EFO-JETS_Clause_Logic_Service__Support_-Redacted.pdf

Source Selection Information See FAR 2.102 and 3.104

DEFENSE LOGISTICS AGENCY

DLA CONTRACTING SERVICES OFFICE -

PHILADELPHIA

700 ROBBINS AVENUE

PHILADELPHIA, PENNSYLVANIA 19111-5092

JUSTIFICATION FOR AN EXCEPTION TO FAIR

OPPORTUNITY (FAR 16.505(a)(4) and FAR 16.505(b)(2))

1. IDENTIFICATION OF AGENCY AND CONTRACTING ACTIVITY:

Agencies Requiring Activity:

Office of the Secretary of Defense (OSD), Defense Procurement and Acquisition Policy (DPAP)

Contracting Activity:

Defense Logistics Agency (DLA) Contracting Services Office- Philadelphia 700 Robbins Avenue

NATURE AND DESCRIPTION OF THE ACTION BEING APPROVED:

Pursuant to FAR 16.505(a)(4) and FAR 16.505(b)(2), the action being approved is an exception to the fair opportunity process because only one awardee being 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. This justification authorizes the use of other than full and open competition to award a Firm Fixed Price task order under the J6 Enterprise Technology Services (JETS) Indefinite-Delivery Indefinite-Quantity (IDIQ) in order for Northrop Grumman Systems Corporation to provide continuity in the Clause Logic Service (CLS) Program. The required contractual action is to provide engineering services to continue the development of the CLS using the existing source code, schemas, user interface, and information assurance footing which are deployed in a development environment.

3. DESCRIPTION OF SUPPLIES OR SERVICES REQUIRED TO MEET THE

AGENCY’S NEED/ESTIMATED DOLLAR AMOUNT:

The purpose of this requirement is to procure engineering services in support of CLS.

These services are mission essential because the Services are writing requirements for their new contract writing system (CWS) now and the Clause Logic interface needs to be ready for the Services to connect to CLS. The contractor, Northrop Grumman Systems Corporation, will be responsible for providing services to develop the requirements and provide maintenance for the CLS pending its readiness to be re-competed IAW the FAR and DFARS.

Defense Procurement Acquisition Policy (DPAP) Program Development and Implementation (PDI) is responsible for ensuring policy integration and Department of Defense (DoD)-wide implementation of procurement-related data standards, processes, and enterprise procurement electronic business systems, policy and systems integration for a variety of procurement-related systems. The federal Acquisition Committee on eGovernment (ACE) establishes federal priorities for procurement-related processes and systems and sets the strategy and functional requirements for DoD-enterprise procurement related business systems. The proposed acquisition is part of the focus on expanding and modifying the Electronic Business (EB) infrastructure to carry a more data-rich flow of information. This has included development of standards for acquisition data and technical data, and targeted changes to systems to close functional gaps and meet emerging policy needs.

An area of recent emphasis resulting from this series of initiatives is the quality of the logic used by CWSs to determine the set of provisions and clauses needed for contract actions. In particular, a need has been identified to provide a standard service for clause selection for numerous CWSs, to include the Air Force Contracting Information Technology (CON-IT), Army Next Generation (Next-Gen) CWS, the Defense Logistics Agency (DLA) eProcurement system (part of DLA’s Electronic Business System (EBS)) which is the replacement of the 4th Estate CWS. CLS is designed to be a standard way of providing clause content for all of the DoD CWSs.

This procurement is necessary to provide continuity in the Clause Logic Program. Northrop Grumman Systems Corporation is the system integrator for the Software development and rules maintenance of the web-based CLS. The required contractual action is to provide engineering services to continue the development of the CLS using the existing source code, schemas, user interface, and information assurance footing which is deployed in a development environment.

The system is hosted at the DLA Defense Automatic Addressing System (DAAS), and at the Acquisition Logistics and Technology Enterprise System and Services (US Army) ALTESS. The system is not approved for production and is accredited by an Interim Authority to Test (IATT), followed by an Authority to Operate (ATO) in FY17. The Designated Authority (DA) for the System is DLA under a Memorandum of Understanding (MOU) with DLA and DPAP. DPAP’s requirement is organic and system support for the CLS in attaining a production-ready status in 2017 to support the DoD Services and Agencies. The present contractor, Northrop Grumman Systems Corporation, is the original and only developer and integrator for the Service. Northrop Grumman Systems Corporation will be responsible for providing engineering services that meets all OSD, DPAP CLS requirements pending the issuance of an ATO and the achievement of system stability.

The period of performance will be a 12-month period.

4. IDENTIFICATION OF THE EXCEPTION TO FAIR OPPORTUNITY (SEE FAR

16.505(a)(4) and FAR 16.505(b)(2)) AND THE SUPPORTING RATIONALE, INCLUDING

A DEMONSTRATION THAT THE PROPOSED CONTRACTOR’S UNIQUE

QUALIFICATIONS OR THE NATURE OF THE ACQUISITION REQUIRES USE OF

THE EXCEPTION CITED:

Per FAR 16.505(a)(4) and FAR 16.505(b)(2)(i)(B) an exception to the fair opportunity process is justified because the task order must be issued to an awardee who is capable of providing the supplies and services required (at the level of quality required) to achieve a deployable system which meets all technical aspects identified in the existing contract, which expires in JUNE 2017.

The supplies or services ordered are unique and highly specialized. It is assumed that development of the base production release of CLS will be complete inside 12 months from the date of contract award. The requirement set as written in the PWS, can only be satisfied by the incumbent vendor Northrop Grumman Systems Corporation owing to the many interdependencies that exist to achieve production system completion. The vendor is performing on the existing task order SP4701-15-D-0001-0019. As stated, the CWS is not a complete production system. Development activity is still occurring. If CWS were a complete system, wherein the Government would own the data rights to said-same, the ability to contract for it on a FAR-defined competitive basis would be feasible. Award to any other source for the near term will introduce program risk, schedule risk, technical risks, information assurance risk, and very high cost risks, which are disproportionate to the parameters, considered reasonable under customary competitive conditions.

Per FAR 16.505(b)(2)(i)(B) an exception to the fair opportunity process is justified because: The incumbent vendor is the only contractor that can meet the aggressive schedules and complex engineering to complete the existing CLS requirements, and deliver production-ready software to meet OSD’s deployment and operation schedules, cybersecurity parameters, functionality, and interface specifications. This is a logical follow-on owing to the state of the development effort which is underway. The initial order was awarded to provide basic functional capability, the logical next step is to incorporate the needs of the Services’ contract writing system requirements, which were not published formally when the initial CLS build effort was launched. The need for a limited source task order on the JETS IDIQ is based-on the aforementioned circumstances regarding the intricate lacing of skills and schedules. It is stipulated that the production software, once completed, should afford the Government, the ability to engender competition to the CLS Program. It is stated for the record that a new learning curve would be significant and costly to the detriment of the Services’ programs to replace the Standard Procurement System according to established policy and acquisition milestones. As previously stated, an alternate vendor will introduce program risk, schedule risk, technical risks, information assurance risk, and high cost risks disproportionate to the parameters, considered reasonable under normal competitive circumstances. The existing vendor’s qualifications are highly specialized to include the composite unique qualities of program experience, subject matter expertise, computing environment familiarity, and authorship of sophisticated algorithms based on FAR/DFARS prescriptions for the use of specific clauses to cover specific acquisition circumstances, and interfaces. These algorithms are implemented in a high performance business rules engine which is also tied to the DoD Procurement Data Standard and Procurement Request Data Standard. The contractor has a specialized expertise that is unique to the DoD new CLS system and is not readily available on short notice from any other vendor. This is because CLS is the only clause logic system that is being developed for the Department of Defense so there is nowhere else to pull this expertise.

The nature of the acquisition requires the use of the exception cited (16.505(b)(2)(i)(B)). The incumbent vendor has the ability to perform the unique functions of the software development as well as the specialized expertise in engineering and knowledge required to support CLS for the near term as demonstrated in the existing developmental user interface product and the existing developmental source code.

The aforementioned Schedule risk is also related to the program requirement that CLS must be ready to support testing and fielding from two to four new DoD contract-writing systems in the next 12 months, to include the development and fielding of DoD FedMall, which has considerable milestone dependency on the use of CLS. In summary, the schedule risk of delay in assimilating a new vendor in the near term will drive cost risk across the DoD Contract writing apparatus because the Standard Procurement System has end of life in the near future and will become unsupported. The next generation Contract Writing Systems require the use of DoD CLS. The exception to competition request covers a 12-month span ADC, after which full and open competition will be advocated. The immediate need is to retain the intimate knowledge gained during the current contract in the area of 1) development, 2) security design and 3) operational requirements 4) interface controls of CLS. Therefore, we forecast that the system can be ready for competition that is more open after the deployment milestones are achieved. The Government owns all the data rights to the system and hence it has not created a monopolistic dependency on the current vendor. The acquisition plan for completing the CLS baseline is a risk-reduction approach consistent with the overall acquisition plan for CLS. The existing task order number is

SP4701-15-D-0001-0019.

5. A DETERMINATION BY THE CONTRACTING OFFICER THAT THE

ANTICIPATED COST TO THE GOVERNMENT WILL BE FAIR AND REASONABLE:

The contractor Proposal will be analyzed in accordance with FAR 15.404-1 procedures. It is anticipated that the Government will use various price analysis techniques including, but not limited to: (1) Comparison of proposed prices to historical prices paid, in accordance with FAR 15.404- 1(b)(2)(ii); (2) Comparison with competitive price lists in accordance with FAR 15.404-1(b)(2)(iv);

and (3) Comparison of proposed prices obtained through other contracted CLS efforts for the same or similar items in order to obtain a fair and reasonable price in accordance with FAR 15.404- 1(b)(2)(vi).

6. ANY OTHER FACTS SUPPORTING THE JUSTIFICATION:

The interface with design specifications for FedMall and EProcurement, along with other new CWS interfaces (such as IDEAS), will depend on CLS readiness in 2017. The combined cost risk identified in this justification is or will be the delays in deployment for those systems.

Quantification is not forthcoming, but it is intuitively very high to the entire contracting community as discussed. It is in the best interest of the Government this contract be awarded to Northrop Grumman Systems Corporation for CLS production system delivery.

This acquisition will be a new task under the rate structure of the JETS IDIQ contract. The CLS Program Office has several years’ worth of data accumulated to evaluate the reasonableness of the price and effort to build-out and place the system into production.

he existing vendor is capable of preventing increased cost and schedule delays to the Government. The risk premium to the Government would pay to another vendor is the cost of regaining experience and technical footing and schedule recovery The risk premium also would include information assurance footing IAW the Risk Management Framework and attendant schedule loss getting the system approved for production, (effectively re-assembling the system components). The CLS Program Office will work to develop new sources as much as possible in parallel with the effort to finish making the system production-ready.

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

REMOVE OR OVERCOME ANY BARRIERS THAT LED TO THE EXCEPTION TO

FAIR OPPORUNITY BEFORE ANY SUBSEQUENT ACQUISITION FOR THE

SUPPLIES OR SERVICES IS MADE:

Once Clause Logic enters its sustainment phase, the requirements and build documents for CLS will provide the baseline needed for open competition. Before CLS is at the sustained level, DPAP expect approximately one year of requirement refinement, system development, testing and system deployment. It is critical DPAP achieves a sustained baseline level for CLS so that CWS integration can be done. As a continuing effort, 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.

8. CERTIFICATIONS.