WF3_DTO5_JA_Final_Signed_Redacted.pdf

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Control Number: FY26-0691

Controlled by: Defense Health Agency (DHA) Controlled by: USAMRAA CUI Category(ies): Source Selection Limited Dissemination Control: SSEL

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(Source Selection Information - See FAR 2.101 and 3.104-4)

1 MAY 2026

Justification for an Exception to Fair Opportunity Federal Acquisition Regulation (FAR)16.505 (b)(2)(i)( )

1. Identification of the Agency and Contracting Activity: The Defense Health Agency, Contracting Office - Defense Healthcare Management Systems (CO-DHMS), intends to award a task-order contract, on an exception to fair opportunity basis, based on the statutory exception and supporting rationale provided herein.

2. Nature and/or Description of Action being Approved: This Justification for an Exception to Fair Opportunity (hereinafter “this Justification”) supports award of a noncompetitive task order, under the multiple award contract (MAC) referred to as “Workforce 3.0” (WF3), to Boston Consulting Group, Federal (BCG). The task order will be issued on a sole source basis in the interest of economy and efficiency because it is a logical follow-on to BCG’s successful performance of the Year 4 Core Task Order in accordance with the performance metrics and outcomes agreed upon in the Year 4 Design-to-Outcome Task Order. During the initial source selection for the WF3 contract, BCG was competitively selected as one of the MAC awardees and was simultaneously competitively selected under the initial fair opportunity process, to perform the Year 1 DTO task order.

The solicitation and resulting contract contain FAR Clause 52.212-4 – Addendum 1, which states, “Attachment 1, Scope and Ordering Guide provides the rules of engagement for issuance of task orders that supplement any ordering clauses and provides contract-wide terms and conditions that will be applicable across all task orders.”

Section 4 of the WF3, Attachment 1, Scope and Ordering Guide, established the “Task Order Rules of Engagement”, and included a diagram of potential scenarios in which an exception to the fair opportunity process would be utilized by the Government.

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Source Selection Information - See FAR 2.101 and 3.104-4

2 MAY 2026

This Justification pertains to two sections of the Scope and Ordering Guide: Section 4.1.3 “Performance Assessment” and Section 4.1.4 “Continuation of Lot 1 work when successful”, which state:

Section 4.1.3 Performance Assessment: After the fifth month of performance of each Lot 1 Core Task Order, PEO DHMS will assess the overall performance of the contractor against the performance metrics that were agreed upon for that Task Order at the completion of the linked Design to Outcome task order. If, based on this assessment, PEO DHMS determines that the contractor’s performance meets or exceeds all performance metrics, then PEO DHMS will have a strong basis to develop a justification for using the logical follow-on exception to the Fair Opportunity process, in the interests of “economy and efficiency,” for the next cycle of Task Orders (linked Design to Outcome and Core).

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Source Selection Information - See FAR 2.101 and 3.104-4

3 MAY 2026

Section 4.1.4 Continuation of Lot 1 work when successful: The Government shall assess the awardee’s progress against these metrics using methods including but not limited to awardee self-reporting, Government direct measurements, sampled measurements, and systematic measurements. If the awardee meets performance to a sufficient level determined by the Government BoD, PEO DHMS may use a logical follow-on (exception to the Fair Opportunity process) for the next cycle of Lot 1 Task Orders if it can establish (consistent with the requirements of FAR 16.505(b)(2)(ii)(B)) that the value achieved against the agreed metrics, taken into account with other necessary factors, satisfies the “in the interests of economy and efficiency” standard under FAR 16.505(b)(2)(i)(C). In such cases, the awardee will then be granted another Design-to-Outcome Task Order to design, plan, and negotiate the objectives, outcomes, and measures for the next Core Task Order.

3. Description of Supplies/Services and Estimated Value: WF3 is a fully managed end-to-end solution for executing DHMS mid-office and back-office functions to support the full spectrum of the Program Executive Office - Defense Healthcare Management Systems (PEO DHMS) product portfolio. As described in the WF3 contract, the Government requires a managed solution (i.e., a stack of capabilities) to cover the full breadth of digital workforce capabilities from technical, administrative, and organizational, across its subordinate and full partner organizations. In this manner, a managed solution will enable one seamless workforce where an individual’s Agency or employment status does not affect the individual’s experience at work and where this condition can easily scale and accommodate fluctuations in demand rapidly. WF3 designates a high-performing contractor team to execute a unified, long-term PEO 3.0 strategy to achieve year-over-year growth through a cohesive, organization-wide approach.

The Year 5 Design-to-Outcome (DTO5) task order builds upon and is a logical follow-on to the Year 4 DTO4 task order, and the Year 4 Core Task Order (CTO4) design execution. The DTO4 and CTO4 task order is a logical follow-on to the DTO3 task order, and the CTO3 design execution. The DTO3 and CTO3 are logical follow-ons to the competitively awarded Year 2 DTO2 task order, and the CTO2 design execution. The DTO2 and CTO2 are logical follow-ons to the competitively awarded Year 1 DTO1 task order, and the CTO1 design execution. In order to continue progressing towards the transformation outcomes identified in Section 1.3 of the Scope and Ordering Guide:

When the transformation efforts are complete, the PEO will:

1. Manage a portfolio of product teams and products that prioritize the experience of those using the products.

2. Have a culture that prioritizes continuous improvement, rapid decision-making, and streamlining business priorities by maximally leveraging policy and regulatory flexibilities to adopt the very best practices in each area of its business.

3. Be a center of excellence for dynamic, multifaceted technologies, platforms, applications, and cyber security compliance.

4. Adopt effective communications with internal and external stakeholders.

Source Selection Information - See FAR 2.101 and 3.104-4

5 MAY 2026

Lot 1.

WF3 Lot 1 consists of Task Orders necessary to establish one, seamless team accountable for achieving the specified transformation and growth metrics over a specified length of time to be continuously evaluated against the overarching outcomes specified in WF3 Attachment 1, Scope and Ordering Guide, Section 1.3 (as established by FAR Clause 52.212-4 – Addendum 1). This includes work necessary to ensure all function necessary for operation of the “world class technology” organization are performed in accordance with the agreed upon designs.

The Government awarded the first DTO task order to BCG on 27 JAN 2022, simultaneously with the award of the IDIQ contracts. The contract requires the DTO awardee to observe, plan, and propose a set of objectives, outcomes, and measures for the performance of its approach, that measurably contribute to targeted transformational outcomes.

As stated in the Scope and Ordering Guide in Section 4.1.3, PEO DHMS will assess the overall performance of the contractor against the performance metrics that were agreed upon for that task order. If PEO DHMS determines the contractor’s performance meets or exceeds all performance metrics, the PEO DHMS will have a strong basis to develop a justification for using the logical follow-on exception to Fair Opportunity process, in the interest of “economy and efficiency” for the next cycle of Task Orders (linked Design to Outcome and Core).

PEO DHMS has determined BCG’s performance has met all performance metrics agreed upon during DTO4 and executed during CTO4 (Ref: DTO5 Decision Memo). The performance metrics, requested outcomes, and invoicing schedule are detailed in the CTO4 contract’s Attachment 2: CTO4 PWS Attachments.

Fair Opportunity to be Considered for the Original Order

Section 1.0 of provision 52.212-2, in the WF3 solicitation advised offerors that, “In addition, this evaluation will result in the concurrent award of the first “Design-To-Outcome” task order. The “Design-To-Outcome” task order will be issued concurrently with the award of the three contracts to the offer determined to provide the “Best Value” of the three awardees. Other awardees will be issued “Incubator” task orders concurrently with contract award to satisfy the “minimum guarantee.” The Source Selection Decision Document completed a comparative analysis and determined BCG was the best value. Accordingly, DTO1, the original order, was issued to BCG on a competitive fair opportunity basis.

DTO2 was a logical follow-on to DTO1 and CTO1. DTO1, the original order, was the base design, agreed upon to start transforming PEO DHMS, its subordinate program offices, and the FEHRM into a world class technology organization. CTO1 was issued as a logical follow-on to DTO1, to begin executing on that design. DTO5 continues to build upon the work accomplished in DTO4 and CTO4. DTO5 is a logical follow-on to DTO4 and CTO4. As explained in the previous justifications for CTO1, CTO2, CTO3, CTO4 and this Justification, the Government’s WF3 acquisition strategy anticipated and expressly outlined this Fair Opportunity Exception in the Solicitation. DTO5 builds upon the DTO4 design and CTO4 execution in order to progress

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Source Selection Information - See FAR 2.101 and 3.104-4

6 MAY 2026

towards the transformation outcomes identified in Section 1.3 of the Scope and Ordering Guide.

Economy and Efficiency

Disruption of service: As part of the DTO task order, the awardee must design the outcomes for the CTO. BCG was awarded DTO1 in FY22, DTO2 in FY23, DTO3 in FY24, and DTO4 in FY25, and has worked with the PEO DHMS on efforts to transform PEO DHMS into a world class technology organization and to maintain continuity of mission. If DTO5 is not issued as a logical follow-on, current transformation efforts would halt and mission continuity would be adversely impacted, including, but not limited to disruption and delay in the following critical efforts:

DHMSM’s transition into the Capability Support lifecycle phase, including the critical contracting actions that must be accomplished to successfully execute the program’s growing portfolio mission.

JOMIS Go-Lives and deployments.

PEO DHMS critical enterprise data orchestration needs to ensure EIDS can support the integrated suite of products PEO DHMS provides to its end users.

Impacts to each program, business service, and technology service progress on their management plans which lays out the outcomes, objectives, and performance measures for their areas.

Degradation and disruption of key technical operations such as system engineering management support and test management

Duplication of efforts: Over the course of DTOs 1-4, BCG and the Government have worked together to document work efforts, create the foundation for transformational design, implement the transformational design, and maintain mission continuity. If the Government does not award the follow-on DTO5 to BCG, the significant efforts already expended by the contractor and Government would need to be accomplished by another contractor, which would require a minimum of three additional months to design its Core Task Order and accomplish transition.

Increased cost: If DTO5 is not issued as a logical follow-on, the PEO DHMS would have to unnecessarily expend funds for the following:

New DTO with Transition:

o A six-month extension for the current CTO task order would be approximately based upon current CTO4 rates ). This six-month period includes 3 months to accomplish a DTO fair opportunity competition and another 3 months to execute the DTO with Transition.

This would be in addition to the new CTO awarded amount in Fiscal Year 2026.

For the reasons delineated above, awarding the logical follow-on DTO5 is determined to be in the interest of efficiency and economy.

As all three criteria are satisfied, it is in the Government’s best interest to utilize the exception at

7 MAY 2026

FAR 16.505(b)(2)(i)(C).

6. Other Facts:

a. Procurement History:

(1) Is this a new requirement? No.

(2) If 6.a.(1) is No, was the action just prior to this one competed? No. The action just prior to this one was also awarded as a Logical follow-on.

(3) If 6.a.(2) is Yes, what has changed where this action cannot be competed? Not applicable.

b. Additional Information: There is no additional information.

7. Actions to Remove or Overcome any Barriers to Competition: The concept of a “linked” DTO and CTO supported by Fair Opportunity exception is fundamental to the Government’s PEO 3.0 acquisition strategy and the resulting WF3 contract. The Government carefully considered performance under CTO4 in accordance with its Scope and Ordering Guide, incentive plans, and outcomes in making the decision to issue DTO5 as a logical follow-on on a sole source basis in the interest of economy and efficiency.

In accordance with DFARS PGI 216.505(b)(2)(A), a copy of the previous justification for CTO3 is provided to assist the approval authority in determining whether the actions to remove or overcome any barriers that led to the exception to fair opportunity cited on the previous justification were completed. As explained above, the Government’s WF3 acquisition strategy anticipated and expressly outlined this Fair Opportunity Exception in the Solicitation.

8. Market Research: WF3 required extensive market research to both inform and shape requirements. Market research consisted of office calls, Requests for Information, Draft Requests for Proposal, Industry Days, internet research, organizational analyses, and many other methodologies.

Findings from market research indicated that substantive transformation takes, at a minimum, 24-36 months and accordingly, the Government acquisition strategy anticipated and expressly outlined this Fair Opportunity Exception in the Solicitation.

9. Technical Certification:

I certify the supporting data under my cognizance, which are included in the justification, are accurate and complete to the best of my knowledge and belief.

8 MAY 2026

Signature captured on attached coordination sheet.

DTO5 Facilitator

PEO DHMS

10. Requirements Certification:

I certify the supporting data under my cognizance, which are included in the justification, are accurate and complete to the best of my knowledge and belief.

Acting Program Executive Officer

11. Fair and Reasonable Cost Determination:

I hereby determine the anticipated cost to the Government for this contract action will be fair and reasonable.

Basis for Determination: The price was already evaluated as part of the solicitation. Per 52.212-2 evaluation – Commercial Items (OCT 2014) the Government used adequate price competition as a basis for establishing reasonableness of the proposed price by comparing the prices proposed by all Offerors. In addition, the solicitation stated in 52.216-18 Ordering (AUG 2020) orders for line items “0001, 0x01, 0x03, and 1001 shall be placed unilaterally at the price agreed upon at the time of contract award, as identified in the schedule, and incorporated as a “catalog” price in accordance with Attachment 1, Scope and Ordering Guide” DTO5 with no transition is CLIN 0401. The total estimated value of the DTO5 task order is not to exceed $1,000,000 and therefore does not require certified cost and pricing data IAW FAR 15.403-4(a)(1).

Contracting Officer

CD-DHMS

12. Legal Review:

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Source Selection Information - See FAR 2.101 and 3.104-4

9 MAY 2026

I have reviewed this justification and have found it to be legally sufficient.

Signature captured on attached coordination sheet.

Office of General Counsel

13. Contracting Officer Certification: I certify this justification is accurate and complete to the best of my knowledge and belief.

Signature captured on attached coordination sheet.

Contracting Officer

CD-DHMS

Approval

Based on the foregoing justification, I hereby approve the procurement of WF3 DTO5 valued at on an exception to fair opportunity basis pursuant to the authority of FAR

16.505(b)(2)(i)(C) – Order must be issued on a sole-source basis in the interest of economy & efficiency because it is a logical follow-on to an order already issued under the contract), subject to availability of funds, and provided that the supplies or services herein described have otherwise been authorized for acquisition.

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