P03 JA for Pega SW Maint Redacted.pdf

JUSTIFICATION

FOR AN EXCEPTION TO FAIR OPPORTUNITY

1. Contracting Activity: Department of Veterans Affairs (VA) Office of Procurement Acquisition and Logistics

Technology Acquisition Center 1701 Directors Blvd

Austin, TX 78744

2. Description of Action: The proposed action is for a Firm-Fixed-Price task order, issued under the National Aeronautics and Space Administration (NASA) Solutions for Enterprise-Wide Procurement (SEWP) V, Governmentwide Acquisition Contract (GWAC), to procure brand name PEGA Systems Business Process Manager (BPM), Automatic Event Service (AES), Business Intelligence Exchange (BIX) software maintenance support. Additionally, the action will also procure brand name PEGA Customer Process Manager (CPM) software and software maintenance support.

3. Description of the Supplies or Services: VA Financial Services Center (FSC) requires brand name PEGA Systems software maintenance support services. The PEGA BPM system processes medical claim data and ensures that claims by vendors are processed in an efficient manner. The PEGA AES is an automatic error detecting system that examines PEGA custom developed software implementations and either makes corrections autonomously or suggest corrections to the software engineers managing the software. The BIX software licenses are used to extract data from the PEGA software so it can be examined by statics big data software to aide in process improvement in the call centers. Both the AES and the BIX software are part of the PEGA Robotics software suite. FSC is currently using a version of the PEGA software to ensure data compliance with HIPPA guidelines. PEGA CPM is one of the products in PEGA’s CRM suite of solutions. CPM is a software that is used to manage customer cases in the FSC Help Desk. Specifically, the software assists Customer service representatives (CSRs) in processing customer service inquires and requests from initiation through resolution. Maintenance will consist of software patches, updates, 8x5 phone support, and access to the technical support online information. The period of performance shall include a six-month base period from May 1, 2021- October 31, 2021; plus, one six-month option period. In addition, there are four optional tasks that will allow VA-FSC to obtain additional perpetual CPM software licenses in increments of either 50 or 100 users with associated maintenance for each quantity to support increasing volume of calls placed to CSRs.

These optional tasks can be exercised at any point throughout the base or optional period. The total estimated value of the proposed action is , which is inclusive of option period and optional tasks.

4. Statutory Authority: The statutory authority permitting an exception to fair opportunity is Section 41 U.S.C. 4106(c)(2) as implemented by the Federal Acquisition Regulation (FAR) Paragraph 16.505(b)(2)(i)(B), entitled “Only one awardee is capable of providing the supplies or services required at the level of quality required because the supplies or services ordered are unique or highly specialized.”

PEGA Systems Maintenance Services VA-21-00053162

5. Rationale Supporting Use of Authority Cited Above: Based on market research, as described in paragraph 8 of this document, it was determined that limited competition is viable among resellers for the PEGA software maintenance support as described in section 3 of this justification. The current IO infrastructure is based only on existing PEGA perpetual software licenses. Only PEGA or a reseller can provide the required software maintenance support because of the propriety source code required to develop and implement software updates and upgrades. No other source can provide the required software maintenance that meets VA's unique functional requirements.

Without access to this code, maintenance support services provided on the software would not be properly configured and render the software inoperable. Additionally, VA requires the procurement of brand name PEGA CPM software as only brand name PEGA software can integrate into the existing infrastructure. Procurement of a new software product, rather than expanding through use of brand name PEGA software and renewing maintenance of existing licenses, would not be compatible with the existing infrastructure. VA requires PEGA software to be interoperable and compatible with the existing infrastructure protocols and functionality for continued operational availability. Use of any other brand name software would not communicate with the existing infrastructure due to the proprietary data constraints. PEGA Systems maintenance services are the only software maintenance services that meet VA’s requirement. PEGA Systems software and support is required in order to maintain compatibility with existing IT infrastructure currently installed and operating within the VA-FSC’s environment. VA-FSC has a substantial investment in its current network and IT infrastructure. If the PEGA products were abandoned in favor of a different product, FSC would need to completely replace the existing infrastructure in place.

Specifically, replacing this infrastructure would result extensive delays and duplicated costs of over $15 million that would not be recovered through competition. This estimate includes the cost of replacement software licenses, custom coded applications that use the PEGA Platform that would need to be replaced, and custom business processes that have been developed around the PEGA infrastructure. Without the acquisition of the required brand name PEGA software or software maintenance there could be a direct impact on the prompt payment of community care claims and invoices processed through the Invoice Payment Processing System. Both systems are built on PEGA software and if there was an issue with these systems and no maintenance the FSC would not have a way to fix the software. This could cause the Veterans to not receive care in the community due to vendors not being paid promptly and cause VA invoices to not be processed.

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. However, the undersigned VA technical representative determined that limited competition is available among authorized resellers. In accordance with FAR 16.505(a)(4)(iii)(A)(1), this justification will be provided with the solicitation to all appropriate NASA SEWP V GWAC holders.

Furthermore, in accordance with FAR 5.301, 16.505(b)(2)(ii)(D), and 16.505(a)(4)(iii), the award notice for this action will be synopsized on the Contract Opportunities website and this justification will be made publicly available within 14 days of award.

7. Actions to Increase Competition: The Government will continue to conduct market research to ascertain if there are changes in the market place that would enable future actions to be competed.

8. Market Research: VA’s technical experts conducted market research in March 2021 to ascertain if other products would satisfy VA’s requirements. Market research was conducted via the NASA SEWP V GWAC website, General Services Administration Advantage, and an independent website search using the Google search engine.

Specifically, the Government's technical experts reviewed similar software products available from , . Although there are products with similar capabilities, the market research determined that no other products are compatible with the existing software already in place. Additionally, the market research confirmed that the source code required to issue the updates is proprietary, and no other vendor has access to PEGA’s proprietary source code required to maintain IO’s existing PEGA deployed infrastructure. PEGA or its authorized reseller are the only sources capable of providing the required maintenance and additional licenses. Based on the above, only brand name PEGA software and software maintenance meets all the Government's requirements.

The Contract Specialist (CS) conducted market research in April 2021 by using the SEWP market research tools. Based on this market research, the CS found resellers under SEWP capable of meeting the full requirement.

9. Other Facts: None

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