J A_ERDC_TI.pdf

Control No. HNC 16-60651

Procurement Sensitive

FOR OFFICIAL USE ONLY - IAW FAR 3.104

Justification Review Document For

Other Than Full and Open Competition

Requirement: Issue a Basic Ordering Agreement (BOA) Call Order for administration and maintenance support services to provide daily onsite and remote support for the High Performance Computing Modernization Program (HPCMP) Technology Insertion 2014 (TI 14) system at the Engineering Research Development Center (ERDC) Department of Defense (DoD) Supercomputing Resource Center (DSRC) located in Vicksburg, MS. Description of work includes on-site system administration, remedial hardware/software inspection and maintenance, and preventative hardware/software inspection and maintenance.

Authority: 10 U.S.C. 2304(d)(1)(B) as implemented by Federal Acquisition Regulation (FAR) 6.302-1(a)(2)(iii), “Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.”

Amount: $4,830,657.00

Prepared by:

Name: Richard Himebrook Phone: (256) 895-2534 Title: Contract Specialist Date: 23 Dec 2015 e-mail: richard.g.himebrook@usace.army.mil

Contracting Officer:

Name: Tracey Shaw Phone: (256) 895-2532 Title: Procuring Contracting Officer Date: 23 Dec 2015 e-mail: tracey.shaw@usace.army.mil

Technical Representative:

Name: Tony Benson Phone: (256) 895-1749 Title: ITS Project Manager Date: 23 Dec 2015 e-mail: tony.r.benson@usace.army.mil

Requirements Representative:

Name: Christine Cuicchi Phone: (228) 688-4771 Title: Associate Director for HPC Centers Date: 23 Dec 2015 e-mail: christine.cuicchi@hpc.mil mailto:richard.g.himebrook@usace.army.mil mailto:tracey.shaw@usace.army.mil mailto:tony.r.benson@usace.army.mil mailto:christine.cuicchi@hpc.mil

Reviews: I have reviewed this justification and find it adequate to support other than full and open competition.

Program Manager:

Name: Alonzo Andrews

Signature: _ Date: _

18 December 2015

Legal Counsel:

Name: Karl Kuhn

Signature: _ Date: _ 30 November 2015

Date:

PARC-WIN CONCURRENCE:

HQ USACE Technical:

CALLOWAY.JOH Digitally signed by

Name: CALLOWAY.JOHN.RICHARD.1043233145 DN: c=US, o=U.S. Government, ou=DoD, ou=PKI, ou=USA, cn=CALLOWAY.JOHN.RICHARD.104323314

Signature: 233145 2016.01.12 13:51:26 -05'00' Date:

HQ Legal Counsel:

Name:

Digitally signed by

BILOTTI.DANIEL.K.1285807065

DN: c=US, o=U.S. Government, .K.1285807065 ou=DoD, ou=PKI, ou=USA, cn=BILOTTI.DANIEL.K.1285807065

Signature: Date: 2016.01.15 10:50:24 -05'00' Date:

N.RICHARD.1043

BILOTTI.DANIEL

Justification Review Document For

Other Than Full and Open Competition

Super Computer Administration and Maintenance

1. CONTRACTING ACTIVITY: United States Army Engineering and Support Center (CEHNC), 4820 University Square, Huntsville, AL 35816-1822.

2. DESCRIPTION OF ACTION: Approval is requested to negotiate a new sole source firm-fixed price (FFP) order against the Basic Ordering Agreement (BOA) W912DY-13-G-0025 to Silicon Graphics, Inc. (SGI) on the basis of other than full and open competition for administration and maintenance support services for the HPCMP TI 14 at the ERDC DSRC located in Vicksburg, MS. Services will include on-site system administration, remedial hardware/software inspection and maintenance, and preventative hardware/software inspection and maintenance. This procurement will be made using FY 2015 RDT&E funds, which is the appropriations type that is utilized by the DSRCs for Operations & Maintenance purposes. The funds provided for this purpose have been reviewed and approved for this effort, and have been made available in the Corps of Engineers Financial Management System (CEFMS) and allocated to PR&C W31RYO51952764.

3. DESCRIPTION OF SUPPLIES OR SERVICES: Description of services includes on-site system administration, remedial hardware/software inspection and maintenance, and preventative hardware/software inspection and maintenance. The system maintenance is critical to the Defense Supercomputer Research Center (DSRC) which is a premier provider of higher performance computing services, supporting the US DoD scientists and engineers. It is one of five supercomputing centers established under the DoD HPCMP Charter. These systems leverage high performance computers to greatly improve the computational research environment for DoD researchers. The period of performance for this order will be 6 Feb 2016 through 16 Aug 2019, which includes a 192 day base period and three one-year option periods.

The total estimated cost of this acquisition is $4,830,657.00. This includes amount is based on preliminary estimates provided by the contractor and is subject to negotiations. This system was previously secured under a contract that unintentionally failed to have its option exercised and a bona-fide need for the maintenance of this system still exists. This new order will fulfill the remaining portion of the originally contemplated Period of Performance (PoP). At the end of this order, the system will be decommissioned and there will be no need for further support of this system.

4. AUTHORITY CITED: 10 U.S.C. 2304(d)(1)(B) as implemented by Federal Acquisition Regulation (FAR) 6.302-1(a)(2)(iii), “Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.”

5. REASON FOR AUTHORITY CITED: In accordance with (IAW) FAR 6.302-1(a)(2)(iii), services may be deemed to be available from only the original source 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 substantial duplication of costs to the Government that is not expected to be recovered through competition and failure to accomplish this action would result in unacceptable delays in fulfilling the agency’s requirements.

The supercomputer that requires continued administration and maintenance support was designed, manufactured, configured, and tested by SGI. Due to the highly technical nature associated with designing and implementing a supercomputer construct, only the original contractor that implemented the hardware and software solution could feasibly accomplish this effort without the government incurring considerable risks when considering financial expenditures and a timeline that would be prohibitive to supporting the system and mission of the DSRC. The system utilizes open-source Linux software, which provides the functionality to effect high-speed parallel communications and concurrent processing among thousands of compute nodes. Although this software language is not proprietary, the time associated with allowing another contractor to decipher SGI’s code and to learn the intricacies and nuances of how the system functions would surely result in breaching the PWS parameters associated with system effectiveness levels, down-time, and user-job interrupts. Additionally, code manipulation could have the unintentional consequence of causing possible irrevocable harm and/or total system failure. The up-front expenditures associated with this system was $27,340,000.00.

Moreover, to compete this requirement openly and then allow another vendor an opportunity to perform work on the system that was designed, built and installed by SGI would result in SGI revoking the warranty on this TI system. This maintenance agreement covers the full-value of any parts that fail during a covered maintenance period, and the PoP associated with this J&A would qualify for this coverage as these associated costs were incorporated into the original proposal for the base installation of the system. The government would be sacrificing the value of this support if it were to allow another contractor to maintain this system. SGI will honor this warranty due to the fact that this order and all of the parameters identified in the PWS will align with the original performance expectations in the previous order that unintentionally went unexercised. The risk exposure for the TI system and the failure of the DSRC’s mission is too great when considering the dollar value of the initial investment and the likelihood that a warranty repair situation will occur throughout its lifecycle. Although system failure and the loss of the initial investment is of paramount concern, other costs can be identified by examining the government’s procurement process. The estimated duplication of costs for the government to re-procure the services by openly competing this requirement are estimated at $176,274.00. A breakdown of these associated re-procurement costs are located in Attachment 1.

Cyber security is another major topic of concern. There can be no degradation to operations involving the Information Assurance readiness of this supercomputer system. Allowing another contractor to initialize work on this system would increase the likelihood of failure to accomplish the required patches and updates on time as the contractor is spooled-up, which will increase the vulnerability of the system and the likelihood of it being breached through a malicious cyber-attack.

With the highly technical nature associated with implementing and designing a supercomputer construct, it is not feasible for any company other than the creator of this system to perform the maintenance services required, without expecting considerable financial, schedule, and mission related risks.

6. EFFORTS TO OBTAIN COMPETITION: A sources sought announcement was posted on 30 September 2015 and closed on 31 October 2015. This notice was open for a total of 31 days, and 11 vendors identified themselves as interested parties through the self-select function in the GPE. Of the 11 vendors that were identified as interested parties, only 5 respondents submitted a Market Survey Questionnaire, as instructed. The questionnaire was designed to gather information about firms that could potentially on-ramp with the HNC TI BOA and identify companies that had the capabilities to fulfill this requirement. The results of the sources sought announcement and market survey was that none of the firms were able to successfully substantiate themselves as having the required skills, experience, or offerings for all of the requirements outlined in the questionnaire and therefore indicated that no new firms existed with the highly complex capabilities to meet the technical requirements of the BOA.

A notice of intent to sole source this work was sent to the HNC HPC TI BOA holders on 16 November 2015. All of the BOA holders (Cray, SGI and HP) expressed disinterest in performing work on any systems other than their own, for the same risks and reasons that were identified in Section 5. – “Reason for Authority Cited.” Based on this information, the government expects that only one company is able to fulfill this requirement without incorporating excessive risk of exorbitant costs and mission downtime. Additionally, a notice of intent was also published on FedBizOpps.gov on 15 December 2015 and will close on 26 December in accordance with the requirements in FAR 5.203(a)(1). To date, there haven’t been any companies that have the technical capability or capacity to expeditiously fulfill this requirement in a cost-effective manner.

Once this J&A is approved, it will be posted to FedBizOpps.gov within 14 days after award IAW FAR 6.305(a) as required by 10 U.S.C. 2304(1).

7. ACTIONS TO INCREASE COMPETITION: The sole source nature of these services procured via this J&A and resultant contract, are not the normal means of procuring these services. Typically, orders accomplished under the HNC HPCMP TI BOA are competitively sourced, and maintenance and support is accomplished over the course of four, one-year option periods. BOA holders as well as all other open market vendors are able to compete for TI awards but this system inadvertently failed to have its option exercised and the requirement for support remains. The long term programmatic objective is to continue to compete each new BOA order, however once a system is in place, the creator of the system is the best option to be the provider of administration and maintenance. Ultimately, any potential benefits of achieving competition for this requirement would be far outweighed by the impact of delaying the supercomputer system administration and maintenance support, which would negatively affect the mission and workload of the DSRCs.

Each BOA order is solicited IAW FAR 16.703(d)(1), with opportunities for new vendors to on-ramp to a new BOA. Further, with the last several awards there were no additional Original Equipment Manufacturer (OEM) vendors who met the minimum node count qualifications for

BOA eligibility. In all solicitations listed below, no additional vendors have been on-ramped on to the HNC HPCMP TI BOA.

• W912DY-13-G-C575; TI-13, BOA Orders 1 &2 (AFRL and Navy)

• W912DY-14-G-C845; TI-13 DHPIs (AEDC, AFRL, & NAVSEA)

• W912DY-14-G-T917; TI-14 (ARL)

• W912DY-14-G-T918; TI-14 (ERDC)

• W912DY-14-G-T919; TI-15 (AFRL)

• W912DY-14-G-T920; TI-15 (Navy)

8. MARKET RESEARCH: Mandatory sources on the Army’s Strategic Sources List Blanket Purchase Agreements (BPAs) were considered, such as Information Technology Enterprise Solutions – 2 Services (ITES-2S), Information Technology Services – Small Business (ITS-SB), and Next Generation (NexGen), but none of the companies identified on this site were feasible and awarding this requirement sole-source was deemed necessary for the reasons outlined in Section 5. “Reason for Authority Cited.” Additionally, an annual review of the BOA was performed in June of 2015, with the findings indicating that the BOA is still the most effective means of meeting the Government’s requirement for the acquisition and maintenance support of TI supercomputer systems.

SGI was contacted with regards to competing the administration and maintenance of this requirement, and out of this conversation of key note, was the voiding of the warranty for the system and all of its components. Any product failure that would occur after having been serviced by a company other than themselves, would not qualify for replacement at no-cost and therefore, any pursuit of another firm to perform this requirement is likely to be substantially higher in cost when compared to the original manufacturer of the system. Industry assessments by the customer and end users representative indicates that there are no additional firms capable of providing the required services at a lower cost than those that can be obtained from the original designer of the system. While there are other providers of the system components, market research shows that it would cost the government a considerable amount of time and money for a new contractor to survey the system and develop a maintenance plan for the existing TI. Although similar products are available through other manufacturers under the BOA, none are as familiar with the software and equipment as SGI since they produced, designed, and manufactured it.

9. INTERESTED SOURCES: As indicated above a Notice of Intent was issued to all three BOA holders on 16 November 2016. As a result, SGI was the only interested source for this requirement. A notice of the Government’s intent was also published on FedBizOpps.gov on 15 December 2015 and closed on 26 December 2015 IAW the requirements in FAR 5.203(a)(1).

There were no interested parties identified on FedBizOpps.gov in response to this notice of intent.

10. OTHER FACTS:

a. Procurement history.

Order # Dollar Amount

Type Period of Performance

Description Disposition

W912DY-13-

G-0025-0001

$32,820,000

FFP

26 Sep 2014

– 24 Apr (7 month base + 4 option yrs)

Design, develop, install, configure and provide administration and maintenance services of supercomputer

Allowed to lapse

$145,822.34

No Order in place

27 Jun 15 – 16 Aug 2015 (50 days)

Contractor continued to provide maintenance services at risk and a ratification is currently being processed.

Ratification Approved

W912DY-13-

G-0025-0003

$649,342.47

FFP

17 Aug 2015

– 5 Feb 2016 (173 days)

Administration and maintenance services for supercomputer

Current Order

SGI received the competitive award for the original firm-fixed price (FFP) BOA Order for this requirement, W912DY-13-G-0025-0001, which included the installation and configuration of the supercomputer system valued at $32,820,000.00, along with four one-year option periods for administration and maintenance. The option years were valued at approximately $1,370,000.00 each. The original award and all option period administration and maintenance pricing were established under competition using the HNC HPCMP TI BOA. The option year for maintenance services was not exercised prior to expiring and a sole source FFP order against BOA W912DY-13-G-0025, Order 0003, was awarded to SGI for the period of 17 Aug 2015 through 5 Feb 2016, valued at $649,342.47 (Ref J&A HNC-15-60507). This sole source order was a bridge to provide continuing service to an existing TI system that is currently in operation and supporting the DoD mission. This bridge was necessary to continue service in the interim period until the remainder of the services could be procured to continue support until the end of the lifecycle for this particular TI. Failure to enact a bridge would have left the TI system inoperable in a very short period of time, and ultimately the DoD Research Engineering Network mission would have failed.

While the current order’s period of performance (PoP) is due to expire on 5 February 2016, the DSRC has a continued requirement for maintenance support. Based on this need, a sole-source follow-on order is expected to be awarded with a PoP of 6 February 2016 through 16 August 2016 with three, one-year option periods. This is to complete the intent of the original BOA order for the TI when competed.

A QASP and COR will be appointed to this order to ensure that future options are exercised in a timely manner.

b. Acquisition data availability.

The technical data packages and Performance Work Statement (PWS) are maintained in the contract file and are available upon request. NOTE: The technical data packages, while available, contain proprietary information and are not releasable outside of the US Department of Defense.

c. Unusual and compelling urgency.

N/A

d. Subcontracting competition.

The BOA contains specific language to address subcontracting competition and small business participation. Subcontract work under this order is expected to be carried out in an ethical manner that provides the maximum benefit to the government IAW FAR 52.203-6 “Restrictions on Subcontractor Sales to the Government,” FAR 52.203-13 “Contractor Code of Business Ethics and Conduct,” FAR 52.209-6 “Protecting the Government’s Interest When Subcontracting with Contractors Debarred, Suspended, or Proposed for Debarment,” FAR 52.204-10 “Reporting Executive Compensation and First-Tier Subcontract Awards,” DFAR 252.222-7000 “Restrictions on Employment of Personnel,” and DFAR 252.209-7004 “Subcontracting with Firms that are owned or Controlled by the Government of a Terrorist Country.”

The level of subcontracting under these procurements is minimal to non-existent.

There are no historical data elements which account for any significant amounts of subcontracting. Based on the highly technical nature of the supercomputers, the use of mainly prime labor is likely to continue. There is no push for subcontracting efforts under this program due to the nature of the work.

SGI’s approved small business subcontracting plan includes a goal of 27% of all expenditures to be awarded to small business. The same proposed goals will apply to this order.

Encl.

Attachment 1 Duplication of Re-procurement Costs

11. TECHNICAL CERTIFICATION: “I certify that the supporting data under my cognizance, which is included in the justification, is accurate and complete to the best of my knowledge and belief.”

ITS Project Manager:

Tony Benson

23 November 2015

Signature Date

12. REQUIREMENT CERTIFICATION: “I certify that the supporting data under my cognizance which is included in the Exception to Fair Opportunity is accurate and complete to the best of my knowledge and belief.”

ITS Program Manager:

Alonzo Andrews

18 December 2015

13. FAIR AND REASONABLE DETERMINATION: “I hereby determine that the anticipated cost to the Government for this contract action will be fair, reasonable and based on a price analysis of the proposed price, historical pricing and the IGE to be conducted prior to award.”

Contracting Officer:

Tracey Shaw

Tracey E. Shaw

29 December 2015

14. PROCURING OFFICER’S CERTIFICATION: “I certify that this Justification and Approval is accurate and complete to the best of my knowledge and belief.”

Contracting Officer:

Tracey Shaw

Tracey E. Shaw

29 December 2015

APPROVAL

Based on the foregoing justification, I hereby approve the procurement of administration and maintenance support services to provide daily onsite and remote support for the High Performance Computing Modernization Program (HPCMP) Technology Insertion 2014 (TI 14) system at the Engineering Research Development Center (ERDC) Department of Defense (DoD) Supercomputing Resource Center (DSRC) located in Vicksburg, MS. IAW FAR 6.302- 1(a)(2(iii), “Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements” for the total estimated amount of $4,830,657.00 provided that the services and property herein described have otherwise been authorized for acquisition.

Jacqueline C. Woodson Date Special Advocate for Competition U.S. Army Corps of Engineers

WOODSON.JACQUE

LINE.C.1049241530

Digitally signed by WOODSON.JACQUELINE.C.1049241530 DN: c=US, o=U.S. Government, ou=DoD, ou=PKI, ou=USA, cn=WOODSON.JACQUELINE.C.1049241530 Date: 2016.01.28 10:32:16 -05'00'

ATTACHMENT 1

ESTIMATED GOVERNMENT COSTS FOR RE-PROCUREMENT

DESCRIPTION POSITION HRS FULL BURN

RATE

TOTAL

Market Research ations fficer ialist

Solicitation OC Office of Counsel

KO 4 $141.00 $564.00 PGM Program Manager KS 8 $116.00 $928.00 PM Project Manager

PGM 4 $124.00 $496.00 PMS Program Specialist PM 6 $117.00 $702.00 RM Resource Manager

Board Analysis SB Small Business

Tech 120 $150.00 $18,000.00 Tech Customer Roles Tech 120 $138.00 $16,560.00 Tech 120 $146.00 $17,520.00

OC 40 $146.00 $5,840.00

KO 16 $141.00 $2,256.00

KS 280 $116.00 $32,480.00

PGM 48 $124.00 $5,952.00

PM 320 $117.00 $37,440.00

BC 8 $150.00 $1,200.00

SB 6 $141.00 $846.00

Peer Review

BOB 8 $116.00 $928.00

KS 16 $116.00 $1,856.00

Award

KS 60 $116.00 $6,960.00

KO 40 $141.00 $5,640.00

RM 10 $75.00 $750.00

PM 20 $117.00 $2,340.00

PGM 4 $124.00 $496.00

BC 2 $150.00 $300.00

PMS 2 $67.00 $134.00

$176,274.00

Hours Estimate and Full Burn Rate: Were calculated using historical data provided by the PM.

KO 8 $141.00 $1,128.00 ACRONYMS

KS 80 $116.00 $9,280.00 BC Branch Chief

PGM 2 $124.00 $248.00 BOB Business Oper Branch

PM 40 $117.00 $4,680.00 KO Contracting O RM 10 $75.00 $750.00 KS Contract Spec