J&A_Property_Pres_-_2018_-_Short_Term_-_Signed.pdf

OTHER THAN FULL AND OPEN COMPETITION JUSTIFICATION

(Pursuant to FAR 6.303-2, the justification must contain sufficient facts and rationale to justify the use of this authority)

1. Contracting Office:

Rural Development Procurement Management Division, for services required by the Default Branch, Customer Service Center, Rural Development (the Requiring Office).

2. Nature of the Action:

This is a bridging action for continued work while a competitive follow-on contract is being solicited and awarded. Mortgage Contracting Services, LLC, (MCS) is the incumbent contractor, currently providing the required services; MCS is the only responsible source for the subject action, as discussed below.

3. Description of the Supplies or Services:

The purpose of this contract is to assist Rural Development (RD) in providing nationwide property/asset management support services for the RD Portfolio of Single Family Housing (SFH) Properties throughout the United States of America (USA). RD uses the subject contract to effectively manage ‘at risk’ properties securing loans underwritten by the United States Department of Agriculture (these are properties which have become vacant for whatever reason).

The contractor manages a nationwide portfolio and provides all of the services necessary to determine vacancy and preserve properties as valuable security. The contractor provides nationwide integration as follows:

Inspections Contractor will provide inspection services to assist RD in managing SFH security properties.

Inspections shall determine vacancy status.

Property Preservation Contractor will provide the full line of property preservation services typically required to protect and preserve the single family housing security property at the minimally acceptable requirements specified in RD handbooks, rules, regulations and statutory authorities, along with maintaining property compliance with applicable local and state laws, ordinances, codes.

The contractor will account for local and seasonal conditions impacting the properties.

This includes but is not limited to securing/rekeying, winterizing, health hazard removal, debris/trash removal and/or initial cleaning, boarding, screening, appropriate seasonal yard maintenance including appropriate trimming, auto lawn cut system, snow removal, eviction assistance, personal property and abandoned vehicle storage and disposition, roof repair/patch/tarp, property repairs, pool and/or sump pump maintenance, vermin and pest control, securing and allowing access for necessary utility turn-off/on, marketing, testing/cleaning/treating/maintaining/boarding, sales/monthly cleaning, posting, signage, lockbox, lead based paint/mold/meth testing and abatement/remediation.

4. Estimated Cost and Period of Performance:

Period of Performance: 1 April 2018 through 31 August 2018

Estimated Cost: $13,249,391.92

5. Statutory Authority and Supporting Rationale:

Only One Responsible Source, 41 USC 253(c)(1), FAR 6.302-1

This authority applies when the services required by the agency are available from only one responsible source, and no other type of supplies or services will satisfy agency requirements.

The contract under which the nationwide management and integration of property preservation services are currently obtained expires on March 31, 2018. The initial planned award date for the replacement contract for the required services, was scheduled for March 15, 2018. In early 2018, RD made the decision to include coverage of portfolio properties in additional states within the replacement contract, increasing its scope. This change required a re-evaluation of the Acquisition Strategy for this effort. Additional market research and analysis is being conducted in an effort to increase competition and accommodate this change in scope. The Requirement Office and Contracting Office are advancing this effort to increase competition and accomplish additional market research and analysis in order to validate the Acquisition Strategy and adjust as appropriate to reach the best result for the government.

The adjusted time line for the Replacement Contract is currently August 31, 2018. It is not in the Government’s best interest to process a competitive solicitation/contract to bridge the period of performance on the current contract and the award of the Replacement Contract, currently estimated at 6 months/180 days. Transitioning a new vendor (a ‘ramp-on’ period) would take ninety (90) days, and transitioning to the awardee of the Replacement Contract (a ‘ramp-off’ period) would take another additional ninety (90) day, resulting in a total transition timeframe of 180 days of the estimated 180 days of this effort.

For this reason, MCS, as the incumbent contractor, is the only one at this time who can immediately provide maintenance to our portfolio of properties. They currently have the subcontracting staff to handle the unique rural location of the properties in order to keep them from violating local ordinances and preventing property damage and value, as well as driving down neighboring property values. In addition, as the incumbent, they currently have an approved process in place for ordering of work and submission of results back to RD.

In addition, MCS, with its network of subcontractors, is currently the only company with the specific knowledge of the location of our properties, and the many intricacies associated with servicing in the relevant rural areas. (While this information can be transferred to another company, it would require the transition time discussed above.) This capability of the incumbent also extends to include emergency services after a major storm (flood, tornadoes).

Transition to another contractor would require time to allow them to develop the network and/or transition portfolio properties into their active network for required services. MCS subcontractors are currently insured/bonded and have the capabilities to quickly respond to all of our portfolio’s needs.

It would be impossible for any other contractor to be able to provide the required service to RD by the required date of April 1, 2018.

Not using MCS for this effort would result in a lapse of service which would cause irreparable damage to government-owned or secured property. This lapse would also create a loss in value for departing borrowers by creating a higher cost to the government for maintenance, as well as create a public relations issue for the Agency as the homes depreciate into disrepair in their local communities during the beginning of the growing (lawn) season.

In addition, allowing the services to lapse while the competitive replacement contract is finalized is not a reasonable option. With a lapse in coverage, the immediate risk to the government would be as follows:

• With no property preservation contract, approximately 3600 properties in 27 States would be left with no maintenance. This places $210,960,000 of value at risk to deterioration and vandalism.

• Puts the Agency at risk of squatters in vacant properties. RD has had incidents of vacant properties being utilized as meth labs which puts stress on local law enforcement as well as put neighbors at risk.

• We are currently approaching tornado and severe storm season in certain parts of the country. Any storm damage would not be able to mitigated causing further deterioration to property value.

• Within weeks, RD would be in violation of local area ordinances for things such as grass height and accessible vacant property. These violations cause the Agency to be assessed fees. Local government liens on the property for these fees place the Agency’s asset at risk.

• Not placing properties under custodial care creates an image problem for RD. Lack of care prior to the current contract created an increase in Congressional Inquiries as well as local news coverage.

• As damage to properties occur and asset value is reduced, entire neighborhoods are at risk for depreciating value. This affects not just the value of RD assets, but negatively affects the local economy as well.

• With no inspection process in place, the Agency would have no knowledge whether a property was vacant or not. Rapid property deterioration caused by an unknown vacancy will occur.

• Lack of services can lead to costly situations. In one extreme case, government costs reached $800,000, due to lack of inspection and proper preservation services.

This could have been prevented with ongoing monthly inspections of all properties.

As stated above, MCS is the only one at this time who can immediately provide maintenance to our portfolio of properties.

6. Competition Effort:

As stated above, the current contract expires March 31, 2018. RD is working on a solicitation for a new award vehicle that will be competed full-and-open to encourage the maximum competition possible. Additional steps taken to increase competition for the replacement contract include Federal Business Opportunities Notice postings and Industry Day to foster communication with vendors in the marketplace.

7. Fair & Reasonable Cost:

The contractor has proposed to use pricing from the current contract, AG-31ME-C-17-0003, where prices were determined to be fair and reasonable prior to award. There have been no market changes to expect that pricing should have changed since that award in August 2017 (6 months ago).

8. Market Research:

Some of the required services were found to be available on GSA schedules. However, because of the transition times discussed above, MCS is the only available supplier prior to finalization of the competed follow on contract.

9. Other Supporting Facts:

N/A

10. Interested Sources.

This Justification will be posted for 30 days, pursuant to the Federal Acquisition Regulations.

Any interested sources will be considered, and also encouraged to respond to the solicitation for the replacement contract.

11. Competition Barrier.

It is anticipated that the change of scope and any acquisition strategy change of the follow on contract will appropriately account for increasing competition.

(Continued)

CERTIFICATIONS

12. Technical Certification (required): I certify that the supporting data (e.g., verification of the Government’s minimum needs, schedule requirements, or other rationale for other than full and open competition) under my cognizance that are included in this Justification and Approval are accurate and complete to the best of my knowledge and belief.

Signature: _______________________________ Date:

Print Name/Title: Richard Cohen Office: USDA RD

APPROVAL

Approval is granted subject to the availability of funds and provided that the products/services described herein have otherwise been authorized for acquisition.

13. Contracting Officer (required): I certify that the facts and representations included in this Justification are accurate and complete to the best of my knowledge and hereby determine that the anticipated cost to the Government will be fair and reasonable. This approval represents the best value in accordance with FAR 6.303-2(b)(7).

Print Name: Brian Johnson Office: USDA RD PMD

14. Competition Advocate

Print Name: Scott Beckstrand Office: USDA RD PMD

14. Competition Advocate