260138J- JA Limited Source Justification.pdf

FEDERAL SUPPLY SCHEDULE LIMITED-SOURCES JUSTIFICATION

Acquisition Title: Technical Support for Payment Systems and Rates, Logical Follow-On (LFO)

Agency: Department of Health and Human Services (HHS)/Centers for Medicare & Medicaid Services (CMS)

Acquisition Strategy: 2-year bridge – Sole Source

Acquisition Year: 2026

Author: Au’Sha Washington

1. Description of Action:

Nature

• ____ New Requirement

• __x__ Follow-On Order

• ____ Modification of Existing Purchase Order / Contract Number

Contract Type

• ____ Firm-Fixed Price

• __x__ Time and Materials

• ____ Cost Plus Fixed Fee (CPFF)

• ____ Term

• ____ Completion

• ____ Cost Plus Award Fee (CPAF)

• ____ Other: ___________

Projected Cost / Price:

FY 26- $4,000,000

FY 27- $4,200,000

Funding Source (s): 1415, 1614, 1703

Name of Proposed Contractor(s): ACUMEN LLC, Street Address: 500 Airport Blvd Ste 100 City, State, Zip: Burlingame, CA 94010-936

2. Description of Supplies or Services:

The Centers for Medicare & Medicaid Services (CMS) seeks consideration to award a 24-month logical follow-on (LFO), consisting of 2 bridge periods of 12-month each, with a total potential period of performance of September 17, 2026 through September 16, 2028.

Each year, the Medicare payment systems propose and finalize payment rates through regulatory notice and comment rulemaking in the year prior to the prospective payment year. CMS requires assistance to remain compliant with this statutorily required work. This procurement provides critical support for several statutorily required payment system ratesetting workstreams, including the Medicare Outpatient Prospective Payment System (OPPS), Ambulatory Surgical Center (ASC), Inpatient Prospective Payment System (IPPS), Long-Term Care Hospital (LTCH) PPS, and the End Stage Renal Disease (ESRD) Prospective Payment System (PPS) payment rates. Specifically, this contract provides technical, clinical, and application support required to analyze, evaluate, and summarize the payment systems applications against the criteria set forth in statute, regulations, and payment policies associated with each payment system and application type.

Additionally, this contract supports compliance with CMS data security policies and the Enterprise Architecture Transformation project goals. The Office of Information Technology (OIT) announced in the summer of 2024 that CMS plans to discontinue using the Statistical Analysis System (SAS) software suite beginning in 2026 due to rising licensing fees and maintenance costs. OIT alerted all components using SAS software that they will need to migrate to other analysis and data management software tools, which would provide similar and more contemporary analytical capabilities at a more cost-effective price point.

Historically, the ratesetting work primarily relied on SAS-based analytical software framework operated and maintained by CMS staff and analytic support contractors. The transition away from SAS requires several actions to successfully move to other software while concurrently maintaining FFS program operations and administering over $396 billion in Medicare payments. We estimate that we will complete tasks associated with the Enterprise Architecture projects by December 31, 2027, including the work required to modernize the 160+ programs that produce the statutorily required rates, policy simulations, and modules for approximately 160 million claim records per ratesetting process.

The estimated value of the proposed action, including all options, is:

Amount Bridge Year 1 $4,000,000.00 Bridge Year 2 $4,200,000.00 Total Bridge Obligation $8,200,000.00

To date, $15,461,139 has been obligated to the original task order over a five-year contract.

The current period of performance is:

Base Year: September 17, 2021 - September 16, 2022 OP 1: September 17, 2022 - September 16, 2023

OP 2: September 17, 2023 - September 16, 2024 OP 3: September 17, 2024 - September 16, 2025 OP 4: September 17, 2025 - September 16, 2026

The proposed period of performance is 9/17/2026-9/16/2028:

Base Period: September 17, 2026- September 16, 2027 Option Period 1: September 17, 2027- September 16, 2028

We intend to issue a competitive solicitation by July 17, 2028, with an estimated award date of November 1, 2028.

In the event that the competitive solicitation is not awarded to the incumbent, we intend to utilize the option to extend services and the option to extend the term of the contract (FAR 52.217-7-8) to ensure coverage throughout the statutorily required ratesetting timelines ( September 17, 2028- November 17, 2028) and a three-month transition period for the new awardee to transition on ( December 01, 2028 – February 29, 2029).

3. Authority:

____:ORDER AGAINST FSS: Authority of the Multiple Award Schedule Program, Title III of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 251, et seq.); Title 40 U.S.C.

501, Services for Executive Agencies; and Section 803 of the National Defense Authorization Act of 2002 (PL 107-107) and implemented by FAR 8.405-6. Mark the applicable exception and for each discuss how the cited authority applies in accordance with FAR 8.405-6(c)(2)(iv).

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

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

__X__: In the interest of economy and efficiency, the new work is a logical follow-on to an original Federal Supply Schedule order provided that the original order was placed 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(a)(1)(i)(C)); or

The agency requires the continuation of highly specialized ratesetting and related enterprise architecture activities that have been developed, refined, and maintained by Acumen since 2010.

Acumen is the only responsible source capable of providing the required services at the level of quality and technical sophistication necessary to meet agency needs at this time. With more than a decade of continuous performance, Acumen has developed substantial institutional knowledge, proprietary analytical tools, and refinements to ratesetting models that are not replicated elsewhere in the market. These capabilities are currently inseparable from the agency's operational workflows and are essential for accurate, timely data production and the execution of rulemaking schedules. The current period aligns with critical milestones in the SAS Conversion and broader enterprise architecture modernization efforts, and introducing a new vendor at this stage would create significant operational and programmatic risk. Transitioning midstream would require reconstruction and relearning of proprietary methodologies, duplication of already-funded development, and revalidation of highly technical processes—all of which would result in unacceptable delays and substantial additional costs.

Because the required work is deeply integrated with ongoing modernization activities and the SAS Conversion effort, switching vendors at this time would require extensive re-familiarization, redevelopment of analytical baselines, and re-establishment of complex data linkages. Such a transition would reduce efficiency, waste previously obligated funds, and delay key milestones associated with data validation and model conversion.

While the continued Federal Supply Schedule (FSS) task order independently qualifies as a logical follow-on under FAR 8.405-6, the broader justification for continuity with Acumen further reflects the sole-source considerations described above. This acquisition also qualifies as a logical follow-on to the original Federal Supply Schedule order, which was issued under full and open FSS ordering procedures rather than limited-sources or sole-source authority. Continuing the work with Acumen is essential to preserving technical and operational continuity across interconnected workstreams that cannot be separated or re-sequenced without jeopardizing mission-critical deliverables. The ratesetting models, data production schedules, and enterprise architecture components under this contract directly support multiple regulatory and rulemaking timelines. Interrupting performance or onboarding a new vendor would compromise the sequencing and validation of these processes, introducing significant risk to statutory and policy deadlines.

A short-term logical follow-on ensures continuity of operations, preserves the value of prior investments, and allows adequate time for full and open competition in 2028. It also gives the agency sufficient runway to develop updated metrics, engage with industry, build internal subject-matter expertise, and design a more targeted and cost-effective competitive strategy.

Continuing the work with Acumen is therefore the most efficient and economical approach, and it squarely satisfies the FAR requirement for a logical follow-on acquisition.

____: An item peculiar to one manufacturer can be a particular brand name, product, or a feature of a product, peculiar to one manufacturer). A brand name item, whether available on one or more schedule contracts, is an item peculiar to one manufacturer. (FAR 8.405- 6(b);

4. Market Research:

The original GSA task order (75FCMC21F0078) was competed on GSA for all GSA Multiple Award Schedule (MAS) vendors in 2021. GSA has already determined the prices of supplies and fixed price services (and rates for services offered at hourly rates) under schedule contracts to be considered fair and reasonable. Therefore, ordering activities are not required to make a separate determination of fair and reasonable pricing, except for a price evaluation as required by 8.405-2(d).

Since the original award was in accordance with the competitive procedures and based on the inability of another vendor to perform several statutorily required payments system ratesetting workstreams, it was determined that no further market research was required at this time. The Contracting Officer will ensure the level of effort, mix of labor proposed, and total price are reasonable for the requested quote.

5. Actions to Increase Competition:

To remove and overcome barriers that led to this restricted consideration, the agency will continue to engage in knowledge transfers with the incumbent to minimize the risks associated with their unique capabilities, proprietary tools and methodologies, and entrenched institutional knowledge. Additionally, the agency will continue to participate in small business days, include this effort in applicable forecasts, and stay current on market activities.

6. Any other facts supporting the justification:

The project team is working with Acumen to revise workflows to leverage internal EA modernization efforts and efficiencies, thereby realizing savings without assuming the risks associated with the open-market effort.

Approvals:

1. Program Office Certification: This is to certify that portions of this justification have been developed by the undersigned program office personnel, including supporting information and/or data verifying the Government’s minimum needs, schedule requirements and other rationale, which form the basis for this Limited Source Justification.

Contracting Officer Representative (COR) / Date

Program/Project Manager (P/PM) / Date

2. Contracting Officer Certification and Best Value Determination:

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.

By my signature below, after review of the relevant documents, I have determined that the order subject to this Limited-Sources Justification represents the best value for the Government as set forth in FAR 8.404(d), and constitutes a fair and reasonable price. The basis for my determination is as follows:

Acumen’s experience as the contractor for the Hospital Outpatients PPS since 2010 provides direct experience with the staff necessary to successfully perform this work. They have leveraged approved GSA categories from the MAS Category 541611 to ensure the team proposed can perform all the necessary task work. Finally, the price for the logical follow-on will utilize their published GSA labor category rates. The labor category rates listed in Acumen’s GSA Catalog are the rates Acumen offers to its Most Favored Customer (MFC) that incorporate a significant discount over Acumen’s standard commercial rates. The prices included in the GSA MAS schedule have been negotiated with GSA and have been approved as fair and reasonable. Considering price reasonableness, demonstrated past performance, technical capability, reduced transition risk, and the critical nature of uninterrupted Technical Support for Payment Systems and Rates, award of this logical follow-on order to Acumen represents the best value to the Government.

Contracting Officer / Date

3. CMS Competition Advocate Approval I hereby confirm the circumstances described above apply and approve the Limited Source Justification.

Name / Date

AU'SHA C. WASHINGTON -S Digitally signed by AU'SHA C. WASHINGTON -S Date: 2026.07.21 14:54:00 -04'00'

AU'SHA C. WASHINGTON -S

Digitally signed by AU'SHA C.

WASHINGTON -S

Date: 2026.07.21 14:54:31 -04'00'

MOHAMMED T.

ISLAM -S

Digitally signed by MOHAMMED

T. ISLAM -S

Date: 2026.07.21 16:15:21 -04'00'

4. Head of Contracting Activity (HCA) Approval I hereby confirm the circumstances described above apply and approve the Limited Source Justification.

N/A Name / Date

5. Office of Small and Disadvantaged Business Utilization

N/A Name / Date

6. OGC Legal Review

N/A Name / Date

7. HHS Competition Advocate Approval

_N/A______________________________________________ Name / Date

8. Senior Procurement Executive (SPE) Approval Based on the foregoing justification, I hereby confirm the circumstances described above apply and approve the Limited Source Justification.

N/A Name / Date