USCG Consolidation DF for FY25 Red Hat Enterprise_Approved.pdf

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I TPotb,ni fi,I Contt·act

Value

2) Market Research

Market research was conducted from 28 August through 3 September 2024 via The National Aeronautics and Space Administration Solutions for Enterprise-Wide Procurement (NASA SEWP V). A Sources Sought was issued on 2 September 2024 to solicit responses from industry and dete1mine the existence of authorized and ce1tified resellers and service providers of Red Hat software. The Sources Sought resulted in nine responses from small business resellers indicating the capability of satisfying the government's consolidated requirement.

New contr·acts would be required upon expiration of the five existing conn-acts. This would require additional resources, time, and effo1t to implement individual contr·acts for Red Hat license subscription and maintenance suppo1t. The dete1mination has been coordinated with the U.S. Coast Guard's Small Business and Industry Engagement representative.

The results of the market research and the successful utilization of cunent vendors (Blue Tech, Inc. and StorageHawk with no repo1ted perfo1mance issues) provide evidence that small business resellers are available and capable of satisfying the government's requirement.

Market research has identified multiple small businesses that are able to satisfy all of the requirements set fo1ih in the Statement of Work.

3) Contr·acting Alternatives - Describe contracting alternatives that would involve a lesser degree of consolidation including the rationale for not using them.

New contr·acts would be required upon expiration of the five existing conn-acts. This would require additional resources, time, and effort to implement individual contr·acts for Red Hat license subscription and maintenance suppo1t.

4) Coordination with Component Small Business Specialist and Office of Small and Disadvantaged Business Utilization (OSDBU)

The dete1mination has been coordinated with the U.S. Coast Guard's Small Business & Industiy Engagement representative and the Office of Small and Disadvantaged Business Utilization (OSDBU).

5) Negative Impacts to Small Business Participation

The selected acquisition str·ategy does not pose a negative impact on contracting with small business concerns. The results of the market research and the successful utilization of cunent vendors (Blue Tech, Inc. and StorageHawk) provide evidence that small business resellers are available and capable of satisfying the government's requirement. In accordance with

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FAR 19.502, there is a reasonable expectation of obtaining offers from at least two responsible small business resellers.

6) Benefits

The benefit of consolidation exists within the streamlining of five existing contracts, four of which are awarded to Blue Tech Inc., and one awarded to StorageHawk, into one standalone contract. This would minimize contract administration efforts and reduce the time and resources dedicated to administering and managing five contracts. Consolidation would eliminate the need to assign five Contract Specialists and Contracting Officers to individual contracts and would instead only require one. Furthermore, consolidation will eliminate inconsistencies in administering individual contracts and will provide cost savings during contract administration. In the absence of the consolidation, five follow-on contracts would be required to preserve the level of maintenance and support currently being received.

Cost savings and price reductions have already been factored in by utilizing NASA SEWP V.

The NASA SEWP V vehicle is pre-negotiated to ensure products and services are available at the lowest possible costs. Consolidating Red Hat requirements into one contract will also result in USCG being able to negotiate discounted high volume product pricing. This concept/approach is commonly known as committed spending. Committed spending is an arrangement where an organization plans to spend a specific amount over a set period on a product or service to secure discounts on product pricing. This model helps reduce costs compared to one-time purchases, making it a popular choice for things like software subscriptions. It also improves budget predictability and strengthens vendor relationships.

USCG is seeking to establish a base contract with option years which should result in further discount potential. In addition, the Government will request an additional discount prior to award.

Quality improvement will be readily visible by way of reduction in administration requirements. By satisfying five requirements performed under one contract, time spent on procurement procedures and the management of the acquired software maintenance will be significantly reduced. Additionally, the time spent on contract administration will be reduced by an estimated 200 hours over the entire period of performance of the order by consolidation when considering invoice processing, completing purchase requests, and other administrative tasks related to the requirement.

Consolidation of these five contracts will have a significant benefit in decreased administration resources. Four of the five contracts are currently awarded to the same Contractor, through an established vehicle. Based on C5ISC estimates, consolidating contracts will result in cost savings of more than $ in the base year alone. Over the course of a five-year contract with option years, the cumulative savings could exceed $ assuming similar annual savings.

The consolidation of Red Hat enterprise software into a single contract does not meet the definition of bundling, per FAR Part 2, because the requirements are being consolidated into a single contract that remains suitable for small business participation. Market research indicates that multiple small business resellers are capable of fulfilling the consolidated