TAB G16_ AWARD SYNOPSIS__JA_MRO Suite Sppt.pdf

J&A 20-014

Ser F2552/ J&A 20-014

JUSTIFICATION AND APPROVAL

FOR USE OF OTHER THAN FULL AND OPEN COMPETITION

1. Contracting Activity

Naval Air Systems Command (NAVAIR), Commander, Fleet Readiness Center (COMFRC) Procurement Group, Patuxent River, MD

2. Description of the Action Being Approved:

This Justification and Approval (J&A) authorizes and approves, on a sole source basis, a Firm Fixed-Price (FFP) contract for the procurement of commercially available maintenance and technical / functional support services for the Maintenance, Repair and Overhaul (MRO) from

JDA Software, Inc. (Note: due to novation change in progress from JDA Software to Blue Yonder, Inc. references below have been adjusted to identify the vendor as the “Incumbent”)

15059 North Scottsdale Road, Suite 400, Scottsdale, AZ 85254-2666. The required mission critical services includes annual software maintenance and services of the MRO presently located and utilized at all three (3) Industrial Fleet Readiness Centers (FRCs) and FRC Field

Activities.

3. Description of Supplies/Services

The FRCs implemented the commercial MRO software suite in 1997. The MRO software is the

“backbone” of the FRC’s enterprise business software application, the Naval Air Systems Command (NAVAIR) Depot Maintenance System (NDMS). The software applications provide a complete, standardized, and automated repairables management system that includes business planning, production planning, master production scheduling, material requirements planning, capacity requirements planning, and the execution support systems for capacity and material for

Naval Aviation assets. This sole source contract would allow the FRCs using the MRO / Enterprise Project Planner (EPP) software to continue to maintain and sustain their existing

MRO implementation without disruption.

This J&A will permit the award for a twelve (12) month base period of performance and four (4) one-year option periods for a total of five (5) years. The estimated value of this effort is $6,964,928 (See table below).

Estimated Dollar Value

DEPARTMENT OF THE NAVY

NAVAL AIR SYSTEMS COMMAND, COMMANDER,

FLEET READINESS CENTER PROCUREMENT GROUP

47038 MCLEOD ROAD BUILDING 448

PATUXENT RIVER, MD 20670

IN REPLY REFER TO

FY 21 FY 22 FY 23 FY 24 FY25

O&MN $1,311,876 $1,351,232 $1,391,770 $1,433,522 $1,476,528

4. Statutory Authority Permitting Other Than Full and Open Competition

10 U.S.C. 2304(c)(1), as implemented by Federal Acquisition Regulation (FAR) 6.302-1, Only

One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.

5. Rationale Justifying Use of Cited Statutory Authority

In accordance with FAR 6.302-1(a)(2)(iii)(B) services may be deemed available from the original sources in the case of follow-on contracts for the continued provision of highly specialized services when it is likely that award to any other source would result in unacceptable delay in fulfilling the agency requirements. Furthermore, pursuant to FAR 6.302-1(a)(2)(iii)(A), award of these services would not only cause an unacceptable delay in fulfilling the agency requirements but would also cause substantial duplication of cost. The details of the delays and duplication of costs are provided below.

The incumbent is the sole designer, developer, manufacturer, and provider of software maintenance for this Commercial-Off-The Shelf (COTS) software. As such, the incumbent has unique and peculiar knowledge of the software, and the support associated therewith. JDA prevents any other company from accessing, manipulating or using their source code without express permission from the incumbent. To date, the incumbent has not given such permission to any other company. Therefore, no other company has the in-depth knowledge or access to proprietary resources, which is needed for the execution of this requirement, for this software application. The incumbent has 100% ownership of the COTS MRO software and its source code, that there is no other company that has access to the source code, and there are no resellers of its software. The incumbent is the only company that can provide the software maintenance and support services for the MRO (reference letter dated 22 August 2019 from Ms. Nancie

Torrence, GVP, Global Aerospace & Defense and Specialty Solutions, Blue Yonder, Inc.). The incumbent has been providing support to the FRCs under the current and prior contracts since

1997.

The ability to maintain and support this COTS software depends on proprietary intellectual property owned by the incumbent. Therefore, to re-compete the software development and procurement to manage NDMS maintenance, repair, and overhaul data for the FRCs would impose significant delays and additional costs that would seriously jeopardize the ability of the FRCs to support the warfighter. It is crucial that the FRCs continue with uninterrupted MRO software support from the incumbent for the efficient and effective operation of their facilities.

The NDMS Program initiatives, which rely upon the incumbent’s MRO / EPP applications as part of the solution include: First, the Assistant Secretary of the Navy (Financial Management and Comptroller) has mandated that COMFRC migrate from Defense Industrial Financial Management System (DIFMS) to Navy ERP by 2021. This mandate has driven a complex, resource intensive, multi-year initiative to re-design interfaces between the incumbent's MRO and the new financial system of record (Navy ERP). Should the NDMS Program lose access to the incumbent's MRO application, the Navy ERP migration effort would immediately be unexecute-able and both ASN (FM&C) and NAVAIR Leadership will become involved in mitigating the issue. No other MRO application can be acquired, configured, and deployed at this time without directly impinging on the mandate from ASN (FM&C).

Second, the NDMS Program is in the early stages of deploying an Electronic Work Package (EWP), which allows artisans to interact with the incumbent’s MRO work orders directly on mobile devices. This high priority initiative is briefed to Commander, Naval Air Systems Command (VADM Peters) who is critical stakeholder in its deployment. The EWP is an extension of the incumbent's MRO and no other MRO application can be acquired, configured, and deployed without directly impinging on the mandate from NAVAIR leadership to deploy EWP across all three industrial FRCs by 2021.

Once these major initiatives achieve their initial deployments, software support will continue to be required in order to optimize overall FRC MRO / EPP performance and additional interfaces tuning as well as new interfaces are expected to be required.

The incumbent’s product is the core application within the NDMS portfolio. As an Acquisition Category (ACAT) III Aircraft Maintenance (AM) Defense Business System, a replacement of the core application would first require the NDMS PMO to embark upon the multi-year process to receive spending authorization from DoD Deputy Chief Management Officer (DCMO) via the Defense Business Systems Investment Management Process. Only after receiving this approval could new contracting efforts begin. Because the incumbent’s MRO continues to perform as required and the company continues to invest and improve their product, given the cost duplication and schedule delay mentioned above, the NDMS Program cannot justify pursuing the lengthy and administratively complex process to seek its replacement. In fact, with their recent MRO 8.3 release, the incumbent has made changes to their core MRO product to keep pace with current software architectures and to provide futuristic and state of the art functionality consistent with COMFRC objectives and modernizations efforts.

The Government would come to great harm without support for this software because it is the central system upon which the entire NDMS business system is based. The ability for NDMS to support the FRCs in their mission to maintain, repair and overhaul NAVAIR assets (i.e., aircraft, airframes, engines, components, etc.) in an effective and efficient manner is absolutely essential for support of the Naval Aviation fleet. The software contains the central database and business software that allows the FRCs to control the assets being maintained, repaired and overhauled at the FRCs. The software manages inventory control, ordering of replacement parts, material planning, and supports repair and overhaul. Without this tool the entire NDMS system would be unable to operate, causing unacceptable delays in the turnaround of Naval Aviation assets to the fleet and directly affecting ongoing war efforts.

Over the past 23 years procurements in excess of $70.5M have been awarded by the Government to the incumbent for software licenses, implementation support services, and software maintenance in support of the FRCs. A new type of software would require a multiple-year procurement, training, and re-integration process, including thousands of man-hours and elapsed time to be expended by organic resources in training and implementation. This would cause a substantial duplication of costs and unacceptable delay of potentially four to six (4-6) years in providing the services now provided by the incumbent and the MRO / EPP software. It would be counterproductive to execute a competition, learn a new tool, and re-implement these sites using a new, unproven tool. If the software requirement were to be competed, the Government would have to retrain over 10,000 FRC employees and re-implement data conversion and over twenty system interfaces for a forecasted $38M in additional costs. These projected costs include an additional $20M in new software licenses, over $13.6M in System Integration, Site Test and

Data Conversion, and over $4.5M in organic end user training. It has been determined that these additional costs would not be recovered through competition as there are no other offerors who have the ability to maintain and support this COTS software, which depends on proprietary intellectual property owned by the Original Equipment Manufacturer (OEM).

The $20M new software license cost was estimated based upon pricing an enterprise-wide MRO solution for an enterprise with over 10,000 users such as the three FRCs, for software provided by companies such as SAP or Oracle. The System Integration, Site Test and Data Conversion costs were estimated based upon original costs experienced by the COMFRC when the MRO solution was first implemented at the FRC’s, including System Integration and Site Test of

$6,614,043 and Data Upload and Transition Costs of $7,079,083. The Organic End User Training cost was estimated based upon original costs experienced by the COMFRC when the

MRO solution was first implemented at the FRCs.

In summary, if this J&A for a follow-on software maintenance and support contract is not approved, the ability to maintain and continue the benefits of the incumbent’s MRO tool including increased war fighting asset availability, fast repair and overhaul turnaround which returns assets to the war fighter more quickly, lower costs, and improved utilization of Government assets, will be disrupted by costly and unacceptable delays. starting with fiscal year 2021.

6. Description of Efforts Made to Solicit Offers from as Many Offerors as Practicable

In accordance with Defense Federal Acquisition Regulation Supplement (DFARS) Procedures, Guidance, and Information (PGI) 206.302-1, a sources sought request for information notice was posted requesting alternative software solutions on the Government’s beta.SAM.gov website on 23 June 2020. The Government received only one response, which was from the incumbent

(JDA Software, Inc.). At this point no other software has been identified that can meet the requirements that the incumbent’s MRO / EPP is currently providing. The Contracting Officer intends to post a sole source pre-solicitation synopsis pursuant to FAR 5.201(b).

7. Determination of Fair and Reasonable Cost:

In accordance with FAR 15.402, the Contracting Officer shall ensure that all supplies and services provided under the resultant contract are procured at a fair and reasonable price. The

Contractor will be required to submit a formal commercially-price proposal with sufficient information to support the accuracy and reliability of the estimate. The incumbent’s proposal will be reviewed by experienced technical and cost analysts with the aid of necessary field pricing support to confirm the pricing is fair and reasonable. The Contracting Officer will utilize cost and price analysis as the basis for negotiating a fair and reasonable price.

8. Actions to Remove Barriers to Future Competition

As this is a COTS product, the Government does not have data rights and does not foresee procuring data rights in the future to compete the software solution in the future. The COMFRC

NDMS Program Office will continue to conduct market research for future requirements on existing and new technologies that become available. In the absence of a transfer of intellectual property underlying the incumbent’s MRO / EPP Software to another business, future competition for the support, maintenance and sustainment of this software in the FRCs is unlikely.

Because this effort is a follow-on for items previously awarded on a non-competitive basis, in accordance with DFARS PGI 206.304(a)(i), the prior J&A was provided to the approval authority for review. Approval of this J&A signifies the approval authority has made the determination required by DFARS PGI 206.304(a)(ii).

CERTIFICATIONS AND APPROVAL

TECHNICAL/REQUIREMENTS CERTIFICATION

I certify that the facts and representations under my cognizance which are included in this

Justification and its supporting acquisition planning documents, except as noted herein are complete and accurate to the best of my knowledge and belief.

Technical/Requirements Cognizance:

Signature Denise Judd 904-317-5559 Date

LEGAL SUFFICIENCY REVIEW

I have determined this Justification is legally sufficient.

Signature Kirsten Jabara 301-757-0578 Date

CONTRACTING OFFICER CERTIFICATION

I certify that this Justification is accurate and complete to the best of my knowledge and belief.

Signature Jessica Nelson 301-757-5932 Date

CHIEF OF THE CONTRACTING OFFICE, COMFRC PROCUREMENT GROUP

LEAD

Upon the basis of the above justification, I hereby approve the solicitation of the proposed procurement(s) described herein using other than full and open competition, pursuant to the authority of 10 U.S.C. 2304(c)(1)

Signature Tracy Medford 301-757-7045 Date