelon service supply chain network, it supports collaborative planning, forecasting and execution processes by linking with a company's enterprise and customer relationship management systems.

The Navy has invested years of testing and evaluating Commercial Off-the-Shelf (COTS) systems like Manugistics, TFD Solutions and PTC/MCA Solutions’ SPO to determine if any could accommodate our readiness based requirements using US Navy Multi-Indenture, Multi-Echelon (MIME) optimization techniques. Only PTC’s SPO software demonstrated readiness performance comparable to Navy legacy models while reducing inventory investment costs.

The current Navy owned software is supporting approximately $20B in inventory investments annually.

A change to another optimization model without a large vetting effort would place the Navy at high risk for increase carrying cost to maintain the same level of readiness. Just a one percent increase in the budget for the same level of readiness would result in a $200M year over year sparing increase cost to the Navy.

Procurement of software and licensing for an alternative solution would be cost prohibitive and unacceptable under current budget constraints. Therefore, award to any other software manufacturer would result in substantial duplication of cost to the Government and is not expected to be recovered through competition and would result in unacceptable delays in fulfilling the agency’s requirements.

6. DESCRIPTION OF EFFORTS MADE TO SOLICIT OFFERS FROM AS MANY OFFERORS

AS PRACTICABLE:

The commercial marketplace was reviewed by NAVSUP BSC 4 December 2017 and 16 January 2018 to ascertain if the requirement meets the FAR definition of a Commercial Item, in accordance with FAR Part

10. Review of the DoD ESI (GSA SmartBuy), GSA Advantage/eLibrary, System for Award Management (SAM), and Original Equipment Manager/vendor website, revealed PTC is the sole reseller for this Servigistics Service Parts Management. This Servigistics product is a Legacy product that can only be executed direct through PTC as the Sole proprietor. Resellers do not have pricing rights to this particular product and therefore cannot quote this.

The proposed acquisition must also be procured on a brand name basis. Pursuant to FAR 6.302-1(c), an acquisition that uses a brand name description or other purchase description to specify a particular brand name, product, or feature of a product, peculiar to one manufacturer does not provide for full and open competition regardless of the number of sources solicited. It shall be justified and approved in accordance with FAR 6.303 and 6.304.

Use of PTC brand name support is essential to the Government’s requirement, thereby precluding consideration of a product manufactured by another company. This requirement is commercial in nature and has been sold, leased, or licensed to the general public. As the developer of the software and the owner of the source code, PTC is the only manufacture authorized to provide the critical functionality support, improvements and fixes to the software through upgrades and new version releases. Procuring an alternative product would result in substantially unacceptable cost and delay, impacting operational mission critical systems.

PTC only offers this product via open market. Procuring alternative product would result in substantially unacceptable cost and delay, impacting operational mission critical systems. The placement of a firm fixed price contract in accordance with the policies and procedures at FAR 13.5 will be used.

7. DETERMINATION OF FAIR AND REASONABLE COST:

The Contracting Officer will determine the prices proposed for the services covered by this J&A to be fair and reasonable using, but not limited to, the techniques listed in FAR 15.404-1(b)(2).

Service Planning and Optimization (SPO) v8.0 is in DADMS under the Logistics FAM and has a status of approved; LDA 4/30/18. DADMS ID 84012 applies. N00367 and N00383 are listed as a stakeholder.

This acquisition has been approved for procurement via ITSR 00023-002-17311and Navy Information Technology Approval System (NAV-ITAS) Information Technology Procurement Request (ITPR) 190761.

8. ACTIONS TAKEN TO REMOVE BARRIERS TO FUTURE COMPETITION:

Requiring activity reviews each requirement on a case by case basis. For the reasons listed above, the requiring activity has determined that no other software presents a viable alternative at this time.

9. CONTRACTING POINT OF CONTACT:

The point of contact at NAVSUP FLC Norfolk’s Mechanicsburg Site is Mark Stumpo, at DSN 430-6459, commercial 717-605-6459 or by e-mail at, mark.stumpo@navy.mil mailto:mark.stumpo@navy.mil