LSJ Addendum - BFM Software Upgrade_Redacted.pdf

CUI

Source Selection Information -- See FAR 2.101 and 3.104

DEFENSE LOGISTICS AGENCY

CONTRACTING SERVICES OFFICE - PHILADELPHIA

700 ROBBINS AVENUE

PHILADELPHIA, PA 19111-5092

BRAND NAME LIMITED SOURCE JUSTIFICATION

(For Acquisition Conducted Under the Authority of the Multiple Award Schedule Program)

1. IDENTIFICATION OF THE AGENCY AND THE CONTRACTING ACTIVITY:

2. NATURE AND/OR DESCRIPTION OF THE ACTION BEING APPROVED:

In accordance with FAR 8.405-6, this limited source justification authorizes the procurement of an upgrade to the Bulk Fuel Management (BFM) 2.0 software. DLA has a requirement for SAP to develop, test, and deliver an upgrade to their proprietary SAP Oil and Gas Funds Management (OGFM) capability that was developed by SAP for DLA named SAP Bulk Fuel Management 2.0 to the next compatible version to make it compliant with SAP S/4 High Performance Analytic Appliance (HANA). DLA requires the new BFM solution to be delivered to complete the S/4 HANA transformation with no loss in current capabilities and functionality. The new BFM solution will be delivered to DLA for installation in DLA’s Enterprise Resource Planning (ERP) cloud landscapes.

The resultant firm-fixed price task order will be placed against a General Services Administration (GSA) Federal Supply Schedule (FSS) Multiple Award Schedule contract and may use Department of Defense (DOD) Enterprise Software Initiative (ESI) agreements. The period of performance (PoP) will include a twelve (12) month base period, one (1) twelve (12) month option period, and one (1) nine (9) month option period.

Controlled by: DLA DCSO Philadelphia

CUI Category: General Procurement and Acquisition/ Source Selection Information see FAR 2.101 & 3.104

Distribution/Dissemination Controls: FEDCON POC: Cecilia.Geraghty@dla.mil / 215-737-2699

3. A DESCRIPTION OF THE SUPPLIES OR SERVICES REQUIRED TO MEET THE

AGENCY'S NEEDS/ESTIMATED DOLLAR AMOUNT:

The DLA Director states within the DLA Strategic Plan 2021 – 2026, Line of Effort # 4 “Modernized Acquisition and Supply Chain Management" via DLA Critical Capability Objective C1:

Transformational information technology capabilities” that “Technology is changing at an exponential rate, generating new possibilities in logistics and customer support” and “We are focusing our Information Technology (IT) and digital capability investments on key areas that will enable us to enhance performance, reduce costs, and make more predictive and data-driven decisions.”

To achieve the Strategic Plan Goals and Objectives, DLA’s ERP is undergoing a lifecycle technical refresh to better align DLA processes with industry standards and simplify computing and sustainment requirements. DLA needs to upgrade the existing ERP environment to the S4/HANA version prior to software end of life in 2027. DLA’s ERP solution is a cohesive SAP business environment with multiple integrations and customizations that enable DLA to establish end-to-end processes to fulfill logistics and financial reporting requirements, streamline and use data sources effectively, reduce inefficient or non-value-added operations, and audit its resources so that it can monitor and make decisions about how the resources are allocated and utilized for the benefit of the warfighter and the US taxpayer. There are integrations with some non-SAP software, however the predominance is SAP.

One of the integrations the ERP uses is a product proprietary to SAP called Bulk Fuel Management (BFM) 2.0. BFM 2.0 is not compatible with SAP’s upgraded S/4 HANA product suite. It is a SAP proprietary non-modifying add-on that DLA procured to attach to the SAP landscape which eliminated core product, core changes, adhering to clean core guidelines. BFM 2.0 is not compatible with SAP’s upgraded S/4 HANA product suite. To ensure DLA does not lose critical functionality, DLA has a requirement to upgrade the existing code and release a new version of BFM. If DLA continues the S/4 HANA upgrade without an upgrade to BFM 2.0, the DLA’s Energy Procurement Business community will be significantly impacted by not having the below capabilities:

A. Industry Standard (IS) Oil & Gas Commodity Formula and Average Pricing

To support common business practices in the Oil & Gas industry, Procurement for Public Sector (PPS) Purchase Contracts and Purchase Orders are enhanced to allow commodity-based formula and average pricing. As part of the F&A pricing, the Internet Pricing Configurator (IPC) is used.

B. IS Oil & Gas Traders and Schedules Workbench (TSW) Fields

BFM Purchase Contract and Purchase Order documents provide the user the ability to enter the required TSW data during document creation. PPS Purchasing Contract and Purchase Order screens are enhanced to include these fields to integrate with Oil & Gas functionality.

C. BFM Revaluation of Energy Procurement Contracts and Orders

The revaluation of the Energy Procurement Contracts and Purchase Orders, supplied with BFM, maintains up-to-date budgetary ledger accounts with IS-PS US_FED to reflect energy commodity price fluctuations. BFM revaluates open DLA Contracts and open Purchase Orders to reflect daily price fluctuations and adjust the associated Guaranteed Minimum, Commitment Target Value, and Earmarked Fund values.

D. IS Oil & Gas Purchase Contracts & Purchase Order Generation date of modification issuance with one 9-month option and one 12-month option.

4. THE AUTHORITY AND SUPPORTING RATIONALE AND, IF APPLICABLE, A

DEMONSTRATION OF THE PROPOSED CONTRACTOR'S UNIQUE

QUALIFICATIONS TO PROVIDE THE REQUIRED SUPPLY OR SERVICE:

The authority permitting other than full and open competition is FAR 8.405-6(a)(1)(B), only one source is capable of providing the required services, and FAR 8.405-6(b)(1), items peculiar to one manufacturer. A brand name item, whether available on one or more schedule contracts, is an item peculiar to one manufacturer, SAP Public Services, Inc.. Pursuant to FAR 8.405-6(b)(1), the SAP brand name is essential to the Government’s requirements, and market research indicates other companies’ similar products, or products lacking the particular feature, do not meet, or cannot be modified to meet, the agency’s needs. As identified within this document, the Government requires a Bulk Fuel Management 2.0 (BFM) solution to continue providing DLA customers the same capabilities they operate with today.

The existing BFM 2.0 solution is not compatible with the upgraded ERP SAP S/4 Software, and therefore the software needs to be updated to ensure DLA does not lose any functionality for its business community. No other software manufacturer has access to SAP’s proprietary source code or the information necessary to deliver an upgrade consistent with the next SAP version which is S/4

HANA.

Services provided by any source other than SAP Public Services, Inc. or its authorized service providers will not satisfy this requirement due to the proprietary nature of the SAP software currently utilized by DLA and the proprietary nature of the services necessary to maintain DLA’s existing environment. Moreover, no alternate company has the authority to provide the proprietary SAP services necessary to meet this requirement. Consequently, only SAP Public Services, Inc., and its authorized resellers/service providers can fulfill this brand name requirement for the BFM solution to successfully accomplish the ERP technology refresh.

ADDENDUM:

In March 2024, DLA leadership decided to accelerate the S/4 HANA upgrade project for the DLA ERP Prototype task order SP4701-22-F-0050. On May 14, 2024, DLA issued the modification for the S/4 HANA upgrade project. When DLA accelerated the S/4 HANA upgrade project, it modified the needs of the BFM project. Upon award of the BFM task order SP4701-24-F-0166 on May 16, 2024, the full requirement of the BFM interface with SRM-PPS and S/4 HANA was not known since the results of the acceleration modification weren’t known until two weeks after modification issuance. As a result of this effort, Carahsoft Technology Corp. identified two separate deliverables for BFM. Both deliverables maintain the existing functionality of BFM 2.0, while updating the integration of the BFM functionality into new SAP products. For the purposes of this document, the Phase I deliverable will be referred to as BFM 3.0 and the Phase II deliverable as BFM 4.0. When DLA accelerated the upgrade for S/4 HANA, it was identified that there would be an interim requirement to interface BFM with S/4 HANA (i.e., BFM 3.0). The original BFM 4.0 requirement was to interface with S/4 HANA and the new S/4 Procurement for Public Sector (S/4 PPS) capability being built by SAP. The BFM 3.0 Module enables DLA to move to S/4 HANA early and allows S/4 PPS to continue the original development timeline, incorporating BFM 4.0 to be fully developed and deployed in the execution phase of S/4 HANA in October 2027.

In accordance with FAR 8.405-6(a)(1)(B), Carahsoft Technology Corp., is the only source which

Source Selection Information -- See FAR 2.101 and 3.104 can provide the required upgrade to BFM due to their in-depth knowledge of the requirement to build both BFM modules. Carahsoft Technology Corp. has the required skills, and no other authorized service providers can have this knowledge because this software is specific and unique to DLA. If another SAP service provider were to come in at this stage in the acquisition, there would be a significant knowledge transfer gap which would ultimately disrupt the schedule and impact the DLA Energy mission. Therefore, it is in the best interest of the Government to modify the current task order SP4701-24-F-0166 with Carahsoft Technology Corp.

5. DETERMINATION BY THE ORDERING ACTIVITY CONTRACTING OFFICER

THAT THE ORDER REPRESENTS THE BEST VALUE CONSISTENT WITH 8.404(d):

SAP products and services are available under established ESI agreements. These agreements were issued against GSA FSSs and the terms and usage of these agreements are in accordance with DFARS 208.74. Pricing under the ESI agreements has been determined fair and reasonable and has included negotiated discounts to GSA FSS pricing.

The Contracting Officer will determine that the order represents the best value to the Government consistent with FAR 8.404(d). In making this best value determination, the Contracting Officer will perform a price reasonableness analysis utilizing the techniques found at FAR 15.404-1, including, but not limited to: (1) Comparison of proposed prices received in response to the solicitation (FAR 15.404-1(b)(2)(i)); (2) Comparison of proposed prices to historical prices paid, whether by the Government or other than the Government, for the same or similar items (FAR 15.404-1(b)(2)(ii));

(3) Comparison of proposed prices with competitive published price lists, published market prices of commodities, similar indexes, and discount or rebate arrangements (FAR 15.404-1(b)(2)(iv)); and

(4) Comparison of proposed prices with the Independent Government Cost Estimate (FAR 15.404- 1(b)(2)(v)).

6. A DESCRIPTION OF THE MARKET RESEARCH CONDUCTED AMONG SCHEDULE

HOLDERS AND THE RESULTS OR A STATEMENT OF THE REASON MARKET

RESEARCH WAS NOT CONDUCTED:

In accordance with DFARS 208.7402, departments and agencies shall fulfill requirements for commercial software and related services in accordance with the DoD ESI. ESI promotes the use of enterprise software agreements with contractors that allow DoD to obtain the most favorable terms and pricing for software and information technology support services. In accordance with DFARS 208.7402, PGI 208.7403, DLAD 39.9001 (h), the DoD ESI service agreements were reviewed, and it was determined that there are three ESI BPA holders for SAP Public Services Inc. (Advantaged Solutions Inc., Carahsoft Technology Corp., Oakland Consulting Group, Inc.) who offer SAP services on their ESI BPAs against their General Services Administration (GSA) Schedules.

7. ANY OTHER FACTS SUPPORTING THE USE OF OTHER THAN FULL AND OPEN

COMPETITION:

N/A

Source Selection Information -- See FAR 2.101 and 3.104

8. A STATEMENT OF THE ACTIONS, IF ANY, THE AGENCY MAY TAKE TO REMOVE

OR OVERCOME ANY BARRIERS THAT LED TO THE RESTRICTED CONSIDERATION

BEFORE ANY SUBSEQUENT ACQUISITION FOR THE SUPPLIES OR SERVICES IS

MADE.

As described above, SAP Public Services, Inc. and its authorized resellers/service providers are the only sources that can support DLA’s existing software and meet the Government’s needs. However, DLA has and will continue to exercise competition as often as possible and is required to conduct ongoing reviews to keep abreast of new technology, both in industry and in the Government as a continuing effort within DLA. DLA uses a variety of vendors, manufacturers, and contracts to fulfill its requirements and will continue its practice of surveying the market to ensure full and open competition whenever possible.

In accordance with FAR Part 8.405-6(b)(3)(B), the Limited Source Justification and the RFQ will be posted on GSA e-Buy.