Perkins JOFOC - 6.302-1_Redacted.pdf

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JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

FAR citation 6.302-1, Only one responsible source and no other supplies or services will satisfy agency requirements

Federal Student Aid (FSA) is proposing to enter into a new, fixed-price non-competitive contract with the incumbent Educational Computer Systems, Inc. (ECSI) located at 1200 Cherrington Parkway Suite 200 Moon Township, Pennsylvania 15108 for the continued servicing of federally held Perkins loans. This proposed action will allow ECSI to decommission and continue operations and maintenance, thereby avoiding any disruption to services due to the current contract and Task Order (ED-FSA-13-D-0003-91003123F0306) expiring on July 31, 2025.

1. Identification of agency and contracting activity United States Department of Education (ED), Federal Student Aid (FSA).

2. Nature/Description of Action Being Approved The Federal Perkins Loan Program was a campus-based program where loans were made by participating schools using a combination of ED and institutional funds. The Federal Perkins Loan Program was discontinued on September 30, 2017, and the last new Perkins loan was disbursed on September 30, 2018.

Today, many schools continue to service their Perkins portfolios and retain the funds collected. From time to time, schools will assign Perkins Loans to ED and its Perkins Loan servicer to manage and service them when either the loan defaults or the school determines it is not in its interest to continue to service its Perkins portfolio. Defaulted Perkins Loans assigned to ED are taken in by the Perkins Loan servicer and then immediately transferred to ED’s Debt Management and Collection System (DMCS) for servicing.

The Office of Loan Portfolio Management has determined that a lapse in service is not in the government’s best interest. The sole source bridge contract to ECSI will ensure continuation of critical services while FSA awaits the results of a Court of Federal Claims protest on the award of the new Perkins Loan Servicing contract from solicitation 91003124R0017, and provides the ultimate awardee with time necessary to transition-in to continue servicing federally-held Perkins loans and allow the incumbent to execute decommissioning work.

The requested contract will include the same services included in the expiring contract with the addition of decommissioning work and potential minor updates to requirements. These services include onboarding of Perkins loans from schools leaving the Perkins program. Loan servicing actions will also include monthly billing, communications with borrowers, and payment processing. Additionally, they will provide early-stage default management and transfer to the long-term default program and transfer of borrowers and records to the ultimate awardee after the conclusion of the protest. The period of performance for the sole source bridge contract is a 6-month base period with four 3-month options for a total of 18 months.

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

In order to meet FSA’s needs, ECSI will need to maintain an efficient, effective, and responsive IT platform and support Perkins loan servicing by meeting the below outcomes.

a. Providing a solution that meets all regulations and compliance standards.

b. Implementing effective default aversion tools to prevent delinquent borrowers.

c. Maintaining a 99% system availability (not including scheduled maintenance outages).

d. Reporting accurate loan data within stated/required time frames to be established between Federal Student

Aid and Servicer.

e. Reporting to NSLDS of Perkins loans and loan activity per ED Servicer data provider instructions.

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f. Successfully transferring Defaulted borrowers to DMCS for servicing.

g. Receiving assigned loans from schools for servicing.

h. Continuing with the current cybersecurity requirements.

i. Transitioning Borrowers and data to a new Perkins loan servicing contract.

j. Decommissioning.

The estimated value of the proposed action, including options, is approximately $11.3 million dollars and includes the full complement of Perkins services. The estimate includes ~$4.84 million upfront for operations and decommissioning and is based on historical loan servicing rates.

4. An identification of the statutory authority permitting other than full and open competition.

The action will be awarded in accordance with 41 U.S.C. 3304(a)(1), the services needed are available from only one responsible source and no other type of services will satisfy the needs.

5. A demonstration that the nature of the acquisition requires use of the authority used:

The use of this authority is demonstrated by the need to negotiate a contract to continue Perkins servicing and decommission the contractor/transfer the borrowers to the appropriate servicer after resolution of the COFC Protest. ECSI is the only company uniquely situated with capabilities to immediately deliver Perkins borrower servicing. A full and open competition would result in a lapse in Perkins servicing, harming approximately 125,000 borrowers and endangering the portfolio, which is valued at over $2.6 billion.

Without this sole source bridge contract, these Perkins borrowers will not receive billing statements, cannot make payments, will have no access to customer service representatives to answer questions, cannot receive counseling on repayment plans, and cannot receive payment forbearance or loan discharges. The incumbent is uniquely situated with capabilities to immediately deliver Perkins borrower servicing without further training, IT System approval, operations validation, or interruption in borrower servicing; continuing mission critical Perkins Loan Servicing during COFC Protest and decommissioning of the incumbent company.

6. Description of Efforts Made to Ensure That Offers are Solicited from as Many Potential Sources as is Practicable The approved Justification for Other than Full and Open Competition will be posted on SAM.gov within 14 days after contract award. A previous competitive solicitation #91003124R0017 was previously issued and concluded with an awardee.

7. Determination of Anticipated Price Reasonableness

The Contracting Officer will determine that the final cost or price negotiated for this contracting action is fair and reasonable prior to award. This determination will be supported by Perkins historical pricing information and if necessary other than certified cost and price data. Additionally, the Contracting Officer will review and compare other contracts and schedule prices for anticipated labor categories for similar services.

8. Description of Market Research Conducted

Federal Student Aid issued a RFI on November 20, 2023, to identify small businesses capable of supporting Federal Perkins Loan Program support services.