91003119C0007_AEDS II Sole Source Justification Ext_23_24 FAFSA Cycle_Redacted_082021.pdf

JUSTIFICATION & APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

Application and Eligibility Determination System II

FAR 6.302-1 – Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements

A firm fixed-price non-competitive contract Application and Eligibility Determination System II (AEDS II) was awarded to the incumbent, General Dynamics One Source (GDOS) on September 26, 2019 for the continued operation of AEDS while FSA planned for a modernized system. The AEDS II sole source contract was awarded as a three-year contract (one 12-month (Development) Base and two (Operations and Management) 1 Year Options) with the period of performance through September 29, 2022.

The Application and Eligibility Determination System (AEDS) II contract provides Federal Student Aid (FSA) with the Central Processing System (CPS) which calculates eligibility for federal aid when students/parents apply through fafsa.gov, the myStudentAid mobile app, phone, and paper applications. The contract also provides financial aid offices with tools to help students apply for federal aid (FAA Access) and manage student aid packages (EDExpress). In addition, the AEDS II contract provides Participation Management (PM), an enrollment system for schools and other partners to access FSA’s systems and exchange Title IV information with FSA through the Student Aid Internet Gateway (SAIG).

1. Identification of Agency and Contracting Activity

United States Department of Education (ED), Federal Student Aid (FSA).

2. Nature/Description of Action Being Approved

FSA is proposing to enter into a second extension of the current fixed-price non-competitive contract with the incumbent General Dynamics One Source (GDOS) located at 3150 Fairview Park Drive, Falls Church, VA 22042 for the continued Application Eligibility Determination System (AEDS). This proposed action will allow GDOS to develop the 23/24 FAFSA application development cycle and award a 4th Option Period from September 30, 2023 to September 29, 2024 to complete operations and maintenance (O&M) of that cycle.

As stated above, the proposed action to develop the 23/24 (Free Application for Federal Student Aid) FAFSA cycle and award a 4th Option Period (to finish the O&M of the cycle), will be the second extension request on the AEDS II contract. Last year, the contract was extended to include the development of the 22/23 FAFSA cycle and an Option Period 3 to complete O&M of that cycle (See Appendix 1 for additional explanation of FAFSA Cycles).

The purpose of the last extension was to allow time for FSA to compete for a contract to develop the 23/24 FAFSA Cycle; but the solicitation was cancelled due to new legislative mandates impacting the new system requirements and lack of funding. This resulted in an unexpected delay and cancellation of the solicitation for the 23/24 FAFSA cycle.

Consequently constituting the need for this sole source extension.

As a result of these delays, the AEDS II contract was modified on September 28, 2020 to add the development of the 22/23 FAFSA application cycle and an additional Option Year to maintain the 22/23 cycle until its retirement. The 22/23 FAFSA application cycle is currently under development and will be available on October 1, 2021. This application cycle will be in the O&M phase for two years (Option Years 2 and 3) until the cycle is retired in September 2023.

With this second extension, the AEDS II contract will be modified to include the 23/24 FAFSA application cycle, with the modification needed by July 15, 2021 or sooner since the development cycle takes around 15 months. This application cycle will launch on October 1, 2022 and will be in the O&M phase for two years (Option Years 3 and 4) until the cycle is retired in September 2024.

Background: After the AEDS II sole source contract was initially awarded in September 2019, a full and open competition procurement for the Next Generation (NextGen) Optimal Processing Solution (OPS) was underway [procurement combined CPS, Servicing, and Common Origination and Disbursement (COD) in one contract]. The OPS solicitation had a target contract award date of June 2020 and a scope that required the new OPS contractor to develop the 22/23 FAFSA application cycle for CPS. This strategy would require parallel operations with the AEDS II sole source contract continuing to maintain the other active application cycles while the new OPS contractor developed the new 22-23 cycle. At the end of Year 3 of the AEDS II sole source contract, the plan was to have all AEDS II functionality transitioned to various NextGen contracts, including OPS.

However, the OPS procurement never proceeded beyond the solicitation phase because of the passing of the Fostering Undergraduate Talent by Unlocking Resources for Education (FUTURE) Act (H.R. 5363) in December 2019 and the impacts it had on the OPS solicitation. The FUTURE Act added additional requirements for securing Federal Tax Information (FTI) which is passed from the Internal Revenue Service (IRS) to FSA to determine aid eligibility. Concurrently, OPS funding was deferred to Fiscal Year (FY)22.

During Option Period 1 of the contract, FSA further revised approach to its procurement strategy. The OPS solicitation was officially cancelled on April 3, 2020, and the requirements for OPS were re-evaluated and revised to reflect the impacts of the FUTURE Act.

Subsequently, the new NextGen procurement was named Award Eligibility Determination (AED) with plans to do a full and open competitive award in FY22.

In late December 2020, the FAFSA Simplification Act was signed into law as part of the Consolidated Appropriation Act, 2021. This Act significantly changes the requirements that determine aid eligibility, such as removing the Expected Family Contribution (EFC) and replacing it with the Student Aid Index (SAI) and a separate calculation for Pell eligibility.

As the requirements for CPS have continued to change, FSA is currently analyzing the best path to successfully implement both the FUTURE Act and FAFSA Simplification Act requirements which has further delayed the award of the AED system. These requirements are still being worked out as FSA pivots to a new strategy which combines the FUTURE Act, FAFSA Simplification Act, AED, and the AEDS II sole source under the new Student Aid Borrower Eligibility Reengineering (SABER) initiative. Current plans are to implement some of the FAFSA simplification provisions in the 23/24 application cycle, but the majority in 24/25 under the full and open competed AED system. The FUTURE Act will be implemented in the 24/25 cycle since it requires a modernized CPS. As a result of all these contingencies, the AED contract is at risk for not being awarded in time for the AED contractor to develop the 23/24 FAFSA application cycle.

3. Description of the Services Required to Meet the Agency’s Needs (including the estimated value)

The AEDS II Contract consists of the following mission critical systems, processes, and operations:

a. Operation and Maintenance of the CPS, the calculation engine which determines eligibility for federal student aid. This work includes: 1) processing edits to support the calculation of the Expected Family Contribution (EFC) and communicating results, 2) releasing code fixes, 3) testing patches and infrastructure upgrades, 4) conducting production troubleshooting/testing, and 5) performing close-out activities at the end of each FAFSA application cycle. Also includes management of the CPS Business Services which are the Application Programming Interfaces (APIs) for Federal Student Aid Information Center (FSAIC) and CPS Services which are the APIs for Digital and Customer Care (DCC).

b. Operation and Maintenance of FAFSA.gov, the online version of the FAFSA. In addition to electronically submitting initial applications, applicants can submit annual FAFSA renewals and corrections to their FAFSAs.

c. Operation and Maintenance of FAA Access, the web-based application that gives school Financial Aid Administrators’ (FAAs) the ability to enter FAFSA applications on behalf of their students. In addition, FAAs can submit annual FAFSA renewals and corrections to FAFSAs. This work includes: 1) processing computes to determine aid eligibility for applicants, 2) releasing code fixes, 3) testing patches/ infrastructure upgrades, 4) conducting production troubleshooting/testing, and 5) performing close-out activities at the end of each FAFSA application cycle.

d. Operation and Maintenance of EDExpress, a desktop program that allows FAAs to submit FAFSA applications (through an interface with FAA Access) and manage their students’ aid packages. In addition to interfacing with CPS to process FAFSA applications, the software interfaces with the Common Origination and Disbursement (COD) system to exchange school, borrower/recipient, award, and disbursement data.

e. Operation and Maintenance of Participation Management, a web-based enrollment and user management system that allows schools, states, third-party servicers, and guarantee agencies to enroll for access to FSA’s services/systems and to exchange information with FSA’ systems via the Student Aid Internet Gateway (SAIG). This work includes: 1) processing paper enrollment forms and signature pages from enrollment requests submitted online, 2) imaging and storing all documents in an electronic image repository, and 3) storing hard copies in a secure warehouse.

f. Development of the FAFSA application cycle for CPS, FAA Access, EDExpress, and Participation Management. This work will roll forward the prior year’s FAFSA application cycle's functionality to enable the processing of a new award year. In addition to bringing forward all the FAFSA application cycle’s functionality, this rollover also includes: 1) adjusting date references, 2) updating state deadline references, 3) updating Pell tables, 4) updating tax form references, 5) updating EFC offset tables, 6) revising verification selection criteria, 7) making minor text updates,

8) deleting unwanted edits, and 9) ensuring documents posted to the web are 508 compliant.

g. Operation of the CPS/SAIG Help Desk, a technical help desk for schools, state agencies, and lenders who are processing FAFSAs or transmitting Title IV data through the SAIG system. The Help Desk provides support primarily for users of EDExpress and FAA Access. This work also includes maintaining the FSA Listserv which is a forum for receiving and broadly responding to questions from schools about FAFSA, COD, and other FSA systems.

h. Operation of Image Data Capture (IDC), a center that processes paper FAFSAs, paper Student Aid Report (SAR) corrections, paper signature pages, and paper history corrections. The work includes scanning, data capture, uploading images to CPS, and hard copy records management. The IDC integrates with CPS to provide data and receive confirmation of processing.

i. Operation of AEDS Printing and AEDS Postage, a center that prints and mails Student Aid Reports (SAR), SAR Acknowledgments, and application letters to applicants.

j. Statistical Analysis Support to include End of Year Reporting, Verification Selection, IRS Statistical Study and Annual Requirements Analysis. This work is critical to help forecast and budget for Pell grants, monitor and develop strategies to reduce improper payments, and evaluate the effectiveness of editing logic within

CPS.

On April 22, 2019, James Hairfield, the acting Senior Procurement Executive (SPE), approved the original AEDS II sole source award for an estimated . The following year, on July 14, 2020, Jim Stader, the new SPE, approved the development of the 22/23 FAFSA application cycle as well as adding another year to the contract (Option Period 3). To date, has been obligated under the sole source contract.

This proposed modification to the contract will allow GDOS to develop the 23/24 FAFSA application cycle and to include a 4th Option Period from September 30, 2023 to September 29, 2024 to ensure no disruption to current services. The estimated value of the proposed action is as follows (See Appendix 2 for additional explanation):

months. A study on mainframe platforms in 2008, confirmed that the available resource pool for mainframe expertise was shrinking. Organizations are having an increasingly difficult time replacing trained personnel, which are rapidly retiring from the workforce. Additional market research conducted in March of 2020 concluded that twelve (12) years later, the risk is significantly greater, and the number of trained personnel has also significantly decreased.

Solutions in today’s marketplace reflect the wide use of open systems, which have grown in scale, reliability, and popularity making FSA’s current service technology outdated.

In addition, it is impractical to have another vendor support AEDS during the requested period. Changing vendors would disrupt ongoing FAFSA application release cycles and impact the availability of the FAFSA application for students to apply for student aid. FSA’s intent is that the current vendor closes out the current cycle and the new vendor begins the new cycle. It is impractical for a vendor to perform O&M on a cycle that was developed by another vendor.

6. Description of Efforts Made to Ensure That Offerors are Solicited from as Many

Potential Sources as is Practicable

As required by Federal Acquisition Regulation (FAR) Subpart 5.203, FSA plans to issue a Notice of Intent on or before May 21, 2021 via beta.Sam.gov for fifteen (15) days, prior to issuing the Request for a Proposal for an additional FAFSA application cycle, to allow for vendor responses. Comments or capability statements may be submitted to the Contracting Officer during this period. In accordance with FAR Subpart, 6.305, the approved Justification for Other than Full and Open Competition will be posted for thirty (30) days on beta.Sam.gov within fourteen (14) days after contract award.

7. Determination of Anticipated Price Reasonableness

In the last extension, the contractor provided the requested pricing for the 22/23 development. Additionally, they also provided 23/24 development prices in the event that the Government required a future extension. The Contracting Officer (CO) will validate that the anticipated prices/costs are fair and reasonable. The Option Year 4 O&M pricing will need to be determined as fair and reasonable by the CO. The CO will make the final determination after review of other contracts, schedule prices for anticipated labor categories for similar services, and AEDS historical information. Prior to award, the CO will review the final price/cost negotiated for this contracting action to determine a fair and reasonable final negotiated price/cost.

8. Description of Market Research Conducted

Market research was conducted in 2014 for a new AEDS solution. Three (3) of the firms that participated in the market research proposed the following timeline for development, implementation, and transition to a new system:

Based on the 2014 market research, FSA estimated that it would take an average of two (2) years to develop a replacement AEDS solution.

In 2017, FSA conducted additional market research and allowed vendors to give oral presentations. Those companies included:

. These vendors also indicated an interest in developing an AEDS replacement solution and gave similar time frames to develop an AEDS replacement.

In January 2020, FSA held a meeting with the Enterprise Technical Integration Management Support (ETIMS) contractor regarding FUTURE Act implementation which resulted in a confirmation from the contractor that a re-engineered CPS platform would take approximately two years to stand up.

Most recently, in October 2020, FSA released a RFI to ascertain up-to-date market research on the schedules, costs, and requirements to modernize the CPS. Sixteen (16) vendors responded. FSA identified the following themes, stemming from these RFI responses, for re-engineering CPS:

Industry did not show an interest in a recompete of the existing O&M legacy system to support AEDS II.

Full functionality of the AED system could not be assured by the go-live date of October 1, 2022.

Prevalence of commercial off-the-shelf (COTS) products rather than a translation of current COBOL code to a modern programming language.

Expected duration of transition, development, and implementation efforts of eighteen (18) months or longer.

From these vendor responses, FSA understands that the development and implementation of a modernized AED system by October 1, 2022 (the system go-live date for the 23/24 FAFSA cycle) could result in a flawed product that does not deliver the full functionality needed to serve FAFSA applicants via all current CPS capacities. Vendor estimates supported an approximately two (2) year AED implementation timeline. Of the vendors that suggested a product could be completed and stood up in under two (2) years, different versions of COTS software were recommended. FSA’s research demonstrates that off-the-shelf solutions are not tailored to the specific needs of AEDS and would require additional time and funding in modifying to fit AEDS’ specific requirements.

9. List of Interested Sources for AED

APPENDIX 1

FAFSA Application Cycles

The following diagram depicts the sequencing of the FAFSA application cycles, with the red 23/24 cycle indicating the new work proposed under the AEDS II contract, as a result of the AED award delay. If GDOS develops the 23/24 FAFSA cycle in Option Year 2, FSA would need to add an additional year (Option Year 4) to the sole source to complete the O&M of this cycle.