2033H624F00063 Justification.pdf

DEPARTMENT OF THE TREASURY

LIMITED-SOURCES JUSTIFICATION

This acquisition is conducted under the authority of the Multiple Award Schedule Program (see FAR 8.401)

Treasury Standard Form – 1012 (Rev 9/23)

Prescribed by Treasury: DTAP 1008.405-6

1. Identification of the agency and the contracting activity:

The requiring activity is the Bureau of the Fiscal Service (Fiscal Service), Disbursing and Debt Management (DDM), and the contracting activity is Fiscal Service, Division of Procurement Services.

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

The purpose of this limited-sources justification is to obtain approval to award an urgent and compelling fee-for-service bridge contract to Coast Professional under the current terms and conditions of 2033H618F00105 for Private Collection Agency (PCA) Services, as described in section 3.a below. The need-by date for these services is 02/18/2024. The (POP) will include a 3-month Base Period and three (3) 3-month Option Periods, with an overall POP of 02/18/2024 – 02/17/2025.

2.b Name of the vendor: Coast Professional (an Other than Small Business) 2.c Requisition No.: FSA-48130100-24-002 2.d Bridge contract: ☒ Yes ☐ No 2.e Brand name: ☐ Yes ☒ No 3.a A description of the supplies or services required to meet the agency’s needs:

The U.S. Department of the Treasury (Treasury), specifically Fiscal Service’s DDM, is responsible for collecting delinquent, non-tax debts owed to the United States. The Debt Collection Improvement Act (DCIA) of 1996 (codified in relevant part at 31 U.S.C. 3711(g)) requires Federal agencies to refer certain types of delinquent, non-tax debts to Fiscal Service for collection; additionally, agencies may opt to refer delinquent non-tax debts that are exempt from this requirement to Fiscal Service for collection at their discretion. DDM services debts on behalf of over 800 federal agency programs, including delinquent loans owed by loans to students, small business owners, homeowners, farmers, and veterans, and administrative debts, such as fines, penalties, overpayments, and fees. The collection of delinquent debts helps fund government operations, maintain key programs, and reduce the federal deficit.

Fiscal Service may attempt to collect referred debt internally prior to referring the debt to a PCA. In such cases, if its efforts are not successful, it will generally refer eligible debts to the PCAs for collection. Fiscal Service may also refer eligible debts directly to PCAs before attempting internal collection. Debts referred to DDM’s Cross-Servicing program are referred to one or more PCAs, as PCAs have the capacity to effectively service the accounts, and the use of PCAs can also free up internal DDM resources to focus on activities best performed by federal employees. These PCA Services are critical to Treasury’s statutory collection mandate and therefore continuity of services is of the utmost concern.

The required PCA Services are summarized below:

Collecting debt on a fee-for-service basis in a competitive environment with other PCAs, where accounts are apportioned to the PCAs every two (2) weeks based on each PCA’s previous performance.

Maintenance of current nationwide licensing and bonding for, and provision of debt collection services for delinquent non-tax Federal and state debt on a national level;

including all 50 United States, the District of Columbia (DC), and the territories of Puerto Rico, Guam, the Virgin Islands, Northern Mariana Islands, and American Samoa.

Providing debt collection services for delinquent non-tax Federal and state debt on a large scale, i.e., multi-million-dollar referral portfolios.

This acquisition is conducted under the authority of the Multiple Award Schedule Program (see FAR 8.401)

Collecting debts owed to federal and state governments and collecting a multitude of debts originating from different sources.

Collecting consumer and commercial debts, including loans and administrative debt types such as fees, fines, penalties, overpayments, grants, employee owed debts, and other miscellaneous categories. Some may be medical debts.

Fully complying with consumer protection laws, including but not limited to the Fair Debt Collection Practices Act, Privacy Act of 1974, Federal Claims Collection Standards and applicable state consumer protection laws.

Maintaining the technical system capability to receive and decrypt files, to mimic operations, and to encrypt and return files.

Maintaining reliable information technology (IT) infrastructure to ensure secure data movement via batch file processing.

Maintaining an IT solution must be compliant with NIST’s Federal Information Processing Standards 140-2 security requirements.

Utilizing electronic formats and transfer protocols to automate, centralize, and transmit inbound and outbound files.

Maintaining a non-production environment for validating file layouts and performing end-to-end testing.

Servicing very large datasets with potential record counts over 300K in a single file where file sizes can reach 100 megabytes or more.

Ensuring government data is stored and encrypted securely.

3.b Includes IT: ☐ Yes ☒ No

4.a Identification of the authority being used (Check the appropriate box that applies).

☒ FAR 8.405-6(a)(1)(i)(A) – An urgent and compelling need exists, and following the procedures would result in unacceptable delays.

☐ FAR 8.405-6(a)(1)(i)(B) – Only one source is capable of providing the supplies or services required at the level of quality required because the supplies or services are unique or highly specialized.

☐ FAR 8.405-6(a)(1)(i)(C) – In the interest of economy and efficiency, the new work is a logical follow-on to an original Federal Supply Schedule order or BPA provided that the original order or BPA was placed in accordance with FSS procedures in accordance with the applicable Federal Supply Schedule ordering procedures. The original order or BPA must not have been previously issued under sole-source or limited-sources procedures.

☐ FAR 8.405-6(b) – Items peculiar to one manufacturer. (i.e., Brand Name specifications)

This acquisition is conducted under the authority of the Multiple Award Schedule Program (see FAR 8.401)

4.b Supporting Rationale: The proposed contractor’s unique qualifications and the nature of the acquisition requires use of the authority cited as follows:

1. PCA Services are mandated by law and are mission critical for Fiscal Service. The DCIA explicitly requires Treasury to maintain a schedule of PCA contractors eligible for referrals. See 31 U.S.C. 3711(g)(5)(C). A stated purpose of the DCIA is to, “rely on the experience and expertise of private sector professionals to provide debt collection services to Federal agencies.” Pub. L. No. 104-134, § 31001(b), 110 Stat. 1321 (1996).

A lapse in PCA services will cause Fiscal Service to fail to meet the statutory mandate.

2. The PCA Services requirement is now in its 6th acquisition cycle, with an active protest against the current in-progress procurement for multiple single-award BPAs (RFQ1653552 PCA Services, solicited via GSA eBuy). Historically, protests against solicitations for the PCA Services requirement have taken a year to resolve. Given the impending 02/17/2024 end-date of the existing PCA Services task orders, the protest against the current PCA Services solicitation, and the gravity of the consequences for the Government if there is a lapse in mission-critical PCA Services (described further below), there is an urgent and compelling need to complete bridge contracts to the current PCA contractors.

3. Other Government agencies will suffer serious operational and financial injury if the

PCA Services lapse. Fiscal Service works with more than 70 agencies, with over 800 programs to resolve delinquent non-tax debts. Under many of these programs, the creditor agency specifically opts for Fiscal Service to utilize PCAs to service their accounts. If the PCA Services lapse, critical funding will not be returned to these federal agencies and resulting budget shortfalls will harm their ability to continue operations. Examples of the potentially affected federal agencies and programs include:

a. Department of Veterans Affairs (VA), Veterans Health Administration (VHA) and VA education loans

b. Small Business Administration (SBA)

c. Department of Housing and Urban Development (HUD)

d. Mine Safety and Health Administration (MSHA)

e. Securities and Exchange Commission (SEC)

f. Department of Transportation (DOT)

g. Federal Emergency Management Agency (FEMA)

h. Centers for Medicare and Medicaid Services (CMS)

i. Defense Finance and Accounting Services (DFAS)

j. Department of Labor (DOL)

k. Department of Agriculture’s (USDA) National Finance Center (NFC)

l. Social Security Administration (SSA)

This acquisition is conducted under the authority of the Multiple Award Schedule Program (see FAR 8.401)

4. DDM itself will experience serious financial and operational injury if PCA Services lapse. DDM’s Cross-Servicing program does not have appropriated funding. DDM’s delinquent debt program creates its own funding through debt collections. If there is a lapse in PCA services, Treasury’s Debt Fund may become insolvent, reducing DDM’s operational funding, which could potentially require DDM to take drastic operational steps such as reduction in workforce. Without the PCA contracts, DDM may not have the necessary funding to operate.

5. In FY23, Fiscal Service referred the PCA contractors 2.1 million delinquent accounts valued at $9.1B. This referral volume is the highest number of accounts ever referred to the PCA contractors in a single fiscal year in the 25-year history of DDM’s PCA program. The second highest total occurred over the previous year, FY22, in which Fiscal Service referred just over 1 million accounts to the PCAs, valued at nearly $3.4B. It is anticipated that the number of debts referred to DDM’s Cross-Servicing program will continue to increase. If the PCA Services lapse, it would be impossible for DDM’s internal staff to adequately handle the accounts volume on their own, especially reduction of DDM operational funding leads to reduction in their workforce.

6. The American public will also be harmed if PCA Services lapse. Strain on DDM internal staff due to overwhelming account volume would result in a portion of debtor calls regarding debts going unanswered. As a result, debtors may be unable to resolve debts or enter into compromise or repayment agreements. Meanwhile, interest and penalties will continue to accrue on most debts, and most debts will continue to be reported to credit bureaus, negatively impacting debtors’ ability to obtain financing. A lapse would jeopardize DDM’s efforts related to Executive Order 13985, Advancing Racial Equity and Support for Underserved Communities Through the Federal Government (January 20, 2021).

7. Coast Professional has successfully performed PCA Services for the Fiscal Service since 2018 under task order 2033H618F00105.

5. A determination by the ordering activity Contracting Officer that the order or BPA represents the best value consistent with FAR 8.404(d):

The Contracting Officer has determined that awarding a single order to Coast Professional against their GSA schedule contract represents the best value consistent with FAR 8.404(d) and lowest overall cost alternative (considering price, special features, administrative costs) to meet the Government’s urgent needs based on the contract’s prior history and market research.

6. A description of the market research conducted among schedule holders and the results or a statement why market research was not conducted:

Contract Specialist Rachel Nonamaker conducted market research in January 2024. Mandatory sources of supply Unicor, AbilityOne, Treasury-Wide Contracts, and Acquisition Gateway were searched, and no sources were identified. GSA eLibrary was searched for GSA contractors under NAICS 561440. A group of 28 contractors, consisting of 18 small businesses and 10 Other Than Small Businesses (OTSB) were identified; all of which have been included in previous market research conducted, as described below.

According to FAR 10.002(b)(1), the Contracting Officer may use market research conducted within 18 months before the award of any task or delivery order if the information is still

This acquisition is conducted under the authority of the Multiple Award Schedule Program (see FAR 8.401) current, accurate, and relevant. Extensive market research was performed by the contracting activity and the program office from approximately September 2022 through August 2023 in preparation for RFQ1653552 PCA Services (the procurement currently underway and facing protest), which is still current, accurate, and relevant. In addition to review of mandatory sources, this previous market research included the following efforts summarized below:

RFI posted to GSA eBuy from 09/14/2022 – 10/14/2023, and review of eight (8) submitted capability statements.

Market research inquiry to a pool of 27 “debt collection” small businesses (including 13 SDBs) identified by the SBA DSBS tool (inquiry sent on 03/17/2023), related secondary market research follow-ups, and review of three (3) submitted capability statements.

Sources Sought Notice posted on SAM.gov from 07/24/2023 – 07/31/2023, related secondary market research follow-ups, and review of 17 submitted capability statements.

The previous market research ultimately identified eight (8) OTSBs as potential sources for fulfilling the PCA Services requirement. While market research revealed no small business capable of fulfilling the requirement, RFQ1653552 PCA Services was issued on an unrestricted basis to a pool of 20 GSA contractors under NAICS 561440, consisting of all 12 of the Small Businesses available on GSA eBuy and the eight (8) OTSBs which were identified as potential sources.

Current market research indicates that there have been no significant changes in the market for debt collection services since the previous market research was conducted.

7.a Any other facts supporting this justification:

This requirement includes a 3-month Base Period and three (3) 3-month Option Periods with an overall POP of 02/18/2024 – 02/17/2025. The program office intends to only exercise as many of the 3-month Options as is necessary to allow the new PCA Services awards to be completed.

7.b Attachments: ☐ Yes ☒ No

8. A statement of the actions, if any, the Requiring Activity and Contracting Activity may take to remove or overcome any barriers that led to restricted consideration before any subsequent acquisition for the supplies and services is made:

The extensive market research performed by the contracting activity and the program office from approximately September 2022 through August 2023 in preparation for RFQ1653552 PCA Services is still current, accurate, and relevant. Considerable efforts were undertaken to provide the maximum possible opportunity to small business.

The Requiring Activity considered how the PCA Services requirement might be broken up by region, rather than requiring all PCAs to be nationally licensed and bonded, as a potential means of increasing small business participation. However, due to functional limitations of the DDM debt collection system, it was determined that it is not possible to alter the requirement to incorporate a network of regional PCAs.

The Contracting Activity performed extensive market research with collaboration from the Requiring Activity to identify potentially capable small businesses, including but not limited

This acquisition is conducted under the authority of the Multiple Award Schedule Program (see FAR 8.401) to an RFI, market research inquiry, and Sources Sought Notice. While the requirements of FAR 19 Small Business Programs do not apply to FAR 8.404 Use of Federal Supply Schedules and market research did not support a small business set-aside, the President’s prioritization of equity (recently reiterated in OMB Memo M-23-11) and the market research prioritization list at DTAP 1008.002(d)(2) were given significant consideration. RFQ1653552 PCA Services was issued on an unrestricted basis to a pool of 20 GSA contractors under NAICS 561440, consisting of all 12 of the Small Businesses available on GSA eBuy and the eight (8) OTSBs which were identified as potential sources. Also, RFQ1653552 PCA Services includes a small business participation plan with a 20% small business goal.

Future requirements for PCA Services will include market research efforts performed by the Requiring Activity and the Contracting Activity with a goal of providing maximum opportunity for small business.

Post award, the SF 1012 will be posted on Contract Opportunities for a minimum of 30 days, and on the Doing Business with Fiscal webpage for a minimum of 30 days in accordance with FAR 8.405-6(a)(2)(i)(B).

9. Certifications and Approvals:

9.b Contracting Officer Certification and Approval. I hereby determine the circumstances of this acquisition support the justification to acquire these supplies or services on a limited source basis. I also certify this limited-sources justification is accurate and complete to the best of my knowledge and belief. Therefore, unless additional approvals are required as prescribed below, as the authorized contracting officer for this acquisition, I hereby approve the processing of this requirement on a limited-source basis.

Name: Robert L. Goff Date:

Signature: