Redacted JA.pdf

DISA Nexus Human Capital Management (HCM) System

CUI

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Controlled By: Defense Information Systems Agency (DISA) Controlled By: SD2 CUI Category: PROCURE Distribution/Dissemination Control: FEDONLY POC: Colin Philben (667)890-3379 colin.e.philben.civ@mail.mil

JUSTIFICATION FOR OTHER THAN FULL AND

OPEN COMPETITION (OTFAOC)

Federal Acquisition Regulation (FAR) Part 6 Justification & Approval (J&A), Supporting Procurements under FAR Part 12, and FAR Part 15

Purchase Request Number: To be determined (TBD) Contract Number: TBD Task/Delivery Order Number: TBD Procurement Title: Defense Information Systems Agency (DISA) Nexus Human Capital Management (HCM) Modernization Estimated Value:

Statutory and Regulatory Authority: 10 U.S.C. 3204(a)(1) (FAR 6.302-1/DFARS 206.302-1)

Justification for OTFAOC Number: JA25-093

Upon the basis of the following justification, I, as the Senior Procurement Executive, hereby approve the use of other than full and open competition of the proposed contractual action pursuant to the authority of 10 U.S.C. 3204(a)(1) (FAR 6.302-1/DFARS 206.302-1)

1. REQUIRING AGENCY AND CONTRACTING ACTIVITY:

Requiring Agency:

DISA, Business System Program Management Office (SD2) 6910 Cooper Avenue Fort Meade, MD 20755

Contracting Activity:

DISA/Defense Information Technology Contracting Organization (DITCO) Joint Enterprise Services Contracting Branch (PS62) 6910 Cooper Avenue Fort Meade, MD 20755

2. NATURE/DESCRIPTION OF ACTION(S):

The purpose of this action is to award a sole source contract to KPMG LLP (known hereafter as KPMG) to provide for continued development, implementation, and sustainment of the DISA Nexus HCM system. The existing DISA Nexus HCM task order, FA701420D0009 / FA701424F0418, was competitively awarded via the Air Force Strategic Transformation Support (AFSTS) multiple-award indefinite delivery / indefinite quantity (ID/IQ) contract vehicle. The AFSTS ID/IQ contract vehicle and task orders issued thereunder were reviewed by the Department of Government Efficiency (DOGE) in early calendar year 2025 and

JA25-093-DISA Nexus Human Capital Management (HCM) System

Page 2 of 9 Pages recommended for termination due to the primary purpose of the ID/IQ contract being for Information Technology (IT) Consulting and Management Services. During the DOGE review, a small subset of task orders executed under the AFSTS ID/IQ contract, including the DISA Nexus HCM Modernization, were approved for continuance via means other than the AFSTS ID/IQ contract which will end on 29 September 2025. The current task order’s base year will also end on 29 September 2025. To continue the development, implementation, and sustainment of the DISA Nexus HCM system’s transformative capabilities without substantial duplication of cost and risk to schedule, a new sole source contract to KPMG is necessary.

The resulting contract will be Firm-Fixed-Price (FFP) and the base period will be funded by Fiscal Year 2025 Operations and Maintenance funds. The period of performance will be as follows:

Base Period: 30 September 2025 – 29 September 2026 Option Period 1: 30 September 2026 – 29 September 2027 Option Period 2: 30 September 2027 – 29 September 2028 Option Period 3: 30 September 2028 – 29 September 2029 Option Period 4: 30 September 2029 – 29 September 2030

3. DESCRIPTION OF SUPPLIES/SERVICES:

The DISA Manpower and Personnel Directorate (J1) requires a modernized HCM platform for a multitude of reasons, such as to streamline the hiring process and to ensure workforce readiness.

The existing system, the Corporate Management Information System (CMIS), is disjointed, inefficient, and often requires manual HCM processes and procedures to complete daily tasks.

The technologies on which the CMIS platform is constructed are outdated and reaching end-of-life thus necessitating substantial manual processes, “swivel chair” integration, and the use of spreadsheets to execute basic HCM processes. Full automation of HCM tasks is required to promote the efficiency and effectiveness of DISA. CMIS is also limited in capabilities due to the existing technology that drives the web front-end being outdated and not capable of providing the functionality that a demanding HCM environment requires. Additionally, the antiquated technologies utilized by CMIS increase the risk of vulnerabilities.

In Fiscal Year 2024, DISA, via Interagency Assisted Acquisition with the Department of the Air Force, competed and awarded a task order under the AFSTS ID/IQ contract for the development, implementation, and sustainment of a modernized HCM IT platform referred to as DISA Nexus HCM. Based on the recommendation of DOGE, the AFSTS ID/IQ contract and task orders thereunder will be terminated and/or not have option periods exercised at the conclusion of the current period of performance. The existing task order for DISA Nexus HCM will therefore expire on 29 September 2025. Continuity of services is required to continue the development of the DISA Nexus HCM capability to transform DISA’s HCM IT platform and facilitate the retirement of the legacy CMIS. By the conclusion of the base period of the existing task order, the initial increment of the DISA Nexus HCM will be implemented in the operational environment. A break in service would not only delay further development of this transformational capability but also would result in an operational system supporting nearly 20,000 users in DISA being unsupported.

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DISA Nexus HCM will significantly streamline how DISA conducts Human Resources (HR) functions, leveraging modern commercially available HCM tools. The DISA Nexus HCM solution is critical to numerous DISA, Department of Defense (DoD), and United States Government initiatives, including, but not limited to: Workforce Next, Office of Management and Budget’s (OMB) Cloud Smart Strategy, the DoD’s Software Modernization Strategy, and Executive Order (EO) 14170 “Reforming the Federal Hiring Process and Restoring Merit to Government Service.” DISA Nexus HCM will further support the retirement of DISA’s legacy 25-year-old Government-off-the-Shelf (GOTS) CMIS HCM system.

Transitioning to a modern HCM tool built upon commercially available technologies will yield substantial benefits to DISA. The solution, as designed, uses ServiceNow as the primary integration for the User Interface / User Experience for employees and will support communication with the workforce, HR case management, knowledge management, self-help libraries, employee/supervisor requests and workflows, and onboarding/offboarding actions.

DISA Nexus HCM will also include a data layer to automate data interfaces with dozens of HR-related systems across DoD and the Federal Government, and the commercially available Workday Platform for core HCM activities, including HR Data, talent acquisition, and manpower.

The delivery schedule for Fully Operational Capability (FOC) of the DISA Nexus HCM solution extends to November 2029. This includes 70 development sprints, 12 program increments, and eight functional releases. By the conclusion of the base period of the existing task order, KPMG will have completed 17 development sprints, two program increments (with a third in-process and projected for completion in October 2025), and one release. The total value obligated by DISA to-date in support of these development sprints, program increments, and functional releases is . Additionally, DISA has obligated nearly under other contract vehicles for ancillary products and services necessary to implement the DISA Nexus HCM system, to include procurement of ServiceNow licenses and the data layer.

4. IDENTIFICATION OF STATUTORY AUTHORITY:

(a) Only one responsible source and no other supplies or services will satisfy agency requirements, 10 U.S.C. 3204(a)(1) (FAR 6.302-1/DFARS 206.302-1).

5. DEMONSTRATION OF CONTRACTOR’S UNIQUE QUALIFICATIONS:

The existing task order for DISA Nexus HCM was competitively awarded under the AFSTS ID/IQ contract to KPMG in September 2024. As the designer of the DISA Nexus HCM system, KPMG possesses a deep subject matter expertise within the HR domain as well as highly specialized technical knowledge of component systems. While other vendors possess the expertise to implement large-scale HCM platforms such as DISA Nexus, KPMG’s solution, which has been under development for nearly one year with the initial increment of the system to be deployed by the end of September 2025, leverages an architecture that brings together best-of-breed platforms (e.g., Workday, ServiceNow and a Data Layer) to provide an integrated solution that meets the complex HR requirements of DISA. KPMG has a team of experienced HCM

Page 4 of 9 Pages professionals who are experts in configuration and implementation of modern, commercially available Software-as-a-Service / Platform as a Service-based HCM systems, to include data management and user support. KPMG has assigned ServiceNow Certified Master Architects to the Nexus program—an extremely rare certification with only approximately 250 such Certified Master Architects in the world.

(a) Description of Events.

DISA/J1’s requirement for a modernized HCM system was identified in November 2022.

Following market research and acquisition planning activities, it was determined that an Interagency Assisted Acquisition (IAA), with the Secretary of the Air Force (SAF) serving as the Contracting Activity, was in the best interest of the Government. Pursuant to the execution of the IAA, SAF competed and awarded a task order to KPMG under the AFSTS ID/IQ contract. The task order was awarded for , for a one-year base period and two, one-year option periods for the development, implementation, and sustainment of the DISA Nexus HCM platform. The base period of performance is 30 September 2024 – 29 September 2025.

Beginning in late January 2025, the DOGE engaged with the SAF Contracting Activity, reviewing the AFSTS ID/IQ contract and all task orders executed thereunder for IT Consulting and Management Services. Pursuant to DOGE’s review, it was recommended that the AFSTS ID/IQ contract and task orders thereunder will be terminated and/or not have option periods exercised at the conclusion of the current period of performance. The existing task order for DISA Nexus HCM will therefore expire on 29 September 2025 in the midst of development activities. Continuity of services is required to continue the development of the DISA Nexus HCM capability to transform DISA’s HCM IT platform and facilitate the retirement of the legacy CMIS.

Additionally, prior to the conclusion of the base period of the existing task order, the initial increment of the DISA Nexus HCM will be implemented in the operational environment. Therefore, a break in service would not only delay further development of this transformational capability but also would result in an operational system supporting nearly 20,000 users in DISA being unsupported.

Despite the DOGE recommendation for the termination of the AFSTS ID/IQ contract and task orders thereunder, the DISA Program Executive Office – Services and DOGE representatives agreed that the DISA Nexus HCM procurement was necessary and justified for the delivery of a usable end item – a modernized HCM IT platform, and not IT Consulting and Management Services. However, since the AFSTS ID/IQ contract will not have subsequent option periods exercised after 29 September 2025, it is necessary to initiate a sole source contract between DISA and KPMG to provide for the uninterrupted continuation of the development, implementation, and sustainment of the DISA Nexus HCM system. The new sole source contract must be awarded prior to 30 September 2025 to prevent a break in support of what will be an operational system as of 29 July 2025, when the first increment is deployed.

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(b) Justification.

(1) Minimum Government Requirements.

The minimum Government requirement is an operational HCM IT platform. By the end of this contract, the Nexus system should facilitate the sunset or retirement of the vast majority of CMIS functionality. The required award date of 30 September 2025 is critical to ensure uninterrupted development, implementation, and sustainment of the DISA Nexus HCM system, maintain the schedule to achieve FOC by November 2029, and ultimately decommission the legacy CMIS system.

DISA’s HCM IT platform transformation aligns to the following authorities, directives, laws, and policies:

1. EO 14210 of February 11, 2025 (Implementing the President's “Department of Government Efficiency” Workforce Optimization Initiative)

2. EO 14170 of January 20, 2025 (Reforming the Federal Hiring Process and

Restoring Merit to Government Service)

3. EO 14271, April 15 (Ensuring Commercial, Cost-Effective Solutions in

Federal Contracts)

4. Human Resources Modernization and Reform Act

5. Federal Information Security Management Act

6. Cybersecurity and Infrastructure Security Agency Standards

7. The Federal Cloud Computing Strategy

8. OMB Memorandum M-15-14 and Circular A-130

9. Office of Personnel Management's Digital Transformation Initiatives

10. DISA Director’s priorities of: (1) Readiness, (2) Campaigning, (3)

Continuous Modernization, and (4) Establish Lethality

11. DISA’s “Workforce Next” Strategy for 2025 to 2029

Continued development of the DISA Nexus HCM system requires highly specialized subject matter experts with both domain expertise and technical knowledge of the DISA Nexus HCM component software systems, the architecture, configurations, and interfaces. For example, a certified ServiceNow System Architect is required to ensure the components are appropriately configured to avoid the introduction of technical debt. The ServiceNow platform utilizes a centralized repository known as a Configuration Management Database (CMDB). Introducing customizations without understanding how the CMDB and platform work can lead to technical debt such as unnecessary complexity, or lack of formality, thus requiring significant rework.

Furthermore, because DISA’s ServiceNow platform is shared with other capabilities, the risk of improper configuration changes adversely impacting existing and fielded functionalities would be substantially increased absent the highly specialized and certified System Architect.

(2) Proposed Sole Source Contractor.

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KPMG LLC (UEI: MAA3SBSDQVM1)

8350 Broad Street, Suite 900 McLean, VA 22102-5150

KPMG was awarded the existing task order on a competitive basis based on their proposed best of breed commercial solution, in-depth knowledge, and previous implementations of HCM solutions. KPMG’s solution is robust and is capable of meeting DISA’s complex HCM requirements. The awarded solution leverages commercially available software in alignment with various EOs and DoD guidance and offers a multi-level approach to solve the problems inherent in DISA’s current CMIS solution. ServiceNow will replace an aging and disjointed user interface / user experience. Workday will further enhance HR specific processes, workflows, and reporting. The data layer will provide the storage, transport, and exchange layer to communicate with 39 internal and external entities and systems, such as the Defense Civilian Personnel Data System (DCPDS), Military Departments’ HCM systems and Defense Finance Accounting Service (DFAS) systems.

(3) Discussion Regarding Cause of the Sole Source Situation.

The cause of the sole source situation is detailed in paragraph 5(a) Description of Events.

(4) Impact.

Failure to award a new sole source contract to KPMG to continue the development, implementation, and sustainment of the DISA Nexus HCM solution would have the following impacts:

• Duplication of Cost: Re-competing this effort would result in FOC for DISA

Nexus HCM being delayed by one year or more (i.e., from November 2029 to November 2030). This delay would necessitate an additional year of operations and sustainment costs for the legacy CMIS system, which is currently annually.

• Lack of Efficiency: Delaying FOC by one year or more would perpetuate the use of the antiquated CMIS system necessitating that DISA personnel endure inefficient manual processes. This has a direct impact to DISA’s workforce readiness.

• Increased Likelihood of Vulnerabilities: Delayed FOC would also increase the likelihood and severity of vulnerabilities within the end-of-life solutions that comprise CMIS. The prevention of and response to identified vulnerabilities associated with the legacy system is labor and cost prohibitive.

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• Delayed Adherence to Established Guidance and Directives: Delayed FOC would impair DISA’s ability to implement and meet the requirements of the above referenced laws; EOs; and federal, DoD and DISA policy and strategies such as streamlining / accelerating hiring, upskilling the workforce, readiness, campaigning, and continuous modernization. The slippage would impact the execution of DISA’s Workforce Next Strategy.

• Administrative Burden: Competing this requirement would introduce substantial administrative burden for Government resources associated with contract planning, solicitation, evaluation, negotiation, and award. These activities were previously accomplished under the AFSTS task order award, which was competitive in nature, and for which this task order serves as a replacement due to the termination of the AFSTS ID/IQ contract as recommended by DOGE.

• Technical Debt: Re-competing this effort would potentially result in award to a new contractor with a divergent technical and management approach that would negate the approximately that DISA has invested in the Nexus HCM solution since September 2024, including costs associated with system design, software procurement, and ancillary services. Further, continuation of this transformative effort to deliver a modern HCM IT Platform requires specialized subject matter experts with both HR domain expertise and highly specialized technical knowledge of component software systems, configurations, and interfaces. It would take a new vendor months to a year to obtain the level of knowledge necessary to effectively continue the development of the DISA Nexus HCM solution. The Nexus solution that KPMG proposed and which was determined to be the best value to the Government under the current task order was designed by KPMG and would require significant if not full reengineering should this task order have to be recompeted. The amount of time it would take to reengineer a solution would significantly set DISA back a year or more and could result in duplication in costs of the current investment of approximately .

6. CONTRACT OPPORTUNITIES ANNOUNCEMENT/POTENTIAL SOURCES:

This effort required a notice of intent to sole source which was published to SAM.gov on 25 June 2025 and responses were due by 11 July 2025. One response was received from Collaboralink, doing business as Groundswell, which was reviewed and considered. Groundswell’s response focused on the sprint execution; however, the work performed to-date is not solely sprints, it includes the architecture, sprints, the program increments, and functional releases.

7. DETERMINATION OF FAIR AND REASONABLE COST:

The current task order was competitively awarded under the AFSTS ID/IQ contract on a FFP basis. At time of award, the prices, inclusive of all options, were deemed reasonable based on adequate price competition. The Contracting Officer intends to leverage historical pricing as a basis for determining fair and reasonable pricing under this sole source effort. However, the

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Contracting Officer may employ any proposal analysis techniques at FAR 15.404-1 as deemed appropriate in reaching a fair and reasonable determination.

8. MARKET RESEARCH:

Market research identified that KPMG is not the only vendor capable of developing, implementing, and sustaining a modernized HCM IT Platform. However, for the reasons cited in paragraph 5 of this justification, KPMG is the only source that can continue to execute the requirement within the existing cost and schedule parameters without duplication of costs, additional sustainment costs for the legacy CMIS system, and achieving a FOC by November 2029.

9. ANY OTHER SUPPORTING FACTS:

None.

10. LISTING OF INTERESTED SOURCES:

When the original market research was conducted for the competitive award on AFSTS, five sources expressed interest in this requirement. An intent to sole source this requirement was posted on 25 June 2025 to 11 July 2025 in conjunction with the sources sought notice. One response was received as detailed in paragraph 6 of this justification.

11. ACTIONS THE AGENCY MAY TAKE TO REMOVE OR OVERCOME BARRIERS

THAT LED TO THE EXCEPTION TO FULL AND OPEN COMPETITION:

(a) Procurement History. The current task order, FA701420D0009 / FA701424F0418, was solicited via full and open competition under the AFSTS ID/IQ and awarded to KPMG.

The current task order’s option period is no longer available to be executed due to the DOGE recommendation to terminate and/or cancel the AFSTS ID/IQ contract vehicle and all subordinate task orders.

(b) Efforts to Remove Barriers to Competition. Once the DISA Nexus HCM solution reaches FOC in November 2029, a competitive procurement will be initiated for the sustainment of the platform.

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TECHNICAL CERTIFICATION: I certify that the supporting data under my cognizance which are included in the J&A are accurate and complete to the best of my knowledge and belief.

NAME: SIGNATURE/DATE: See separate signature page

TITLE/ORGANIZATION: Contracting Officer Representative / DISA

PHONE:

REQUIREMENTS CERTIFICATION: I certify that the supporting data under my cognizance which are included in the J&A are accurate and complete to the best of my knowledge and belief.

NAME: SIGNATURE/DATE: See separate signature page

TITLE/ORGANIZATION: Program Manager / DISA

CONTRACTING OFFICER CERTIFICATION: I certify that this justification is accurate and complete to the best of my knowledge and belief.

NAME: SIGNATURE/DATE: See separate signature page

TITLE/ORGANIZATION: Chief Joint Enterprise Services Contracting Branch, PS62

HEAD OF THE CONTRACTING ACTIVITY (HCA) APPROVAL: I have reviewed this justification and find it to be accurate and complete to the best of my knowledge and belief. This review serves as approval.

NAME: SIGNATURE/DATE: See separate signature page

TITLE/ORGANIZATION: Head of the Contracting Activity

ALL QUESTIONS REGARDING THIS JUSTIFICATION ARE TO BE REFERRED TO

Sebrina A. Lewis, (667) 891-4461, sebrina.a.lewis.civ@mail.mil.