FBO_JOFOC.pdf

J&A Number 19-3?

EXHIBIT 1

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

1. IDENTIFICATION OF THE AGENCY AND THE CONTRACTING

ACTIVITY, AND SPECIFIC IDENTIFICATION Of THE DOCUMENT AS A

“JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION.”

Agency: U.S. Department of Housing and Urban Development (HUD) Office of the Chief Procurement Office 451 7th Street SW, RM 5256 Washington, DC 20410

Contracting Activity: Office of the Chief Procurement Officer, Headquarters

2. NATURE AND/OR DESCRIPTION OF THE ACTION BEING APPROVED.

Approval is being sought to enter into a 6-month sole source contract with Pyramid Systems, Inc. (PSI) to provide uninterrupted and continued Information Technology Services and Support for the Tenant Rental Assistance Certification System (TRACS).

HUD proposes to enter a contract for Information Technology (if) Operations and Maintenance (O&M) Services and Support to provide continued services until a new competitive contract is awarded. The sole source award via bridge contract will ensure continuity of services while continuing to work the competitive acquisition.

Type of contract will be Firm fixed Price.

Contract action will be funded with Information Technology (IT) funds.

Method of contracting will be a new contract award.

3. A DESCRIPTION OF SUPPLIES OR SERVICES REQUIRED TO MEET

THE AGENCY’S NEED (INCLUDING THE ESTIMATED VALUE).

Contractor support is required for O&M Services and Support for the Tenant Rental Assistance Certification System (TRACS). These services are required on behalf of Multifamily Housing to maintain the rental assistance contract, tenant and voucher information. TRACS also tracks eligibility for the rental assistance programs (income, dependents, family size/composition, and unit information). TRACS Tenant Business system is the only repository for Multifamily’s Housing tenant data and is the primary repository for Multifamily Housing Subsidy Contracts.

Performance Period: 8/3 1/20 19 through 02/26/2020 Total Estimated Dollar Value: $1,217,979.20

4. AN IDENTIFICATION Of THE STATUTORY AUTHORITY

PERMITTING OTHER THAN FULL AND OPEN COMPETITION.

Statutory Authority: FAR 6 302-2, Unusual and Compelling Urgency, 41 U.S.C.

3304 (a)(2).

5. A DEMONSTRATION THAT THE PROPOSED CONTRACTORS

UNIQUE QUALIFICATIONS OR THE NATURE OF THE ACQUISITION

REQUIRES USE OF THE AUTHORITY CITED.

As the incumbent, Pyramid Systems, Inc. (PSI) located at 2677 Prosperity Ave. Ste.

700 fairfax, VA 22031, has extensive experience in successfully providing expedited and efficient support services under the past and existing HUD contract. PSI has demonstrated an in-depth knowledge of HUD’s if infrastructure, inclusive of a clear understanding of HUD’s multifamily modernization standards. Only this contractor can meet this requirement due to the lack of time available to make a new contract award by August 30, 2019 and the need for continued services. In addition, only this contractor can meet the current operations and maintenance support needs of TRACS because TRACS is one of HUD’s mission critical system servicing 28,000 system users and processing approximately $1 billion per month in subsidy payments.

The Tenant Rental Assistance Certification System (TRACS) is a legacy system hosted on the IBM mainframe using Cobol, CA Gen 8.6, and Nomad to run overnight production cycles to process tenant certifications and electronic subsidy payments for 27,600 users.

In a mainframe environment, production programs are executed in batch mode using Job Control Language (JCL). JCL is the name for scripting languages used on IBM mainframe operating systems to instruct the system on how to run a batch job or start a subsystem. More specifically, the purpose of JCL is to: [iJ say which programs to run, using which files or devices and [ii] for input or output, and at times to also indicate under what conditions to skip a step.

In FY20 18, TRACS processed the following transactions for affordable housing:

• 743,927 tenant move-in transactions for affordable assisted units or roughly 61,994 low-income tenants moving into affordable housing per month

• $11,975,622,703.31 in subsidy paid to affordable housing owners or approximately $9,979,686.00 per month

Under the Congressional mandate, HUD must ensure assisted projects provide “decent, safe, and sanitary” affordable housing for low-income tenants. A break-in-service would immediately result in no support to execute the JCLs on the IBM mainframe to process tenant certifications and voucher subsidy payments. No TRACS support has an immediate impact on safety for HUD’s most fragile tenant population (i.e., elderly, family, and disabled); the risk of injury, danger, or loss of life increases because owners of affordable housing cannot make mortgage and utility payments due to the non-payment of subsidy. The business impacts that would be effective on August 31, 2019 without a bridge contract in place would be as follows:

• 61,994 low-income tenants will not move into affordable housing that is “decent, safe, and sanitary” because TRACS cannot process tenant certifications

• 3,006 rental assistance contracts for 126,958 low-income units for elderly tenants will not make mortgage and utility payments due to non-payment of subsidy

• 2,947 rental assistance contracts for 35,074 low-income units for disabled tenants will not make mortgage and utility payments due to non-payment of subsidy

• 173,331 rental assistance contracts for 1,277,037 low-income units for family tenants under Project-based Section 8 will not make mortgage and utility payments due to non-payment of subsidy if a bridge contract is not awarded, the harm to the government will be mortgage defaults on fHA-insured loans. The financial impacts would affect September 2019 mortgage payments:

• FHA-insured loans will not be paid resulting in loan defaults for 7,062 FRA insured loans and 702,793 units for the multifamily affordable housing portfolio

• $25,445,470,615 mortgage default on the outstanding balance of FHA-insured loans; a mortgage default is a situation in which the owner is not making payments on their mortgage, and the loan is considered to be “in default,” meaning that HUD will be required to pay-off the outstanding balance and assume the financial liability for these defaulted FHA-insured loans

• $132,247,346 monthly mortgage default effective September 2019

6. A DESCRIPTION OF EFFORTS MADE TO ENSURE THAT OFFERS

ARE SOLICITED FROM AS MANY POTENTIAL SOURCES AS IS

PRACTICABLE, INCLUDING WHETHER A NOTICE WAS OR WILL NOT

BE PUBLICIZED AS REQUIRED BY SUBPART 5.2 AND If NOT, WHICH

EXCEPTION UNDER 5.202 APPLIES.

As required by the FAR Subpart 5.2, a notice will be publicized in the Federal Business Opportunities site, www.fedbizopps.gov. Additionally, a competitive acquisition is in progress for a follow-on contract for Information Technology Operations and Maintenance (O&M) and Development, Modernization and Enhancement (DME) services for TRACS with an anticipated award date of FY20, 1St Quer

7. A DETERMINATION BY THE CONTRACTING OFFICER THAT TIlE

ANTICIPATED COST TO THE GOVERNMENT WILL BE FAIR AND

REASONABLE.

The Contracting Officer will determine that the anticipated cost to the Government will be fair and reasonable based on the Independent Government Cost Estimate (IGCE) founded on historical pricing for the same or similar services and on the negotiated direct labor rates under the current contract.

8. A DESCRIPTION OF TUE MARKET RESEARCH CONDUCTED (SEE

PART 10) AND THE RESULTS OR A STATEMENT OF THE REASON

MARKET RESEARCH WAS NOT CONDUCTED.

A competitive acquisition for a follow-on contract for services and support for TRACS is currently underway. The original market research, conducted by the program personnel in October 2018, on the competitive acquisition was done via Acquisition Gateway located on the SBA website. The original market research determined that there is adequate competition in the marketplace amongst small business that are capable of providing a commercial service. Additional market research was not conducted for this 6-month bridge contract because market research was recently performed for the competitive action and the market has not changed.

9. ANY OTHER FACTS SUPPORTING THE USE OF OTHER THAN FULL

AND OPEN COMPETITION.

A competitive acquisition is currently underway for the re-procurement of TRACS’ services and support. The impact of delay if a bridge contract is not awarded by August 30, 2019, is that there will be a break in service and a major business impact of not being able to respond to data and automated process maintenance initiatives related to managing the Multi-Family Housing underwriting, default reporting, portfolio management, housing counseling and other FHA programs affecting the Office of Multi Family Housing and the overall mission of HUD to provide subsidy to families in need. There are no estimated duplicative costs.

10. A LISTING OF THE SOURCES, IF ANY, THAT EXPRESSED, IN

WRITING, AN INTEREST IN THE ACQUISITION.

No sources have expressed, in writing, an interest in this sole source acquisition.

11. A STATETMENT OF ACTIONS, IF ANY, TIff AGENCY MAY TAKE TO

REMOVE OR OVERCOME ANY BARRIERS TO COMPETITION BEFORE

ANY SUBSEQUENT ACQUISITION FOR SUPPLIES OR SERVICES

REQUIRED.

A competitive acquisition for the re-compete of services and support for TRACS is currently ongoing. Contract award is anticipated for FY20 1st Quarter.

12. CONTRACTING OFFICER CERTIFICATION THAT THE

JUSTIFICATION IS ACCURATE AND COMPLETE TO THE

CONTRACTING OFFICER’S KNOWLEDGE AND BELIEF.

See certification at Part 2, Form HUD-24012.