USPTO-OP-026 Sole Source Justification_SIMS Follow-on Final Redacted.pdf

Form USPTO-OP-026.v5.0 (11/2023)

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Controlled by: United States Patent and Trademark Office, OCAO, RICPO, 571 272 9990

SOLE SOURCE JUSTIFICATION (SSJ)

(35 U.S.C. 2(b)(4)(A))

SECTION I. COMPLETED BY THE PROGRAM OFFICE

Program Office: Office of the Chief Information Officer (OCIO), Enterprise Infrastructure Delivery Office (EIDO)

Program Office POC: Dan Byrd

Title of Procurement: Storage Infrastructure Managed Services (SIMS) Contract

Acquisition Package #: ACQ-25-0153

Estimated Value (including options) Contracting Officer: Victor Martinez Contracting Officer Phone: (571) 270-1887 Vendor Name (if applicable): PERATON Contract or Order # (if applicable):

1. Description of the Action The USPTO intends to negotiate with and award a contract to Peraton, Inc. The total anticipated value of the contract is . The anticipated period of performance is a one-year base period and two (2) one-year option periods:

Base Period: December 1, 2024 – November 30, 2025 Option Period 1: December 1, 2025 – November 30, 2026 Option Period 2: December 1, 2026 – November 30, 2027

The contract type is hybrid allowing both ‘fixed price per unit’ for storage capacity and ‘labor hour’ for service.

2. Description of the Supplies/Services The purpose of this contract is to provide Storage Infrastructure Managed Services (SIMS) for the USPTO.

The SIMS contractor will provide USPTO with support in the areas of ownership, design, support, and maintenance of the USPTO’s storage infrastructures, located in Alexandria and Manassas, VA.

1) Storage Services – The table below provides an overview of the estimated price, by storage service class, for the agency’s maximum anticipated storage need:

Base Period: December 1, 2024 – November 30, 2025 Storage Service Classes Qty (TB) Cost per

TB/per month Amount

Enterprise Gold Performance Storage 10.40 Enterprise Silver Performance Storage 66.90 Enterprise Bronze Performance Storage 3,931.50 Data-at-Rest Encryption – Block Storage 1,767.20 Performance Storage Network Attached Storage Capacity 1,602.45 Data-at-Rest Encryption – Network Attached Storage 192.90 SAN Ports 1,672.00 Storage Performance Monitoring Software 8,260.40 Object Store 537.01 Object Store Cache 266.20 Enterprise Legacy Performance Storage 30.40 Enterprise Bronze Performance Storage Replication 5.20

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Hyperconverged Storage Node Infrastructure Optimized for MySQL Medium 0.00 Hyperconverged Storage Node Infrastructure Optimized for Backup – Small 1.00 Hyperconverged Storage Node Infrastructure Optimized for Backup – Medium 1.00 Hyperconverged Storage Node Infrastructure Optimized for Backup – Large 18.00

Option Period 1: December 1, 2025 – November 30, 2026 Storage Service Classes Qty (TB) Cost per

TB/per month Amount

Enterprise Gold Performance Storage 10.40 Enterprise Silver Performance Storage 66.90 Enterprise Bronze Performance Storage 3,931.50 Data-at-Rest Encryption - Block Storage 1,767.20 Performance Storage Network Attached Storage Capacity 1,602.45 Data-at-Rest Encryption – Network Attached Storage 192.90 SAN Ports 1,672.00 Storage Performance Monitoring Software 8,260.40 Object Store 537.01 Object Store Cache 266.20 Enterprise Legacy Performance Storage 30.40 Enterprise Bronze Performance Storage Replication 5.20 Hyperconverged Storage Node Infrastructure Optimized for MySQL Medium

0.00

"Hyperconverged Storage Node Infrastructure Optimized for Backup - Small" 1.00 "Hyperconverged Storage Node Infrastructure

Option Period 2: December 1, 2026 – November 30, 2027 Storage Service Classes Qty (TB) Cost per

TB/per month Amount

Enterprise Gold Performance Storage 10.40 Enterprise Silver Performance Storage 66.90 Enterprise Bronze Performance Storage 3,931.50 Data-at-Rest Encryption - Block Storage 1,767.20 Performance Storage Network Attached Storage Capacity 1,602.45 Data-at-Rest Encryption – Network Attached Storage 192.90 SAN Ports 1,672.00 Storage Performance Monitoring Software 8,260.40 Object Store 537.01 Object Store Cache 266.20 Enterprise Legacy Performance Storage 30.40 Enterprise Bronze Performance Storage Replication 5.20 Hyperconverged Storage Node Infrastructure Optimized for MySQL Medium

0.00

"Hyperconverged Storage Node Infrastructure Optimized for Backup - Small" 1.00 "Hyperconverged Storage Node Infrastructure

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�� 8niTue 9enGor QualiIications or 1ature oI the AcTuisition USPTO awarded task order DOC44PAPT1409026 to Peraton, Inc. (previous known as 9iON) in -uly 2014.

Since then, the SIMS infrastructure has been wholly owned and operated by Peraton, Inc. Originally, the SIMS task order included a base period of appro[imately 16 months, followed by si[ one-year option periods. On March 2020, USPTO e[tended the total period of performance task order DOC44PAPT1409026 by three years.

At the time of this three-year e[tension, USPTO¶s future storage strategy was undefined. Therefore, a re-compete of the SIMS task order was considered premature and would result in major financial and technical risks to the agency.

Since 2014, the USPTO has invested over �266M into the Contractor-owned SIMS environment, including all hardware and engineering associated with the agency¶s storage needs. If the SIMS reTuirement were to be competed at this time and awarded to any other contractor, a buyout of the e[isting SIMS infrastructure would be reTuired.

, as The USPTO currently estimates that such a buyout would cost the agency appro[imately outlined in the below table:

Price Composition 9alue Hardware acTuisition price 1 year hardware maintenance Re-purchase software licenses Annual labor cost for operations Total price to acTuire Peraton assets

In 2021, after the SIMS task order was e[tended, the Office of the Chief Information Officer (OCIO) established the Cloud Center of E[cellence (CCoE). The CCoE serves as a centralized cloud computing governance function for USPTO that advocates and is the champion for the CIO Cloud Strategy to drive cloud transformation and cloud migrations. Through the CCoE, a Cloud Migration Roadmap was established.

However, due to a lack of prioritization over the past three years, the agency has achieved only limited success in migrating its systems to the cloud. This lack of prioritization was recently corrected when, on -uly 2024, the USPTO¶s Financial Advisory Board, memorialized the agency¶s intent to finance an aggressive information technology (IT) technical debt reduction and cloud implementation plan. USPTO¶s new accelerated cloud implementation plan establishes that 100� of all cloud appropriate systems will move to the cloud by the end on fiscal year (F<) 2027. Based on this increased commitment to cloud migration, USPTO has established an ambitious on-prem storage reduction schedule:

On Prem Storage (PB*) Demand Quarter Date Actual Projected

Q1 FY24 12/31/2023 11.060

Q2 FY24 3/31/2024 10.890

2) Ancillary Engineering Services – The table below provides an overview of the estimated price for the agency¶s anticipated ancillary engineering services related to the SIMS reTuirement:

Period Estimated Price Base Period: December 1, 2024 – November 30, 2025 Option Period 1: December 1, 2025 – November 30, 2026 Option Period 2: December 1, 2026 – November 30, 2027

Total

The total estimated price for this contract is

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Q3 FY24 6/30/2024 9.580

Q4 FY24 9/30/2024 8.140

Q1 FY25 12/31/2024 7.891

Q2 FY25 3/31/2025 7.435

Q3 FY25 6/30/2025 7.425

Q4 FY25 9/30/2025 7.257

Q1 FY26 12/31/2025 7.195

Q2 FY26 3/31/2026 7.022

Q3 FY26 6/30/2026 7.011

Q4 FY26 9/30/2026 6.992

Q1 FY27 12/31/2026 6.992

Q2 FY27 3/31/2027 5.623

Q3 FY27 6/30/2027 5.213

Q4 FY27 9/30/2027 1.023

Q1 FY28 12/31/2027 1.023

1 Petabyte (PB) 1024 Terabytes (TB)

USPTO is already e[ecuting its planned migration by transitioning applications stored within the current SIMS task order to the cloud storage provided under the Enterprise Cloud Modernization (ECM) contract (1333B-21F00280055).

The planned retirement of the SIMS infrastructure is now aligned with the agency¶s cloud implementation plan of residing in the cloud by the end of F<2027. This makes the would-be SIMS infrastructure buyout investment obsolete in three years. The SIMS infrastructure buyout cost, which is over 90� of the total estimated value of the proposed three-year contract, represents an insurmountable financial burden to the agency over a three-year period. The USPTO¶s accelerated planned retirement of the SIMS infrastructure by F< 2027 eliminates the would-be SIMS infrastructure buyout for any residual on-premise data storage reTuirement (1.023 PB from above).

�� 2ther )acts Supporting the -ustiIication All USPTO data and global intellectual property resides on the SIMS infrastructure. If USPTO were to e[perience a lapse in service related to SIMS infrastructure, USPTO employees would lose access to USPTO data, effectively shutting down IT operations as systems will not operate without access to stored data. USPTO operations including patent and trademark e[amination would cease.

�� /isting oI sources that e[presseG interest in Zriting The acTuisition strategy to negotiate and award a µsole source¶ contract to Peraton, Inc. was formulated as a result of USPTO¶s new cloud implementation plan which was formalized on -uly 2024. Prior to this, USPTO was conducting market research for a Storage as a Service (STaaS) reTuirement which was meant to replace the SIMS task order. As part of the STaaS market research effort, USPTO posted a ReTuest for Information (RFI).

In total, 28 vendors responded to the RFI:

Amazon Web Services Freedom Technology Partners

(FTP) PVM

Blue Tech Inc. GovConnection, Inc. Red River Technology LLC Capital Technology GovSmart, Inc. Rubrik, Inc.

Capital Technology, LLC Greenbrier Government Solutions Inc RV Global Solutions Inc

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Data Storage Science, LLC (DSS) Hewlett Packard Enterprise SAIC Dell Federal Systems L. P. Insight Public Sector (IPS) SMS Data Products Group, Inc. (SMS) Deloitte Consulting LLP Leidos, Inc. Stratera Technologies, Inc.

Digital Technologies Inc NetApp U.S. Public Sector Inc. ThunderCat Technology, LLC Dynamic vSolutions Peraton Inc. World Wide Technology (WWT) Epoch Concepts Pure Storage, Inc.

SECTION II. COLLABORATION BETWEEN THE PROGRAM OFFICE AND OP

6. Adjudicated Type of SSJ (select from the drop-down box) [ o Sole Source (Procurement of supplies or services that is entered into or proposed to be entered into by an agency after soliciting and negotiating with only 1 source). ]

7. Statutory Authority

This action is being executed for Sole Source used in accordance with the authority of 35 U.S.C. 2(b)(4)(A) (Patent and Trademark Office Efficiency Act)

There’s a reasonable expectation that no other company can perform the work or provide the required supply. [Sole Source]

Given the financial constraints described in Section 3 above regarding the storage infrastructure buyout, no company other than Peraton, Inc. can fulfill the SIMS requirement.

8. Efforts to solicit as many potential sources as possible

As stated in Section 3 above, on March 2020, USPTO extended the total period of performance of the current SIMS task order with Peraton Inc. by three years. In its sole source justification for the extension, USPTO stated that “[o]nce the USPTO’s future storage strategy is finalized, the agency will make reasonable efforts to compete any future requirement.” To that end, in November 2023, USPTO launched a market research effort for a Storage as a Service (STaaS) contract. The STaaS requirement was envisioned as a Hybrid Cloud Operation model which included the gradual replacement/elimination of the SIMS infrastructure and eventual data migration into a 100% cloud environment over a six-year period of performance.

The USPTO invited industry to submit market research responses to the STaaS survey questions aligned to Hybrid Cloud Operations. Market research continued with USPTO requesting concept papers from a select group of vendors. After an assessment of all market research information received, USPTO identified four vendors to participate in an alternate competition in accordance with section 6.1.1 of the Patent and Trademark Acquisition Guidance (PTAG) and 35 U.S.C. 2(b)(4)(A) (Patent and Trademark Office Efficiency Act).

USPTO extended an advanced draft copy of the STaaS request for proposal (RFP) to the four selected vendors for feedback. On July 8, 2024, USPTO received over 120 questions/comments from the alternative competition vendors.

On July 24, 2024 the Financial Advisory Board (FAB) Financial Recommendations for the FY 2026 Budget Request to the Office of Management and Budget memorandum was finalized with a stated program performance outcome to “Move 100% of systems identified by the OCIO as cloud appropriate for patent, trademark, and enterprise business functions to the cloud by the end of FY 2027, thereby increasing resiliency and reliability.”

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The SIMS infrastructure buyout, by itself, presented a nearly intractable challenge to USPTO and the vendors selected to participate in the StaaS alternative competition. Accelerating the cloud migration only exacerbated that challenge. The FAB’s recommendation and USPTO’s subsequent adoption of its cloud implementation plan eliminates the need for SIMS infrastructure by the end of FY 2027. This shift from six years to an approximately three-year timeframe, in combination with the SIMS infrastructure buyout, renders the acquisition strategy for the STaaS requirement unviable.

At the conclusion of the anticipated sole source SIMS contract, USPTO plans to fulfill its enterprise need for storage via the ECM contract. The current ECM contract expires in September 2026. Market research for the follow-on ECM contract is anticipated to begin in the first quarter of FY 2025. Award of the follow-on ECM contract is projected for the 2nd half of FY 2026.

9. Market Research

USPTO conducted market research related to the now discontinued STaaS requirement. See section 8 for details.

10. Actions to remove or overcome barriers to competition

The USPTO’s planned retirement of the SIMS infrastructure by FY 2027 virtually eliminates the would-be SIMS infrastructure buyout for any residual on-premise data storage requirement. This removes the primary competition barrier should the agency need to compete and award a contract for on-premise data storage services beyond FY 2027.

Further, the agency’s cloud storage requirement is currently fulfilled via the Enterprise Cloud Modernization support contract (ECM) 1333BJ21F00280055. As stated in section 8 above, the current ECM contract expires in September 2026. USPTO will compete the follow-on contract to ECM in FY 2026. This competition is anticipated to begin on the 4th quarter of FY 2025 and an award is projected for the 2nd half of FY 2026.

SECTION III. COMPLETED BY OP

11. Determination by the Contracting Officer that estimated cost will be fair and reasonable.

The Contracting Officer will finalize a price reasonableness determination, appropriate to the contract type, prior to contract award. Detailed documentation and justification of price reasonableness will be provided in the Acquisition Form Documentation (AFD) to be prepared upon completion of negotiations.

SECTION IV. REVIEW AND APPROVAL

1. Technical Certification

By signature below, the Technical Representative certifies that the supporting data necessary to form the basis for this justification is accurate and complete to the best of their knowledge and belief. Furthermore, the Technical Representative certifies that the justification has been adjudicated by the Program Office and OP.

Technical Representative Digital Signature

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�� Contracting 2IIicer¶s CertiIication

By signature below, the ordering activity Contracting Officer certifies that this justification is accurate and complete to the best of their knowledge and belief.

Contracting Officer¶s Digital Signature

�� /evel aEove 5evieZ (/A5) (see 30 ������� Ior GeIinition) (reTuired for actions at all dollar values)

Level Above Review¶s Digital Signature

4. 2IIice oI *eneral /aZ (2*/) Counsel (reTuired for actions valued at !�2M)

Office of General Law Counsel¶s Digital Signature

5. Competition AGvocate Approval� (reTuired for actions valued at !�2M to ��15M)/Concurrence (reTuired for actions valued above �15M) 1/A

Competition Advocate Digital Signature

�� Bureau 3rocurement 2IIicial (B32)/ 'irector oI 23 (or 'esignee) (reTuired for actions valued at ��5M) 1/A

By signature below, the ordering activity BPO/Director of OP certifies that this justification is accurate and complete

BPO/Director of OP (or Designee) Digital Signature

Contracting Officeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeer¶r¶r¶r¶¶¶r¶¶r¶¶r¶r¶r¶r¶r¶r¶r¶r¶¶¶¶r¶r¶r¶r¶r¶r¶rr¶r¶¶¶r¶r¶r¶r¶r¶¶¶r¶r¶r¶r¶r¶¶r¶r¶r¶rr¶r¶r¶r¶rr¶rr¶r¶rrrr¶rrrrrrrrrrrr¶rrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr sssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssssss Dig

Users, Martinez, Victor

2024.10.07 11:36:00 -04'00'

By signature below, the ordering activity LAR certifies that this justification is accurate and complete to the best of their knowledge and belief.

1/A

By signature below, the ordering activity OGL Counsel deems this justification legally sufficient.

By signature below, the Competition Advocate certifies that they have reviewed this justification and has determined that sufficient facts e[ist to support the justification.

to the best of their knowledge and belief.

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7. Head of the Contracting Activity (HCA) (or Designee) Approval (required for actions valued >$15M) N/A

By signature below, the HCA certifies that they have reviewed this justification and has determined that sufficient facts exist to support the justification.

HCA (or Designee) Digital Signature

Section V. Attachments [As Required] None