P03 IBM JA 9-9-24 final1_Redacted.docx

LIMITED-SOURCES JUSTIFICATION

1. Contracting Activity: Department of Veterans Affairs (VA) Office of Procurement, Acquisition, and Logistics Technology Acquisition Center 23 Christopher Way Eatontown, New Jersey 07724

2. Description of Action: This proposed action is for a firm-fixed price sole source task order to International Business Machines (IBM) for the renewal of Multiple Virtual Storage (MVS) software maintenance and licenses. This effort is being conducted under the authority of the Multiple-Award Schedule (MAS) Program and the proposed effort will be awarded under General Services Administration (GSA) MAS contract number GS-35F-110DA to IBM.

3. Description of the Supplies or Services: VA, Office of Information Technology, Infrastructure Operations (IO) requires renewal of IBM MVS software licenses and maintenance for seven (7) software products: CICS Transaction Server for z/OS; Enterprise COBOL for z/OS; ISPF Version 3 for VM/SP; Advanced Workload License Charge for zOS v2 Base & zOS v3; z/OS Resource Management Facility (RMF) v2 & RMF v3; Advanced Workload for z/OS v3 Data Facility Storage Management Subsystem data set services & hierarchical storage manager (DFSMSdsshsm); Advanced Workload for z/OS v3 Data Facility Storage Management Subsystem removable media manager (DFSMSrmm).

Additionally, IO requires software maintenance for eleven (11) perpetually licensed software products: Connect Direct for z/OS; Debug Tool for z/OS; Security Guardium Key Lifecycle Manager (GKLM) for Storage; Security Guardium Key Lifecycle Manager (GKLM) for z/OS; Security zSecure Manager for RACF z/VM; Sterling Gentran for z/OS; z/VM Directory and Facility; z/VM for v7; z/VM; z/VM Resource Access Control Facility (RACF); zMulti-Factor Authentication (zMFA).

Mainframes continue to critical Mainframe requirements.

cyber security software to thwart cyber attacks, seamless and effective user authentication, and quick, reliable and secure communication critical capabilities.

All of the software listed above is currently in use within VA IO. VA also requires additional licenses and maintenance for one (1) product, IBM Sterling Gentran for z/OS of four (4) Value Units (VUs) due to a hardware upgrade from z15 to z16 which requires more capacity, as a result additional licenses are needed. These additional licenses are required since the hardware upgrade to z16 is proprietary to IBM, and these additional licenses must be interoperable with the IBM software that is already Value Unit is the License Metric used by IBM and describes how their licenses are measured.

The MVS software is used for the seamless end-to-end performance monitoring of systems and applications that are supported on the Mainframe. The renewal of IBM FY25 IBM-MVS License & Maintenance

VA-25-00000417

MVS software maintenance and licenses is needed to continue supporting the overall VA network cybersecurity incident response. The MVS software maintenance will consist of software upgrades and updates to include point releases, service releases and security release of applicable software on a quarterly basis and/or within 48 hours in cases in which a high-risk vulnerability fix becomes available.

These software upgrades and updates are necessary for IO to continue successful operation of the existing IBM-based infrastructure which supports existing IO software and Interactive System Productivity Facility (ISPF) software, zSecure Manager software and zMulti-Factor Authentication (zMFA) software remains operational. The proposed mainframe software maintenance is for the following Information Technology (ITCs) locations, including but not limited to Austin and Philadelphia to ensure consistent IO environments as a centralized standard for the ITCs and District data center cybersecurity infrastructure.

The Contractor shall provide one telephone number and/or a Point of Contact for VA to utilize open maintenance support calls. The required full level of service includes 24 hours per day, 7 days per week telephone and online coverage with a two (2) hour response time. All VA support calls will be initiated by the VA designated point of contact. The Contractor shall provide secure connection capabilities for the downloading of software updates and/or the uploading of diagnostic information.

This effort is for the procurement of software licenses and maintenance, for both perpetually licensed software products, and products licensed as a subscription, currently in use within VA. VA also requires additional perpetual licenses and maintenance for one (1) product. The Period of Performance will be October 1, 2024 through September 30, 2025. The total estimated value of the proposed action is

4. Authority: This acquisition is conducted under the authority of the Multiple Award Schedule Program. The specific authority providing for a limited source award is Federal Acquisition Regulation (FAR) 8.405-6(a)(1)(i)(B), Only one source is capable of providing the supplies or services required at the level of quality required because the supplies or services are unique or highly specialized.

5. Rationale Supporting Use of Authority Cited Above: Based on market research as described in Section 8 of this document, it was determined that only one source, IBM, 6710 Rockledge Drive, Bethesda, Maryland 20817-1834 can meet the . MVS software for the seamless monitoring of end-to-end performance of business services. VA requires software maintenance capable of supporting its existing infrastructure protocols and functionality for continued operational availability including upgrades and updates comprised of point releases, service releases of applicable software on a quarterly basis, or within 48 hours in cases where a high-risk vulnerability fix becomes available. IO's current infrastructure and software communicates through MVS source code which is based upon IBM proprietary data and source code.

MVS infrastructure protocols. If changes were made to the underlying IBM source code by anyone other than IBM, significant mistakes could be made which would appropriately monitor its data centers.

source code necessary to develop, configure and implement software updates. IBM does not allow access from outside entities to modify their source code; this can only be done by IBM. The current IBM based infrastructure supports multiple critical VA programs, most notably the Benefits Delivery Network (BDN) which is VA's primary veterans' claims processing, tracking and payment system which tracks and distributes approximately $40 billion in Veterans' entitlements annually. Based on the concerns above, IBM is the only source capable of providing the required MVS software maintenance that meets these unique requirements. Further, no other software products are compatible or interoperable with the IO's existing IBM MVS proprietary database structures, protocols, and software application programming interfaces. Due to these proprietary constraints the use of any other vendor for maintenance would require a complete replacement of the IBM infrastructure currently in place. This replacement is estimated to produce duplicative costs of $800,000 in resource costs alone and approximately $20M to replace existing IBM mainframes. This replacement effort is estimated to require a minimum of 18 months. The cost of replacement and the lost time would include the amount of time necessary for installing a new product in a test environment, testing the product which would be necessary to be replicated for the over 60 applications on the mainframe, and putting the new product into production. These estimates of time and costs are based on previous acquisition history and the estimated duplicative costs would not be recovered through competition. In addition, during this time both products would need to be run simultaneously so that there was no downtime.

negative impact on multiple critical VA programs, including BDN. In return, this could result in the interruption of impact VA's ability to continue reducing the claims processing backlog and would cause potential harm to Veterans who need continued access to care.

Based on extensive market research, as described in Section 8 of this document, it was determined that there is no competition among vendors for the required software maintenance and that IBM is the sole provider of the required IBM software maintenance. Further, the current IO infrastructure is based on existing IBM mainframe hardware and software, and VA requires software and software support compatible with the existing infrastructure protocols and functionality for continued operational availability. For example, the required MVS software maintenance provided under this effort will also allow updates to be communicated to the existing IBM ISPF (Interactive System Productivity Facility) software. Only IBM can provide the necessary software updates because of the propriety source code required to develop and implement software updates. Without access to the proprietary source code, it is not possible to develop the required updates, upgrades, point releases, service releases and security releases. No other source is capable of providing the meet Federal Information System Management Act Nation Institute Standards and Technology 800-53 high system controls and Internal Revenue Service Publication

1075 requirements to ensure Financial Tax Information data, specifically requirements addressing system management, file management, audit controls, change management and incident response. In addition, ISPF works seamlessly with an existing implementation of IBM zSecure software licenses across the VA enterprise. IBM zSecure requires ISPF to function correctly and fully. No other license is compatible with or interoperable with the existing IBM zSecure, proprietary database structures, protocols, and software application programming interfaces.

The IBM brand name MVS software licenses are the only software products that for these existing licenses.

6. Efforts to Obtain Competition: Market research was conducted, details of which are in Section 8 of this justification. This effort did not yield any additional sources that can meet the Government's requirements. There is no competition anticipated for this acquisition. In accordance with FAR 8.405-6(a)(2) this justification will be made publicly available within 14 days of award. Furthermore, in accordance with FAR 8.405-6(b)(3) this justification will be posted with the Request For Quotation.

7. Actions to Increase Competition: The Government will continue to conduct market research to ascertain if there are changes in the marketplace that would enable future actions to be competed. Specifically, the Government will continue to monitor the marketplace to determine whether other brand software could integrate into VA's existing network infrastructure.

8. Market Research: The Government's technical experts conducted market research by reviewing similar software and software maintenance support services in March 2024, to ascertain if there were other software products or software maintenance services that could meet VA's requirements.

Specifically, the Government's technical experts conducted web-based research on software maintenance solutions including Action Message Format, Message Pack, and Alternative Format Service. As a result of the market research, the technical experts confirm implementation is proprietary to IBM. IBM is the only source capable of providing the required software maintenance including required upgrades and updates to the existing IBM MVS software. No other source has the capability of developing and issuing software updates and fixes for IBM MVS software necessary to support the functional requirements stated in Section 5 of this justification.

is compatible and interoperable with the equipment that is currently in use, VA existing Mainframe management software. VA technical experts frequently review industry trade periodicals and conduct online research to determine whether any other brand names of Mainframe management software were currently available to meet this requirement. According to that research, since IBM MVS software is technical experts concluded that VA can only utilize IBM MVS software to add to its existing environment without causing disruptions to existing Mainframe architecture interoperability. As a result of this market research, VA technical experts concluded that only the brand name IBM MVS software is capable of fulfilling VA's Mainframe management software requirements.

Additionally, all other products researched were unable to meet the Government's software requirements or software maintenance requirements necessary to support IO's existing IBM MVS software or avoid the duplicative costs and time as outlined in Section 5 of this justification.

The required software maintenance cannot be purchased through IBM resellers. The Original Equipment Manufacturer, IBM, confirmed in June 2024 that the required MVS software licenses and maintenance is available only through IBM's GSA Multiple Award Schedule contract number GS-35F-110DA.

9. Other Facts: None.

10. Technical and Requirements Certification I certify that the supporting data under my cognizance, which are included in this justification, are accurate and complete to the best of my knowledge and belief.

Date

11. Fair and Reasonable Price Determination: I hereby determine that the proposed contract action will represent the best value to the Government consistent with FAR 8.404(d). GSA has already determined that the prices on the FSS contract are fair and reasonable. Further price analysis, to include an analysis of proposed level of effort and mix of labor, will be conducted and subsequent negotiations held as necessary. Additionally, price discounts will be sought.

12. Procuring Contracting Officer Certification: I certify that this justification is accurate and complete to the best of my knowledge and belief.

Approval

In my role as procuring activity Advocate for Competition, based on the foregoing justification, I hereby approve the renewal of International Business Machines (IBM) Multiple Virtual Storage (MVS) software maintenance, and licenses on an other than fair opportunity basis pursuant to the authority cited in Section 4 above, subject to availability of funds, and provided that the property and services herein described have otherwise been authorized for acquisition.

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