RFP 60RRBH21R0003 IBM zCloud Services - Attachment 1 - Sole Source Justification FINAL.pdf

UNITED STATES OF AMERICA

RAILROAD RETIREMENT BOARD

844 NORTH RUSH STREET

CHICAGO, ILLINOIS 60611-1275

SUBJECT: RFP 60RRBH21R0003 IBM Government zCloud Transition, Planning and

Operations Services Via GSA Alliant 2 GWAC Contract - Sole Source Justification

1) US Railroad Retirement Board

Acquisition Management (AM) Division and the Bureau of Information Systems (BIS).

2) Nature and description of the action being approved:

RRB intends to award a predominantly Firm-Fixed-Price Delivery/task order without considering other awardees under the General Services Administration (GSA) Alliant 2

Contract Number 47QTCK18D0015 pursuant to FAR 16.505(b)(2)(ii)(B). The proposed contractor is IBM Global Business Services - U.S. Federal, 6710 Rockledge Drive, Bethesda, MD 20817.

3) Description of the supplies or services required to meet the agency’s needs (including the estimated value)

The RRB is soliciting, from IBM on a sole source basis, services to acquire a cloud solution at the IBM Government zCloud facility, inclusive of Infrastructure as a Service and Platform as a Service herein referred to as Mainframe as a Service (MFaaS). The RRB requirements also include Mainframe Operations and Transition Services (MOTS) of the RRB’s mainframe processor in its Headquarters data center until the RRB’s mainframe operations are in production in the IBM Government zCloud. The RRB is also soliciting project managed professional services to migrate its mission critical business applications and data from operation on its Headquarters Mainframe System to the IBM Government zCloud. RRB estimates the maximum period of sole source performance not to exceed five years, including options.

The RRB estimates the total five (5) year value of these services as at or below $23,000,000.00.

MFaaS provides a unique solution on solely an interim basis to continue supporting mission critical applications residing on the mainframe platform, while the RRB completes application modernization to eventually migrate to a distributed (non-sole source) platform. The refactoring and migration is anticipated to take about five (5) years. The solution also allows RRB to migrate off existing hardware and software into a Government cloud service model, as required by OMB’s October 2018 Federal Cloud Computing Strategy. IBM will provide all MFaaS resources and shall host RRB mainframe applications and data.

The RRB’s enterprise-wide IT Modernization effort is at a crossroads regarding the strategy to modernize its IBM Z12 mainframe infrastructure and platform. A previous attempt using a

RFP 60RRBH21R0003 IBM Government zCloud Transition, Planning and Operations Services

Attachment 1 - Sole Source Justification Page 2 of 6 different approach to modernize the RRB mainframe was unsuccessful proving too complex to achieve desired outcomes within the cost constraints. The RRB conducted an alternatives analysis, with assistance from Gartner, to seek a more cost-effective approach for systems modernization.

RRB determined through the referenced analysis that IBM is the only vendor that can provide the services and has the depth of expertise required to migrate to a near-term sustainable state supporting the RRBs systems modernization. The intent is to have continuity by the IBM support staff from the augmentation stage, transition to the zCloud environment, and to the near-term, stable-state production environment.

Engaging with IBM for staff augmentation will enable the RRB to accelerate its migration process to the IBM Cloud with zero transition time between phases for operational support, thereby minimizing knowledge transfer requirements.

Current RRB critical applications and data infrastructure are based upon IBM production systems approaching end of life. Introduction of components, which are incompatible with IBM equipment, introduces considerable risks into the near-term, stable-state production environment. The RRB anticipates a substantial budget risk with the acquisition of non-IBM equipment/resources before proceeding with interoperability testing. The introduction of non- IBM components in the migration to the near-term production environment would consume RRB resources and severely detract from the RRB pursuit of its systems modernization strategy. RRB’s mission critical systems are all dependent on the continuation of this sole source solution and its residing data until modernization is complete.

Data must continuously be synchronized between the legacy mainframe environments, utilizing the existing software and the new modernized environments, until 100% of the functionality contained within the legacy environments is built into the new modernized systems. Key applications are still dependent on the legacy mainframe applications, until 100% of mission critical functionality is migrated into new modernized systems, including Personally Identifiable Information (PII), and Federal Tax Information (FTI).

Notably, IBM does not allow resellers to provide the exclusive maintenance support services and associated software necessary toward RRB’s modernization efforts. IBM provides 24/7/365 access to global technical support and for overnight replacement of failed components or entire devices as required. Their maintenance program (already in place for RRB’s principal business application infrastructure) covers operating system software updates of both minor and major releases, fulfilling the functional and security needs of the RRB infrastructure. These software updates are proprietary to IBM and are only available from IBM.

The RRB will benefit from optimized monthly charges for IBM software volume licensing.

Soliciting competitive offers for IBM products, services, and solutions will only result in increased costs to the RRB due to re-seller mark-ups. Again, the RRB is soliciting services and solutions to move its business critical applications from the data center to the cloud during this sustainment phase of the modernization effort. This approach enables both the IT staff and the business staff to focus on the post-stabilization modernization efforts and use the RRB’s limited modernization funds for re-engineering our critical business applications and data to the target environment.

Attachment 1 - Sole Source Justification Page 3 of 6

Migrating to the IBM Government zCloud will allow the RRB to execute its current applications in a sustainable state without a recompilation, greatly minimizing the complexity of migration.

Other “IBM-like” manufacturers generally rely upon IBM operating systems (OS) updates before upgrading their own operating systems. Delayed OS updates places the RRB mission critical computing environment at risk for incompatible operating systems, or worse, security gaps in said environment.

4) Identification of the statutory authority permitting other than full and open competition

This procurement is in accordance with FAR 16.505(b)(2)(ii)(B) - 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. Only the IBM solution is acceptable because the products and services required are unique or highly specialized and are items peculiar to one manufacturer/service provider.

5) Demonstration that the proposed contractor’s unique qualifications or the nature of the acquisition requires use of the authority cited

This requirement supports specific RRB hardware and software products proprietary to IBM, currently installed and in use supporting RRB mission critical applications. The current mainframe environment is running on a base platform of IBM brand hardware and software with additional supporting third party products. The Government does not own the data rights to the propriety software code and cannot reproduce IBM products. IBM has sole proprietary rights and no other company has the data rights to sell, unless the company is an authorized distributor or reseller of IBM products.

The RRB plans to re-engineer its applications and data onto non-IBM zOS platform(s) in an estimated five-year modernization strategy. The RRB cannot reasonably migrate its mainframe environment to another platform or vendor. However, that stabilization effort would detract funds and manpower resources from its five-year modernization strategy re-engineering phase.

During the modernization stabilization phase, the RRB has deemed the use of anything other than an IBM brand mainframe product and associated software set as non-viable. Discussions with marketplace Subject Matter Experts (SMEs) and other Government Federal Agencies employing IBM mainframe resources has revealed that the use of other products would be a multi-year effort to convert millions of rows of data and re-write millions of lines of application code and security profiles. Efforts to move to another mainframe product set would be a duplication of time and cost since the migration to a different platform using distributed systems has begun.

IBM is the only vendor that can offer seamless transition, migrating from the IBM mainframe running production systems at the RRB Headquarters, to an IBM solution in a Government zCloud. Services must be like for like to ensure proper functionality of existing application code. The IBM solution provides consolidation of all products to include hardware, software and services under a Mainframe as a Service (MFaaS) offering. IBM has existing relationships

Attachment 1 - Sole Source Justification Page 4 of 6 with all of the hardware, software, and service vendors currently being utilized by RRB, and is the last remaining zOS mainframe manufacturer. Conversion to an alternate hardware and software system would require a multi-year conversion that is cost prohibitive, futile, and unsustainable since modernization efforts has begun. Furthermore, other non-IBM providers are unable to provide a complete solution. IBM has sought out and successfully established relationships allowing it to offer MFaaS to its Government and commercial customers.

Compatibility with the existing production environment devices is limited to the brand name identified. Any use of other than IBM certified products would result in interoperability, compatibility and interface issues within mission critical RRB systems for data transfer. The

IBM product set includes third party products to ensure complete functionality. These companies have successfully entered into a relationship with IBM, allowing IBM to create a product set yielding significant savings to the Government. The brand name IBM solution offers lower pricing due to volume discounts created through the totality of contracts/solutions

IBM provides across the public and private sector.

Further supporting a smooth transition and continuity of support, IBM has several decades of institutional knowledge of RRB functions. IBM maintains the RRB’s mainframe DR environment at USDA’s DISC facility, which would allow ease of access for information transfer should it require the RRB DR system data.

Without this mission critical platform, required upgrades, patches and fixes, the data maintained through the mainframe would not be accessible to front-line RRB Claims personnel. RRB would also encounter unplanned outages which would impact (delay) payments to RRB annuitants, thus jeopardizing their financial security. All aspects of the RRB rely on the systems, and could force an agency wide shutdown of operations.

6) Description of efforts made to ensure that offers are solicited from as many potential sources as is practicable, including whether a notice was or will be publicized as required by FAR Subpart 5.2 and , if not, which exception under 5.202 applies.

Agency Market research results, conducted from April through August 2000, included marketplace expert advice services indicate that other manufacturers do not offer this unique

Mainframe as a Service and solution set. In order to prevent an interruption in service and complete loss of production and backup data, only IBM products are compatible for the migration of existing components in the RRB environment.

This effort supports the Office of Management and Budget (OMB) October 2018 Cloud Smart policy to reform federal Information and Technology (IT) management by mandating agencies to evaluate cloud based IT solutions before making any new IT investments.

RRB is posting this sole source justification to the Alliant 2 site within GSA eBuy and to the

Government wide point of entry at beta.sam.gov per FAR 16.505(b)(2)(ii)(D).

http://www.beta.sam.gov/

Attachment 1 - Sole Source Justification Page 5 of 6

7) Determination by the contracting officer that the anticipated cost to the Government will be fair and reasonable

The Contracting Officer will perform a price analysis to ensure the price to the government will be fair and reasonable. The RRB Acquisition Team will negotiate pricing with the Contractor to achieve a fair and reasonable price for all services.

8) Other facts supporting the use of other than full and open competition

The use of IBM is at the direction/decision of the CIO as both the platform of choice for standardization and compatibility along with being in the best interest of the RRB.

The RRB greatly benefits by utilizing the IBM standards of successful (both Federal and

Commercial) migrations leveraging IBM’s established and tested business practices.

The Government intends to use the period covered by the proposed task order to refactor and transition off the in-house IBM mainframe platform to distributed platform(s). The Government does not foresee the need for future sole source acquisitions for the same type of support.

Once the mission critical applications and data are re-engineered and cloud hosted on distributed platform(s), those systems can be supported by numerous cloud providers, thus eliminating the barriers to competition.

9) Listing of the sources, if any, that expressed, in writing, an interest in the acquisition:

IBM Global Business Services

[See Certifications on Next page]

Attachment 1 - Sole Source Justification Page 6 of 6

10) Technical Representative Certification

I certify that the information in this Sole-Source Justification is accurate and true to the best of my knowledge and belief.

_____________________________ 11/16/2020

Terryne F. Murphy Date

Chief Information Officer

11) Contracting Officer Certification

I certify that the information in this Sole-Source Justification is accurate and true to the best of my knowledge and belief.

____________________________ 11/16/2020

Paul T. Ahern Date

Chief of Acquisition Management and Contracting Officer

Head of Contracting Activity Approval:

I, as the agency Senior Procurement Executive, concur and approve this Justification for a sole source task order award to IBM Corporation, under the GSA Alliant 2 GWAC program

Contract for the above described services, per the FAR subpart 16.505(b)(2)(ii)(C)(3)(i).

____________________________ 11/17/2020

Keith B. Earley Date

Director of Administration and Senior Procurement Executive