Redacted JandA.pdf

Controlled Unclassified Information (CUI) Control No:

Contractor: Veranox Corporation Supply/Service: Development, operation, support, and maintenance of a Roll-On-Roll-Off

(RORO) Processing, Exploitation and Dissemination (PED)

CUI

JUSTIFICATION REVIEW DOCUMENT

FAR PART 6 JUSTIFICATION AND APPROVAL FOR OTHER THAN

FULL AND OPEN COMPETITION

Programs/Equipment: The purpose of this effort is to further develop, operate, support, and maintain the Roll-On-Roll-Off (RORO) Processing, Exploitation and Dissemination (PED) tactical edge processing system in support of Army Research Laboratory (ARL) Programs that are themselves intended to advance the state-of-the-art in their respective areas of concentration.

Authority: 10 U.S.C. 3204(a)(1) as implemented by FAR Part 6.302-1 -- Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.

Amount:

Prepared by:

Contracting Officer:

Technical:

Requirements:

Controlled by: Department of the Army Controlled by:

CUI Category: General Procurement and Acquisition Distribution/Dissemination Control:

Contractor: Veranox Corporation Supply/Service: Development, operation, support, and maintenance of a Roll-On-Roll-

Off (RORO) Processing, Exploitation and Dissemination (PED)

This action is a follow-on to contract W911QX19C0014 which was not competed and utilized authority 10 U.S.C. 3406 as implemented by FAR 6.302-1, Only one responsible source and no other supplies or services will satisfy agency requirements.

Contract W911QX-19-C-0014 is a follow-on to contract W911QX-18-C-0034 which was not competed and utilized authority 10 U.S.C. 3406 as implemented by FAR 6.302-1, Only one responsible source and no other supplies or services will satisfy agency requirements.

Actions to Increase Competition of the previous justification, stated:

“ARL will continue to survey the marketplace to increase competition by attending conferences and exhibitions and also conducting searches on the internet. ARL will further continue to interact with other Government researchers through open discussions with industry experts. However, the specialized knowledge obtained through performing work in the specific programs referenced earlier inhibit other vendors due to the increase in anticipated costs as well as schedule risks associated with a new contractor being awarded this effort as the work to be performed is a continuation and progression of work which initially started under contract BAA W911QX-13-C-0165 in 2013. As the sole developer of the system, Veranox is the only source with the necessary technical knowledge to support the Government’s requirements without any delays as stated in Section 5. It is anticipated that as current program concludes and new programs emerge, the pool of potential vendors will increase due to the development of new requirements which will support a possible competitive award in the future. To date, no other vendor has been identified that has the ability to provide the required research and development services for the RORO system.

During the original BAA contract, the Contractor developed a baseline hardware and software configuration, as well as Network Design and Backup and Recovery/Imaging Guide, which were provided to the Government. This information was updated on the current contract with Network Diagrams of the updated systems, RORO Configuration Test Plan and Results, Updated System Backups, RMF Documentation package, and Monthly and Final Reports. The Government holds Unlimited Rights to all information generated by the previous contracts. This information will be used to evaluate proposed strategies and processes for future RORO PED system procurement actions.

ARL has continued to monitor developments with PED systems, but as of yet has not located any which are substantially comparable to the system currently in use. This is

Contractor: Veranox Corporation

Structured Query Language (SQL) Server, Cisco data center class switches (NX-OS), and the Massachusetts Institute of Technology’s (MIT) APIX software among others.

The purpose of this effort is to further develop, operate and maintain the RORO system, and thereby advance the state-of-the-art capabilities in deployable PED systems at the tactical edge in networking and communications in contested and austere environments. The research and development services are necessary to develop solutions to the current requirements for Artificial Intelligence / Machine Learning (AI/ML) and event data context and to support and maintain the RORO system as an operational PED testbed at ARL in Adelphi, MD. Additionally, continuous system operation and maintenance is required for hardware and software updates and upgrades, including vendor firmware updates, and software and operating system patches. System security, including Cybersecurity support, is also required.

Major Event support is also required with the above continuation of R&D support services, as they are closely related. Major event support consists of the three (3) continuing activities described above that are associated with the RORO system and currently supported by Veranox Corporation: AISC, Major Event support is the key event of the Coalition Warfare Program (CWP), The aim of these exercises is to assess emerging technologies that can assist in addressing operational challenges the Warfighter may face while in complex and contested urban environments.

Major Event Support is conducted as an annual, international exercise, with future exercises already planned for FY2022, FY 2023, FY 2024 and FY 2025 at locations yet to be determined. These events have shown the opportunity for improvements to the RORO PED system which are described in section 5 below. A description for each continuing activity is outlined in the paragraphs below.

AISC:

The AISC is a Government program designed to accelerate the transition of AI solutions into the hands of coalition Armed Forces for tactical edge decision making in multi-domain urban-littoral operations. In support of urban-littoral operations, the AISC will:

1. Develop, implement, and integrate AI algorithms and software solutions to enhance the performance of a variety of military systems;

Contractor: Veranox Corporation

2. Perform multi-national experiments and demonstrations with the AI-enabled systems, and;

3. Provide opportunities to focus on the intersection of edge technology with legal and ethical frameworks.

AISC requires a platform for the development, integration, test and evaluation of AI solutions for edge command and control centers. ARL’s Tailored AI at the Tactical Edge (TATE) platform functions in this capacity as a mobile testbed and tactical processing node with a local area network and a collaborative AI framework using the RORO hardware. The framework provides a network for simple and smart sensors, sensor clusters, platforms and AI agents and enhanced adaptive autonomous and hybrid workflows. It also provides for real-time planning, dynamic tasking and rapid execution.

The purpose of this effort is to receive support for the TATE platform in terms of configuration, operation, maintenance, documentation, and user support in order to maintain this framework. Onsite support will be necessary. Therefore, travel to event locations, both within the Continental United States (CONUS) and Outside the Continental United States (OCONUS), is included as part of this requirement.

A key part of the support required is the preparation of the ACROPOLIS program to meet cybersecurity

Contractor: Veranox Corporation requirements including technical configuration, software versioning and updating, system scans using Assured Compliance Assessment Solution (ACAS) and Security Compliance Automation Protocol (SCAP) tools, and documentation. Moreover, the event cybersecurity requirements continue to develop over time, resulting in an ongoing requirement to monitor the relevant meetings and respond with appropriate documentation and/or system configuration changes and evidence of compliance.

The Government has determined that there is an ongoing and future need for Major Event Support as well as further development, operation and maintenance of the RORO PED tactical edge processing system, which justifies the inclusion of option periods on the proposed contract. Specifically, the RORO system will be expected to support the missions of the which currently includes missions in support of AI/ML. AI/ML is ever-changing, and the Government anticipates the RORO system will need continuous further developments to appropriately support AI/ML missions and any other missions the system is tasked to support. Ongoing maintenance is necessary to keep the system up-to-date on hardware firmware and software patches for Information Assurance requirements. This includes the Defense Common Ground Station (DCGS) software that is utilized by Army analysts on the RORO PED. Failure to procure ongoing maintenance would result in inoperability and non-compliance for the system. Further information is provided in section 5 below.

4. Authority Cited:

10 U.S.C. 3204(a)(1) as implemented by FAR Part 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), “when the supplies or services required by the agency are available only from one responsible source or from Department of Defense (DoD), National Aeronautics and Space Administration (NASA) and the Coast Guard, from only one or a limited number of responsible sources, and no other types of supplies or services will satisfy agency requirements, full and open competition need not be provided for.” As further described in FAR 6.302-1(a)(2)(iii)(A) and (B), “for DoD, NASA, and the Coast Guard, services may be deemed to be available only from the original source in the case of follow-on contracts for the continued provision of highly specialized services when it is likely that award to any other source would result in - (A) Substantial duplication of cost to the Government that is not expected to be recovered

Contractor: Veranox Corporation through competition; or (B) Unacceptable delays in fulfilling the agency’s requirements.”

Both situations are outlined below in detail.

In order to ensure experimental continuity of the RORO mission, the institutional knowledge and technical expertise that Veranox Corporation has gained is vital to the success of the mission associated with this system. The proposed vendor has developed the required knowledge and expertise through performance on previous Government funded contracts, including the predecessor to the current requirement, W911QX19C0014. This expertise relates to the five (5) current, interrelated requirements which are continued operation and maintenance of the RORO system, further development of the RORO system, and associated Major Event support. No other source holds the required mix of institutional knowledge and technical expertise for RORO system-specific operation, AISC event support. The requirement needs to be awarded by 19 July 2022 to ensure R&D services are not lapsed, and so that enough time is delegated to prepare the RORO system for upcoming Major events. This is a valid requirement in terms of the quantity or period of performance required and the delivery date or period of performance required.

Continued Operation and Maintenance

In addition to the COTS software listed in section 3 above, Veranox Corporation has gained extensive expertise with the GOTS, ARL analyst environment toolset, including:

Data set loading;

Digital Terrain Elevation Data (DTED) loading and configuration;

Map server loading, configuration and management;

Network optimization for sensor applications; and Physical deployment of analyst systems and networks in field environments.

Veranox Corporation has provided technical support in terms of system configurations as well as end user support directly to analysts. The ability to work with these aforementioned GOTS software in collaboration with the COTS software and the ability to provide the required technical support is vital to the success of the RORO mission and experimental continuity. Providing training to another source for the aforementioned specific sensor systems, GOTS applications, protocols, and networks that Veranox

Contractor: Veranox Corporation

Corporation already wields, would cost the Government time, manpower, and duplicated costs outlined in the chart below.

Further Development

RORO virtual resource management and configuration are needed for optimization to maximize the benefits that the system provides its users. Virtual Desktop Infrastructure (VDI) hardware requires additional development to allow the analyst the ability to utilize a more stable environment. In addition, the RORO PED system needs to support the development and testing of AI/ML at the tactical edge, which requires the implementation and configuration of GPU hardware technologies as well as support for new software stacks for running the algorithms. Containers, for example, provide new and more efficient methods of creating, utilizing, and archiving operating environments for the deployment and testing of software applications in a repeatable manner. The RORO PED system needs extended hardware, software and configuration development support to implement the container architecture. Moreover, AI/ML development typically requires access to very large datasets for training algorithms, resulting in the requirement to develop and implement newer and faster methods of providing data to the system. These developments that come out of Major Event Participation, in addition to the AI/ML developments in Section 3, benefit the Warfighter by providing a more capable PED system that allows communications and situational awareness at the tactical edge. In addition, the RORO system supports interoperability with Coalition Partners which is a benefit to both our Military and our allies. Overall, the RORO PED can advance the Army Chief of Staff (CSA) Science and Technology priorities and goals that includes Network Command, Control, Communications and intelligence. Through years of development with the RORO system, and through years of working with the Army and Coalition Partners in support of common goals, Veranox Corporation has gained advanced institutional knowledge necessary for further development of the RORO system. Due to the aforementioned, Veranox Corporation is the only company that is capable of further development of the RORO system.

AISC Event Support

Veranox Corporation has demonstrated experience in further developing, operating, maintaining and supporting the RORO system at events and exercises for the past nine

(9) years, making them the sole vendor that possesses institutional knowledge and

Contractor: Veranox Corporation extensive technical expertise in the technologies utilized on the RORO system and ARL analyst environments. Additionally, based on the duplication of costs outlined below, it is determined that Veranox Corporation, is the sole vendor that can provide the Government’s minimum requirements.

In particular, Veranox has supported the Contested Urban Environment (CUE) exercise in 2017, 2018, 2019, and 2021 with our coalition partners, including Canada, the UK, New Zealand, and Australia. This support involves integration with their specific sensor systems, applications, protocols, and networks. In addition, over the past several years Veranox has gained extensive expertise with the ARL analyst environment toolset and is able to provide technical support in terms of system configurations as well as end user support directly to the analysts. Moreover, Veranox has acquired significant experience in supporting the structure, operations tempo, methodologies, processes and priorities of CUE event(s). No other contractor has this mix of technical expertise, RORO system-specific operation experience, and CUE event support experience. The CUE program is now transitioning to the Artificial Intelligence Strategic Challenge (AISC), and it includes the same underlying RORO system and the same coalition partners – just an emphasis on AI instead of interoperability – and so the baseline expertise earned by Veranox over the years working on the RORO system still applies.

In order for ARL to maximize success and accomplish all of our objectives for the AISC program, ARL requires continuity of operations, experimentation, and support for the RORO system. Any other contractor would require exorbitant spin-up time and substantial additional labor costs that would delay and potentially derail ARL accomplishing its goals for AISC.

Support

Veranox has used the RORO processing and data collection lessons learned at AISC events to create a more robust data collection capability

Veranox has been supporting data collection requirements at events for two (2) years under Contract W911QX19C0014, listed in the Performance Work Statement (PWS) as “other technology events” and has gained significant experience in working with the various Department of Army participants, sensor platforms, data types, system/data documentation requirements, operations tempo, methodologies, processes and priorities, and data transport and security

Control No: JA-22-Adel-181

Contractor: Veranox Corporation technologies. is a very large and complex technology event with numerous requirements for participation, coordination, and communication that cannot be easily replicated or handed off to another contractor. The technology events allow for the advancement of the RORO system’s technology since it is utilized operationally throughout the event.

Support

In addition to data collection at events, the Government requires support to facilitate the participation of the program at the events. The program also allows for the advancement of the RORO system’s technology since it is utilized operationally throughout the event. Veranox Corporation is currently the only company familiar with the system components and current cybersecurity requirements which are necessary for providing support to the system.

The system will be in the middle of the cybersecurity review process at the proposed start date of the contract period. Thus, it would be cost-prohibitive for the Government to get another contractor up to speed in the time and budget available for these events.

Contractor: Veranox Corporation

**Note 3: The basis of estimate for a new contractor assumes four (4) engineers would be required in order to support tasks under this contract based on most recent discussions with . The basis of estimate for Veranox assumes only (2) engineers would be required based on the labor being provided on the current contract. Thus, no costs could be expected to be recovered through competition since another vendor would require more employees than the incumbent contractor to be able to meet the same requirement.

This table reflects an objective estimate of the

There are substantial costs associated with the time and effort of Government and other contractor personnel required to educate the new contractor personnel in system development, operation, maintenance, program design, and interrelationships. These costs cannot be objectively quantified.

Based on the aforementioned, it is determined that Veranox Corporation, is the sole vendor that can provide the Government’s minimum requirements with substantial duplication of costs and unacceptable delays.

6. Efforts to Obtain Competition: The Contracting Officer has published the notices required by FAR 5.201 and no bids or proposals were received. The contracting office published a synopsis to SAM.gov on 06 April 2022 under Synopsis Notice number W911QX22R0009 as required by FAR 5.201 and Defense Federal Acquisition Regulation Supplement (DFARS) 205-205.71 and DFARS Procedures, Guidance and Information (PGI) 206.302-1(d) in effort to gain competition.

This synopsis, notifying the public that any capability statement, proposal or quotation will be considered, closed on 22 April 2022, and no responses were received.

In an effort to obtain competition, the following websites were used to search for potential sources: UNICOR, Ability One, CHESS, One Acquisition Solution for Integrated Services (OASIS), and GSA. These included discussions held with knowledgeable individuals that are subject matter experts within Government, conducting interchange meetings and holding presolicitation conferences to involve potential offerors early in the acquisition process. Despite these actions, the

Contractor: Veranox Corporation

Government was unable to identify any other sources with the required capabilities to enable the utilization of competition for this effort.

a. Effective Competition: Neither limited nor full and open is expected for this specific action.

b. Subcontracting Competition: The proposed vendor is a small business under the NAICS code for this effort (541715) and is therefore exempt from the requirement for subcontracts IAW FAR 19.702(b)(1).

7. Actions to Increase Competition:

has actively conducted extensive market research to identify other sources with similar capabilities and will continually survey the marketplace in order to determine whether any other source has emerged that can fulfill the Government’s requirements. At this time, the institutional knowledge and technical expertise are not available in the marketplace since Veranox Corporation has exclusive experience with the RORO PED system and the Government does not own any of the technical data packages. As the sole developer of the system, Veranox Corporation is the only source with the necessary institutional knowledge and technical expertise to support the Government’s requirements without any delays or duplications of costs as stated in Section 5.

Veranox Corporation currently has no authorized third-party service providers. However, the Government will closely monitor this and pursue a brand name sole source for future acquisitions if any third-party service providers become available.

Additionally, continued oversight of this requirement will enable requirements developers to stay knowledgeable about the best and most advanced technologies available. Before any future procurement for this requirement is made, an analysis will be made to determine if having another vendor provide these services is justified based on the potential cost reduction that would be obtained through competition. Currently, utilizing another source is impractical, because the Government would be required to provide extensive training and knowledge necessary to perform the required tasks. A cost that has already been incurred on previous developmental efforts. If future analysis shows that the potential cost reduction through competition outweighs the cost and time of implementing either of these courses of actions, one of the above courses of actions may be implemented.

Contractor: Veranox Corporation

Also, breaking out any subsystems or components of this requirement is not possible because the requirements are symbiotic. The RORO PED system’s development is dependent on the major event support required, while the major event support determines, refines, and advances the operational capabilities of the RORO PED system. In short, the support provided in one directly advances the technology contained in the other. Thus, no portion of this requirement can be broken out for competition.

Two (2) other vendors ( described in section 8 below) were researched to determine if they were capable of meeting the Government’s requirements. The Government determined that only these two (2) vendors have the potential to gain the institutional knowledge and technical expertise required to support tasks under this effort because these two (2) companies are the only companies, other than Veranox Corporation involved with and support for in a similar capacity. No other source could possibly seek to obtain the institutional knowledge and technical expertise required to support tasks under this effort. Thus, the Government will continue to review these two (2) sources in order to determine if they have gained new capabilities leading to the ability to support tasks under this requirement. The Government will review additional sources if additional sources become involved with the major events. At this time, it was determined that neither of these companies currently possess the institutional knowledge and technical expertise required to support tasks under this effort (See Market Research in section 8 for more information).

The Government will continue to conduct market research to monitor industry for alternatives for future use in hopes to increase competition by attending conferences, conducting internet searches, and maintaining open discussions with industry experts.

8. Market Research: Market research was conducted between December 2021 and February 2022 by the Contracting Officer’s Representative (COR) within the of the Army Research Laboratory (ARL) with and is the laboratory point of contact for the Army Laboratory’s RORO system. The market research techniques used consisted of consulting with various subject matter experts in the field of portable PED systems along with Information Assurance personnel at ARL.

The Information Assurance personnel at ARL were consulted to gain more information on industry and possible sources. The Information Assurance personnel have over

. Two (2) companies, , were selected for review because both of these companies

Contractor: Veranox Corporation have personnel on site at both AISC, and are intimately familiar with actual requirements and Operational Rate of Activity (OPTEMPO) at these events.

However, the Government determined that both companies are incapable of meeting the Government’s requirements since their personnel do not possess the dynamic range of skills necessary for performance under this effort. The Government also determined that if these two (2) companies, the only other companies familiar with the associated Army requirements, cannot provide the necessary support, then it would not be possible for any other company not familiar with these Army requirements to provide the required support. A summary of the research is provided in the paragraphs below.

Additionally, the COR held market research meetings with management of both companies and both companies specifically stated that in order to provide the aforementioned skillsets (VM WARE, Linux Support, Risk Management Framework, etc.), four (4) to five (5) employees at a minimum would need to be provided, not including the ramp up resources and training. Veranox is currently providing two (2) employees with these skills. This reduces the local travel costs and more importantly, allows attendance to offsite events, such as AISC 22 , both of which limit attendance during these times. In addition to both companies lacking the technical expertise in the technologies utilized on the RORO system, Contractor: Veranox Corporation

The next event, , is scheduled for September 2022, which is only a brief time away. The first AISC event is scheduled for October 2022, also a short time away.

The technical and operations requirements for and AISC, the short time to prepare, and the cost to the government to change contractors necessitates that only Veranox Corporation is capable of satisfying the Government’s needs and is the essential contractor for this action. It is in the best interest of the Government to have the support for data collection and cybersecurity, as well as the support, maintenance, and operation of the RORO system performed by Veranox Market research concluded that Veranox Corporation is the only sole source capable of providing research and development services for continued development, support, maintenance, and operation of the RORO system.

9. Interested Sources: A Synopsis was posted on SAM.gov on 06 April 2022 and closed on 22 April 2022. To date, no responses to challenge the intent to sole source were received and no other sources have written to express interest.

10. Other Facts:

a. Procurement history.

(1) Contract numbers and dates of the last several contracts for these same requirements:

Contract: W911QX-13-C-0165 (Broad Agency Announcement (BAA) contract awarded in response to Competitive Solicitation #ARL BAA

W911NF-12-R-0011)

Contractor: Veranox Corporation (Small Business) Award Date: 8/28/2013 Period of Performance: 8/28/2013 to 8/31/2018 Dollar Value:

Competitive Status: Full and Open Competition Authority: Not Applicable

Contract: W911QX-18-C-0034 awarded following success of BAA contract W911QX-13-C-0165.

Contractor: Veranox Corporation (Small Business) Award Date: 07/20/2018 Period of Performance: 07/20/2018 to 07/19/2019

Contractor: Veranox Corporation

Dollar Value:

Competitive Status: Sole-Source Authority: 10 U.S.C. 3406 as implemented by FAR Part 6.302-1 -- Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.

Contract: W911QX-19-C-0014 awarded following success of sole source contract W911QX-18-C-0034.

Contractor: Veranox Corporation (Small Business) Award Date: 07/24/2019 Period of Performance: 07/24/2019 to 07/19/2022 Dollar Value:

Competitive Status: Sole-Source Authority: 10 U.S.C. 3406 as implemented by FAR Part 6.302-1 -- Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.

(2) If any prior contract for this requirement was accomplished using full and open competition, include a detailed explanation of the changed circumstances causing this action to now limit the sources.

Original procurement was ordered under BAA contract W911QX-13-C- 0165. The objective of this contract was to design, configure, and test a prototype hardware infrastructure in support of a virtualization layer upon which any number of research programs can deploy individualized systems and configurations in a rapid and repeatable manner, while preserving the core configuration of the PED testbed. This enabled ARL to quickly switch back and forth between research programs in the testbed, while preserving individual program environments and minimizing the time and labor required to move between program-specific configurations. The contractor, Veranox Corporation, was successful in the developing the RORO PED tactical edge processing system. This preceding contract was a BAA contract effort.

Contractor: Veranox Corporation

(3) If a justification was prepared to support the procurement made before this one, a summary of the contents of paragraph 7 of the justification for that procurement and an explanation of the results.

W911QX-19-C-0014 – ARL anticipated further developments and breakthroughs for comparable services performed on similar RORO systems designed for use in contested and austere environments. Any known sources that can provide the necessary development, support, operation, and maintenance were sought after for competitive interest.

To date, no other vendor has been identified that has the ability to provide the required research and development services for the RORO system.

(4) An explanation of any unusual patterns that may be revealed by the history, e.g., several consecutive, urgent buys.

ARL has been placed in a position that requires consecutive sole-source contracts to be awarded to Veranox Corporation on a sole-source basis. This is due to the awardee, Veranox Corporation, being the Original Equipment Manufacturer (OEM) of the RORO PED system which was developed under contract W911QX13C0165 in response to a Broad Agency Announcement (BAA) Competitive Solicitation W911NF12R0011. Contract W911QX18C0034 and follow-on contract W911QX19C0014 were then executed in order to continue development and maintenance of the system to meet ARL’s mission.

Through these efforts, Veranox Corporation has gained specialized knowledge that could only be obtained through development of the system and by performing work in the specific programs referenced earlier. This specialized knowledge inhibits other vendors from being capable of providing the same level of required support. Additionally, each previous contract has proven to build upon the previous technological advancements. Since ARL requires the same pace of these advancements and since ARL does not possess the capability to reverse engineer the system, Veranox Corporation will continue to be the only contractor capable of providing these services until other companies become more involved with the aforementioned programs, or until the current companies involved, , gain the technical capabilities required for full performance under this contract.

Contractor: Veranox Corporation

13. Fair and Reasonable Cost Determination: I hereby determine that the anticipated cost or price to the Government for this contract action will be fair and reasonable.

This determination will be made using the following:

_X_ Cost analysis

__ Price analysis __ Should cost

_X_ IGE

__ Audit:

__ Other:

As a part of this basis, certified cost or pricing data:

__ Will be required.

_X_ Will not be required and the following exception applies (FAR 15.403):

__ Prices that will be agreed upon are based on adequate price competition.

__ Prices that will be agreed upon are based on prices set by law or regulation.

__ A commercial item is being acquired.

__ A waiver has been granted by the head of the contracting activity (HCA) in accordance with DFARS PGI 215.403-1.

__ The contract action is a modification to a contract or subcontract for commercial item(s).

_X_ The estimated cost of the contract action is less than the threshold for certified cost or pricing data.