Ride Simulators

MEMORANDUM FOR RECORDJuly 7, 2023 SUBJECT: Sole Source Justification – Pulseworks, LLC Through a request for proposals issued in 2012, Smithsonian Enterprises (“SE”) contracted with Pulseworks, LLC to provide motion ride simulators at 2 museum locations, NASM and Hazy. Pulseworks, LLC was awarded the contact for a five (5) year base term commencing on January 1, 2012 with two (2) three-year extensions at Smithsonian’s option. The most recent option to renew was exercised from 1/1/2019 to 12/31/2022. Pulseworks has been a reliable business partner over the Term of the Agreement, and has remained flexible over the past 3 plus years when their revenue dropped significantly as a result of the pandemic, and during the renovation of NASM, Pulsework’s flagship location. During the NASM renovation, Pulseworks and Smithsonian had an agreement in place for a temporary simulation gallery at NASM. Pulseworks dedicated significant capital and design expense towards this location and planned

subsequent post-renovation location, and created new equipment for the temporary and agreed post-renovation galleries. The then Director of NASM made a decision to allocate the space for a gallery of exhibits, and Pulseworks essentially lost that capital and any potential revenue they would have received. As a result of that decision, both Pulseworks and Smithsonian Enterprises, in good faith, agreed to find new and better opportunities for simulators/virtual reality within the Smithsonian. The exhibit at NZP is a result of that good faith effort. The five-year agreement would allow Pulseworks to launch new services at the Smithsonian National Zoo, and continue to provide the services at HAZY. Pulseworks has proven to be profitable, reliable, and innovative business partner, and has a unique and distinctive offering in the ride simulation industry.The Smithsonian Institution hereby provides notice of its intention to issue a sole source stand-alone contract to Pulseworks for ride simulators at Hazy and the NZP. The financial terms include a 42.1% share of net revenue to the Smithsonian at Hazy; and a 25% net revenue share on the first $500,000; 30% on net revenue from $500,000 to $800,000, and 40% thereafter at the NZP. SE has done extensive market research through various avenues, including through attendance at industry trade shows, as well as discussions with industry experts that manage similar simulation experiences. Pulseworks is unique in that Pulseworks manages the research and development for their products, and custom designs of both the hardware (e.g. motion bases, virtual reality headsets, 4D facets like wind machines) and the software (the interactive content). Other motion ride simulators operate one or the other (hardware or software) which is not ideal for Smithsonian due to the scale of our projects as well as the ongoing updates and maintenance that is required for such systems. Pulsework’s simulators/virtual reality use cutting edge technology, and are built to be durable and efficient, which meets the demands of Smithsonian’s high visitor and usage numbers. Pulseworks also has the expertise to monetize their services, based on their product size (built for more than one user) and their efficiency/maximization of revenue per square foot. It is the Smithsonian's position that awarding this contract to any contractor other than Pulseworks would likely result in the project being delayed causing serious impact to SE’s revenue source and that the duplication of costs would exceed what would be gained through competition.For subcontracting opportunitiesContact: Pulseworks LLCAttn: Raj DespandeEmail: info@pulseworks.comPhone: 770-916-1722Address: 5100 Highlands Pkwy, SEAtlanta, GA 30082 Contracting Office Address: The Smithsonian InstitutionOffice of Contracting and Personal Property ManagementExpress Delivery Address: 600 Maryland Avenue SW, Suite 500E, Washington, DC 20024USPS Mailing Address: MRC 1200, PO Box 37012, Washington, DC 20013-7012Place of Performance: Washington, DCPrimary Point of Contact: Christopher J. CraneAttorney/Advisorcranec@si.edu