73351022F0141.LSJ Over SAT 8.405.6.REDACTED.pdf

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LIMITED SOURCES JUSTIFICATION

FOR AN ORDER / BPA EXCEEDING

THE SIMPLIFIED ACQUISITION THRESHOLD

(AUTHORITY: FAR 8.405-6)

Award No. 73351022F0141

This acquisition is conducted under the authority of the Multiple Award Schedule Program.

1. Agency and contracting activity. Small Business Administration (SBA), Office of Performance, Planning and the Chief Financial Officer, Office of Financial Operations & Acquisition Management, Acquisition Operations Division and Office of Capital Access.

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

This is a limited source justification for a new task order under GSA MAS GS-00F-045DA for Continuing Support for COVID-19 Programs. This task order will be a sole-source to:

Guidehouse LLP 2941 Fairview Park Dr Ste 501 Falls Church, Virginia 22042-4543

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

The Small Business Administration’s (SBA) Office of Capital Access (OCA), including the Office of Financial Program Operations (OFPO) and the Office of Performance and Systems Management (OPSM) requires additional technical and functional support for the CARES-enacted loan program delivery. Starting in April 2020, the incumbent began providing COVID-19 loan program support to SBA across several pandemic related loan programs. This task order provides combined project management, loan data reviews for potential fraud and technology support across program activities by leveraging existing processes and infrastructure. This PWS covers three distinct but inter-related workstreams:

Workstream 1: Enhanced Support to the Office of Capital Access for Fraud Investigation Project Governance, Technology Support

PPP & COVID EIDL Loan Review Support. The incumbent shall continue to assist OCA with PPP and EIDL Loan Reviews by reviewing loans with fraud-related Alert(s) and/or Flag(s) and dispositioning all Alert(s) and Flag(s) on each loan.

1. STAR™ Fraud Detection Technology Solution Guidehouse developed a supervised learning machine learning alert scoring model (Star Tool) to enhance the detection of highest risk loans by assigning each PPP and PPS loan with an escalation probability.

2. Zip Code Analyses: Guidehouse developed procedures to focus on groups of PPP and COIVD-EIDL loans from certain geographies, based on zip code, determined to be of higher risk of fraud (as similarly reported by various studies and regulatory bodies). To date, Guidehouse has referred to SBA for potential fraud of Zip Code Files, inclusive of loans. The manual review of Zip Code Files, inclusive of loans, is ongoing.

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3. Compliance Screening: Guidehouse continues to conduct monthly checks for reinstated loans that are ready for disbursement and require compliance screenings.

Guidehouse also runs daily batch data matching to identify changes in loan and forgiveness data and ensures the daily transfer of data and supporting documents into CAFS and the forgiveness platform. Though frequency is based on volume, Guidehouse may also conduct Covid EIDL loan screenings.

4. Wind-Down: Guidehouse will finalize the post-completion STAR use-case and configure its end-state based on SBA guidance. Guidehouse will engage in training and knowledge transfer, ensure the final dispositioning and status of all loans, back-up and archive all data, conduct final reporting, and transfer a view-only copy of STAR.

The incumbent will continue governance support with their experienced Project Management Team to meet increased regulatory reporting needs of the PPP and EIDL Loan Review Programs including specialized project governance support

Workstream 2: Project Management and Technology Support for Implementing Legislative and Administration Priorities

a. Provide technical support for the fraud review of loan data using the STAR system, daily batch data matching for data changes, and processing forgiveness processing or referrals based on new fraud investigation results

b. Provide Project Management in the implementation of new Legislative and Administration policy including fraud related legislation. Asist in identifying staffing and IT system impacts of new legislation and policies.

Workstream 3: EIDL/PPP/CAFS Call Center Support

PPP/COVID-EIDL Call Center Support. SBA faces an ongoing need to continue support from the Guidehouse Call Center staff to answer and resolve up to 50,000 calls per day regarding CARES Act loan programs. The Guidehouse Call Center staff is trained to assist callers with specific COVID-19 loan program information, greatly reducing calls that must be answered by loan officers. The call center staff is also trained to identify and record caller information when the caller is requesting unusual information pertaining to loan disbursements and modifications. This information is automatically included in the data used by the loan review support team which is identifying fraudulent loans.

Capital Access Financial System (CAFS) Support for COVID EIDL Servicing. The OCA is responsible for servicing all direct loans issued by the SBA which includes payment processing and loan accounting processes. SBA issued over 4 million COVID EIDL direct loans which now require loan payments beginning in October 2022. OCA will use an online CAFS Borrower Portal where borrowers can review loan information including the loan balance, current payment information and authorize payments. The approximately 4 million EIDL borrowers will require a CAFS user account and ‘on boarding’ to access the Borrower Portal. Guidehouse and OPSM have identified and trained call center agents to assist in the CAFS ‘on barding process’. Although SBA has issued email campaigns to EIDL borrowers instructing them to get CAFS Borrower Portal Accounts, a major call center demand is expected to start in September of 2022 in response to October loan payments coming due.

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These tools and processes can meet the SBA’s needs immediately, as they are currently deployed at SBA and leverages knowledge and data gathered and developed over the course of the pandemic. It is also currently meeting the demands of this effort through the PPP/EIDL/CAFS Call center.

Base (08/27/22 – 1/26/2023)

FAR 52.217-8 (01/27/23 –

07/26/2023) Total

Task 1 REDACTED REDACTED REDACTED Task 2 REDACTED REDACTED REDACTED

Task 3 REDACTED REDACTED REDACTED

REDACTED REDACTED REDACTED

4. Authority and supporting rationale. The following circumstance justifies limiting the source as supported below:

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

On March 13, 2020, President Trump declared the ongoing Coronavirus Disease 2019 (COVID-19) pandemic of sufficient severity and magnitude to warrant an emergency declaration for all States, territories, and the District of Columbia. With the COVID-19 emergency, many small businesses nationwide are experiencing economic hardship as a direct result of the Federal, State, tribal, and local public health measures that were taken to minimize the public’s exposure to the virus. These measures, some of which were government-mandated, were implemented nationwide and included the closures of restaurants, bars, and gyms. In addition, based on the advice of public health officials, other measures, such as keeping a safe distance from others or even stay-at-home orders, were implemented, resulting in a dramatic decrease in economic activity.

On March 27, 2020, the President signed the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) (Pub. L. 116-136) to provide emergency assistance and health care response for individuals, families, and businesses affected by the coronavirus pandemic. The Small Business Administration (SBA) received funding and authority through the CARES Act to modify existing loan programs and establish a new loan program to assist small businesses nationwide adversely impacted by the COVID-19 emergency. Section 1102 of the CARES Act temporarily permits SBA to guarantee 100 percent of 7(a) loans under a new program titled the “Paycheck Protection Program.” Section 1106 of the CARES Act provides for forgiveness of up to the full principal amount of qualifying loans guaranteed under the Paycheck Protection Program and requires SBA to issue guidance and regulations implementing section 1106 within 30 days after the date of enactment of the CARES Act. Given the intent of the Paycheck Protection Program to provide expeditious relief, broad accessibility, loan forgiveness, 100% guaranty and over $600 Billion potential loan amount, fraud, waste, and abuse became an inherent risk. Section 1110 of the CARES Act provides COVID-19 Economic Injury Disaster Loans (EIDL) designed to provide economic relief to businesses experiencing a loss of revenue due to the pandemic. The COVID-19 EIDL program provides borrowers low interest

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rate, long term loans that include an automatic one-year deferral on repayment, though interest begins to accrue when the loan is disbursed.

SBA successfully implemented the CARES Act loan programs listed above resulting in loan portfolio value growth from approximately $200 Billion to over $1 Trillion in just 2 years.

The urgency created is for two reasons: (1) the loan reviews are ongoing and need to be completed in a consistent manner using consistent tools; and (2) the call center needs to be up and running asap because borrower repayment begins October 1, 2022.

Of particular relevancy: On August 5, 2022, President Biden signed the H.R. 7352, the “PPP and Bank Fraud Enforcement Harmonization Act” and H.R. 7334, the “COVID–19 EIDL Fraud Statute of Limitations Act of 2022.” These legislative acts establish a ten-year statute of limitations for the identification of fraud by borrowers under the SBA’s COVID-19 PPP and Economic Injury Disaster Loan programs. While the new legislation is being reviewed by SBA policy experts, SBA must quickly develop and continue without disruption, implementing the application of automated fraud detection scenarios, investigative protocols, and forensic audit reviews to determine whether Paycheck Protection Program and COVID-19 EIDL loan proceeds are legitimately originated, disbursed, and utilized. The tools developed by the incumbent contractor mitigates these inherent risks and minimizes improper payments to protect taxpayer interests. SBA needs the incumbent to finish the fraud detection services on the remaining COVID-19 loan data. It is essential that SBA maintain consistent forensic audit reviews required by the CARES Act. This process is expected to be complete in 6 – 9 months.

These reviews help SBA identify suspicious loan application data which can lead to litigation against fraudulent borrowers.

The SBA could not anticipate the August 5, 2022, passage of H.R. 7352, the “PPP and Bank Fraud Enforcement Harmonization Act and H.R. 7334, the “COVID–19 EIDL Fraud Statute of Limitations Act of 2022 and prepare a new competitive acquisition to continue the loan review process initiated by Guidehouse. The only immediate solution capable of meeting the requirements for adequate PPP and EIDL Loan oversight and fraud review is the incumbent’s specialized tools and processes, and experienced staff. The award of this sole-source contract provided SBA time to evaluate the new legislation listed above and develop new competitive acquisitions for any future need for these services. The incumbent modified its commercial systems developed specifically to meet the needs of the SBA. These tools were developed as the incumbent learned the needs of the SBA over the course of the pandemic. The incumbent will provide additional governance support to meet increased regulatory reporting needs of the PPP Loan Review Program including specialized project governance support. It will provide additional technology support and enhanced fraud detection by leveraging existing infrastructures specifically modified for the Agency’s needs.

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

This contract will be priced using the incumbent’s GSA pricing which has already been found fair and reasonable. The contract will be fixed price which limits the government’s risk of overrun.

Further, the incumbent has successfully performed this requirement since 2020 with excellent performance history. The Contracting Officer has determined that award of this contract under the incumbent’s GSA MAS schedule provides best value to the Government.

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6. Market research conducted among schedule holders (or reason market research was not conducted).

Market research was not conducted for the reasons stated in Section 4.

7. Any other facts supporting the justification.

There are no other facts.

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

Any services currently provided under this award that are needed after this contract ends will be procured through a competitive acquisition that is anticipated to be released in fiscal year 2023.

CERTIFICATION AND APPROVAL

9. Technical / Requirements Representative Certification. I certify that this requirement constitutes the Government’s minimum needs and the supporting data provided herein is accurate and complete to the best of my knowledge and belief.

REDACTED

Program Office/COR

10. Contracting Officer’s Certification and Approval. I certify this justification is accurate and complete to the best of my knowledge and belief, and hereby provide approval.

REDACTED

Contracting Officer

11. Approval

Director, Acquisition Operations Division Acting HCA

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Competition Advocate

Senior Procurement Executive