LSJ 693JJ322F00367N HERS Model FE.pdf

Federal Highway Administration Office of Acquisition and Grants Management

JUSTIFICATION FOR SOLE SOURCE

FAR 8.405-6 LIMITED-SOURCES JUSTIFICATION

1. Identification of the agency and the contracting activity.

Federal Highway Administration (FHWA), Office of Acquisition and Grants Management, 1200 New Jersey Avenue, S.E., Washington, DC 20590

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

This is a justification for limiting sources to Contractor Deloitte Financial Advisory Services LLP under Blanket Purchase Agreement (BPA) 693JJ322A000011 Time-and-Materials (T&M) task order 693JJ322F00367N modification P00007. This modification action will extend the period of performance for one year, beyond its original three year period of performance, for a total of four years from September 30, 2022 to September 29, 2026, and increase the ceiling amount to complete tasks providing technical support services for the Economic Evaluation of Highway Investment Needs Research and Highway Economic Requirements System (HERS) Programming Support 2022 project. The HERS project develops new capabilities for the HERS model such as the interchange analysis, pavement preservation, and resilience needs assessment and documents these methodological improvements in the form of scripts and memorandums, which are passed to the Volpe National Transportation Systems Center (Volpe) contract for implementation in the HERS model. The project utilizes the newest data (2024), which may introduce unexpected challenges. An agile funding approach made possible through a T&M type order and optional task contract line-item numbers (CLIN) was determined to be the most approximate contracting mechanism. The current action being approved supports exercising optional Task 3, 5, and 7, and adding additional funds to complete Task 6.

3. A description of the supplies or services required to meet the agency’s needs (including the estimated value).

The FHWA’s Office of Transportation Policy Studies manages the development and maintenance of the Highway Economic Requirements System (HERS) model. The HERS model quantifies at a national level the relationship between the level of investment in highway preservation and capacity and future highway conditions and performance.

Analyses performed with HERS for the biennial Conditions and Performance (C&P) Report to Congress and for other applications provide valuable information for assessment of the Nation’s highway investment needs. Because of the important role of the HERS model in producing the Congressionally mandated biennial C&P Report, the FHWA has an on-going research program to revise and update the analytical procedures used in the HERS model.

These updates can generally be broken down into three types of sequential activities:

• Type I -- Development of equations and algorithms for the new or revised procedures.

• Type II -- Coding the equations and algorithms into the Intel FORTRAN Compiler

11.0 language used by HERS and testing of the code.

• Type III -- Integrating the updated code into the baseline HERS model and testing of the revised model.

A combination of Type I and Type II activities are conducted by Deloitte. Deloitte provides maintenance to keep the model’s parameters up to date as well as the development of enhancements to the model to exploit improvements in available data. The Contractor updates the HERS model parameters and Operations Preprocessor for use in the 26th and 27th editions of the C&P report and supports the FHWA in its efforts to enhance and apply the HERS model. Volpe is currently supporting Type III activities by integrating the products of this task order into the official HERS model source code.

The increase to the ceiling amount supports a small portion of exercising options Task 3, Task 5 and Task 7, and supports a greater portion of the effort required to complete Task 6 which includes the following activities:

• Conducing preliminary prep work for the next C&P report;

• Finalizing the interchange analysis, coding, and testing and results report;

• Conducing a feasibility analysis for adopting UPDAPS into HERS; and,

• Finalizing updates to HERS code and coordinating with Volpe to transfer modeling improvements and conducting Verification and Validation of the new code.

The total estimated value for this contract action is $474,179.76. The total estimated ceiling increase is $265,540.31 and the new total estimated ceiling value is $1,604,241.53.

4. The authority and supporting rationale.

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 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 In the interest of economy and efficiency, the new work is a logical follow-on to an original Federal Supply Schedule order in accordance with applicable Federal Supply Schedule ordering procedures and was not previously issued under sole-source or limited procedures. The task order meets these competition requirements.

The task order was competitively awarded in 2022 and Deloitte’s quote was determined to provide the best overall value to the Government. The work required under this modification action allows the Government to complete the objective’s listed in the Statement of Work (SOW) and relies upon the work that Deloitte has already completed. As explained in Section 3. above, FHWA has an on-going research program which requires the update of three types of sequential activities, two are currently provided by Deloitte, and the third is provided by Volpe to integrate all the products into the source code of the official HERS model. These tasks hold an important role in in FHWA fulfilling its Congressional mandate required under 23 U.S.C. § 503(b)(8)(A), and it would be a detriment to stop work so close to completion as it would lead to increased costs and a longer time to complete the project. The following tasks are associated with this modification action:

• Optional Task 3 HERS Parameter and Preprocessor Updates for 27th C&P Report includes updating the HERS Preprocessor and Main Model with parameters and assumptions in preparation for the 27th edition of the C&P Report (total value is $62,781.73 and increase to ceiling value is $1,835.38).

• Optional Task 5 2024 HPMS Database Review requires assisting FHWA in identifying and resolving problems in the HPTS sample data to be used for the development of the 27th edition of the C&P Report (total value is $39,613.79 and increase to ceiling value is $1,174.74).

• Optional Task 7 Incorporating Pavement Preservation into HERS requires developing new capabilities to capture the impact of the applications of preventative maintenance for flexible and rigid pavements on condition, performance, and investment needs of pavements (total value is $112,510.73 and increase to ceiling value is $3,256.68).

• Task 6 HERS General Support requires the development of additional enhancements to the HERS model and the development of documentation to support the adoption of the new capabilities. The extension will allow the Contractor to complete remaining work for preparing for the next C&P report, finalizing the interchange analysis, coding, and testing and results report, conducting a feasibility analysis for adopting UPDAPS into HERS, and finalizing preparation of updates to HERS code, and coordination with Volpe to transfer and conduct Verification and Validation of the new code (total value is $259,273.51 and increase to ceiling value is $259,273.51.)

Due to the unique circumstances and familiarity with the HERS model, Deloitte is the only capable source that can meet the Government’s requirements.

5. A determination by the ordering activity contracting officer that the order represents the best value consistent with 8.404(d).

This task order was competitively negotiated, the labor rates proposed were discounted from Deloitte’s BPA labor rates and previously determined as fair and reasonable. The Contractor’s quoted labor rates in the Limitations of Funds Notification letter dated June 4, 2025, are consistent with the current BPA labor rates for task order Year 3. The level of effort for this work has been validated by the COR.

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

Market research revealed that Technical Support Services are available from eight schedule holders under BPA 693JJ322A000010 through 693JJ322A000017. The eight BPA holders were solicited for this task order requirement in 2022 and two vendors submitted quotes.

Deloitte provided the best overall value to the Government and was rated as Outstanding for the technical evaluation due to demonstrating a clear understanding of the challenges of the HERS modeling environment and the data requirements.

The initial task order was awarded on a competitive basis and Deloitte is providing pricing for this modification action that was determined as fair and reasonable at the time of award.

https://www.acquisition.gov/far/8.404#FAR_8_404

Price escalation over time is in accordance with Deloitte’s BPA award. To award this requirement to another Contractor is not in the best interest of the Government and would delay completion of FHWA’s objectives.

7. Any other facts supporting the justification.

This contract action is essential to complete work which was delayed for up to four months due to the mandatory contract action pause earlier this year requiring FHWA to ensure all contracts implemented the most current Executive Orders (EO) and due to the unavailability of the Office of Transportation Policy Studies (HPTS) research funding.

There is an unpredictable amount of collaboration required between Deloitte and Volpe for the HERS Operations to successfully implement the scripts produced by this task order into the functional HERS model to support analyses for the C&P Report. A decision to stop the current work and award it to another Contractor would disrupt ongoing research that depends on multiple interdependent factors and coordination with the related contract action.

Executing this sole source task order modification to Deloitte is in the best interest of the Government to continue the delivery of this innovative research for the HERS model and the next mandated C&P report.

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

The unique circumstances associated with this project require a sole source task order modification within the scope of the original order. The Government will continue to award as many competitive task orders as possible under its BPA’s and ID/IQs for these types of services.

9. Technical Certification and Approval

The evidence and any supporting data which form a basis for the justification have been certified as complete and accurate by the technical representative.

Rachel James Date Task Order Contracting Officer’s Representative

10. Contracting officer’s certification that the justification is accurate and complete to the best of the contracting officer’s knowledge and belief.

Carolyn Lethert Date Contracting Officer