JA-ATCH 1-Limited Source - 86614624Q000005- STRD Phase 2 -FAR 8.405-6(a)(1)(i)(B)- Redacted-10-16-24.pdf

JA No. 24-30

8661462Q00005– Moving to Work (MTW) Evaluation Cohort 2

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JUSTIFICATION

FOR LIMITED SOURCES

IAW FAR 8.405-6(a)(1)(i)(B)

86614624Q00005

Stepped and Tiered Rent Demonstration (STRD) Phase 2

1. REQUIRING AGENCY: U.S. Department of Housing and Urban Development

Policy Development & Research

451 7th Street, SW Room 8120

Washington, DC 20140

PRISM APP Number: APP-R-2024-053

PRISM Requisition Number: RCS-R-2024-00029

2. NATURE/DESCRIPTION OF ACTION BEING APPROVED:

The U.S. Department of Housing and Urban Development (HUD) will award a sole source contract to MDRC to provide the services for the second phase of the Stepped and

Tiered Rent Demonstration (STRD) Phase 2.

This award will be issued under Federal Acquisition Regulation (FAR) Section 8.405-

6(a)(1)(B), only one source is capable of responding due to the unique or specialized nature of the work.

NAICS Code: 541611 - Administrative Management and General Management

Consulting Services

PSC: B546 - Housing and Community Development Studies

3. DESCRIPTION OF SERVICES REQUIRED TO MEET AGENCY’S NEEDS

(INCLUDING ESTIMATED VALUE):

Moving to Work (MTW) is a designation that can be extended to public housing agencies

(PHA) that enables PHAs flexibilities in how they administer their HUD-funded housing assistance. Fiscal Year 2016 Appropriations language directed the HUD to expand the

MTW program by adding 100 public housing agencies (PHA) to the program over a 7-year period. PHAs are being added to the MTW program in cohorts, with each cohort being subject to rigorous evaluation by HUD. The second cohort of the MTW expansion includes 10 PHAs that are implementing alternative rent calculation rules—specifically, APP-R-2024-053 RCS-R-2024-00029 Page 2 of 5 stepped rent and tiered rent policies. This project is known as the Stepped and Tiered

Rent Demonstration (STRD). (Note: the project was previously referred to as “MTW

Cohort 2”) An essential feature of STRD is that it is a randomized controlled trial— eligible households are being randomly assigned to either 1) continue under the regular rent rules or 2) be subject to one of the new rent policies. This approach is the gold standard for research, and will enable HUD to evaluate the effect of the new rent policies on participating households. Implementing STRD as a randomized controlled trial requires extensive collaboration among HUD, an independent evaluator, and PHAs. HUD has established the overall vision of the demonstration, including 1) the requirement that it be a randomized controlled trial, and 2) the goals and basic parameters of the alternative rent policies. HUD also awarded a contract to MDRC to serve as the evaluator for the first phase of the demonstration. The PHAs are responsible for 1) implementing the alternative rent policies, 2) carrying out random assignment, and 3) operating the new rent rules throughout a six-year study period. During Phase 1, MDRC has played a vital role in preparing PHAs for those tasks. In particular, without MDRC support, PHAs would not have been able: to carry out random assignments properly, modify their software systems to administer the new rent rules properly, or prepare their staff to administer the new rent rules properly.

The PHAs began enrolling households (that is, conducting random assignment and having the new rent rules take effect) in January 2023 and enrollment will be complete in the fall of 2024. The rent rules will remain in effect for six years, through the fall of

2030. Final evaluation results are therefore not expected until 2031 or 2032. MDRC’s contract, for the first phase of the demonstration, concludes in September 2025. The new contract (the subject of this sole source justification) will cover research activities required during the second phase of the demonstration—after enrollment is complete but before final evaluation results are feasible. These research activities will include: 1) conducting a survey of STRD participants and analyzing survey results, 2) collecting and analyzing administrative data from HUD, STRD PHAs, state agencies (responsible for

SNAP and TANF programs), and local homelessness agencies (responsible for HMIS data), 3) interviewing STRD PHA staff, and 4) writing interim reports to summarize the aforementioned analysis. Notably, the 3-year mark is a significant milestone under both the stepped rent and tiered rent policies. Although final evaluation results will not be feasible until 2031 or 2032, interim results as of 2027 will be very important to HUD.

The Government estimates the value of this acquisition to be $3,000,000.

4. IDENTIFICATION OF STATUTORY AUTHORITY FOR LIMITING

SOURCES UNDER FEDERAL SUPPLY SCHEDLES

Authority: 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.

H59281 Highlight

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5. DEMONSTRATION THAT PROPOSED CONTRACTOR’S UNIQUE

QUALIFICATIONS OR NATURE OF THE ACQUISITION REQUIRES USE OF

AUTHORITY CITED:

The uniqueness of the services required under this procurement centers on the following facts:

a. STRD requires the collection, storage, and analysis of sensitive personally identifying information (PII) about the individuals participating in STRD. HUD has established a system of records to govern this information

(https://www.federalregister.gov/documents/2022/09/13/2022-19717/privacy-act-of-

1974-system-of-records) The STRD Evaluation data files system will include data from

HUD, PHAs, other federal data systems (National Directory of New Hires), state data systems (state agencies that administer SNAP and TANF), local data systems (agencies that administer homelessness programs and maintain HMIS data), and data collected by

MDRC under the Phase 1 contract. Analysis of this data is a key requirement of the phase

2 contract. At present, this information does not exist all in one place. But MDRC has established more than two dozen MOUs and/or data sharing agreements to enable them to access all of the necessary administrative data. Having an organization other than MDRC perform the phase 2 contract would require renegotiating data sharing agreements, and some of the partners may be unwilling to do so. Notably, due to delays in the roll-out of

HUD’s new Housing Information Portal (HIP) system, which is replacing the IMS/PIC system, not even HUD has access to certain essential PHA data. Those data are stored by the PHAs themselves, in their local software systems. MDRC has detailed knowledge of those software systems, having worked with the PHAs and software providers to modify the software systems under Phase 1. MDRC is also receiving data extracts from the PHA systems. As a result, MDRC currently has access to PHA data that HUD does not have.

Awarding the phase 2 contract to MDRC is necessary to ensure that all required data is available for analysis.

b. MDRC has developed strong working relationships with staff at the ten PHAs in

STRD. They have built trust and rapport with PHA staff. This enables MDRC to identify problems (where PHA staff are not administering the rent rules or research procedures correctly), and to correct the problems tactfully without jeopardizing the relationship between the PHA, HUD, and the research team.

c. Beyond the facts cited above, MDRC has developed substantial expertise specific to

STRD. MDRC played a key role, along with HUD and the PHAs, in designing the stepped rent and tiered rent policies. They worked with the PHAs and the PHAs’ software providers to modify software systems to administer the new rent rules. And they trained PHA staff to administer the new rent rules. No other entity (including HUD and the PHAs themselves) has the same level of expertise in the new rent policies as MDRC.

For these reasons, the Office of Policy Development and Research is requesting a sole source contract with MDRC, to complete phase 2 of the STRD evaluation and build on work already done under Phase 1 (under Contract # HHSP233201500059I; Task Order:

https://www.federalregister.gov/documents/2022/09/13/2022-19717/privacy-act-of-1974-system-of-records https://www.federalregister.gov/documents/2022/09/13/2022-19717/privacy-act-of-1974-system-of-records

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HHSP23337009T (which was awarded competitively) and Contract GS-10F-0245N;

Order number 86614620F00010 (which was awarded non-competitively under FAR

8.405.6(a)(i)(C)).

6. DESCRIPTION OF MARKET RESEARCH EFFORTS MADE AMONG

SCHEDULE HOLDERS AND RESULTS:

The Office of Policy Development and Research is requesting a sole source contract with the incumbent contractor, MDRC. The market research conducted demonstrates that while there are many firms capable of conducting social science research, none possess the unique constellation of attributes that can be demonstrated by the incumbent

Contractor.

7. DETERMINATION BY THE CONTRACTING OFFICER THAT THE

ANTICIPATED COST TO THE GOVERNMENT WILL BE FAIR AND

REASONABLE:

Prior to contract award, the Contracting Officer will compare the contractor’s proposed prices for this effort against the independent government estimate to ensure the anticipated price will be fair and reasonable.

8. ANY OTHER FACTS SUPPORTING THE USE OF LIMITIED SOURCES:

There are no other facts other than the facts stated in paragraphs 5 – 7 above.

9. STATEMENT OF ACTIONS TO REMOVE OR OVERCOME ANY

BARRIERS TO COMPETITION BEFORE ANY SUBSEQUENT

ACQUISITIONS:

PD&R anticipates that completing STRD will require a third phase, under a subsequent contract. The rent policy study period will continue through 2030, and it will take an additional 12-18 months to collect data and write-up results. The phase 2 contract cannot last more than 5 years (ending in 2029 or 2030, depending on the timing of award).

Several actions will be taken to reduce barriers to competition before the phase 3 contract award. During 2024-2025, it is expected that the HIP system will be rolled out for all

PHAs, replacing the current IMS/PIC system; after that point, HUD should have access the PHA data required for the long-term evaluation. (Data that is, currently, only available to the PHAs and MDRC.) HUD will also require MDRC, under the proposed phase 2 contract, to deliver all data with full documentation, such that that data could be available to a successor contractor for phase 3.

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10. CONTRACTING OFFICERS CERTIFICATION:

I certify that the facts contained in this justification are complete and accurate to the best of my knowledge.

Approved By:

Cathy J. Baker

Contracting Officer