JFOC_Synopsis.pdf

Justification for Other Than U.S. Deparfrnant otHoii&ng

Full and Oren ComretItlon and Urban Developmentr r office of the Chief Procurement Ofllcej’

PART I - PROGRAM OFFICE RECOMMENDATION

I recommend the use of other than tiI and en competition for the acquisition of (describe geMcss aritksJ

Indi]t tuiI Studies cit tLie 1sutuLM tlve Insurn FundNdktsticna aliouldie conducted tj the fc3tng courtS(s)y Cprgwldl names, thju’s end paints olcontacl; continue on uparuts shaste asneededJ: RIZ. .

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The eatimated cost of this acquisition Is: $ I .71)0.000.00 The alatutoiy exception which allows this use of other than full and open competition is [select one):

Only one reipon&ble source and no other supplies or services will satisfy agency requirements -41 USC 3304 (a)f1) (see FAR 6.302.1) fJ Unusual and competing urgency -41 USC 3304 (8M2) (see FAR 8.302.2) Q Industrial mobiitzstian; engineering, developmental or research capabitty or expert services - 41 USC 3304 (s)(3) (see FAR 8.3023) D Authorized or required by statute -41 USC 3304 (a)(5) (see FAR 8.302-5) Q Pubic Interest (NOTE: requires Sacretirlal approval end Congressional Notification) -41 USC 3304(817) (see FAR 6.302-7) L*] A description of tile circumstances that support the use of the above statutory authority is attached and included as Exhibit 1 to this justificetlon.

Program Office Ceruficsilen. I certify that the Information contained In this jusUfieflon is accurate end complete to the best my imoWedge and belief.

1ead of Program oMca [nj 1 Title/Name of Office:

Brian D. M ry L AUtSIWI Secmtay for HOuUIQ.F.domJ Ho gAthiifrs* CcmIucncr, H

PART 2 - CONTRACTING OFFICER REVIEW a(ND CERTIFICATION Provfde addition Juatiflcadon and comments here Continue onback is naodad.

Contracting Officer Certification.

I certify that the Information contained In this Juatiti cation is accurate end complete to the best of my b,owiedge and belief.

Name: Signature: Data:

<Pre4ou t1on unusable I Page 1 of 2 tom, HUD-240 2 (07/2011)

PARE 3-OTHAFPROYALS

Up to $700,000 - Corgeacting Officer Nerne Title

Date

$700,000 to $13,500,000 - onipiftbn Advocate

W1ature

Gicr $88,000,000 - Senior Rocurarnerd eouttve Naiii. 1Thb0 Signature

AddWcn Contracting Offi erjustlflcedanlcomments from front [attach additional pages it needed]

Mdftlonit Guidance for Completing the Justification (see HUD Handbook 2210.3, Chapter 4)

PART I Program Office R.comm.ndatlon The supporting doctrientation In the Ethiblt 1 must describe:

• The nature of the proposed epoulsifion that requires other than fuD and open competition;

• The unique qualifications of any proposed sole source; and

• The market research condcud (see FAR Pert 10) and the result. or the reason(s) why market research was not conducted.

The cast esthwate must Include eli cost. of the proposed ecquisttion, e.g.. options, s.sterns IWo costs, etc. The totni will determine the approval loyal needed (sea 3 below).

FAR Subpart 6.3 descrIbes the statutory exceptions, their appllcsbtllty end lknftatians on their use.

Hesd of the Program Offlca means:

• Far sit Headquarter. acquisfticzw the cogntzant Asetitant SecNtery or designee.

• For field acquisitions: the program office director (e.g., Director, Multifamily Housing) within the State or Area Office.

PART 2 ContractIng Officer Review and Certification Besides any Irdormatton provided to support the program office’s justification, the Contracting Officer ahab provide:

• Ooctjnentad result. of any Federal Bualnesa Opportutty notices or explanation of why no notice was published.

• A eteternent of actions the Deparblient may take to remove barriers to competition for subsequent acquisitions of similar services I supplies; and

• A detennlnadon that the anticipated t I price Is fair and reasonable.

(Soc FAR Subpart 63 for further guidance.)

The Contracting Officer signing the certification shall be the same IndMdual who will sign the proposed acquisition action Mitch is the subject of th edflcetion.

PART 3-Other Approvals The Contracting Officer shalt obtain the approval for the doliar value ranges Indicated.

If any person required to sign to these blocks disapproves this Justification, ha/she shall return ft to the requesting activity with a written detemtinabon.

The requesting activity may obtain the name of the Contracdng Activity Competition Adeocete from the cognizant contracting office.

The Haad of Contracting Actlvfty is defined at Subpart 244)2.1 of the HUD Acquisition Regulation (48 CFR Chapter 24). The cognizant contracting office may also provide the name of this lndMdual.

AkinsolaA. ayi Signature

$13,500,000 to $08,000,000- Hoed of thq iiçibig Activity me

This ACPO, Policy, Systems and Risk Management

This

13Me

Revioun edition mutable Page 2 at 2 tone HUD-24012 (0712011)

U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

WASHINGTON, DC 20410-3000

OFFICE OF CHIEF PROCUREMENT OFFICER

Control Number: 19-29

JUSTIFICATION FOR OTHER THAN FULL & OPEN COMPETITION:

TITLE: FY19 Actuarial Review Studies of the Federal Housing Administration (FHA) Mutual Mortgage Insurance fund (MMIF)

(1) Identfication of the agency and the contracting activity, and specific identification ofthe docttment as a “Justification for other than fill and open competition.”

U.S. Department of Housing and Urban Development tHUD) Office of the Chief Procurement Officer (OCPO) Office of Risk Management and Regulatory Affairs (ORMRA) 451 7th Street, Room 5256 Washington, DC 20410

(2) Nature andJor description of the action being approved.

The Office of Risk Management and Regulatory Affairs (ORMRA), request approval for a sole source award to Pinnacle Actuarial Resources, Inc. to fulfill a statutory obligation to obtain an independent annual Actuarial Study of the Federal Housing Administration’s (FHA) Mutual Mortgage Insurance Fund (MMIF), and to report to Congress annually on the financial status of the Fund. This is a new Firm Fixed Price contract.

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

The purpose of this procurement is to produce the FY20 19 - fY2020 Actuarial Review that results from the annual independent actuarial study of the MMI Fund, and to provide associated analyses that use the actuarial model to answer a variety of policy questions.

This is described in 12 USC 1708:

(4) Annual Independent Actuarial Study. The Secretamy shall providefor an independent actuarial study ofthe Fund to be conducted annually, which shall analyze thefinancialposition of the Fund. The Secretamy shall submit a report annually to the Congress describing the results ofsuch study and assessing the financial status of the Fund. The report shalt recommend adjustments to underwriting standards, program participation, orpremiums, fnecessary, to ensure that the Fund remainsfinancially sound. The report shall also include an evaluation of the quality control procedures and accuracy ofinformailon utilized in the process ofunderwriting loans guaranteed by the Fund. Such evaluation shall include a review ofthe risk characteristics of loans based not only on borrower information and peiformance, but on risky associated with loans originated orfunded by various entities orfinancial institutions.

The Contractor will be responsible for the annual independent actuarial studies for both Forward Loans and HECM in the MMI Fund. The office requires support to obtain independent annual actuarial studies of the MMI Fund portfolios to measure, as required by the National Housing Act (as amended), whether the MMI Fund has 2.0 percent in economic net worth against its outstanding insurance commitments, and what new policy actions might be required if the Fund has less than 2 percent in economic net worth. The estimated value of this requirement is $1,700,000.00, and the period of performance is August 21, 2019 through August 20, 2020.

(4). Statutory Autlwrity:

The statutory authority permitting the sole sourcing of services is 41 U.S.C. 3304(a)(2) as implemented by FAR 6.302-2. Unusual and compelling urgency.

(5) Contractor’s Unique Qualifications:

The Office of Risk Management and Regulatory Affairs had a contract with Pinnacle Actuarial Resources (Pinnacle) to provide actuarial review of the MMI Fund. As part of the contract, Pinnacle provides essential actuarial reports and evaluation of the MMI Fund net present value of cash flows.

The Pinnacle contract and related services are a central component of Office of Evaluation’s (OE) management toolbox. Pinnacle’s services are critical in the Actuarial Review of the MMI Fund.

The current break in service is adversely impacting OE’s ability to obtain an independent actuarial evaluation of the MMI Fund.

The Agency has an urgent and compelling need to fulfill a statutory obligation to obtain an Independent Annual Actuarial Study of the Federal Housing Administration’s (FHA) Mutual Mortgage Insurance Fund (MMIF), and to report to Congress annually on the financial status of the Fund.

The identified Sole Source contractor, Pinnacle Actuarial Resources, has successfully demonstrated the ability to provide the required services under contract HSP233201850046A and possesses the required staffing resources without a significant ramp-up period or additional costs. The actuarial analysis that the identified Sole Source contractor, Pinnacle Actuarial Resources provides, allows the OE staff to rapidly deploy staffing resources to conduct the independent actuarial review of the MMI Fund. The Statement of Work (SOW) also requires the contractor to maintain fully staffed personnel equipped with and capable of providing the specific actuarial tools, data analysis and data accessibility flinctionalities.

Notwithstanding the above, Pinnacle also has a staff who were “PIVed” for the previous contract award and may have to be rePlVed. Hopefully, the Pinnacle staff will be able to assume all required key personnel roles and responsibilities to perform immediately. This is an advantage to the Government since the average time to complete HUD’s PIV Security process for employees of a new contractor is 45 days.

In summary, failure to provide an actuarial review of the MMI fund because of the current break in service could result in adverse results to HUD. Having a contractor with qualified and capable staff with essential actuarial tools, an established contractor network coupled with the ability to ramp-up quickly, allows the contractor to begin performance immediately to meet the OE’s primary mission goals. This will mitigate the negative impacts of the current lapse in service and provide the Agency with a contractor who can mitigate any potential vulnerability, harm and political ramifications to the CE Department.

(6) A description of efforts made to ensure that offers are solicitedfrom as many potential sources as is practicable, including whether a notice was or will be publicized as required by Subpart 5.2 and, fnot, which exception tinder 5.202 applies.

The original procurement strategy was to use a Shared Services Interagency Agreement (IAA) with Health and Human Services/Program Support Center (HHS/PSC), HHS issued a solicitation previously (2017 & 2018), however they received no proposals for the requirement. HHS/PSC next posted solicitation 19-233-SOL-00026 on GSA eBuy on February 22, 2019, which received no proposals. further research identified Pinnacle Actuarial Resources, LLC (Pinnacle) as a potential vendor. OE’s SME’s assessed and unanimously concluded that Pinnacle was capable to complete the contract requirement.

(7) A determination by the contracting officer that the anticipated cost to the Government wilt befair and reasonable.

Prior to the issuance of any contract award, the Contract Specialist/Contracting Officer will obtain pricing information and an analysis will be conducted to sufficiently determine that the overall price represents a fair and reasonable price to meet the Government’s needs. Information will be obtained to evaluate the reasonableness of the price.

(8) A descriptioit of the market research conducted (see Part 10) and the results or a statement of the reason market research was not conducted.

A Request for Information was released for the new requirement by KHS/PSC. No sources responded with their capability statements. HHS/PSC next posted solicitation 19- 233-SOL-00026 on GSA e3uy on February 22, 2019, which received no proposal’s.

Further research identified Pinnacle Actuarial Resources, LLC as a potential vendor. OE’s SME’s assessed and unanimously concluded that Pinnacle (the incumbent vendor) was capable to successfully complete the contract requirement.

(9) Any otherfacts supporting the use ofother than ftttt and open competition, such as:

The Office of Risk Management and Regulatory Affairs (ORMRA), has a statutory obligation to obtain an independent Annual Actuarial Study of the Federal Housing Administration’s (fHA) Mutual Mortgage Insurance Fund (MMIF), and to report to Congress annually on the financial status of the Fund. The actuarial contract expired on March 22, 2019. Therefore, there is a critical need to obtain a bridge award to the Pinnacle contract to mitigate the increasing negative impact of the current lapse in service. Pinnacle has the necessary tools, processes, and personnel to continue providing the required and critical support services to OE reliably.

Pinnacle’s unique qualification in providing the adequate staffing mix and required services illustrates not only the best value to the Government, but also the ability to maintain the essential technical and personnel expertise to deliver outstanding performance and reliability under this very important contracting effort. The Housing Office of Risk Management and Regulatory Affairs (ORMRA) has an urgent and compelling requirement for Actuarial Review Services in accordance with Statutory requirements described in 12 Usc 1708. This requirement was originally being procured under an assisted acquisition agreement with HHS PSC. HHS conducted an acquisition and selected an awardee. However, prior to the execution of a contract award, HHS informed customer agencies that they were no longer providing assisted acquisition services. Any actions that were not awarded as of the time of the notification would not be awarded, the money would be returned, and the customer agencies would need to find another solution. This requirement was not awarded at the time of the notification. As such, as an interim measure, a sole source is being awarded to the incumbent while a competitive procurement will be conducted for the next iteration of this requirement.

This will allow the ORMRA to immediately obtain the necessary contractor support to provide the analysis needed for a report due to Congress by the Secretary by November 15, 2019 on the MMI fund.

Given the approach of a sole source contract to the incumbent who has successfully performed in the past, the risk of protest is low and as such this waiver is being sought. A competitive procurement will follow this action which will be fully reviewed to include legal review.

(10) A listing of the sotirces, ifaizy, that expressed, in writing, aiz interest in the acquisition.

No firms expressed interest in this acquisition other than Pinnacle Actuarial Resources.

(11) A statemeitt of the actions, if any, the agency may take to remove or overcome any barriers to competition before any stthsequent acquisition for the supplies or services required.

A Source Sought notice and a Pre-Solicitation notice will be publicized as required by FAR Subpart 5.2 to ensure that to the maximum extent practical competition will be achieved for the re-competition of this acquisition.

(12) Technical Certification:

See HUD-24013, Part 1, Justification, Section Program Office Official’s Certification.

(13) Contracting Officer Certification:

See HUD-24013, Part 2, Contracting Officer’s Determination and Certification.