A18 73351020Q0164-LSJ-Over SAT 8.405.6-CA-Final -10-5-20-CO & CA.pdf

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LIMITED SOURCES JUSTIFICATION

FOR AN ORDER / BPA EXCEEDING

THE SIMPLIFIED ACQUISITION THRESHOLD

(AUTHORITY: FAR 8.405-6)

PR/SOL/CONTRACT #: 73351020Q0164

This acquisition is conducted under the authority of the Multiple Award Schedule Program.

1. Agency and contracting activity: Small Business Administration (SBA) Acquisitions Directorate Tracy L. Lambert 13221 Woodland Park Road Herndon, VA 20171 703-487-8100 Ext. 6714 Tracy.Lambert@sba.gov

Requiring Agency: Small Business Administration, ODA, DCMS Eric Wall 409 Third Street, SW Washington, DC 20416 202-205-6739 Eric.Wall@sba.gov

2. Nature and/or description of the action being approved.

The purpose of this requirement is to acquire risk scoring and portfolio analysis services for the Novel Coronavirus Disease (COVID-19) loan portfolio to assist the SBA Office of Disaster Assistance (ODA) in effectively and efficiently monitoring the COVID-19 disaster loan portfolio, including the performance and credit quality of the disaster portfolio by both portfolio segments and loans. In addition to monitoring ODA’s COVID-19 portfolio, the services will include predictive measurement of the COVID-19 disaster portfolio. This order will be a logical follow on, sole source award to TrueNorth, LLC.

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

The Office of Disaster Assistance (ODA) is seeking a direct award to the current contractor, TrueNorth LLC, to perform portfolio health and analysis for the portfolio consisting of COVID- 19 loans.

This contractor will provide all qualified personnel, facilities, equipment, logistical support, and other materials and/or services necessary to perform ODA’s requirement for portfolio heath and analysis for the portfolio consisting of COVID-19 loans. This effort includes providing data processing/consumer credit scoring on borrowers for disaster home loans and principals of disaster business loans as follows:

• Data processing on borrower for the COVID disaster principals of disaster business loans.

• Plan the approach of portfolio analysis.

• Development and production of SAS data sets on disaster loan portfolio (COVID business).

• Credit score borrower for principals of COVID disaster business loans.

mailto:Tracy.Lambert@sba.gov mailto:Eric.Wall@sba.gov

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• Predict performance of portfolio based on factors deemed most important to loan making.

• Plan on approach of portfolio analysis.

The COVID portfolio is now more than 3.5 million approved loans. The estimated cost to update credit scores is $1,362,500.00 for the COVID work. The period of performance for this order will be 12 months from the date of award.

4. Authority and supporting rationale.

The following circumstance justifies limiting the source as supported below:

Logical Follow-on under the authority of FAR 8.405-6(a)(1)(i)(C) – In the interest of economy and efficiency, the new work is a logical follow-on to an original competed Federal Supply Schedule (FSS) order 73351018F0253. The original order was placed in accordance with the applicable FSS ordering procedures. The original order was not previously issued under sole-source or limited sources procedures.

The non-COVID Disaster Portfolio is comprised of SBA loans made directly to eligible borrowers (homeowners and businesses) in designated disaster areas. The non-Coronavirus disease (COVID-19) Disaster Portfolio is comprised of SBA loans made directly to eligible borrowers (homeowners and businesses) in designated disaster areas. As of June 30, 2020 SBA had 225,208 active disaster home loans with an unpaid principal balance (UPB) of $5.763 billion and 1,822,400 disaster business active loans with a UPB of $121 billion. The Non-COVID requirements are currently being performed by TrueNorth LLC under contract number 73351018F0253.

The COVID Disaster Portfolio is currently comprised of approximately 3.3 million loans at roughly $175 billion. This portfolio is estimated to continue to grow to potentially 5 million loans at $367 billion. ODA currently has a contract for the non COVID portion of the portfolio. The costs associated with the current non-COVID portion of portfolio analysis is $344,095. This is for a portfolio consisting of approximately 226,000 loans. The bulk of the cost are fixed employment costs. The only variable costs are related to obtaining updated credit scores at approximately $.25 per loan.

The SBA-ODA proposes to award a logical follow-on task order to TrueNorth, LLC., for Credit Risk Scoring and Portfolio Analysis Services for the COVID Portfolio. This acquisition will be a sole source award against TrueNorth LLC’s General Services Administration’s (GSA) Federal Supply Schedule; Financial and Business Solutions (FABS) schedule under SIN 520-5 Loan Servicing & Asset Management Services.

TrueNorth, LLC would be performing the same work on both the non-COVID and COVID loan portfolio. Due to the COVID disaster declaration, ODA’s portfolio has grown substantially from 220,084 non-COVID home and business loans to over 3.5 million in COVID Loans. The size of the portfolio would increase the contract cost above the ceiling. This follow-on will ensure ODA can measure the COVID loans without delay or cost associated with a new contract.

Since the COVID data will be reported the exact same way as the non-COVID data, it is more cost effective to have the current contractor perform the additional work. If SBA were to compete this work and have two contractors performing, there would be duplicating/overlapping work. Both contractors would be reporting the same information, separately. It is more cost effective to ask the current contractor to perform the additional work. Having one contractor perform the COVID and non-COVID portfolio would save time and money due to the knowledge and reports that will be

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provided to SBA. The government would not need to train another contractor, would not need to provide additional documentation, would not need to have additional meetings, and would not need to later merge the data for a “total picture.” The reports would be similar, and SBA would be able to combine the information easier with one contractor then having to review and prepare reports from two different contractors.

TrueNorth LLC is an expert in this field who possesses historical knowledge, experience and understands ODA’s nomenclature, processes, policies, and needs. A new contractor would need to be trained to understand each of these at substantial cost and time.

5. Determination by the ordering activity contracting officer that the order represents the best value consistent with FAR 8.404(d).

GSA has already found the prices fair and reasonable: however, the contracting officer will request additional discounts/price reductions before awarding this task order that is consistent with FAR 8.405-4.

The Contracting Officer anticipated the cost to the Government will be fair and reasonable since this order will be procured utilizing the contractor’s GSA approved schedule terms and conditions. This order is a logical follow-on utilizing the contractor’s GSA Schedule approved rates but at a discounted rate due to the volume of loans. To ensure fair and reasonable pricing is received, an evaluation of the quote will be conducted to ensure the government is receiving fair and reasonable rates. Discounts will be requested.

6. Market research conducted among schedule holders (or reason market research was not conducted).

A review of the previous awards for this work has shown that only two companies have submitted quotes in the past: Hamilton Enterprises and TrueNorth LLC. They both have current GSA Schedules.

When the current order was competed only TrueNorth LLC submitted a quote.

A request for quote will be sent directly to the contractor utilizing their current GSA schedule under FAR 8 Required Sources of Supplies and Services/FABS Services Group and Schedule 520 5 Loan Servicing & Asset Management Services.

7. Any other facts supporting the justification.

It would be in the best interest to continue utilizing TrueNorth, LLC for the COVID-19 risk scoring and portfolio analysis services. They are currently working on the non-COVID requirement, so they have the knowledge and understanding of the program. History shows that there is not much interest in this work since only two companies have submitted quotes in the past.

Currently, TrueNorth has been performing at a satisfactorily or above level and has provide the government with exceptional results.

8. Actions, if any, the agency may take to remove or overcome any barriers that led to the restricted consideration before any subsequent acquisition for supplies and services is made.

The current order expires in August of 2021. It is the SBA’s intent to compete this action if required in the future and if it is in the best interest of the government.

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CERTIFICATION AND APPROVAL

9. Technical / Requirements Representative Certification.

I certify that this requirement constitutes the Government’s minimum needs and the supporting data provided herein is accurate and complete to the best of my knowledge and belief.

Eric Wall Contract Officer Representative

10. Contracting Officer’s Certification and Approval.

I certify this justification is accurate and complete to the best of my knowledge and belief, and hereby provide approval.

Tracy Lambert Contracting Officer

11. Approval

Kip Sheppard Director, Acquisition Division

I hereby determine that the circumstances used above apply to this requirement.

Sarah Davis Competition Advocate

Wall

KIP

SHEPPARD

Digitally signed by KIP

SHEPPARD

Date: 2020.10.02 14:14:44 -06'00'

TRACY

LAMBERT

Digitally signed by TRACY

LAMBERT

Date: 2020.10.05 13:13:19 -04'00'