Source Selection Information See FAR 2.101 and 3.104

Document # 26-092

JUSTIFICATION FOR AN EXCEPTION TO FAIR OPPORTUNITY

(ABOVE SAT)

1. Identification of Requiring Activity and Contracting Activity.

The requiring activity the Assistant Secretary of the Navy, Financial Management & Comptroller (ASN (FM&C)), Washington, DC. The contracting activity is NAVSUP Fleet Logistics Center (FLC) Norfolk, Contracting Dept., FM&C/BUMED Directorate.

2. Nature and description of contract action.

This acquisition is conducted under the authority of 10 U.S.C. 3406(c)(5). This action is an exception to the fair opportunity process to be awarded as a new task order. The placement of a Firm Fixed Price order is anticipated.

This procurement action supports the provision of financial remediation integration services that are currently performed under Contract number N0018923FZ707. Contract number N0018923F707, was awarded on a competitive basis to Guidehouse Inc., a large business; the existing contract expires on 31 March 2026. This task order would fall under the Financial Improvement Program (FIP) IV indefinite-delivery indefinite-quantity multiple award contract

(IDIQ MAC).

The proposed acquisition is to issue a sole source task order to Guidehouse for transformation, f its transformation goals, including a clean audit and modernization of FM systems.

Two key efforts are driving this requirement: (1) Department of the Navy (DON) leadership deadlines to achieve a clean audit opinion (Working Capital Fund (WCF) in FY26 and General Fund (GF) in FY28), and ( environment, including ERP+, the drive toward artificial intelligence (AI), and the use and governance of data. These efforts (e.g., audit, ERP+, AI, and data) are critical Department priorities, and missed timelines or delays would have significant consequences.

- Achievement of a clean audit opinion is a Department of War (DoW) and DON no-fail mission under a tight timeline

- The ERP+ technical upgrade is a system prior the current software becoming obsolete

- AI efforts are a major department priority to achieve better efficiency and results;

integrating AI into the financial management (FM) strategy and operating model is critical to making sure the DON is prepared to fully embrace this emerging technology.

audit, ERP+, and AI. Reliable and accessible data is transformation goals.

The proposed task order would provide critical program management, integration, alignment, strategy, and governance support services that would enable these efforts. Without this holistic integration support, there is an increased likelihood that these efforts may fail to achieve their

Specific services and key goals of the proposed task order are:

FMS Transformation Strategy and Operations (S&O) Strategic planning, execution, and governance of FM Transformation

AI-Driven Operating Model Design Design, document, and deliver a comprehensive future-state systems support operating design

Financial Statement Audit Corrective Action Plan (CAP) Development, Monitoring, and Evaluation

Program Management and Integration synthesize data into executive-ready briefs, distribute information as necessary to ensure alignment toward mission, enable executive decision-making

The period of performance for this requirement would be a one-year base period beginning 01 April 2026. The task order will include one one-year option. The Government Estimate is

, inclusive of all options.

The base period of the resultant follow-on contracts will be funded with the corresponding Fiscal Year Navy Operations & Maintenance (O&MN) appropriations. These funds are expected to be available in the corresponding fiscal year.

Option periods will be exercised subject to the availability of funds. Options will be funded utilizing appropriations O&MN of the fiscal year in which the option year is exercised.

4. Statutory authority permitting other than full and open competition.

The statutory authority that permits not providing each awardee a fair opportunity to be considered for each order exceeding the micro-purchase threshold issued under a multiple award contract is 10 U.S.C. 3406(c)(5), as implemented by FAR 16.505(b)(2)(i). The applicable exception to the fair opportunity process for this justification for the award of an order exceeding the simplified acquisition threshold is:

The exception to the fair opportunity process is FAR 16.505(b)(2)(i)(C)- The order must be issued on a sole-source basis in the interest of economy and efficiency as a logical follow-on to an order already issued under the contract, provided that all awardees were given a fair opportunity to be considered for the original order.

Over the past several years, the Department of the Navy (DON) has established a robust Financial Improvement and Audit Remediation Program (FIAR) that encompasses all DON Major Commands and crosses numerous functional components including service provider interface and coordination.

In the FY2024 National Defense Authorization Act, Congress has mandated that all components of the DoW be auditable by FY28. As this deadline approaches, DON and DoW leadership have also made financial health and audit a renewed point of priority, which has driven increased urgency in achieving audit goals. In early 2025, the Secretary of the Navy has named Audit as a top challenge and included Audit a

War signed a memorandum reiterating the an SECWAR and SECNAV priorities and statements of urgency, the DoN is aiming to achieve remediation of the General Fund by FY28. For this and future audits to be successful, there must be a sustained, integrated, and holistic strategy, governance, and program management effort that encompasses

Guidehouse has been the primary provider of Sustainment, Project Management, and Internal Control services to the DON since 2022. All five MAC holders were given fair opportunity to quote under the previous task order N0018923FZ707. efforts have significantly for the ERP+ technical upgrade.

This effort is a logical follow-on to the critical Remediation Integration services currently being executed by Guidehouse under contract N0018923FZ707. Through their incumbent performance on this and preceding task orders, Guidehouse has amassed unparalleled and non-transferable institutional knowledge of the Department of the Navy's (DON) complex financial environment, audit roadmap, and strategy and operations. Awarding this new work to any other vendor would be neither economical nor efficient and would introduce substantial costs and unacceptable mission risks. Given the extremely tight timelines to both th technical upgrade, transfer of this work to any vendor other than the incumbent would present significant risks to meeting DON priorities.

Award to any non-incumbent would likely result in substantial duplication of cost to the Government and unacceptable schedule and programmatic delays. If a new vendor were to provide these services, it would necessitate a lengthy learning curve. This totals an approximate duplication of cost detailed in the table below in order to bring the new contractor up to speed on work already completed and build the expertise to continue the effort.

The Navy will overcome barriers to competition through reassessing the requirements after presumably passing audit by 2028. At that point, it is anticipated that contractor support will transition to ensure that the unmodified audit opinion is sustainable in subsequent financial statement audit engagements. This shift in scope should result in future competition. As this effort proceeds, barriers to future competition will be sought to be reduced or removed. Any subsequent follow-on requirements to the ones covered by this Justification will be handled on a case-by-case basis.

8. CONTRACTING POINT OF CONTACT.

The point of contact at NAVSUP Fleet Logistics Center Norfolk Contracting Department, BUMED/FM&C Directorate is Stephanie Murphy Code 244.1, who may be reached at (771) 229-3283 or by e-mail at Stephanie.m.murphy28.civ@us.navy.mil.