SSJ_v3.1.docx

SOLE SOURCE JUSTIFICATION (SSJ)

1. IDENTIFICATION OF AGENCY AND CONTRACTING ACTIVITY

Agency: Social Security Administration

Project Title: Subject Matter Expert Consulting Support for IBM Mainframe Software Contract

Proposed Contractor: SZS Consulting LTD

Tracking Information: Advanced Procurement Plan (APP) #: OTSO-16-016L0 Relevant current/previous order #: SS00-15-50316

2. NATURE OF ACTION BEING APPROVED

Type of Action:

_X_ New award ____ Modification of existing award, number ______________________

Contemplated Contract Type:

_X_ Firm fixed-price ____ Time and materials/labor hour ____ Combination

3. DESCRIPTION OF SUPPLIES/SERVICES AND ESTIMATED VALUE

Estimated Value: $125,508.81

The current approach at the Social Security Administration has been to negotiate with IBM lacking specific institutional information of how IBM can and will discount IBM Mainframe Software. The consequence of lacking this knowledge is that SSA may not be achieving all of the cost savings and/or cost avoidance that is possible or that SSA is eligible to receive from IBM. To ascertain if SSA has been achieving best value for the government in its purchase of IBM Mainframe Software will require the services of a consultant who has been privy to the specific discounting and pricing methodologies IBM has available, or has made available, for customers whose enterprises are comparable to SSAs. This purchase order will enable the Division of Resource Management and SSA Executives to demonstrate that adequate due diligence was in fact performed with regard to utilization of taxpayer’s funds to purchase IBM Mainframe Software. SZS Consulting will provide specific guidance with regards to structuring, and framing terms and conditions of the current and upcoming option years for SSA’s IBM Mainframe Software task order. SZS Consulting service will evaluate and inform the SSA about pricing flexibilities of future purchases IBM has regarding products and licenses.

4. IDENTIFICATION OF STATUTORY AUTHORITY PERMITTING OTHER THAN FULL AND OPEN COMPETITION

41 U.S.C. § 1901, as implemented by the Federal Acquisition Regulation (FAR) 13.5—“Simplified Procedures for Certain Commercial Items”.

The acquisition is “commercial” in nature, as defined at FAR Section 2.101, and will be solicited using FAR Part 12, as well as the procedures outlined at FAR 13.500.

The basis for restricting competition is that a reasonable basis exists for concluding that the agency’s minimum needs can only be satisfied by:

_X_ (1) Unique supplies or services available from only one source or only one supplier with unique capabilities ____ (2) The existence of limited rights in data, patent rights, copyrights, or secret processes; the control of basic raw material; or similar circumstances, make the supplies and services available from only one source

5. DEMONSTRATION OF CONTRACTOR'S UNIQUE QUALIFICATIONS

SZS has privy knowledge of IBM’s discounts, benefits, and comparable pricing offered to other agencies. The market research and additional information provided by SZS will be solely focused on price and terms.

IBM has made Mainframe Software pricing an extremely complex endeavor, and many potential avenues for cost savings, favorable terms and pricing, and discounts from economies of scale, are either obscured by IBM or simply not documented in the public domain. As such, the only individuals with specific knowledge of how IBM will discount its mainframe software are current and former employees of IBM.

SZS is uniquely qualified to provide these services to SSA based upon the following:

1. SZS was founded by David Wilson who is a retired IBM Executive with 30 years of service.

a. SZS has intimate knowledge of the often unannounced special terms and exceptions to IBM’s standard licensing and pricing policies.

b. Many of these special terms and conditions were developed by SZS principals prior to their implementation.

c. SZS has intimate knowledge of additional special terms and conditions available for IBM customers in the European Mainframe Market, which are likely to be unknown to US based consulting firms.

d. SZS, by virtue of experience within IBM, has an informed view of all of the license models announced by the major vendors in the mainframe area and the available special business or transaction oriented models implemented for specific situations.

2. Only a source with intimate knowledge of special discounts, terms and conditions, which have been utilized in the past by IBM will meet SSA’s needs for this engagement. This experience can only be obtained by someone who has worked at IBM at a sufficiently high level such that they are versed in the nuances of exceptions and special discounting offers, which IBM may make available to mainframe software customers.

6. DETERMINATION BY THE CO THAT THE ANTICIPATED COST TO THE GOVERNMENT WILL BE FAIR AND REASONABLE PRICE

In accordance with FAR Part 13.106-3, the CO will perform a final price analysis in order to determine the eventual awardee’s proposed price is fair and reasonable.

7. DESCRIPTION OF MARKET RESEARCH

_X_ We used market research conducted within 18 months of the anticipated award date. Therefore, we consider the information still current, accurate, and relevant.

_X_ When examining whether this is a requirement for Commercial vs Non-Commercial items, market research helped determined that this requirement involves _ X_ A) Items of a type customarily available in the commercial marketplace;

____ B) Items of a type customarily available in the commercial marketplace with modifications; or ____ C) Items used exclusively for governmental purposes (i.e. not commercially available).

_X_ Market research helped determine _X_ Customary practices regarding customizing, modifying, or tailoring of items to meet customer needs and associated costs;

____ Customary practices, including warranty, buyer financing, discounts, contract type considering the nature and risk associated with the requirement, etc., under which commercial sales of the products or services are made;

____ Requirements of any laws and regulations unique to the item needed;

____ Availability of items that contain recovered materials and items that are energy efficient;

____ Distribution and support capabilities of potential suppliers, including alternative arrangements and cost estimates; and _X_ Size and status of potential sources (see FAR Part 19).

_X_ Techniques for conducting market research include any or all of the following:

__X__ (i) Contacting knowledgeable individuals in government and industry regarding market capabilities to meet requirements.

__X__ (ii) Reviewing the results of recent market research undertaken to meet similar or identical requirements.

__X__ (iii) Publishing formal requests for information in appropriate technical or scientific journals or business publications.

____ (iv) Querying the government-wide database of contracts and other procurement instruments intended for use by multiple agencies available at https://www.contractdirectory.gov/contractdirectory/ and other government and commercial databases that provide information relevant to agency acquisitions.

____ (v) Participating in interactive, on-line communication among industry, acquisition personnel, and customers.

____ (vi) Obtaining source lists of similar items from other contracting activities or agencies, trade associations or other sources.

____ (vii) Reviewing catalogs and other generally available product literature published by manufacturers, distributors, and dealers or available on-line.

____ (viii) Conducting interchange meetings or holding presolicitation conferences to involve potential offerors early in the acquisition process.

____ Additional information, sources, comments

8. ANY OTHER SUPPORTING FACTS

In accordance with FAR 4.1102, 4.1201, and 9.401, upon selection of an awardee, the CO will examine the System for Award Management in order to make an affirmative determination of the contractor’s responsibility.

9. LIST OF SOURCES EXPRESSING INTEREST IN THE ACQUISITION IN WRITING

No other sources have expressed an interest in this acquisition.

10. ACTIONS AGENCY MAY TAKE TO REMOVE OR OVERCOME BARRIERS TO COMPETITION BEFORE ANY SUBSEQUENT ACQUISITION IS REQUIRED

We will continue to survey the market place by synopsizing our requirement and reviewing product literature and capability statements submitted by the vendor community.

CERTIFICATION BY THE CONTRACTING OFFICER AND

OTHER CONTRACTING OFFICIALS

The contracting officer and other contracting officials hereby certify that the information provided in support of this justification for an exception to fair opportunity is accurate and complete to the best of their knowledge and belief.

image1.emf image2.emf