FY11 SAP MAXSECURE SUPPORT

Procurement Request Number: FY11 MaxSecure Purchase JUSTIFICATION AND APPROVAL TO PROCURE USING OTHER THAN FULL AND OPEN COMPETITION Justification for OTFAOC Number: JA11-016 Upon the basis of the following justification, I, as Procuring Activity Competition Advocate (PACA), hereby approve the use of other than full and open competition of the proposed contractual action pursuant to the authority of 10 U.S.C. 2304 (c) (1), Only one responsible source and no other supplies or services will satisfy agency requirements. JUSTIFICATION 1. Agency and Contracting Activity: Agency: Navy ERP Program Office 2551 Riva Road Annapolis MD, 21401 Contracting Activity: DISA/DITCO/PL8311 2300 East Drive, Bldg 3600 Scott AFB, IL 62225-5406 2. Nature/Description of Action(s): The Navy Enterprise Resource Planning (ERP) Program is an initiative to consolidate the four existing Department of the Navy (DON) ERP pilots: Supply Maintenance Aviation Reengineering Team (SMART) Naval Supply System Command (NAVSUP), SIGMA Naval Air System Command (NAVAIR), Navy Enterprise Maintenance Automated Information System (NEMAIS) Naval Sea System Command (NAVSEA), and CABRILLO Space and Naval Warfare Systems Command (SPAWAR) into a single system. This will provide standardization of DON processes, integrated enterprise solution to seamlessly support end-to-end capability, to provide accurate, consistent, timely financial information from a single source, and to manage and track costs drivers as an enterprise. Systems, Applications, and Products (SAP). Public Services' Enterprise Resource Planning software suite is the core application utilized by all four pilot programs. In order to consolidate the pilot programs, Navy ERP has purchased and implemented the mySAP business suite software and "add-on" software. Currently, Navy ERP has deployed to NAVAIR, NAVSUP and SPAWAR. Release 1.1 was deployed February 2010 followed by the deployment of release 1.0 to the General Fund operations of NAVSEA. Navy ERP will deploy Release 1.1 Material Group 3 and NAVSEA Working Capital Fund in February 2011 and October 2011. This procurement is for a new follow-on contract for SAP MaxSecure support services to support Navy ERPs implementation of SAP software. The contract type will be Firm-Fixed Priced (FFP) for a period of one year with three one-year options. Fiscal Year (FY) 2011 Operations and Maintenance (O&M) funds will be used for this procurement. The SAP MAXSecure is expected to provide the Navy ERP program with much more rapid response times to request for support to SAP. The service will provide resources whose sole focus will be to understand the Navy ERP system and react to any issues related to the software affecting the production system. This will support the mission with respect to minimizing downtime and impacts to the user base for the Navy ERP enterprise business system. Other goals include assistance in standing up a certified Navy ERP SAP competency center and recommendations for improvements within the Navy ERP SAP system with regard to system performance. 3. Description of Supplies/Services: This justification and approval (J&A) authorizes and approves the issuance of a sole source contract for SAP MaxSecure Support Services. This will need to continue as long as Navy is deploying new releases to the DON sites. At this point in time, all releases to the Navy ERP are anticipated to be completed in 2015. Support services include: - SAP Government Support and Services (GSS) Secure Backoffice Infrastructure and Remote Support: With standard SAP maintenance under the Software License, customer messages may be viewed and addressed by SAP Global support, without restrictions. When connection is needed to the Licensee network in cases where login is required for problem resolution, Licensee requires that login can only be performed by cleared resources over an approved communication channel that terminates in the continental US. Under this contract, SAP GSS provides this secure channel and maintains a controlled area from which the secure connection will terminate in a GSS-provided, or if agreed a Licensee-provided, personal computer ("PC"). This PC shall contain and be prepared to run the agreed upon and Licensee-provided Client VPN software, which will enable the SAP GSS secure connection to the Licensee solution infrastructure. - SAP GSSOn-Site Technical Quality Manager (TQM): Includes but not limited to: Fully understands the US Navy Solution, Security, business processes and landscape to be able to address top issues proactively; central point of contact from SAP support at US Navy and interfaces into the SAP Back office; Coordinates integration and testing with US Navy ERP; Ensures access to the right resources at SAP (Expertise on Demand); Escalation path into SAPA to ensure fast issue resolution; Coordinates experts from SAP during service delivery; Manages top issues to ensure resolution and if necessary appropriate escalation paths; Monitors and reports engagement to US Navy and SAP management - SAP GSS Safeguarding and Subject Matter Expert Services: Analyzes and evaluates, provides findings and recommendations for further knowledge transfer, mentoring and best practices The estimated base price of this procurement for the base year is $1,038,931.00. Additionally, Navy ERP requires as an optional CLIN for additional support hours as a contingency to meet emergent support needs for the February 2011 deployment of release 1.1 and for the NAVSEA Working Capital Funds release in Oct 2011. The price of the optional support is projected at $258,000.00. Option Year 1 base price is $1,038,931.00 with two optional CLINs for support projected at $258,000.00. Option Year 2 base price is $1,038,931.00 with two optional CLINs for support projected at $258,000.00. Option Year 3 base price is $1,080,488.00. The total estimated life-cycle is $4,971,281.00. To date, Navy ERP has awarded the following sole source contracts to SAP for new software licenses for a total cost of $22,852,537.00: N00104-02-A-ZE77 (EH0101); W81XH-06-P-0604; N00104-02-A-ZE77 (M802); N00104-02-A-ZE77 (M804); N000421-07-F-0232; N00104-02-A-ZE77 (M805), HC1028-08-C-2004, and HC1028-09-P-2046. Navy ERP currently has a current contract (HC1028-10-P-2030) for MaxSecure support in place which expires 6 Jan 2011. By utilizing SAP software, Navy ERP is providing a standardization of DON processes, integrating enterprise solutions to seamlessly support end-to-end capability, providing accurate, consistent, timely financial information from a single source, and managing and tracking cost drivers as an enterprise. Navy ERP is the financial system of record for NAVAIR, NAVSUP, SPAWAR and NAVSEA. Additionally, Navy ERP will be deploying SAP Supply Chain Management Software to all four commands which directly supports the warfighter by ensuring the efficient and timely appropriation, tracking and deployment of supplies. The specialized support provided by this contracting action ensures the deployment of SAP to the commands is managed by the highest skilled technicians. Without this level of support, the scheduled deployments to the commands could potentially be delayed. Navy ERP is scheduled to deploy the Release 1.1 Material Group 3 and NAVSEA Working Capital Fund in February 2011 and October 2011. If Navy ERP does not deploy on schedule, then NAVSEA will not have a Working Capital Fund financial system of record nor will Navy ERP be able to consolidate the Wholesale and Retail supply functions to the Navy. Release 1.1 is imperative for wholesale and retail data for Navy ERP. 4. Identification of Statutory Authority: Only one responsible source and no other supplies or services will satisfy agency requirements, 10 U.S.C.2304(c)(1). SAP Public Services, Inc is the manufacturer of SAP software. SAP Government Support and Services Inc. is the only company that maintains the proprietary rights to the source code, distribution rights and support services. There are no other authorized resellers of MaxSecure support for SAP software. 5. Demonstration of Contractor's Unique Qualifications: SAP is the core ERP software being utilized by Navy ERP. All four Navy ERP pilot programs were deployed using SAP software. Navy ERPs mission is to converge the four pilot programs for implementation throughout the Navy. Navy ERP has purchased and implemented the SAP software suite within its architecture and within the Development, Quality Assurance (QA), Production and Disaster Recovery Centers in order to consolidate the exiting functionality. Navy ERP has deployed the SAP ERP system to NAVAIR, NAVSUP and SPAWAR. This requirement is for additional software support services to be provided by SAP personnel who have the training, knowledge and understanding of the SAP source codes and functionality required to provide this level of support. To date, Navy ERP has awarded the following sole source contracts to SAP for new software licenses for a total cost of $22,852,537.00: N00104-02-A-ZE77 (EH0101); W81XH-06-P-0604; N00104-02-A-ZE77 (M802); N00104-02-A-ZE77 (M804); N000421-07-F-0232; N00104-02-A-ZE77 (M805), and HC1028-08-C-2004. Navy ERP has awarded the following maintenance support renewal contracts for a total of $5,154,833.00: N00024-05-F-B105; N00024-06-F-B033; N00104-02-A-ZE77 (M803); HC1013-07-F-3350, N00104-02-A-ZE77 (KH01) and HC1028-08-C-2004. Navy ERP awarded the previous support services on contract HC1028-08-F-2122 for a cost of $1.5M, support services on contract HC1028-09-P-2046 for a cost of 1.5M, and support services on the current contract HC1028-10-P-2030, for a cost of 1.5M. Navy ERP will lack the support necessary to resolve problems which may arise with the Navy ERP financial system of record, provided by SAP. It is imperative that the Navy ERP financial system is operating at full capacity at all times. Issues could lead to reduced production system health, reduced response time, lack of user access. As an ACAT I program, down time will lead to loss of functionality, which results in massive loss of funds.