20241025 JA-Redacted_Redacted.pdf

CUI

SOURCE SELECTION INFORMATION – SEE FAR 2.101 & 3.104

Controlled by: USTRANSCOM Controlled by: Directorate of Acquisition CUI Category/ies: CUI Limited Dissemination Control: FED ONLY POC:

JUSTIFICATION AND APPROVAL (J&A)

UNITED STATES TRANSPORTATION COMMAND (USTRANSCOM)

DIRECTORATE OF ACQUISITION (TCAQ)

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

THIRD PARTY PAYMENT SYSTEM (TPPS)

CONTROL NUMBER: 24-51

1. CONTRACTING ACTIVITY.

USTRANSCOM IT Programs & Support Services Division (TCAQ-D), 508 Scott Drive, Building 1900W, Scott AFB, IL 62225.

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

A one-year extension for continued operational support of the TPPS is necessary to enable the successful award of a follow-on Indefinite Delivery/Indefinite Quantity (IDIQ) contract and completion of the one-year implementation period. Accordingly, a modification will be awarded to HTC71119DD001 to extend the Period of Performance (PoP) through 31 December 2025.

3. DESCRIPTION OF SERVICES REQUIRED TO MEET THE AGENCY’S NEEDS.

Pursuant to Management Reform Memorandum (MRM) No. 15, Reengineering Defense Transportation Documentation and Financial Processes, the Department of Defense (DoD) is required to utilize a TPPS for the transportation payments of Continental United States freight shipments (covered in 31 United States Code (U.S.C.) § 3726, Payment for Transportation; 40 U.S.C. § 121, Administrative; and 41 Code of Federal Regulations 102- 118, Transportation Payment and Audit).

The TPPS provides a fully automated, commercial payment and accounting system and associated system support services for transportation-related expenses. The automated system provides a common, real-time, electronic transportation payment environment shared by the shipper and the Transportation Service Provider (TSP). The system streamlines transportation payment and accounting processes for the DoD and other federal agencies while capturing and retaining detailed finance and accounting information at the transaction level, integrating appropriate shipment information with the transportation finance, payment, and accounting process.

4. STATUTORY AUTHORITY PERMITTING OTHER THAN FULL AND OPEN

COMPETITION.

FAR 6.302-1(a)(2)(iii)(B), services may be deemed to be available only from the original source in the case of follow-on contracts for the continued provision of highly specialized services when it is likely that award to any other source would result in unacceptable delays in fulfilling the agency’s requirements.

5. DEMONSTRATION WHY THE PROPOSED CONTRACTOR’S UNIQUE

QUALIFICATIONS OR THE NATURE OF THE ACQUISITION REQUIRES USE OF

THE AUTHORITY CITED.

The follow-on IDIQ contract includes a one-year implementation period to provide the awardee ample time to set up the infrastructure necessary to process the DoD’s average of 1M (+/- 10%) transportation transactions per month. If the awardee does not have sufficient time to implement its system to perform to the level required, the DoD risks non-compliance with MRM No.15, as well as other statutory and regulatory requirements, including the Chief Financial Officer and Federal Financial Management Improvement Act and Federal Generally Accepted Accounting Principles. Degradation of TPPS capabilities also significantly impacts the DoD’s readiness posture by eliminating the single documentation and billing process for all modes of transportation. Although the awardee’s inability to meet required quantity levels and prompt payments could be mitigated, in the short term, by manual intervention, such mitigation would significantly increase costs to the Services. Specifically, the average FY23 rate for e-Commerce (i.e., TPPS) invoice processing was , while the average manual processing rate was . Therefore, as the DoD averages 1M invoices per month, the monthly cost to the Services would increase by (1M invoices * ( - )) for invoices processed manually.

In addition to being cost prohibitive, manual intervention would also be detrimental to TSP payment timelines, jeopardizing company financials and the continued ability to support USTRANSCOM missions. Such payment delays directly violate the terms of multiple USTRANSCOM contracts which require the TPPS contractor to pay the TSP within three days of an approved invoice. Manual payment processing would exceed these timelines, creating unacceptable delays in payment. In addition to the DoD, the following federal agencies are also impacted if the current contract is not extended:

• Bureau of Engraving and Printing

• Bureau of Land Management

• Consumer Product Safety

• Department of Energy

• Department of Health and Human Services

• Department of State

• Department of Veterans Affairs

• Federal Emergency Management Agency

• General Services Administration

• Indian Health Services

• National Archives and Records

• National Cemetery Administration

• Peace Corps

• U.S. Census Bureau

• U.S. Citizenship and Immigration

• U.S. Geological Survey

As the implementation period is anticipated to take a year to complete, no company other than U.S. Bank National Association is positioned to provide services to cover this extension.

6. DESCRIPTION OF EFFORTS MADE TO ENSURE THAT OFFERS ARE

SOLICITED FROM AS MANY POTENTIAL SOURCES AS IS PRACTICAL.

Based on the above, offers from other sources were not solicited.

7. DETERMINATION BY THE CONTRACTING OFFICER THAT THE

ANTICIPATED COST TO THE GOVERNMENT WILL BE FAIR AND

REASONABLE.

The current IDIQ contract was awarded to U.S. Bank National Association on 26 February 2019 with a PoP of 1 March 2019 – 31 December 2024. Under this contract, a fixed payment processing fee is charged against each invoice submitted by the TSP. The TPPS contractor pays the TSP the amount invoiced, less the fixed payment processing fee, and the Defense Finance and Accounting Service reimburses the TPPS contractor on behalf of the Services for the entire approved invoiced amount. As such, the TPPS IDIQ contract does not include priced line items directly billable to the Government. Rather, the fixed payment processing fee serves as compensation for the TPPS contractor’s services.

For the current IDIQ contract, as well as the follow-on solicitation, offerors were required to propose a fixed payment processing fee not to exceed 1.75% based on such factors as the Specialized Transportation and Support Services cost recovery fee, early payment incentive requirements, prime interest rate, and prior contract rates. The Government anticipates the fixed processing fee for the one-year bridge to be 1.75% or lower. The Contracting Officer will determine the price fair and reasonable.

8. DESCRIPTION OF THE MARKET RESEARCH CONDUCTED, AND THE

RESULTS, OR A STATEMENT OF THE REASON MARKET RESEARCH WAS

NOT CONDUCTED.

The Government reviewed the current award (HTC71119DD002) and the market research for the follow-on solicitation (HTC71123RD002). As noted above, the contractor is required to process over 1M monthly electronic transactions. A one-year implementation period for the follow-on IDIQ contract is necessary for the contractor to establish new accounts, set up interfaces with shipper and DoD systems, test interfaces, and validate successful transactions.