4A. Sole Source Justification Form.docx

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Governor’s Office of Information Technology (OIT) Sole Source Justification and Certification

A state agency shall complete this form before entering into a sole source procurement under CRS §24-103-205 and Procurement Rule R-24-103-205-01 for the purchase of goods over $10,000 and services over $25,000 and for sole source personal services contracts with a value over $100,000 in accordance with CRS §24-102-205(3)(a)(VI). Except, Sole Source Justification and Certification Forms are not required:

· Under circumstances outlined in §CRS 24-101-105 and related rules; and/or

· For interagency or intergovernmental agencies.

Procurement Rule R-24-103-205-01 states the following two criteria must be met to have a Sole Source procurement:

· There is only one good or service that can reasonably meet the need, and

· There is only one vendor who can provide the good or service.

SECTION 1 – SOLE SOURCE DETAILS: This section is to be completed by the Program Manager.

Program Manager Name:

A. Contractor/Vendor Name:

Ad Hoc LLC

Vendor Address: 1350 I Street NW, Suite 550, Washington, DC 20005 Phone/eMail: 202-818-8710 / contracts@adhoc.team

Have you procured goods and/or services from this vendor in the past 2 years? ☐ No ☒ Yes

If Yes, provide details (including cost, project name, etc.):

B. Goods and/or Services to be Procured for this Sole Source:

(Describe in detail the goods and/or services to be procured and how they meet the State’s needs.)

C. Determination of Sole Source:

1. What type of Market Research was conducted?

In conjunction with DPA, a Payroll Solution Modernization Request for Quotes (RFQ) was sent to the OIT Agile Vendor Pool on 9/12/22 and Ad Hoc LLC was awarded the project via Task Order CMS# 192308 (under Master Task Order CMS# 170877). The work will need to be extended beyond the 8/22/26 expiration date of Ad Hoc’s original Agile Vendor Pool Master Task Order CMS# 170877.

2. If applicable, obtain manufacturer statement affirming good/service is not available through a distributor/reseller or other source:

D. Justification of Sole Source: (Provide a detailed explanation of Vendor’s sole source status – what is the basis for identifying this as a sole source - why will only this good/service fulfill the State’s need?)

AdHoc is a critical vendor for the state’s number one project – payroll modernization, known as COMPAS. AdHoc was selected from an OIT pool of vendors with critical competencies to ensure completing the project timely and on budget within the new technology selected by our sister agency DPA.

AdHoc has played an integral role in creating accurate data repositories, analyzing legacy data as well as programming key data pulls from CPPS (legacy application).

AhHoc is rapidly approaching the end of their contract (August 2026) and DPA requires their services be continued through December 29th, 2026 to deliver COMPAS. The project cannot afford any delays. The institutional knowledge that AdHoc now has is critical to the success of COMPAS. Any delay would jeopardize both up and downstream projects costing the state of Colorado millions of dollars (eg. Mainframe retirement).

Thank you for pursuing a Sole Source, AdHoc for the work they are doing.

E. Conflict of Interest

If yes, please explain:

F. Pricing Evaluation: (Reference the price/cost analysis guidance when responding to the following questions)

Explanation of fair and reasonable prices/rates per CRS §24-103-403:

SECTION 2 – APPROVAL AND CERTIFICATION FOR CONTRACTS: To be completed by the procurement office.

*** Approved for one time purchase as described on this request ***

What was the result of the BIDS posting and provide BIDS web statistics: (Was Another response Received)

☐ No

Total # of Hits:

Certification – for Sole Source Personal Services Contracts over $100,000:

By signing below, we hereby certify, in accordance with CRS §24-102-205(3)(a)(VI), that we have determined that the agency has complied with CRS §24-102-205(5)(a) and has posted a sole source personal services contract on BIDS for not less than three business days.

Purchasing Agent:

Signature

Printed Name

Date

Approved:

Purchasing Director or Delegate Signature

Printed Name

Date

Use of Sole Source Form/Summary of Price and Cost Analysis Requirements:

Both sole source and emergency procurements require a written determination by the head of a purchasing agency, or a designee, of the basis for the approval. This form is designed for approval of a “sole source,” not an emergency procurement. Consult with your procurement official regarding requirements for emergency procurements.

This form should be completed and approved before formal negotiations leading to execution of an agreement with a vendor where a competitive process (documented quote, sealed bid, or competitive sealed proposal) is not used because a sole source is justified.

Normally, the actual pricing cannot be evaluated until after execution of the contract or issuance of the purchase order. The price or cost analysis (§24-103-403) should be included with the procurement file before execution of a purchase order or when the contract is routed for approval.

The methods of price cost analysis are explained in Chapter 5 of the Colorado Contract Procedures and Management Manual. Normally, price analysis is not done in competitive solicitations where “adequate competition” exists, because the competitive process takes care of the “fairness and reasonableness” of prices. However, in a sole source situation where no price competition exists, some analysis must be done to insure that the requirements of the controller’s statute are met, i.e., that prices or rates are “fair and reasonable.”

Common methods of price/cost analysis include:

a. Comparison of prices and rates to established catalog prices or market prices. In a sole source situation, there commonly are similar prices or rates, e.g., those on price agreements, that can serve as a guide to fairness or prices or rates proposed by a sole source provider. In some cases, e.g., some utilities, prices and rates are set by law or regulation (utility tariff rates).

b. Historical prices or rates for similar items or services procured in the past also serve as a guide to fair and reasonable prices.

c. In either case, even though neither historical or market prices involve the identical service, some analysis can often be done which evaluates the differences in the types of services or goods, and concludes that the nature of the differences warrant the differences in pricing. In other cases, judgments must be made that proprietary aspects of the service or commodity warrant expenditure of the prices or rates in excess of what is customary.

d. In cases where neither historical or catalog prices exist, cost analysis must be used. Vendors can be asked to provide summary level detail of materials and labor costs, as well as markups and other indirect cost rates included in the price. Technical judgments concerning labor hours can be applied to labor hour rates to evaluate the reasonableness of the overall price. Reasonable profit, of course, is another element of price. The Procurement Rules require the submission of cost or pricing data for noncompetitive acquisitions exceeding $50,000.

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