r_JA 12-25 DPS Bridge Contract.pdf

JUSTIFICATION FOR AN EXCEPTION TO FAIR OPPORTUNITY

Defense Personal Property S)'3tem (DPS)

I. CO~CTINGAcnyiTY

United States Transportation Command, Directorate of Acquisition, DPO Support Division (USTRANSCOM!fCAQ-D), 508 Scott Drive, Scott AFB, IL 62225.

2. NATURE ANPIOR DESCRIPTION OF THE ACTION BEING APPRQYED

USTRANSCOM!fCAQ Joint Program Management Office (JPMO) for Household Goods Systems (HHGS) requires continued operations, sustainment, and software development support for the Defense Personal Property System (DPS). At this point in time and explained herein below, only the existing contractor, System Research and Applications (SRA), has the unique and specialized skills required at the level of quality to complete DPS Increment ll. Approved by Office of the Under Secretary of Defense in 2007, DPS Increment II (formerly Phase II) consists of several functional capabilities to improve personal property shipments such as Short-Fuse Awards, Special Solicitations, Personally Procured Moves (PPM), Local Moves, Volume Moves, One-Time-Only (OTO), Boat One-Time-Only (BOTO), and Mobile Home One-Time-Only (MOTO).

The resultant contract will include both firm-fixed price and cost reimbursable tasks. The Government anticipates utilizing DITCO's Encore II multiple award IDIQ contract

3. DESCR!PTION OF SERVICES REOUJRED TO MEET THE AGENCY'S NEEDS

DPS is a web-based system managing personal property shipments for the DOD in support of the Defense Personal Property Program (DP3), a Service member quality of life program. Each year, the DOD is responsible for moving and storing approximately 500,000 to 600,000 household goods (HHG) shipments at a cost of over $2.2B. DOD is the single largest customer in the personal property shipping industry representing approximately 15% of all domestic and international moves.

DOD personal property shipments involve a complex logistical scenario including: I) determining member and employee household goods shipment entitlements established by the Joint Federal Travel Regulations (JFTR) and Joint Travel Regulations (JTR) Volume II; 2) managing the HHG shipment from counseling to delivery; 3) qualifYing carriers to perform DOD shipments; 4) soliciting rates for domestic and international shipments; 5) counseling Service members and DOD civilian personnel; 6) evaluating Transportation Service Provider's (TSP) performance; and 7) paying invoices, computing excess costs, and settling claims. System operational availability worldwide is required twenty-four

(24) hours a day, seven (7) days a week, and 365 days a year.

The following DPS Increment II capabilities were completed during Fiscal Years (FY) I ()..II: Short Fuse Awards, initial capabilities for Special Solicitations, PPM, Local Moves, and Volume Moves.

The remaining Increment II capabilities are: OTO, BOTO, MOTO, and completion of Special Solicitations functionality. The following Services' mandated requirements must be completed prior to the FY13 peak season (May- August): Storage-In-Transit (SIT) Warehousing and SIT Selection.

Furthermore, regulatory and business rules changes may require updates to the existing DPS system.

Three COTS-product upgrades must also be implemented during the next 18 months to resolve security vulnerabilities necessary to maintain DPS' authority to operate. The products approaching end of life include: Interactive Voice Recognition (JVR), Manugistics, and Seibel Customer Relationship Management (CRM). These products must be configured specifically to support DPS applications.

The total estimated value of this acquisition is for 18 months of performance.

4. IDENTIFICATION OF THE EXCEPTION TO FAIR OPPORTUNITY AND SUPPORTING

RATIONALE. INCLUDING A DEMONS!RATION THAT THE PROPOSED CONTRACTOR'S

UNIQUE QUALIFICATIONS OR THE NATURE OF THE ACOUISmON REO VIRES USE OF THE ExcEPTION CITED

FAR 16.505(b)(2)(i)(B), only one awardee is capable of providing the services required at the level of quality required because the services ordered are unique or highly specialized.

Prior to the 2011 personal property shipment peak season, DPS experienced unforeseen system performance and network issues. These issues--screen freezes, lock-ups, bandwidth constraints, and core errors--impeded the Service members' ability to request personal property moves and submit claims. Moreover, the TSPs' ability to accept offered shipments was negatively impacted. After considerable research and collaboration between DISA, the Services, and the program office, these network capacity and system issues were resolved. These events, outside of the control of this agency, caused all scheduled functional enhancements, maintenance releases, and technology upgrades related to Increment II to be put on hold from May through August 2011. As a result, Increment ll was delayed 12 months from the original implementation schedule. Due to this delay, the remaining period of performance on the existing task order (HC! 028-08-D-2026-6S01) was insufficient to complete the scheduled Increment II capabilities. At this time, the Government's assumption was that the remaining Increment II capabilities were a severable task from the existing, developed baseline. Therefore, these planned capabilities were withheld from SRA to protect the competitive nature of the follow-on acquisition and effectively stopped development of the remaining Increment II capabilities in August 20 II leaving Increment II incomplete.

On 9 June 20 II, a draft Request for Proposal (RFP) was sent to Encore II prime contractors as a part of the market research for an intended competition for the DPS operations, sustainment and development requirement. The Performance Work Statement (PWS) attached to the RFP included the remaining Increment II capabilities, Increment III capabilities, system sustainment, and technical upgrades. On 28 July 2011, further market research was conducted in the form of a pre-solicitation conference with 53 industry partners in attendance. The Government gave an overview ofDP3, explained DPS functionality, presented an overview of the PWS tasks, and responded to industry questions and comments. The conference resulted in a majority of industry attendees identifying the need to provide detailed technical data including comprehensive design characteristics to properly craft a software development approach. As industry's questions were researched, it became apparent the Government's initial assumption regarding severability of the remaining Increment II capabilities was incorrect. Underlying software dependencies and level of detail necessary for industry to prepare a responsive and competitive proposal revealed that the remaining Increment II capabilities were a non-severable effort. This market research reinforced the need for comprehensive documentation of a completed DPS Increment II software baseline to establish a fair and competitive environment for the Increment III solicitation.

Due to system instabilities created by the drastically elevated system usage, the available window to introduce software code and product upgrades into the Production system is limited to periods outside of the "Peak Season" timeframe from May-August and the qualifications and rate filing/best value scoring processes held in January-February. These events drive a unique schedule constraint not recognized in other software programs and restricts the Government to two (2) windows of opportunity (60-day and 120-day) to introduce changes to the Production environment.

A bridge contract of 18 months is necessary to complete the remaining Increment II capabilities. As explained above, the Government was 12 months behind schedule in August 20 II for Increment II development due to the reasons stated. Also, as stated above, the Government halted development in August 2011 with two months of scheduled development remaining (August- September), ultimately causing a 14 month delay in development of the remaining Increment II requirements. Presently the Government and SRA are working on a software release to stabilize the DPS baseline in response to the unforeseen system performance and network issues addressed above prior to continuing with the remaining Increment II capabilities development. This release is planned for completion and production implementation in the 2nd quarter of FY 12. There is insufficient time remaining on the present task order after implementation of this release to re-enter Increment II development. The Government will re-enter and complete Increment II development through a bridge contract with SRA of 18 months, I April2012 through 30 September2013. Increment II software development is projected to be completed in July 2013 (16 months from April2012); however, the Government must delay implementation into the Production environment by 2 months due to the constraint of not introducing new software code into Production during peak season as explained above. Therefore, implementation and the Government's full assessment (4 weeks of test) oflncrement II will not be completed until September 2013. Furthermore, a 2-month transition period (August- September 20 13) is also I?lanned within the 18-month bridge contract to support uninterrupted system operations.

SRA, as the current and sole developer of Increment II capabilities possesses the requisite knowledge of the DPS application code, COTS customized code, and interface code. This level of knowledge is necessary to fully comprehend the complex interactions within the DPS architecture without which would result in an unacceptable delay.

Furthermore, a substantial duplication of cost to the Government is not expected to be recovered through competition. The inherent complexity of the Increment II code, integration of custom code and COTS applications with the databases, system configurations, interface dependencies, business rules, and process flows would require a new developer to spend an unacceptable amount of time analyzing DPS's software code, configuration items, and architecture to be able to successfully develop the remaining Increment II capabilities, Services' mandated requirements, and technology upgrades. The Government estimates that a contractor would require no less than 6 months to adequately analyze and learn a system as complex as DPS in order to properly begin modifying system capabilities required by Increment II requirements and associated upgrades. The estimated ramp-up cost to complete the remaining Increment II capabilities, Services • mandated requirements, and technology upgrades are at least in labor cost for a -person development team for

(See Note).

Notwithstanding this duplication of costs, the delays in development and integration of new coding would result in unacceptable delays to the completion of Increment II. The amount of release testing.

regression testing. and retesting required if a new developer's code was introduced in the midst of Increment II development would be unacceptable and create an unnecessary level of risk to the system and greatly hazard the successful completion of the DP3 mission.

The DPS program requires the completion of the remaining Increment II capabilities, special solicitations, SIT and the associated technical upgrades for the following salient characteristics and reasons.

• Functionality is required for compliance with Congressional requirements and DOD travel regulatory requirements

• Timely execution in implementation of required functionality in a software code base with high complexity o Concurrent integration oflncrement II capability with the security-directed update of COTS products due to end of life of the present COTS products to meet Information Assurance requirements

The remaining Increment)) functionality represents approximately 8,000 movements per year that are not being implemented in accordance with Congressional and DOD entitlement directives to acquire services on both a competitive and best value basis.

The Increment II functionality, Services' mandated requirements, and technology upgrades require a combination of significant code development across multiple modules, revision of adoption code associated with the primary COTS integration product (Manugistics ), and extensive regression testing. Independent evaluations of the DPS development contractor's software code by a Federally Funded Research and Development Center (FFRDC) and Government Engineering activities identified that the DPS custom code has both high complexity and minimal software code descriptions in many of the modules and functions that require adaptation to incorporate the new functionality, requirements, and COTS product upgrades. This has created the environment where the current development contractor team's inherent knowledge of the code is critical to assure a successful deployment by 30 Sep2013.

The Increment II capabilities are built upon Manugistics, a third-party COTS application. The COTS product is a Transportation Industry upper quadrant (best of breed) commercial application used to process high volume rate solicitations and related transportation rate tiling and management processes. This COTS application has required the development of extensive adaption code (glue code) in order to integrate its functionality, data tables and interactions with the rest of the DPS core software code. The current development contractor's intimate knowledge of the software code and associated interactions is deemed essential due to the complexities associated with the current adapted code to incorporate the updated Manugistics application.

Note: The ost estimate is based on a person team with labor hours using a average labor hour rate. The average labor rate is based on Encore II IDIQ labor rates and applicable labor categories for software development; reference Enclosure 8, Independent Government Cost Estimate (IGCE) Base Year 5 at the following website:

http://www.ditco.disa.millhqlcontracts/encorllguide.asp.

5. DETERMINATION BY THE CONTRACTING OFFICER !HAT THE ANJICIPATED

COSTS wm. BE FAIR AND REASQNABLE

The Government plans to issue a task order to SRA utilizing DITCO's competed Encore II multiple:

award IDIQ contract. The Contracting Officer will utilize various methods of price analysis such as· comparison to historical pricing, commercial price lists, Encore IDIQ rates, and the Independent Government Cost Estimate (IGCE). In addition, the JPMO will provide a thorough technical review of the labor hours and skill mix proposed by SRA for both the fixed-price and cost reimbursable effort. Based on this approach, the Contracting Officer anticipates that a fair and reasonable price will be obtained.

6. ANY OTHER FACTS SUPPORTING THE JUSTIFICATION

As a key defense business system impacting the Services' quality of life, DPS receives Congressional-level oversight from both the Senate and House Armed Services Committees. The program office provides annual updates regarding DP3 and the implementation of the DPS capabilities. Delays in expanding DPS functionality does not support the DOD's primary focus of DPS which is improved quality oflife for the warfighter.

7. A STATEMENT OF THE ACTIONS. IF ANY. THE AGENCY MAY TAKE TO REMOVE

OR OVERCOME ANY BARRIERS THAT LED TO THE EXCEPTION TO FAIR

OPPORTUNITY BEFORE ANY SUBSEQUENT ACOUISWON FOR THE SERVICES IS

MADE

Upon completion of the IS-month contract, the Increment II software baseline will be complete and issues of non-severability for this requirement will be resolved. The programmed Increment Ill effort is severable because it includes an independent, modular development of new capabilities to be built upon a redesigned, more supportable and secure architecture. A complete Increment II software baseline and severable Increment III requirements coupled with the availability of necessary documentation identified by Industry will facilitate a fair and competitive environment for the Increment III solicitation.

8. CONTRACTING OFFICER'S CERTIFICATION

I certify that the data supporting the recommended use of exception to fair opportunity is accurate and complete to the best of my knowledge and belief.

EVELYN M. BliUER Contracting Officer l.;t!J.aQ.QO II

DATE

9. TECHNICAL AND REQUIREMENTS PERSONNEL CERTIFICATION.

I certify that the data supporting the recommended use of exception to fair opportunity is accurate and complete to the best of my knowledge and belief.

Program Director, JPMO Household Goods Systems and Deputy Program Executive Officer

DATE

CONTRACTING ACTIVITY: United States Transportation Command, Directorate of Acquisition, DPO Support Division, USTRANSCOM!rCAQ-D, 508 Scott Dr, Scott AFB IL 62225-5357

PROGRAM/PROJECT: Defense Personal Property System (DPS}

AUTHORITY: FAR 16.505(b}(2}(iXB}

ESTIMATED CONTRACT COST:

REVIEW AND APPROVAL:

GAIL T. EVANS

Acting Chief, DPO Support Di\rmcm

ROTH

Office of the Staff Judge Advocate

Chief, Business Support and Policy Division

Competition Advocate

APPROVED:

DATE '

1 s-oe"c 1/

DATE

DATE

DATE

I have determined that the circumstances in FAR 16.505(b}(2}(i}(B) apply to this order.

'2.~~;2 i~ ~c_ /( Head of the Contracting Activity