Attachment 1 to LSJ GSA First Time Homebuyer (6-28-21).docx

JUSTIFICATION

FOR LIMITED SOURCES

IAW FAR 8.405-6(a)(1)(i)(B)

1. REQUIRING AGENCY:

U.S. Department of Housing and Urban Development, Policy Development & Research 451 7th Street, SW Room 8120 Washington, DC 20140

2. NATURE/DESCRIPTION OF ACTION BEING APPROVED: HUD will issue a sole source contract to Abt Associates under Federal Acquisition Regulation (FAR) Section 8.405-6(a)(1)(B), only one source is capable of providing the supplies or services required at the level of quality required because the supplies or services are unique or highly specialized. The requisition, titled First-Time Homebuyer Education and Counseling Demonstration: Additional COVID-19 Analysis, is PRISM Requisition Number: RCS-R-2021-00065

Background

The Department designed the First-Time Homebuyer Education and Counseling Demonstration as a large-scale randomized experiment to answer the question about the relative efficacy of homebuyer education and counseling on first-time borrowers. The demonstration aims to test whether in-person or remote homebuyer education and counseling services result in improvements across three outcome domains: preparedness and search, financial capability, and sustainable homeownership. In the wake of the mortgage market and foreclosure crisis, the Housing and Economic Recovery Act of 2008 (HERA) required HUD to establish the Pre-Purchase Homeownership Counseling Demonstration (Section 2128). The Demonstration was required to test different means of providing counseling (e.g. via telephone, individualized in-person counseling, web- based counseling, counseling classes, and any other type deemed appropriate by the Secretary) on a sample of 3,000 participants and report the results to Congress.1 However, the Demonstration specified in HERA did not include appropriations so HUD had to wait until the FY 2010 Appropriations, where the Demonstration was funded under the Obama Administration’s Transformation Initiative, whose goal was to increase knowledge about the effectiveness of HUD’s policies and programs on the ground.

1 Housing and Economic Recovery Act of 2008, Public Law 110-289, Section 2128, Enacted: July 30, 2008, pgs. 2841-2.

In the FY2018 Appropriations Act, Congress provided funding for critical research, demonstrations, and evaluations, including the First-Time Homebuyer Education and Counseling Demonstration. On July 2, 2019, the Department used that FY2018 appropriations to award the long-term follow-up survey contract, HUD contract 86544A19C00001, to be conducted by Abt Associates (the current incumbent) as a follow-on contract for the continuation and completion of the current First-Time Homebuyer Education and Counseling Demonstration HUD contract DU204SA-14-C--01 awarded on September 30, 2014. Since the award of the long-term follow-up survey contract was delayed by over 9 months and because of delays caused by the federal government shutdown December 22, 2018-January 25, 2019, Abt Associates needed an additional 14 months, through June 30, 2021, to conduct the analysis and reporting tasks under Option 4 of the existing HUD contract DU204SA-14-C--01.

In December 2020, Congress requested the Additional COVID-19 Analysis of the First-Time Homebuyer Education and Counseling Demonstration in the Consolidated Appropriations Act, 2021. This procurement is a COVID-19 follow-on and falls under the flexibility granted per the Stafford Act’s procurement flexibility and justifies the only one source restriction because of the unique and specialized nature of the work.

3. DESCRIPTION OF SERVICES REQUIRED TO MEET AGENCY’S NEEDS (INCLUDING ESTIMATED VALUE): HUD’s Office of Policy Development and Research (PD&R) seeks to issue a sole source contract to Abt Associates to conduct an Additional COVID-19 Analysis to supplement the long-term impact analysis and reporting of the long-term follow-up survey data of the full study sample that Abt Associates is completing as part of the existing contract, Impact Evaluation of the First-Time Homebuyer Education and Counseling Demonstration, DU2014SA-14-C--01. Because of the COVID-19 pandemic and because administrative data analysis can be conducted on the study sample up to 7 years after enrollment in the First-Time Homebuyer Education and Counseling Demonstration, this contract will enable HUD to benefit from such an extended analysis and take advantage of the randomized experiment that has been ongoing since 2013 to see if there are any impacts of homebuyer education and counseling on the financial well-being and homeownership tenure of the 5,700 study participants. Conducting the additional COVID-19 impact analysis and reporting on the results will complete the long-term impact analysis of the First-Time Homebuyer Education and Counseling Demonstration that is currently being implemented under DU204SA-14-C--01. Since study participants are aging out of the 7-year study window on the consent form, it is paramount to start the Additional COVID-19 Analysis as soon as possible to minimize the amount of study participant attrition that is occurring 7 years after the start of the study. Luckily, the study sample stands at 5,770 at the end of the impact analysis and only started to decrease in October 2020, with at least 5,000 study participants whose outcomes can still be analyzed by June 2021.

The Additional COVID-19 Analysis is designed to answer the following overall research questions, modified from the long-term impact evaluation of the First-Time Homebuyer Education and Counseling Demonstration that is currently being implemented under DU204SA-14-C--01 that is currently underway:

i. Does the offer and receipt of homebuyer education and counseling services mitigate the impact of the COVID-19 pandemic on prospective low- to moderate-income, first-time homebuyers?

ii. Are there specific impacts of the COVID-19 pandemic on FHA first-time homebuyers?

iii. To what extent does the offer and receipt of homebuyer education and counseling services improve participants financial well-being during the COVID-19 pandemic?

iv. To what extent does the offer and receipt of homebuyer education and counseling services improve participants’ ability to sustain homeownership following home purchase during the COVID-19 pandemic?

v. What is the impact of COVID-19 pandemic on the financial well-being and homeownership tenure of the Demonstration’s large diverse sample of prospective and current first-time homebuyers across 28 large metropolitan areas across the United States?

vi. Does the impact of the COVID-19 pandemic differ across the study’s different subgroups?

The COVID-19 pandemic has created an unprecedented and unique research opportunity (1) to see if the homebuyer education and counseling treatment being tested in the Demonstration has had an impact on treatment group participants in terms of their financial well-being and homeownership tenure and (2) to understand the impact of COVID-19 pandemic on a large diverse sample of first-time homebuyers across 28 large metropolitan areas across the United States. But for the COVID-19 pandemic, the Department would not be seeking to conduct this unprecedented Additional COVID-19 Analysis. The COVID-19 pandemic justifies Abt Associates conducting this one final analysis of the landmark First-Time Homebuyer Education and Counseling Demonstration that they designed, implemented, and are currently completing the long-term impact analysis. The objective of this Additional COVID-19 Analysis is to see if the homebuyer education and counseling services provided and tested on the Demonstration’s diverse sample of over 5,700 prospective first-time homebuyers in 28 large metropolitan areas across the U.S. reduced the negative impact of the COVID-19 pandemic on the study participants financial well-being and homeownership tenure.

Congress requested the Additional COVID-19 Analysis of the First-Time Homebuyer Education and Counseling Demonstration in the Consolidated Appropriations Act, 2021. This procurement is a COVID-19 follow-on and falls under the flexibility granted per the Stafford Act’s procurement flexibility and justifies the only one source restriction because of the unique and specialized nature of the work.

4. IDENTIFICATION OF STATUTORY AUTHORITY AND DEMONSTRATION THAT THE PROPOSED CONTRACTOR’S UNIQUE QUALIFICATIONS OR THE NATURE OF THE ACQUISITION REQUIRES USE OF THE AUTHORITY CITED:

Authority: FAR 8.405-6(a)(1)(i)(B) – Only one source is capable of providing the supplies or services required at the level of quality required because the supplies or services are unique or highly specialized.

In addition to the reasons provided in Item (1) above, HUD/PD&R believes that Abt Associates, Inc. should continue to serve as the contractor through this final phase of work for three primary reasons: design issues, timing, and cost efficiency.

Design Issues

Abt Associates is the only responsible source capable of providing the services required at the level of quality required because the services are unique or highly specialized. The Department’s requirements under this contract flow directly from the existing Abt Associates contract to conduct the Impact Analysis of the First-Time Homebuyer Education and Counseling Demonstration. Abt Associates is the only existing contractor with the necessary and relevant experience designing and implementing the First-Time Homebuyer Education and Counseling Demonstration, conducting the long-term impact analysis of the long-term follow-up survey data that was collected 36-60 months after random assignment, and the only contractor with the existing legal agreements and contracts with the national lenders, HUD, study participants, and the national credit bureau required to complete the Additional COVID-19 Analysis.

Abt Associates is the only responsible source to conduct the Additional COVID-19 Analysis requested by Congress. No other contractor could come in at the end of this multi-year, multi-site randomized national experiment and work with the 3 national lenders to renegotiate existing non-disclosure agreements (NDAs), and memoranda of understanding (MOUs) between each of the parties (lenders, HUD, and Abt Associates), obtain and an authorization to operate (ATO) from HUD for the study’s data system, and execute a contract with a national credit bureau for the last credit data and credit history request. A critical part of the Demonstration and of the incumbent contractor’s unique qualifications is the Authorization to Operate (ATO) at the FISMA moderate level that the incumbent has from HUD for the Demonstration’s data system. The HUD ATO at the FISMA moderate level was a lender prerequisite for the lenders to execute the MOUs, provide customer referrals to participate in the Demonstration, and provide origination and servicing data that is required to perform the Demonstration’s Additional COVID-19 Analysis analyses. Abt Associates is the only contractor that has the necessary infrastructure in place to start seamlessly conducting analysis in the same fashion as the long-term impact analysis they are currently conducting under existing HUD contract DU204SA-14-C--01.

Timing

Since study participants are aging out of the 7-year study window on the study consent form, it is paramount to start the Additional COVID-19 Analysis as soon as possible to minimize the amount of study participant attrition that is occurring 7 years after the start of the study. Luckily, the study sample stands at 5,770 at the end of the impact analysis and only started to decrease in October 2020, with at least 5,000 study participants whose outcomes can still be analyzed by June 2021. Any other contractor would have to take at least a year to renegotiate existing non-disclosure agreements (NDAs), and memoranda of understanding (MOUs) between each of the parties (lenders, HUD, and Abt Associates), obtain and an authorization to operate (ATO) from HUD for the study’s data system, and execute a contract with a national credit bureau for the last credit data and credit history request. By then the sample size would have attrited down to a level that would make the Additional COVID-19 Analysis useless and not worth pursuing because the chance of detecting an impact of already rare events, such as ever-60-day delinquency would be statistically undetectable.

Cost Efficiency Abt Associates is the only contractor that has the necessary infrastructure in place to start seamlessly conducting analysis in the same fashion as the long-term impact analysis they are currently conducting under existing HUD contract DU204SA-14-C--01. Any other contractor would cost the Department at least an additional $500,000 to renegotiate existing non-disclosure agreements (NDAs), and memoranda of understanding (MOUs) between each of the parties (lenders, HUD, and Abt Associates), obtain and an authorization to operate (ATO) from HUD for the study’s data system, study participant consent forms, and execute a contract with a national credit bureau for the last credit data and credit history request, which would cost more than the subject requirement.

5. DETERMINATION BY THE CONTRACTING OFFICER THAT THE ANTICIPATED COST TO THE GOVERNMENT WILL BE FAIR AND REASONABLE: Prior to contract award, the Contracting Officer will compare the contractor’s proposed prices for this effort against the current ongoing task order and the independent government estimate to ensure the anticipated price will be fair and reasonable.

6. DESCRIPTION OF MARKET RESEARCH EFFORTS MADE AMONG SCHEDULE HOLDERS AND RESULTS: The Office of Policy Development and Research is requesting a sole source contract with the vendor, Abt Associates, that has completed the prior phases of this study. Market research was not conducted because of the unusual situation with the incumbent contractor designing and implementing all other parts of the First-Time Homebuyer Education and Counseling Demonstration and having the only staff that are cleared to work on the study through the existing NDAs, MOUs, ATO for the data system, and HUD contract to conduct the long-term impact analysis of all of the data they have collected. To date, the First-Time Homebuyer Education and Counseling Demonstration, funded by HUD’s Office of Policy Development and Research, has been conducted by Abt Associates. Given the complex methodology, the existing legal agreements, and necessary infrastructure to start seamlessly conducting the Additional COVID-19 Analysis in the same fashion as the long-term impact analysis they are currently conducting under existing HUD contract DU204SA-14-C--01, Abt Associates has a unique set of qualifications to carry out the final phase of this important project. No other contractors have the knowledge and experience to complete the work under this contract in the required time frame without a break in service, which would have a major impact on the research. Incurring the cost and project delays to do that again would be prohibitive, duplicative, and would result in insurmountable delays that would jeopardize the success of the final analysis of this landmark demonstration.

7. OTHER SUPPORTING FACTS: All supporting facts are listed above.

8. ACTIONS TO REMOVE OR OVERCOME ANY BARRIERS TO COMPETITION BEFORE ANY SUBSEQUENT ACQUISITIONS. This is the final phase of the First-Time Homebuyer Education and Counseling Demonstration. There will be no additional funding, no additional analyses, and the study participants are aging out of their seven-year participation as stipulated in the study consent form so by 2022 there will not be enough study sample to conduct meaningful analyses. The COVID-19 pandemic created a unique and unprecedented opportunity to do capitalize on the existing randomized controlled trial and conduct additional analysis on the study sample, an opportunity that could not have been envisioned and will not occur again during the life of this study.

For all new studies, the Office of the Chief Procurement Officer (OCPO) will work closely with PD&R to develop the Performance Work Statement that will encompass all phases of the study, and the contract award will be awarded for the completion of the study if it is not more than 5 years. If the contract has to be for more than 5 years, OCPO will request approval in accordance with HUDAR 2417.204.

Attachment 1 to Limited Source Justification for First-Time Homebuyer Education and Counseling Demonstration: Additional COVID-19 Analysis OCPO and PD&R will perform thorough market research to solicit other vendors that are capable of performing complex nationwide studies. The market research will include RFIs and an Industry Day.