Redacted IBM Middleware J and A FAR 16.5 FINAL_Redacted.pdf

IBM MIDDLEWARE SOFTWARE AND MAINTENANCE CONTROL # VA-26-00039630

JUSTIFICATION FOR AN EXCEPTION TO FAIR OPPORTUNITY

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

2. Description of Action: The proposed action is the issuance of a Firm-Fixed Price (FFP) delivery order under the National Aeronautics Space Administration (NASA) Solutions for Enterprise Wide Procurement (SEWP) V Governmentwide Acquisition Contract (GWAC) for the procurement of brand name, IBM Sterling Business to Business (B2B) Integration Suite Middleware software licenses, maintenance, support, and Health Checks remote engagement.

3. Description of the Supplies or Services: The Department of Veterans Affairs (VA) Financial Services Center (FSC) requires continued licensing for approximately 11,200 licenses, maintenance, and support for its existing IBM Sterling B2B Integration Suite Middleware environment, which supports mission-critical financial, healthcare, and procurement transaction processing, electronic data interchange (EDI), and secure integration with external partners, while providing a highly customizable mapping logic, a high-volume EDI/B2B engine, and real-time processing to meet unique VA requirements. Health checks remote engagement will evaluate the already establish Electronic Commerce Branch (ECB) MiddleWare Platform and provide expert feedback on deployment, installation and configuration.

VA anticipates up to thirty percent (30%) growth in the middleware environment during the contract life-cycle as additional enterprise systems, integrations, and external trading partners are on-boarded. To support this anticipated growth, the Government may acquire additional middleware licenses of the same type currently deployed within the environment. Additional licensing capacity may be acquired in increments of 100 Processor Value Unit (PVU). Optional Contract Line Item Numbers (CLINs) are to purchase additional new MiddleWare software licenses with maintenance and support.

The requirement includes IBM Software Subscription and Support (S&S) for all licenses.

IBM S&S provides access to IBM-issued security patches and vulnerability remediation updates, version upgrades and product enhancements, defect resolution and bug fixes, 8x5 technical support and access to IBM support resources and ongoing entitlement to licensed functionality under IBM’s Processor Value Unit licensing model. These services are required to maintain system security, stability, and operational continuity of the existing IBM middleware environment. VA requires Health Checks remote engagement to evaluate the best practices and architecture for development of IBM software solutions.

The requirement includes renewal and support of IBM software products, which correspond to the currently deployed IBM middleware components within the VA FSC environment. The anticipated period of performance is a 12-month base period with two, 12-month option periods. The total estimated value of the proposed action is approximately inclusive of all options.

4. Statutory Authority: Pursuant to Federal Acquisition Regulation (FAR) Overhaul VA Deviation 16.507-7(a), the following brand name requirement is being justified and approved as an exception to fair opportunity under the statutory authority of Section 41 U.S.C. 4106(c)(2) as implemented by FAR Overhaul VA Deviation 16.507-6(b)(2), 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.”

5. Rationale Supporting Use of Authority Cited Above: The VA FSC operates a fully deployed IBM Sterling B2B Integration Suite supporting mission-critical financial transaction processing and electronic data exchange across internal VA systems and external partners.

This platform has been fully implemented, tested, and integrated into VA operations and is actively supporting production workloads. The environment is built on IBM-specific middleware components, including IBM B2B Gateway, IBM Transformation Extender (ITX), and IBM Secure Proxy, which are tightly integrated and dependent on IBM’s proprietary architecture. IBM is the Original Equipment Manufacturer (OEM) and works directly with authorized resellers and is the only entity authorized to provide S&S, including proprietary patches, updates, version releases, defect resolution, and access to IBM engineering support. These services are proprietary to IBM and can only be provided or distributed by authorized resellers. Only IBM or its authorized resellers can provide validated updates, patches, and licensing entitlements required to maintain system operability, security, and compliance. The IBM Sterling platform utilizes proprietary transformation engines, mapping tools, and configuration frameworks that are not interoperable with other middleware platforms. The existing VA environment includes IBM-specific transformation maps and partner integrations that cannot be reused or migrated to alternative platforms without complete redevelopment.

Replacement of the IBM platform would require full system re-architecture, redevelopment of all transformation mappings, reconfiguration of all external partner interfaces, and complete testing and validation of the new environment. Such an effort would introduce significant cost, schedule delays, and operational risk to mission-critical financial systems. The IBM Sterling B2B Integration Suite is essential to the Government’s requirements and if the Government could not use the IBM Sterling B2B Integration Suite and had to research another contractor that could integrate with VA systems, the estimated development process would take approximately three years and $13M to secure a suitable product. Additionally, the Government would need to start the development process from the beginning and build a new system to ensure it integrates properly with VA systems. IBM Sterling Middleware Platform is needed to modernize the solution which enables VA to process medical claims, provide pharmacy and insurance verification and adjudicate, process, and collect revenue for the VA

Page 2 of where over one million veterans and their families received healthcare at VA Facilities. If the Government cannot use IBM Sterling B2B Integration Suite then there is a risk with delays to processing Veterans healthcare claims. IBM consolidates legacy systems into a single platform that achieves a modernization solution for processing medical healthcare claims. Continuing to use software that has reached its end of life increases the VA exposure to cybersecurity threats, puts Protected Health Information (PHI) at risk, and may result in non-compliance with regulatory standards.

The requirement cannot be modified to enhance competition without fundamentally changing the Government’s need to support the existing IBM middleware environment.

Failure to procure IBM Software Subscription and Support would result in loss of security updates, increased system vulnerability, potential system instability, and disruption to mission-critical financial transaction processing systems. The Government would be adversely impacted through increased operational risk, potential system downtime, and degradation of services supporting financial operations and external partner integrations.

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 met all of the Government’s requirements. However, limited competition is available among authorized resellers for IBM licenses, maintenance, and support. In accordance with FAR Overhaul VA Deviation 16.507-7(c)(1)(ii) this justification will be provided with the solicitation to all appropriate NASA SEWP V GWAC holders. Furthermore, in accordance with FAR Overhaul VA Deviation 5.301and 16.507-7(c)(1)(i), 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 identify alternative middleware platforms and assess opportunities to increase competition in future acquisitions.

8. Market Research: The Government conducted market research to identify alternative middleware and integration platforms capable of meeting the VA’s requirements.

This research included a review of commercially available enterprise integration platforms. It was discovered that no platforms were deemed capable of supporting data exchange, transformation, and partner connectivity. The Government considered options like Cleo, Mulesoft Anypoint Platform (Mulesoft) and OpenText. Cleo Integration Cloud does not offer complex or deep translation that the VA requires for mapping logic unique to the VA. Mulesoft Anypoint Platform does not natively translate EDI x12 transactions OpenText BizManager acts as a traffic manager without built-in EDI translation or real-time processing capabilities for EDI mapping.

Additionally, migration to any of these alternative platforms would require full redevelopment, reconfiguration, retesting, and potential recertification under VA security requirements, resulting in significant duplication of time and costs as detailed above.

Based on this market research, the Government determined that no alternative product can meet the requirement without unacceptable operational impact and significant cost

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Page 4 of investment. Accordingly, only IBM brand name software can satisfy the Government’s needs.

On March 12, 2026 a Request For Information (RFI) was posted to National Aeronautics and Space Administration (NASA) Solutions for Enterprise-Wide Procurement (SEWP) and Contracting Opportunities which closed on March 19, 2026. Six responses were received from Anzena Systems (Small), PIC’D Group, LLC (Service Disabled Veteran Owned Small Business (SDVOSB)), Joltec LLC DBA as Loudountec (Hubzone, 8(a)), ETSI (Woman Owned Small Business (WOSB)), Tryfacta (WOSB) and V3Gate (SDVOSB). Anzena Systems, PIC’S Group, Tryfacta and ETSI provided capability statements or a quote only and were deemed technically non-responsive. Joltec and V3 Gate were deemed technically responsive. Joltec addressed key EDI specific and Middleware Platform experience with IBM Expert Services and Sterling. V3Gate addressed key EDI specific and Middleware Platform experience to include experience with Transformation Extenders, Sterling Security Proxy and full licensing support. None of the RFI responses received offered any alternative solutions to IBM.

The Contract Specialist conducted additional market research, April 1, 2026, and identified 105 contract holders that are resellers of IBM products and support by utilizing NASA SEWP V Government Wide Acquisition Contract (GWAC) Market Research Tool.

Of these 105 resellers, 27 are verified SDVOSBs, two are Veteran Owned Small Businesses (VOSB), 22 are Woman-Owned Small Businesses, six are HUB Zone Small Business, 23 are Small Businesses and 25 are Large Businesses. Furthermore, NASA SEWP has a dynamic catalog where line items can be added based on customer requests provided that the required item or service is within the scope of NASA SEWP V contract suite and therefore additional competition may be achieved.

The Small Business Administration’s Small Business Search (SBS) database was reviewed for the identification of prospective Service-Disabled Veteran-Owned Small Businesses (SDVOSBs) and Veteran-Owned Small Businesses (VOSBs) under North American Industry Classification System (NAICS) code 541519. The SBS database search yielded 244 SDVOSB and VOSB vendors that could potentially provide the required services under that NAICS code.

9. Other Facts: None.