DOAD II LSJ Support Services for OCFO OFM and JPMO.pdf

OPOAM 3008.405-6

Limited-Sources Justification (LSJ)

For orders or BPAs exceeding the Simplified Acquisition Threshold

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LSJ No.: FY25-069

This acquisition is conducted under the authority of the Multiple-Award Schedule Program, 41 U.S.C. 152(3), Competitive Procedures, and 40 U.S.C. 501, Services for Executive Agencies.

1. Agency and Contracting Activity.

The Department of Homeland Security (DHS), Office of Procurement Operations (OPO), Departmental Operations Acquisition Division (DOAD) II proposes to award an order pursuant to FAR 8.405-6(a), Limiting Sources.

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

DHS/OPO intends to limit the number of sources solicited pursuant to FAR 8.405- 6(a)(1)(i)(C) for the procurement of Financial Management and Accounting as well as audit support services to Proposed Contractor: Kearney Company PC, 1701 Duke Street, Suite 500, Alexandria, VA 22314.

3. Description of Supplies/Services. Provide the estimated total value (including options, if any).

The contractor shall provide a continuation of support to DHS Office of the Chief Financial Officer (OCFO) Office of Financial Management (OFM) and Joint Program Management Office (JPMO) Financial Systems Modernization (FSM) program for accounting services and support to include auditing, remediation, expert technical accounting and consulting services;

assistance in the preparation and validation of financial management business processes and supporting and DHS Component’s annual reporting activities. Specifically, the Contractor will ensure the OCFO are provided the following services:

1) Complete and accurate delivery of deliverables critical to DHS and other reporting requirements, as applicable, to sustain the Department’s unqualified audit opinion issued by the Independent Auditor (IPA) for the fiscal year ended 30 September 2025 with Annual Financial Reporting due by 15 November 2025;

2) Support other critical efforts related to risk and financial management for the Financial Systems Modernization Solution (FSMS), external audit (including the U.S. Government Accountability Office, herein referred to as GAO) and internal assessment oversight and maintenance;

3) Mitigate audit, information technology general control (ITGC), and accounting-related risks impacting FSMS and the DHS FSM program;

4) Adequate coverage for a sufficient transition period, as applicable. Responsibilities also include quality control (QC) / quality assurance (QA), project status reporting, milestone management, and execution briefing support for the scope of services.

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5) Support DHS OCFO’s annual planning process to determine the scope of DHS financial management initiatives that will support the Department’s efforts to sustain a clean financial statement audit opinion, with the ultimate goal of a clean internal control audit opinion;

6) Assist DHS OCFO and DHS Components in preparing the Agency Financial Report (AFR), which includes audited financial statements and other information required by OMB; and

7) Prepare and review documentation and generating reporting for government review and approval, to meet DHS Financial Accountability Act (FAA) and OMB A-123 and A- 136 compliance requirement or other financial report requirements as identified by management.

The estimated total value for this effort is $2,899,894. The JPMO effort, estimated at $1,887,546, includes a five-month base period starting April 24, 2025, followed by a three (3) month option period. The OFM and Workforce Development effort, estimated at $1,012,348, includes a three (3) month base period starting April 24, 2025, followed by a three (3) month option period.

JPMO

Period Duration (Months) Unit Price Total Base Period Five (5) Months

(04/24/2025 - 09/23/2025) N/A $1,179,841

Option Period 1 Three (3) Month (09/24/2025 – 12/23/2025)

N/A $707,705

Total $1,887,546

OFM and Workforce Development Period Duration (Months) Unit Price Total Base Period Three (3) Months

(04/24/2025 - 07/23/2025) N/A $481,243

Option Period 1 Three (3) Month (07/24/2025 – 10/23/2025)

N/A $531,105

Total $1,012,348

4. Authority and supporting rationale.

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 Federal Supply Schedule order provided that the original order was placed in accordance with the applicable Federal Supply Schedule ordering procedures. The original order or BPA must not have been previously issued under sole-source or limited-sources procedures.

This acquisition is being conducted under the authority of the Multiple-Award Schedule Program, 41 U.S.C. 152(3), Competitive Procedures, and 40 U.S.C. 501, Services for Executive Agencies, in accordance with FAR 8.405-6(a), Limiting Sources. An award will

LSJ No. FY25-069 - 3 -be made in the interest of economy and efficiency as a logical follow-on to Task Order No.

70RDAD21FC0000113 pursuant to FAR 8.405-6(a)(1)(i)(C). The original award was competitively solicited and awarded using the ordering procedures at FAR 8.405 under Blanket Purchase Agreement (BPA) No. 70RDAD19A00000009 established under General Services Administration (GSA) Multiple Award Schedule (MAS) Contract No. GS-00F- 031DA and expires on April 23, 2025. It is necessary to limit competition for new work described herein as services are needed after expiration of the incumbent contract and pending award of the competitive follow-on task orders.

Rationale:

The scope of this proposed short-term order will remain unchanged from services and deliverables as outlined in the original Statement of Work (SOW). The current Task Order No. 70RDAD21FC0000113 expires in the middle of several key audit activities to include the FSMS external GAO audit and the Departments financial statement audit for fiscal year 2025. The original task order requires Kearney Company PC to perform four tasks: Financial Reporting Requirements Services (Task 1), Workforce Management Division (Task 2), Financial Management Information Systems (Task 3), Financial Statement Automation (Task 4). This logical follow-on task order requires continued performance of the same four tasks. For example, both orders require support including technical accounting, financial management, accounting treatment manual, and audit support services, which are needed in support of the OCFO’s annual financial audit activities and to provide assistance with the Department’s FSM efforts.

Additionally, both orders have a primary focus of supporting mission critical audit assurance efforts, including the annual financial statement audit, GAO audit and High Risk Strategy reporting support. Currently, Kearney Company PC provides critical support toward the creation of the Annual Financial Report which is a statutory function in accordance with the CFO Act of 1990 (PL 101-576) and the DHS Financial Accountability Act of 2004 (PL 108- 330). The award of a logical follow-on order would allow for the current vendor to complete the work that commenced under the current task order.

The support currently provided by the incumbent is critical to the continued success of the DHS CFO’s execution of the DHS mission. Bringing in a new contractor would create substantial delays, require considerable lead time to become productive due to the learning curve, and would significantly impact the program’s ability to support critical FSMS audit functions. The incumbent’s knowledge gained through performance of the original contract cannot be transferred to another contractor without a substantial duplication of time and costs, which would pose a significant risk to the Department’s unqualified (“clean”) financial statement audit (for FYE 30 September 2025) and to the in-flight GAO audits with interim and final reporting occurring between now and 30 September 2025. In addition, the incumbent currently holds the requisite security clearances, suitability, and personnel on-site necessary for continued support while the new task order is being initiated. The incumbent’s familiarity and experience with the JPMO’s FSM and the OFM’s program, stakeholders, and customers; the financial systems; audit requirements and processes; ITGCs; remediation activities; and its nuances and complexities will alleviate the substantial risk that would be

LSJ No. FY25-069 - 4 -present if a new contractor was brought on board without sufficient transition time. Any awardee other than the incumbent would be required to obtain the cognizant security clearances, suitability, cyber hygiene, and review by the Chief Information Officer (CIO) which, based on the median time it has taken contractors to obtain the necessary clearances and suitability for efforts under DHS OCFO, would veritably result in a minimum delay of 100 days from the time of award to full performance by the contractor. Given the limited timeframe of this bridge order, DHS has determined that the estimated duplication of time and costs thus could not be substantially recovered through competition and will result in unacceptable delays in fulfilling the agency’s requirements. Due to the in-flight audits and assessments and ongoing challenges that have been presented by the FSMS, and the risk to Departments financial statement audit, it is critical that DHS retain the experience and knowledge base of the incumbent until a recompete is complete. Allowing a short-term interim task order will allow additional time to execute a recompete contract action. This support is critical to the timely completion of the audit. If audits are not completed on time, the audit opinion may be modified or delayed. The audit opinion is critical for the Administration and Congress as it lets them know whether or not the information in the financial statements is accurate. The audit opinion informs the users of financial statements about the integrity and competency of Executive leadership and the Department and can have a direct impact on future funding requests.

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

The contracting officer has determined that issuing the proposed task order to Kearney Company PC for the system support technical services represents the best value and will result in the lowest overall cost, considering price and administrative costs, to meet the Government’s needs. The procurement will be conducted utilizing procedures found in FAR 8.405-3 Blanket Purchase Agreements (BPAs), to issue a single task order against the Financial Management & Operations (FMO) Support Services BPA for the DHS OCFO, OFM and JPMO. DHS/OPO has already determined that BPA rates are fair and reasonable.

Discounts to these BPA rates will be requested. Additionally, prior to issuance of the task order, the ordering activity will consider the level of effort and the mix of labor proposed to perform the specific task being ordered in order to determine that the total price is reasonable. The contractor’s labor mix and level of effort will also be compared to the Independent Government Cost Estimate (IGCE).

6. A description of the market research conducted among schedule holders and the results, or a statement of the reason market research was not conducted.

Market research was extensively conducted in 2023 and 2024 as part of the DHS FMO BPA award competition and the subsequent task order competition.

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As part of that market research for the DHS FMO BPA process, three (3) primary methods were employed:

1) Request for Information (RFI) Issued: In January 2023, DHS sent RFI No.

70RDA224RFI000001 to ALL GSA Multiple Award Schedule (MAS) venders under Special Item Numbers (SIN)s SIN 541211 – Auditing Services, SIN 541611 – Management & Financial Consulting, Acquisition and Grants Management Support and Business Program and Project Management Services, and SIN 541219 – Budget and Financial Management Services. A total of seventeen (17) vendors submitted a response that was reviewed, evaluated, and incorporated, as applicable, into the BPA structure, approach, and documentation. Full RFI assessment results are included as Attachment A of the BPA Market Research Report.

2) Acquisition History Review: The reviewer examined the prior task orders awarded under the prior FMO BPAs, to include the current task order for this requirement, Task Order No. 70RDAD21FC0000113.

3) Review of the GSA Federal Supply Schedule/Multiple Award Schedule: The reviewer examined the GSA Federal Supply Schedule/Multiple Award Schedule and GSA eLibrary to identify business establishments by the type of economic activity (i.e., North American Industry Classification System (NAICS)) and respective alignment to GSA’s schedule (i.e., Special Item Number (SIN)) and inventory and examine available vendors able to support the work being solicited.

For the subsequent task order competition, the Program Office reviewed the market research for the DHS FMO BPA. Additionally, two Professional Services Strategic Sourcing Vehicles were reviewed: One Acquisition Solution for Integrated Services+ (OASIS+) and the Program Management, Administrative, Operations (Clerical), and Technical Services II

(PACTS II).

• PACTS II Functional Category 1 provides program management and technical services, but period of performance is ending February 2025 and PACTS III is not available at this time.

• NAICS code 541219 is available in the OASIS + Pool 2. Review of the OASIS dashboard, 34 Task orders have been awarded to vendors under NAICS Code 541219 from Oct 2024 - Feb 2025. Awards were made to Veteran Owned Small Business, Small Business and Large Business.

However, it was determined that only one of the vendors has the knowledge gained, by being the current contractor, which will prevent any gaps in critical functions until a follow-on task order can be competitively awarded.

7. Any other facts supporting the limited-sources justification.

The follow-on awards of 70RDAD21FC0000113 will be competed as two separate efforts: 1.

OFM and Workforce Development effort and 2. JPMO effort.

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The target award date for the larger follow-on for the OFM and Workforce Development effort is July 2025. The initial three-month base period will provide support from the expiration of Task Order No. 70RDAD21FC0000113 on April 23, 2025, through the award date of the follow-on in July 2025. The three-month option period will only be exercised if a transition period is needed from the incumbent contractor to the follow-on awardee.

The target award date for the JPMO follow-on effort is September 2025. The initial five-month option period will provide support from the expiration of Task Order No.

70RDAD21FC0000113 on April 23, 2025 through the award date of the follow-on in September 2025. The three-month option period will only be exercised if a transition period is needed from the incumbent contractor to the follow-on awardee.

8. A statement of actions, if any, the agency may take to remove or overcome any barriers that led to restricted consideration (i.e., limited-sources) before any subsequent acquisition for the supplies or services is made.

This short-term, non-competitive logical follow-on award is necessary to prevent gaps in these critical services and allows OCFO additional time to plan and recompete follow-on efforts that will help meet future OCFO needs. The services required for the logical follow-on task order for the JPMO effort will ultimately be combined with the JPMO Program Management (PM) recompete and will not be included in the larger competitive follow-on effort for the OFM and Workforce Development tasks included in Task Order No.

70RDAD21FC0000113. Additionally, this bridge task order will only include a period of performance sufficient to complete the FSMS audits and allow for the requirements to align with the period of performance for the follow-on efforts. The Program Office is finalizing the requirements documents and conducting market research for both recompetes. Through initial market research, the Program Office is considering a competitive award on DHS FMO BPA or GSA One Acquisition for Integrated Services (OASIS)+.

9. DHS intends to post this requirement on System for Award Management (SAM.gov) pursuant to FAR 8.405-6(a)(2)(i).

10. Technical/Requirements Personnel Certification.

Pursuant to FAR 8.405-6(c)(2)(x), I certify that this requirement meets the Government’s minimum need and that the supporting data, which form a basis for the Limited-Sources Justification, are accurate and complete.

Meghean Melendrez Date Technical Representative/COR

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11. Contracting Officer Certification.

Pursuant to FAR 8.405-6(c)(2)(ix), I certify that the Limited-Sources Justification is accurate and complete to the best of my knowledge and belief:

Leslie Kenser Date Contracting Officer

12. Approval.

Antoinette Clay Date Procuring Activity Advocate for Competition