Redacted JA for ITES-3H-Ext 3 Approved for Release on SAM.pdf

Control No: 23-047

C n ol

Department of Army Class Justification and Approval for Other than

Full and Open Competition

1. Contracting Activity: U.S. Army Contracting Command – Rock Island (ACC- RI), Rock Island Arsenal, Rock Island, IL 61299-8000.

2. Description of Action: Product Lead Computer Hardware Enterprise Software and Solutions (PL CHESS) requests firm-fixed-price (FFP) bridge modifications extending the 17 ITES-3H Multiple Award Indefinite Delivery Indefinite Quantity (MA IDIQ) contract vehicles. ACC-RI projects award of the bridge modifications in August 2023. During the extension, ITES-3H Government users, through de-centralized ordering procedures, will obligate as appropriate, based on the nature or purpose of the purchase and the requiring activity’s mission. Program Executive Officer, Enterprise Information Systems (PEO EIS) approved an acquisition plan in accordance with (IAW) Defense Federal Acquisition Regulation Supplement (DFARS) 207.103(d)(i)(B) on 07 December 2011 for the ITES-3H MA IDIQ contracts. An amendment to the plan was required and was approved by PEO EIS Officer on 30 June 2023.

The MA IDIQ ITES-3H contracts expire on 22 August 2023. Efforts to conduct a competitive follow-on are underway, but for reasons described in paragraph 5, the new contracts will not be in place prior to expiration of the current contracts. This action for bridge modifications will ensure continuation of the Army-mandated standardized Information Technology (IT) hardware ordering capability while the Government continues the competitive follow-on

The Government did not compete the requirement prior to this action, under the authority of Federal Acquisition Regulation (FAR) 6.302-1, as supported by justification and approval (J&A) control number 21-097. That J&A’s paragraph 7, Actions to Increase Competition, states, “The follow-on ITES-4H acquisition will be a fully competitive acquisition. Award is anticipated during the third quarter of FY23”.

The Government is continuing to conduct a competitive source selection for ITES-4H but has encountered delays as further described in paragraph 5. The Government currently anticipates awarding the ITES-4H contracts in .

The proposed period of performance extension, , is 23 August 2023 through . The proposed contract modification will include a 21-month base period of performance, PL CHESS calculates a ceiling increase, , based on the Independent Government Estimate (IGE).

The requested ceiling amount increase utilizes IGE data. The IGE’s forecasted burn rate uses ITES-3H historical ordering data, noting historical fiscal year fourth-quarter ordering surges, and utilizing an 8.3% yearly Consumer Price Index each year. The following table summarizes the requested ordering period extensions and associated ceiling increase.

Approval of this justification will extend the ordering periods of the following competitively awarded ITES-3H FFP MA IDIQ contracts:

3. Description of Supplies/Services: ITES-3H provides a full range of state-of-the art IT equipment, software, and related incidental services. The ITES-3H scope will remain the same during the extension and encompasses all requirements for IT, including hardware, software, and related integration services for providing end-to-end solutions, which are major components of major systems and other highly specialized equipment.

Items include servers, desktops, notebooks, workstations, thin clients, storage systems, networking equipment (including wireless), network printers, product ancillaries (including equipment cabinets, racks, and mounts), peripherals (including monitors), network cabling products, video teleconferencing products, standalone displays (including plasma screens and high definition television), scanners, everything over internet protocol products, communications devices, power devices, software, basic warranty and warranty options, and other related accessories and options. Services are incidental to the hardware buys and include system configuration and integration, physical site analysis, installation and relocation, high availability configuration, warranty, and legacy equipment maintenance. ITES-3H maximizes the Government’s shared purchase power by allowing agencies to leverage volume discounts; helps agencies operate more efficiently by reducing administrative costs and contract duplication; and expands the sharing of Government-wide buying data, leading to better-informed business decisions.

This extension will allow for continued contract management of the current ITES-3H products and related incidental services, as outlined in the current ITES-3H vendor catalogs, with no revision. The actual products and related incidental services ordered during the extension will not be known until each individual delivery order is competed under ITES-3H, as it is the ordering agency level where precise requirements and associated funding is determined, as described in section 2.

4. Authority Cited: Title 10 United States Code (U.S.C.) Section 3204(a)(1), as implemented by FAR 6.302-1, Only one responsible source and no other supplies or services will satisfy agency requirements.

5. Reason for Authority Cited: As described at FAR 6.302-1(a)(2)(ii)(B), supplies may be deemed to be available only from the original source in the case of a follow-on contract for the continued development or production of a major system or highly specialized equipment, including major components thereof, when it is likely that award to any other source would result in unacceptable delays in fulfilling the agency’s requirements.

a. This extension is necessary due to delays in the competitive acquisition process based on the large volume of industry questions, issuance of solicitation amendments, solicitation closure delays, and pre-award protest reconciliation.

ACC-RI previously forecasted the ITES-4H final solicitation (released on 25 August 2021) to close on 21 October 2021; however, due to a large volume of industry questions and solicitation amendments required, the solicitation closed a year later on 25 October 2022.

Prior to the solicitation closing, the Government received an agency-level protest

b. The Government requires a bridge extension of the ITES-3H contracts to avoid any lapse in ordering capability between the ITES-3H expiration and the ITES-4H award, . The Government received

For historical reference, ITES-3H’s timeline for evaluation to award was

The requested period of performance extension covers contract actions associated with

The ITES-4H milestones provided below are as concise as possible

c. Other than the ITES-3H contract holders, there are no other alternative sources that meet the Army’s unique standards, security requirements, and enterprise architecture requirements. The Army Federal Acquisition Regulation Supplement (AFARS) Part 5139, Acquisition of Information Technology, identifies the CHESS program as the “mandatory source for commercial IT purchases,” and Army Regulation (AR) 25-1, Army

d. There is insufficient time to conduct a separate competition and source selection for an interim MA IDIQ contract in time to provide the Army’s immediate IT requirements.

e. PL CHESS continuously monitors and manages ITES-3H to identify new/emerging technologies, responds to security threats, and implements new DoD and Army guidance on IT management in the portfolio of IT. ITES-3H is the primary Army source for the procurement of networking and security solutions in support of global military missions and critical daily information management sustainment activities.

6. Efforts to Obtain Competition: ACC-RI will publish the notices required by FAR 5.201, Synopses of Proposed Contract Actions. Under the ITES-3H extension, the Government will achieve effective competition through delivery order competition. IAW FAR 16.505(b), DFARS 216.505-70, and AFARS 5116.505, Ordering, the ITES-3H contract holders will be afforded a fair opportunity to compete for delivery orders unless an exception is justified IAW FAR 16.505(b)(2).

7. Actions to Increase Competition: The follow-on ITES-4H acquisition is a full and open competitive acquisition. The Government anticipates awarding ITES-4H

8. Market Research: The PL CHESS office is constantly engaged in researching IT hardware markets in order to identify current industry trends and better pricing.

Representatives of CHESS continually perform market research through meetings with industry and other Government agencies, Requests for Information (RFIs), market surveys, and attendance at various conferences and forums. The CHESS team also has quarterly calls with representatives from Gartner regarding trends in Government procurement. Gartner is a technological research and consulting firm contracted with the Government to provide PL CHESS with an understanding of recent completed IT procurements and up-to-date information on IT marketplace trends. As such, the CHESS team gains independent advice and recommendations to assure its portfolio of contracts meet the Army’s IT requirements.

In October 2022, the CHESS team reviewed the market by surveying the following alternate IT hardware/software contract vehicles: GSA, NASA SEWP V, CIO-CS, 2GIT, Federal Aviation Administration’s (FAA) Strategic Sourcing for the Acquisition of Various Equipment and Supplies (SAVES), and Next Generation Enterprise Network-R End User Hardware (NGEN-R-EUHW). The market research concluded that using an alternate contract vehicle for the Army’s ITES-3H requirements exposes unacceptable costs and IT security risks to the Army. In summary, utilizing alternate contracts are not viable alternatives for the following reasons:

a. No single alternate contract vehicle provides all the features of the ITES-3H contract.

b. Contract Usage Fees – All alternate contract vehicles open to Army users have usage fees that the schedule holder pays to the administering agency, as detailed in paragraph 5c.

c. Army-Unique IT Specifications – No alternate contract vehicle (at the base contract level) incorporates the Army-unique specifications, thereby increasing unnecessary IT security risk and contract administration burden. In contrast, ITES-3H contracts provide UNIX and Non-UNIX based servers, desktops, notebooks, etc. that meet the Army-unique standards and baseline configurations for the commonly used computing environment with the Army enterprise infrastructure and support the LandWarNet which is the Army’s managed network connecting to the DoDIN-A at the contract level. These unique standards, baseline configurations, and support of the LandWarNet are dictated in Army technical papers, Army regulations, and other Army regulatory guidance such as U.S. Army NETCOM Technical Authority for Implementation of Army End-User Computing Environment Version 7.0, 13 March 2020. Army users must negotiate Army standard baseline configurations and requirements that support the Army’s LandWarNet at the order level on other contracts. Further, such endeavors to utilize other vehicles will introduce significant risks to the Army, in the areas of cost, compliance, security, asset visibility, supply chain risk management as well as terms and conditions.

d. Army Reporting – Using alternate contracts removes the ability to permit the implementation of the unified contracting and vendor management strategy across the Department of Army. The Army Office of the Chief Information Officer loses asset visibility in how much the Army spends on IT when alternate contract vehicles are used.

The loss of data prevents the Army from leveraging economies of scale when determining future requirements.

Based on the discussion in paragraph 5 above, only the incumbent contract holders can meet the Army’s needs without unacceptable delays, higher costs, and higher security risks. Issuing an RFI or Sources Sought Notice (SSN) for this bridge extension will provide no additional benefit to industry or the Government nor is it necessary to put potential offerors on notice. Issuing an RFI or SSN would be a duplication of effort and would yield the same results identified earlier. The Senior Contracting Official/Senior Executive Service approved a waiver to the requirement to post an RFI or SSN as required by DFARS 206.302-1(d) and DFARS Procedures, Guidance and Information 206.302-1(d) on 31 May 2023.

9. Interested Sources: To date, no other sources have expressed a written interest in this requirement.

10. Other Facts:

a. Procurement History:

Contract Usage Fee Compliant with Army Standards

Asset Visibility

Viable Alternative

GSA IT

Schedule 70

Yes No No No

NASA

SEWP V

Yes No No No

CIO-CS Yes No No No

2GIT Yes No No No

FAA SAVES N/A (Not open to Army) No No No

NGEN-R

EUHW

N/A (Not open to Army) No No No

Contract Vehicle/ Contract Type

Contract Number

Award Date

Competitively Awarded (Y/N)

Awardee/ Contractor

Current Award Expires

Dollar Value

TDP

(Y/N)

ITES-2H

FFP

Contracts

2/09/2007 Y Six Vendors

6/23/2016 N

ITES-3H

FFP

Contracts (par. 2)

2/22/2016 Y 17 Vendors (par. 2)

2/21/2021 N

ITES-3H

(extension)

FFP

Contracts (par. 2)

2/22/2021 N J&A 21-009

FAR 6.302-1

17 Vendors (par. 2)

4/21/2022 N

ITES-3H

(extension)

FFP

Contracts (par. 2)

4/22/2022 N J&A 21-097

FAR 6.302-1

17 Vendors (par. 2)

8/22/2023 N

b. Class J&A: This class J&A will cover all future actions, each of which will include a statement of applicability memorandum for record stating the action is within the scope of the class J&A in each contract file.