LSJ_-_ICPs.pdf

General Services Administration Federal Supply Schedule Limited Source Justification

FAR part 8.405-6

1. Identification of the Agency and Contracting Activity

a. Federal agency and contracting activity:

Department of Health and Human Services Centers for Medicare & Medicaid Services 7500 Security Boulevard Baltimore, MD 21244-1850

b. Sponsoring organization:

Department of Health and Human Services Centers for Medicare & Medicaid Services Office of Acquisition and Grants Management Division of Audit, Compliance and Closeout 7500 Security Boulevard, MS C2-21-15 Baltimore, MD 21244-1850

c. Contracting Officer Representative:

2. Nature and/or description of the action being approved

a. Acquisition purpose and objectives. The purpose of this acquisition is to obtain audits of incurred cost proposals (ICPs) for FY 2007 and FY 2008 to assist CMS in negotiating final indirect cost rates.

b. Project background. CMS has awarded the audit of incurred cost proposals (I CPs) to independent CPA firms. The objective of these audits is to perform an examination of the auditee's incurred cost submittal and render an opinion on whether the claimed incurred costs and indirect rates are reasonable; are allocable to the contract; and are allowable under the contract and under Part 31 of the FAR for for-profit contractors; OMB Circular A-122 for non-profit organizations and the HHSAR. In this regard, the auditor must confirm the claimed costs were accumulated in compliance with generally accepted accounting principles (GAAP); the FAR for for profit contractors; OMB Circulars A-122 and A-133 for non-profit organizations; the CAS, if applicable; the HHSAR; and provisions of the contract. A determination must be made regarding the adequacy of the auditee's accounting system for the accumulation, recording, billing and recording of costs under Government contracts for the period under review.

3. Description of the supplies or services required to meet the agency's needs (including the estimated value).

a. Project title. Audit of ' I CPs for FY 2007 and FY 2008.

b. Project description. CMS is responsible for managing and administering the Medicare and Medicaid programs and contracts under the procedures and policies set forth by the Federal Acquisition Regulation (FAR) for audits of for-profit contractors and OMB Circulars A-122 and A-133 for audits of non-profit organizations. CMS awards many of its contracts through cost reimbursement pricing arrangements. Contractors are required to submit I CPs within six (6) months following the contractor fiscal year end for costs incurred during the prior year. CMS will coordinate and is responsible for establishing and issuing the final rate letter to the auditee after consideration of contractor final audit findings. In those cases in which both the auditee and the audit firm agree on all aspects of the submitted and/or questioned costs, the Contractor will issue the a rate letter on behalf of CMS for signature by the auditee and ultimate signature by the designated Contracting Officer within CMS or other designated OPDiv.

• Requirement type.

X[J Support services (non-research & development) [J Suppli~s/equipment [J Information technology (IT) [J Other (specify):---,-------,------

• Type of action.

[J New requirement- X[J Follow-on- Modification to existing task order [J Other (specify): ________ _

• Proposed contract/order type.

XCJ Firm-fixed-price CJ Time and materials CJ Indefinite delivery (specify whether indefinite quantity, definite quantity, or requirements): ____ _ CJ Other (specify): ____ _

• Acquisition identification number.

141689

c. Total estimated dollar value and performance/delivery period.

The total estimated dollar value is with a performance period from date of award through September 26, 2014.

4. Identification of the justification rationale [see 8.405-6(a) and (b)] and, if applicable, a demonstration of the proposed contractor's unique qualifications to provide the required supply or service.

a. Acquisition authority.

XCJ This acquisition is conducted under the authority of the Multiple Award Schedule Program. Consideration of schedule contractors will be restricted to fewer than the number required by Federal Acquisition Regulation (FAR) 8.405-6(a)(1) [see FAR 8.401, 8.405-1, 8.405-2, 8.405-6(b), and 8.405-6(g)(1)] (i.e., fewer than three FSS contractors).

CJ This acquisition is conducted under the authority of the Multiple Award Schedule Program. Consideration of schedule contractors will be restricted only to the item peculiar to one manufacturer as provided in FAR 8.405-6(a)(2) [see FAR 8.401 and 8.405-6(g)(1)].

b. Demonstration of the propoi'~d contractor(s) unique qualifications to provide the required supply or service.

• Name and address of the proposed contractor(s).

Clifton LarsonAIIen 11710 Beltsville Drive, Suite 300;

Calverton, MD 20705

• Nature of th~ acquisition and proposed contractor(s) unique qualifications.

Although there are other firms that can perform incurred cost proposal audits, it is logical for efficiency and cost

' 3 reasons for CLA to perform these additional audits. See comments in Paragraphs 6 and 7 below.

5. Determination by the ordering activity Contracting Officer that the order represents the best value consistent with FAR 8.404(d).

The offeror will be requested to propose a firm fixed price for each audit (FY 2007 and FY 2008) according to the labor skill categories in its GSA contract along with the basis/rationale for the hours proposed. Discounts will be encouraged in the Request for Quotation. The firm will be requested to consider experience already gained in understanding accounting practices in their proposal/quotation.

The proposal will be reviewed for conformance to the GSA schedule labor skills and rates. The proposed hours and the basis/rationale of the estimates will be analyzed. Price comparison to comparable audits will also be made.

6. Description of the market research conducted among schedule holders and the results, or a statement of the reasons market research was not conducted.

TCiiftonlarsonAIIen was competitively awarded an Order for the audit of Incurred Cost Proposals FY 2009 through FY 2012 in September 2013. CLA is currently performing an audit of FY 2009 through FY 2012 incurred cost proposals (ICPs). We consider the incorporation of these additional audit years (FY 2007 and FY 2008) to result in greater Govern111ent efficiencies due to CLA's current knowledge of the Auditee and its current presence at

I

The audits of FY 2007 and FY 2008 were not included in the initial award.

At the time of initial award, it was our understanding the audit of ' FY 2007 and FY 2008 ICPs were in process to be competed by DCAA. . We recently were made aware that DCAA had not begun the audits of FY 2007 and FY 2008 ICPs. Due to CLA's current knowledge of , we determined to be in the best interests of the Government to have them audited by a CPA firm, particularly the CPA firm that was currently performing audits on the subsequent years.

7. Any other facts supporting the justification.

These requirements are a logical follow-on to the original FSS BPA order (Contract HHSM-500-2012-000188, Order HHSM-500-80002). The Incurred Cost Proposals have a unique history in that they have been revised on several occasions and CMS has held multiple meetings with the Company regarding their ICPs submissions and the various revisions.

Due to these unique circumstances it is in the best interests of the Government to have CliftonlarsonAIIen perform the audits on FY 2007 and FY 2008, as well as continue their efforts in reviewing FY 2009 through FY 2012. is a large company with a complicated accounting structure, further complicated by a history of utilizing an ABC accounting system under their "Legacy" Medicare contracts. It is both time and cost efficient for one CPA company to perform the audits and for CMS to manage the audit effort with one CPA firm. It is both time and cost efficient for the cognizant CO who will resolve the findings and negotiate final rates to interface with one CPA firm. Coordination with the Contracting Officer settling the Claim is also required.

8. Statement of the actions, if any, the agency may take to remove or overcome any barriers that led to the restricted consideration before any subsequent acquisition for the supplies or services is made.

a. Removal of barriers to competition.

It is not anticipated that there will be a repeat to this unique situation, thus no repetitive barriers to competition are anticipated.

c. listing of sources, if any, that expressed an interest, in writing, in the acquisition.

During the last competition amongst each BPA holder, the following contractor's submitted bids to review ICP years 2009-2012:

CliftonlarsonAIIen

Because award was granted to the LPT A Offeror, CLA received award of ' ICP years 2009-2012. CMS believes that CLA is the appropriate choice since they have already received subsequent years which would benefit CM.S, , and CLA, in conducting similar reviews throughout their final audit. This is considered to be the most efficient way to complete review of ' ICP years 2007 through 2012.

No other sources have expressed an interest.

9. Program office certification.

This is to certify that the portions of this justification that have been developed by the undersigned program office personnel, including supporting information and/or data verifying the Government's minimum needs or requirements, or other rationale for limited sources, are accurate and complete.

Recommend

Contracting Officer Representative Acquisition Business & Services Group Division of Financial Services (DFS)

Acquisition Business & Services Group Division of Financial Services (DFS)

Acquisition Business & Services Group

10. Contracting Officer Certification.

This is to certify that the justification for the proposed acquisition has been reviewed and that to the best of my knowledge and belief the information and/or data provided to support the rationale and recommendation for approval is accurate and complete.

Divisibn of Program Integrity & Financial Management Contracts