82_-_EFO_-_JETS_EBS_Production_Support_Mod.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(b)(2))

Upon the basis of the following justification, I hereby approve the issuance of the contractual action described below using an exception to fair opportunity, pursuant to the authority cited herein.

1. IDENTIFICATION OF AGENCY AND CONTRACTING ACTIVITY:

Agencies Requiring Activity:

Defense Logistics Agency J62E 8725 John J. Kingman Road Fort Belvoir, VA 22060 POC: Colby Rickabaugh Phone: 717-770-6153

Contracting Activity:

DLA Contracting Service Office- Philadelphia 700 Robbins Avenue Philadelphia, PA 19111-5092 POC: Valarie Palumbo Phone: 215-737-7055

2. NATURE AND DESCRIPTION OF THE ACTION BEING APPROVED:

Pursuant to FAR 16.505(b)(2), the action being approved is an exception to fair opportunity. DCSO

– Philadelphia awarded an Enterprise Business System (EBS) Production Support task order competitively on May 1, 2018 to maintain and sustain the EBS system by providing contractor support for on-going J62E analysis, requirements, design, development, integration, test, deployment, and sustainment for EBS Portfolio Management (PfM) modernization and sustainment programs.

After award of the EBS Production Support task order, the J8 Finance office requires additional IT support to work on the Treasury mandated G-Invoicing system and to implement EBS system changes to correct notices of findings from DLA’s auditor. DLA requires services to develop a technical design to allow EBS to interact with Treasury’s G-Invoicing system. This will include design and build of interfaces for general terms and condition agreements with DLA’s customers and interfaces for billing, receipt, acceptance and payment of intra-governmental transactions for DoD and federal trading partners. The G-Invoicing system will replace and enhance the existing Military Interdepartmental Purchase Request (MIPR) process. The Fiscal Service of the Treasury

Department is mandating all Federal agencies to use the G-Invoicing system under the authority of 31 U.S.C. 3512(b) and 3513 and DLA’s goal is to comply with the general terms and conditions for G-Invoicing in FY19. This requires additional support because the Treasury/DoD mandated timeframes (OSD Comptroller has requested GT&C compliance in 2019) and the scope of audit findings was not understood prior to the award of the Production Support task order. Ernst and Young (DLA’s auditor) will be issuing over 100 additional notice of findings as part of the FY18 audit. They have been presenting the draft of those findings between July and September of 2018.

Ernst and Young provides new draft findings almost every day. The G-Invoicing implementation schedule, 5055 interface enhancements, negative payables redesign, and FSCM implementation are emerging business requirements, which were not finalized at the time of the original contract award. These changes in J8 business requirements necessitate additional contractor support to implement the required EBS changes to satisfy DLA’s business needs.

In recent months, it has become apparent that DLA cannot effectively manage over 1 million open accounts receivable documents worth more than $3B using existing EBS tools. DLA purchased SAP’sFSCM module license in May 2018, which now need to be configured and implemented by a vendor familiar with DLA’s billing and accounts receivable processes to be integrated with EBS.

FSCM is SAP’s Financial Supply Chain Management module. It provides the capabilities needed to establish a more robust collections department at DLA. FSCM provides workflow lists for collection specialists and will provide the ability to track customer contacts, promises to pay and provide additional reporting and oversight for collection efforts.

J8 also requires an enhancement to existing EBS interfaces associated with the accounting of collections and disbursements. The existing EBS interface does not process partial payments or collections which results in thousands of rejected interface transactions each month. This modification will allow the existing EBS FI-INT-5055 RICE object to automatically process partial payments and collections and thereby reduce manual workload. FI-INT-5055 is the EBS inbound interface from a DFAS system called DDARS. DDARS is a system DFAS uses to voucher collections and disbursements. DFAS senior leaders have recently told J8 leadership that DLA will not be able to improve their Funds Balance with Treasury (FBWT) Reconciliation without these changes. FBWT reconciliation is required for DLA to pass an audit in FY19. The current EBS Production Support contractor, Accenture, is familiar with the existing 5055 interface and is the only source capable of starting the 5055 interface modifications immediately.

Immediate support is required to remediate the audit findings as soon as possible based on the direction of the Vice Director and DLA senior leaders.

DLA has received numerous audit findings around negative payable postings. From May 22, 2018 through May 25, 2018, a cross-process team met at DLA’s Lorton facility to redesign the negative payable process. DLA is non-compliant with the Treasury Financial Manual (TFM) United States Standard General Ledger (USSGL) relative to Negative Payable general ledger postings. To address this issue, the DLA Director established a task force/audit surge team to develop the required corrective action plan for the Independent Public Auditor’s 2017 Notice of Finding and Recommendation (NFR) FIN-2017-TF-024, GF-033, and WCF-058. A request for J6 support to design the modifications to the EBS negative payable logic was created in June 2018. To date, J6 has been unable to start work on this project given existing levels of resourcing and other audit workload. It has been determined that existing processes within EBS will need to be redesigned or updated to address a new way of handing payments without a receipt. The negative payable problem needs to be corrected in FY19 for DLA to pass an audit. This is one of DLA’s most significant audit findings in our general ledger. Because of the negative payable problem, DLA is non-compliant with the Treasury Financial Manual, the United States Standard General Ledger, Generally Accepted Accounting Principles (GAAP) and mandated budgetary to proprietary tie-points for reconciliation. It is imperative that this work starts as soon as possible so the vendor is able to correct the negative payable problem early in FY19. Delaying the implementation of negative payable correction, delays the timeframe for DLA passing an audit. Audit compliance is a major focus for the DLA Director and OSD Comptroller.

The Defense Logistics Agency Information Operations (J6) will be automating many of DLA’s “transactional” type processes and tasks through Robotic Process Automation (RPA). This technology can take manual, high-volume, repetitive rule-based processes and accomplish these repetitive tasks quickly at reduced costs and higher performance (24x7). To expand on the initial capabilities and deliver RPA capability to more users, additional support is needed to help gather requirements and deliver cross functional capabilities utilizing agile methodologies. This support will collaborate with DLA Requirements Managers and Requirements Owners to gather, analyze, refine, and confirm requirements. It will work with DLA Requirements Managers to continuously manage and prioritize requirements within the Agile methodology framework and maintain management and traceability of all requirements.

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

THE AGENCY’S NEEDS/ESTIMATED DOLLAR AMOUNT:

The purpose of this modification to the current task order is to obtain support for new requirements to the EBS program that were not anticipated in the original sustainment task order award.

After award of the EBS Production Support task order, the J8 Finance office requires additional IT support to work on the Treasury mandated G-Invoicing system and to implement EBS system changes to correct notices of findings from DLA’s auditor. DLA requires services to develop a technical design to allow EBS to interact with Treasury’s G-Invoicing system. This will include design and build of interfaces for general terms and condition agreements with DLA’s customers and interfaces for billing, receipt, acceptance and payment of intra-governmental transactions for DoD and federal trading partners. The G-Invoicing system will replace and enhance the existing Military Interdepartmental Purchase Request (MIPR) process. The Fiscal Service of the Treasury Department is mandating all Federal agencies to use the G-Invoicing system under the authority of 31 U.S.C. 3512(b) and 3513 and DLA’s goal is to comply with the general terms and conditions for G-Invoicing in FY19. This requires additional support because the Treasury/DoD mandated timeframes (OSD Comptroller has requested GT&C compliance in 2019) and the scope of audit findings was not understood prior to the award of the Production Support task order.

The Robotic Process Automation (RPA) program requires support to automate processes which are currently EBS portfolio processes. This requirement is an urgent requirement as it is one of the CIOs top priorities. This process will support DLAs urgent priorities of Audit Readiness and EBS Reconciliation. Support that is needed consists of program and technical support related to EBS and knowledge of EBS organizational and technical structure. The support resource will provide guidance to the RPA team, develop program specific documentation and keep track of tasks.

This modification will also support the newly acquired Spigit software integration. This support will include installation, configuration and sustainment of the software. The contract to acquire

Spigit software was awarded August 10, 2018 and the period of performance began on September 17, 2018. DLA requires cleared administrators that can obtain access to our government systems to perform sustainment activities. Making this software available in DLA will directly support the DLA Directors Strategic Plan of embracing innovation and creating an innovative workforce. This software is designed to solicit DLA employees on ways to solve problems the agency faces and will give them an opportunity to bring to light potential solutions. The current vendor is uniquely positioned to offer this support because they have the ability to staff qualified and knowledgeable resources needed to support the criticality of the initiative. The current vendor is best positioned to locate a resource with the right technical skills and EBS system knowledge.

The current task order period of performance is 01 May 2018 to 31 October 2018 with two 12-month option periods and one 6-month option period. The period of performance for the new requirement is 30 September 2018 to 30 April 2021. The estimated dollar value of this requirement from 30 September 2018 to 31 October 2018 is $449,157.80. The estimate dollar value from 01 November 2018 to 31 October 2019 is $1,862,696.14. The estimate dollar value from 01 November 2019 to 31 October 2020 is $908,691.60. The estimate dollar value from 01 November 2020 to 30 April 2021 is $469,853.20. The total life cycle cost for this requirement is $3,690,398.74.

4. IDENTIFICATION OF THE EXCEPTION TO FAIR OPPORTUNITY (SEE 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(b)(2)(i)(B) an exception to the fair opportunity process is justified because only one awardee is capable of providing the supplies or services required at the level of quality required in the required timeframe because the supplies or services ordered are unique or highly specialized.

The expertise regarding the technical details and functional configuration of EBS is essential to ensure interoperability between the existing production system and G-Invoicing. Detailed knowledge of EBS is required to implement EBS modifications to address and correct audit findings. The many years of Accenture support on the EBS contract make them uniquely qualified to provide the necessary expertise without any time for knowledge transfer to meet the G- Invoicing and audit remediation schedule. Historically, it takes approximately a year for SAP subject matter experts to have the necessary detailed EBS expertise to work complex system changes independently. That year includes 3 months of system monitoring, 3 months of working tickets, 3 months of configuring simple system changes and 3 months of shadowing experienced developers on more complex system changes.

5. A DETERMINATION BY THE CONTRACTING OFFICER THAT THE

ANTICIPATED COST TO THE GOVERNMENT WILL BE FAIR AND REASONABLE:

As the Contracting Officer, I hereby determine that the anticipated cost to the Government will be fair and reasonable. Proposals 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 with competitive price lists in accordance with FAR 15.404-1(b)(2)(iv);

and (2) Comparison of proposed prices obtained through market research 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:

N/A

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:

The EBS Production Support Contract was solicited as a competitive acquisition under the JETS contract. The new scope and requirement for support of the DLA Financials and RPA will be included as part of the Performance Work Statement for future EBS Production Support services, if any, and will be solicited on a competitive basis. This modification includes urgent DLA initiatives that were identified during the competition of the Production Support Contract and soon after award. As future needs are identified, we will have time to solicit on a competitive basis and still meet the required delivery date.

8. CERTIFICATIONS.

TECHNICAL CERTIFICATION

Requirements Certification: I hereby certify that the support data provided for which I am responsible and which form a basis for this justification are complete and accurate.

_____________________________________ 09/27/2018 Susan Vanmeter DATE J62E Portfolio Manager

Contracting Certification: I hereby certify that this justification is accurate and complete to the best of my knowledge and belief.

Valarie Palumbo DATE Contracting Officer

DLA Contracting Services Office Philadelphia

In accordance with FAR 16.505(b)(2)(ii)(C)(2), I have determined that FAR 16.505(b)(2)(i)(B) applies and I approve this justification.

John Fafara DATE Competition Advocate DLA Contracting Services Office Philadelphia