Annex 1 - Justification and Approval New Orleans_1_Redacted.pdf

AT&T is the Incumbent Local Exchange Carrier (ILEC) and owns the infrastructure and switches supporting the Navy services. An ILEC is a telephone company that provided local service prior to the Telecommunications Act of 1996, which owns most of the local loops and facilities in a serving area. AT&T owns the critical circuits operational for the Navy, base customers, fire department, and Anti-terrorism and Force Protection (ATFP). AT&T is the current provider of emergency 911 trunks at the Regional Dispatch Center (RDC) and owns the outside cable plant that feeds the cable to the BCO main switch facilities in order for the Government to access dial tone and any circuits provided. AT&T is the only vendor that has a point of presence at these locations. The vendor must have the resources (i.e. facilities, technicians, equipment) readily available for telecommunications emergency requirements, 24 hours a day, 7 days a week, 365 days a year.

The subject requirement supports approximately 10,000 Lines for NAS/JRB New Orleans customers, 7000 lines for NIWC, and 3000 lines for MARFORRES. Fleet, fighter and family activities consisting of service members from the Navy, Army, Air Force, Marines, National Guard, Coast Guard and Homeland Security would immediately see negative impacts to their mission if connectivity services are significantly disrupted or discontinued. Loss of telephone services would result in the termination of all LEC services lost during the delay and would significantly hinder communications across the base. All military, civilian, and contractors would be negatively impacted, as cell phone services would be overwhelmed if attempting to support regular communications historically supported by contract services. It is expected that life safety issues would arise, as the Parish 911 Call Center has not been tested to handle overflow of that magnitude. Base Security would also be impacted as their communication plan incorporates use of the current services. Furthermore, the customer anticipates significant, negative funding impacts would likely result due to Request for Equitable Adjustment (REA) based on AT&T’s terms, as the implications of communications loss would force the Government to enter into a less favorable contract. It is not possible to calculate the alternative cost or risk associated with termination of the service, but it is widely considered exponential in terms of both cost and risk when compared to the terms, and cost (monthly/annual rate) of the current contract. Furthermore, the costs and terms of the current contract are known and planned, whereas entering into an REA with AT&T has great potential to result is unknown risk and cost.

Award to any new Contractor would require significant infrastructure investment and maintenance of dual infrastructure while transitioning from the incumbent Contract to the new Contractor. The dual network support would be cost prohibitive to the Government due to risk involving uncertainty of time span for the provider to fully test and cut-over of required services. Considering the substantial cost to replace the entire base infrastructure from analog to VoIP, award to any other Contractor than AT&T would require that Contractor to lease telephone circuits, phone trunk lines, and switches from AT&T as the duplication costs would be prohibitive.

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

The Contract Specialist took various methods to obtain market research specifically for the requirement at NAS New Orleans and other bases supported by LEC services. The following represents a combination of market research including results from other recent, and similar LEC requirements under NCTAMS LANT, NAS Key West, NAS Jacksonville, NAS Gulfport, NAS

Kingsville. The requirement for Voice Messaging Services was not available from AbilityOne, including NIB/Source America, Federal Prison Industries (FPI)/UNICOR, and NASA Solutions for Enterprise-Wide Procurement (SEWP).

A query of the Small Business Dynamics website revealed 16 small businesses under keyword “WIRED TELECOMMUNICATIONS”; North American Industry Classification System (NAICS) – 517311 – Wired Telecommunications. An email was sent to each small business to determine if they could fulfill requirement with no responses received.

Market research discussions with commercial vendors relayed increased difficulties supporting outdated phone line technology, specifically analog copper lines, citing rising costs from carriers for end-of-life devices. Many vendors offered a VoIP alternate or partnering with the current service provider. Though partnering with AT&T was mentioned, no details were provided to describe the proposed partnering, nor examples of past partnering with AT&T. Nor did vendors address capabilities or technical competencies related to the tasks outlined in draft PWS. They could not confirm whether they could perform all services required. In each instance, some services would require partnering with the infrastructure owner AT&T. Though vendors recommended conversion to VoIP services, for them to support the base infrastructure, a modern fiber solution would be required. For a VoIP solution, a significant number of media converters and installation of Category (CAT 6) cabling to include VoIP for all buildings without CAT 6 cabling would be required, which is not requested by the PWS.

The Government was informed by the incumbent that AT&T does not allow third parties to operate AT&T owned equipment due to proprietary concerns and a small business or subcontractor are considered third parties. AT&T affirmatively stated the services required by the Performance Work Statement (PWS) fall entirely within the expertise, capabilities and capacity of their company.

An additional query of the D2D Defense Category Management website was conducted on 14 Feb 2024 under NAICS 517111 and PSC Code DG11. The results identified three (3) Tier 0 contracts under Common Spend Navy Category and twelve (12) contracts under All Contracting Departments with Tier 0 contracts. Based on the results of this market research, there are no potential strategic contracts available, and it has been determined that the Government’s needs cannot be met through the use of the common category solutions.

Market research indicated, competitive businesses, if allowed, would be required to partner services, with well over 51% being performed by AT&T, or similar large service carrier with the resources to seamlessly support all telephone services, resulting in significate pass-through costs to the Government. A partial set-aside is not possible, since the incumbent fully performs all telephone services, infrastructure and proprietary data unique to the facility.

NCTAMS LANT as the technical expert of the infrastructure, have made known all services are performed by the incumbent and no portion of the work is managed, nor able to be described by NCTAMS LANT, for partial set-aside.

Based on the replies from industry and market research, we have no confidence nor reasonable expectations of obtaining offers from two or more responsible small business concerns based on the specific nature of our customer’s requirement and how AT&T owns the intellectual property that we further do not expect to receive fair market prices, quality, and delivery from GSA, Small Business Dynamic Search, and DON Category Management Office. Therefore, the CS recommends soliciting the requirement as Unrestricted Sole Source to AT&T Corporation.

NCTAMS LANT recently indicated they have begun market research and are preparing an Industry Day to determine the feasibility and cost of a VoIP solution. That effort will closely follow the current buy, and if determined more beneficial to the Government, has the potential to become a better solution.

7. Determination of Fair and Reasonable Cost. The Contracting Officer (KO) anticipates issuing a contract modification to cover the required services at prices established in the base contract. As such, the KO has determined the anticipated cost to the Government of the supplies/services covered by this J&A will be fair and reasonable.

8. Actions to Remove Barriers to Future Competition.

This customer is currently in the early stages of market research for VoIP Solution. Based on the timeline provided, it will be at least two (2) years to consider replacing the outdated ISDN copper-based wires and analog switches infrastructure before installing a new VoIP Solution.

A follow-on contract will immediately follow this action and will include a twelve month base period with options to continue coverage of required services until a VoIP solution is available.