A06 FBP FAR 6.3 JoFOC _Final.pdf

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United States Department of Agriculture Justification for Other than Full and Open Competition

Commercial Supplies/Services Exceeding $7.5 Million, and Non-Commercial Supplies/Services Exceeding the Simplified Acquisition Threshold

FAR 6.3

Control No. (if applicable) _____________________

1. Identification of the agency and the contracting activity.

2. The nature and/or description of the action being approved.

The U proposes to enter into a contract with Moody’s Analytics, Inc., 7 World Trade Center 250 Greenwich Street, New York, NY, 10007 - on a Negotiated firm fixed price contract for the USDA Farm Business Plan services which supports activities and tasks related to farm business planning, financial/credit analysis, technical support with configurations and enhancements used by the Farm Agency. These activities and tasks are for Operations and Maintenance (O&M) and Development, Modernization, and Enhancement (DME). This contract renewal derives from an effort established outside of the OCP: AG-3151-C-16-0040. This base contract expires September 2021.

There are no option periods or existing task orders permitted or available.

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

The U Farm Services Agency (FSA) guarantees loans and provides direct loans to farmers and ranchers who cannot obtain financing through conventional lending institutions. FSA’s lending officials use Moody’s Analytics Lending Cloud proprietary software to assist with farm business planning and financial/credit analysis services in support of loan making and servicing for direct and guaranteed loan programs. FSA began using Moody’s Analytics Lending Cloud software in 2004 to automate the farm business planning process. This software provides immediate access to field-based employees and gives them the ability to pull credit reports and perform credit analysis. The software provides FSA the capability to analyze the financial position and debt structures of farmers and ranchers seeking direct loan guarantees.

Moody’s Lending Cloud software uses proprietary software code which is not available through resellers or partners. FPAC IT architects and specialists along with FSA technical staff estimate that replacing Moody’s Lending Cloud software with different commercial-off-the-shelf (COTS) software or a new custom-built IT application will be a 12-18 months prohibiting FSA’s ability to issue farm

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Base year - $6.2 million Option year 1 – $6.3 million Option year 2 – $6.4 million Option year 3 – $6.6 million

4. The statutory authority permitting other than full and open competition.

The following circumstance provides the justification for other than full and open competition under

FAR 6.3:

41 U.S.C. 3304(a)(1), as implemented by FAR 6.302-1, titled "Only one responsible source and no other supplies or services will satisfy agency requirements."41 U.S.C. 3304(a)(1), as implemented by FAR 6.302-1, titled "Only one responsible source and no other supplies or services will satisfy agency requirements."

5. A statement demonstrating the unique qualifications of the proposed contractor or the nature of the action requiring the use of the authority.

FSA utilizes the Lending Cloud Ag Tool Software Suite and support services provided by Moody’s Analytics in support of the USDA FSA Farm Loan Program. FSA provides direct loans and guarantees to farmer and ranchers who cannot obtain financing through conventional lending institutions. Farm Business planning and financial/credit analysts are the leading business processes conducted by FSA’s lending officials. FSA’s Farm Loan Program’s backbone is a Web-based farm business planning application which promotes data sharing between the Government, the producer, guaranteed lenders and community partners who are assisting customers.

This requirement is to sustain FSA’s Farm Business Plan with the Lending Cloud Ag Tool software platform which provides FSA with the ability to respectfully analyze farmers’ financial positions and debt structures. This application will ensure FSA farm business planning and financial credit analysis is available to the target audience in a Cloud environment. Moody’s is the sole proprietary owner of the software rights and is the sole source services provider for the Lending Cloud Ag Tool which is not available through authorized resellers or partners and is not accessible to other sources

The following unique functions and minimum requirements have been determined essential for the successful continuation and support of the farm business planning and financial/credit analysis services provided to Ranchers and Farmers by FSA with the Lending Cloud Ag Tool:

Automation of secure and confidential FSA business processes linked to farm business planning and financial/credit analysis supporting direct and guaranteed loans.

Continued accessibility to proprietary data secured by the Lending Cloud tool.

FSA Direct interface capabilities authorizing field offices to directly pull credit reports from credit bureaus and secure critical information from various integrated data sources and reports.

A direct ability to generate customized forms using the data gathered and stored in the Lending Cloud Ag Tool application.

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Ability to access all Reporting tool information captured in the analysis of all customer records and ability to monitor the data and query portfolio in support of a rapid program response to Congressional inquiries.

Direct and secure application access to eleven (11) farm operating models required by USDA FSA farm loan underwriting parameters; leading to the ability to assess risk of farm operations and make sound and supported recommendations of credit worthiness and securely relay loan decision role-based access integrated with USDA eAuth security limiting access to farmer personally-identifiable information (PII).

Moody’s currently is the only known vendor who provides a complete Lending Cloud Ag Tool and solution that meets all mandatory FSA Federal regulatory and program requirements. Market research confirmed that moving to another vendors platform would require a complete system overhaul greater than18 month and this delay would create a consequential gap in service causing potential harm and increased risk to FSA’s ability to issue farm loans.

Without direct access to Lending Cloud Ag Tool software and support services, FPAC and FSA will be unable to monitor farm loan portfolio risks to reduce the ability to provide lending options to socially disadvantaged farmers. Onboarding of a new platform will create an environment of constant downtime until the new platform has been fully tested and deployed, this will leave farmers and ranchers no access to a secure portal to obtain FSA Farm loans. This will limit their ability to sustain the agricultural needs of the nation and economy while socially disadvantaged farmers and ranchers will lose a critical source of credit.

There are other vendors that offer similar components that make up the “Suite” of software currently employed, such as FINPACK, Ncino Bank Operating System, and ProAG Bankware Technologies AnyCore AG. Although the offerings from the other vendors are comparable, it was noted in the market research that there are no other fully authorized, automated or electronic alternatives as advanced and uniquely compatible with the USDA FSA’s loan application and acceptance processes except for Lending Cloud Ag Tool.

Lending Cloud Ag Tool software products are copyrighted by their developer, Moody’s Analytics, and no other source is authorized (or capable) to provide maintenance, upgrades and technical support services for this proprietary software.

6. Description of efforts made to ensure offers are solicited from as many potential sources as is practicable.

This requirement will be posted on in accordance with FAR 6.305(c). Moody’s Analytics is the sole provider and sole source for the Lending Cloud Ag Tool Software and Support Services.

7. Description of the market research conducted and the results or a statement of the reason Market Research was not conducted.

Market research was conducted to identify whether any business vendors could provide a COTS solution meeting most or all of FSA’s farm business plan requirements.

The web-based search identified the following vendor offerings:

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FINPACK – The product provides a credit analysis tool that generates basic or detailed reports as needed to conduct credit worthiness decisions. Market research noted several minimum requirements as not being met nor able to be modified without significant and cost prohibitive actions.

Ncino Bank Operating System Agriculture Lending – The product provides automated workflow to make data entry timelier and speed up the approval processes. Customers can view loan process status and track and upload documents. Market research noted several minimum requirements as not being met nor able to be modified without significant and cost prohibitive actions.

ProAG Bankware Technologies AnyCore AG – The product provides an agricultural Loan Origination System that allows customers to share financial data and quickly apply for loans. It provides lenders the necessary tools to perform credit analysis and loan underwriting. Market research noted several minimum requirements as not being met nor able to be modified without significant and cost prohibitive actions.

Moody’s Analytics Lending Cloud – The product provides the ability to import credit report from the three major credit bureaus, import tax returns, and support portfolio level analysis using system-wide data to manage portfolio health and perform peer benchmarking for lending risk. As Moody’s retains proprietary control and access of the software code base of Lending Cloud, the application is not accessible to any other source without Moody’s approval. Written confirmation was received verifying that no re-sellers or partners exist with Moody’s on their Lending Cloud application. A brief search on GSA was completed for verification purposes; no resellers were identified.

8. Any other facts supporting the use of other than full and open competition.

FSA has two levels of customers, the farmers and ranchers (producers) obtaining direct loans and the lenders obtaining loan guarantees. The centralized data on the Moody’s Analytics Lending Cloud software allows FSA to share producer information across its farm loan programs, farm programs, and field operations areas as well as with other USDA agencies, as appropriate. The software provides financial and credit analysis and must be capable of providing unlimited access to an unlimited number of customer accounts.

9. Listing of the sources, if any, that expressed a written interest in the acquisition.

Moody’s Analytics, Inc.

7 World Trade Center 250 Greenwich Street, New York, NY, 10007

Market research and clarification assessed that no other vendor

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10. Statement of actions, if any, the agency may take to remove or overcome any barriers to competition if subsequent acquisitions are anticipated.

FSA will publish a farm loan programs modernization roadmap in fiscal year 2022 which will include technology options to meet farm business planning and financial/credit analysis automation requirements. Based on the technology assessment included in the modernization roadmap, FSA will make a buy vs. build decision.

Ongoing market research is being carried out to establish if potential vendors are willing and able to provide customizations to their products to meet FSA’s needs. As customizations take significant time and resources, not every potential vendor is able to commit to these dedicated tasks. Efforts will include determining if a solution that meets the farm loan programs requirements is available on GSA or other marketplaces.

If FSA decides a custom-built application is needed to automate the farm business planning and financial/credit analysis processes, FSA will use the planned Farm Production and Conservation (FPAC) Business Center multi-award blanket purchase agreement with a restricted (small business) and unrestricted track, named Farm Loan Program Software Delivery Services, to compete a call order to replace the existing Farm Business Plan tool.

11. Determination by the Contracting Officer that the anticipated cost to the Government will be fair and reasonable.

As this is a sole source requirement pricing will be negotiated directly with .

This will lead to a final fair-and-reasonable determination.

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Certifications & Approvals

The information provided for this justification has been reviewed and certified accurate and complete by _Brian Rueckl_, Program/Technical Personnel.

Contracting Officer (not exceeding $750,000). I have reviewed this justification and certify it to be accurate and complete to the best of my knowledge and belief.

Approved.

Reviewed and forwarding to the Procuring Activity Advocate (MASCO or Delegate).

JOSHUA TAFOYA

Digitally signed by JOSHUA

TAFOYA

_________________________________________________Date: 2021.08.03 08:25:52 -06'00' Josh Tafoya Contracting Officer

Additional Reviews & Approvals

Signatures are required at each threshold up to the total estimated dollar value of the acquisition.

Advocate for competition for the procuring activity (MASCO or Delegate approved by HCA for USDA) (if over $750,000, but not exceeding $15 million). I have reviewed this justification and certify it to be accurate and complete to the best of my knowledge and belief.

Approved.

Reviewed and forwarding to the Head of the Procuring Activity/HCA.

Richard Jiron Mission Area Advocate for Competition

Head of the procuring activity (HCA for USDA) (if over $15 million, but not exceeding $75 million). I have reviewed this justification and certify it to be accurate and complete to the best of my knowledge and belief.

Approved.

Reviewed and forwarding to the Senior Procurement Executive (SPE).

Dorothy Lil y Acting Head of the Contracting Activity United States Department of Agriculture

RICHARD

JIRON

Digitally signed by RICHARD

JIRON

Date: 2021.08.06 09:37:29 -06'00'

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