Final Approved JOFOC 9.13.2023.pdf

Justification for Other Than Full and Open Competition

U.S. Department of Housing and Urban Development

Office of the Chief Procurement Officer

PART 1 - PROGRAM OFFICE RECOMMENDATION

I recommend the use of other than full and open competition for the acquisition of [describe services or supplies]

Negotiations should be conducted with the following source(s) only [provide names, addresses and points of contact; continue on separate sheets as needed]:

The estimated cost of this acquisition is: $

The statutory exception which allows this use of other than full and open competition is [select one]:

Only one responsible source and no other supplies or services will satisfy agency requirements - 41 USC 3304 (a)(1) (see FAR 6.302-1)

Unusual and compelling urgency - 41 USC 3304 (a)(2) (see FAR 6.302-2)

Industrial mobilization; engineering, developmental or research capability; or expert services - 41 USC 3304 (a)(3) (see FAR 6.302-3)

Authorized or required by statute - 41 USC 3304 (a)(5) (see FAR 6.302-5)

Public interest (NOTE: requires Secretarial approval and Congressional Notification) - 41 USC 3304 (a)(7) (see FAR 6.302-7)

A description of the circumstances that support the use of the above statutory authority is attached and included as Exhibit 1 to this justification.

Program Office Certification. I certify that the information contained in this justification is accurate and complete to the best my knowledge and belief.

Head of Program Office [name] Title/Name of Office:

Signature: Date: For additional information contact:

PART 2 - CONTRACTING OFFICER REVIEW AND CERTIFICATION

Provide additional justification and comments here. Continue on back as needed.

Contracting Officer Certification.

I certify that the information contained in this justification is accurate and complete to the best of my knowledge and belief.

Name: Signature: Date:

Previous edition unusable Page 1 of 2 form HUD24012 (12/2020)

Home Equity Conversion Mortgage Business Service Provider

Reverse Mortgage Insight Inc, 34232 Pacific Coast Hwy, #D4, Dana Point, CA 92629-3856, John Lunde 949-429-0452

11,209,003.77

Vance T. Morris Associate General Deputy Assistant Secretary

Susan Betts/202.402.2785

Carmen Calloway 9/11/2023

Digitally signed by: VANCE MORRIS

DN: CN = VANCE MORRIS C = US O = U.S. Government OU = Department of Housing and Urban Development, Office of Housing

Date: 2023.09.11 08:56:41 -04'00'

VANCE MORRIS

Digitally signed by: CARMEN CALLOWAY

DN: CN = CARMEN CALLOWAY C = US O = U.S.

Government OU = Department of Housing and Urban

Development, Office of the Chief Procurement Officer

Date: 2023.09.11 09:38:31 -04'00'

CARMEN CALLOWAY

J&A 23-40

5 5 0

5 0 75

Additional Guidance for Completing the Justification (see HUD Handbook 2210.3, Chapter 4)

PART 2 - Contracting Officer Review and Certification

PART 1 - Program Office Recommendation

The supporting documentation in the Exhibit 1 must describe:

• The nature of the proposed acquisition that requires other than full and open competition;

• The unique qualifications of any proposed sole source; and

• The market research conducted (see FAR Part 10) and the results or the reason(s) why market research was not conducted.

The cost estimate must include all costs of the proposed acquisition, e.g., options, systems life costs, etc. The total will determine the approval level needed (see 3 below).

FAR Subpart 6.3 describes the statutory exceptions, their applicability and limitations on their use.

"Head of the Program Office" means:

• For all Headquarters acquisitions: the cognizant Assistant

Secretary or designee.

• For field acquisitions: the program office director (e.g., Director, Multifamily Housing) within the State or Area Office.

Besides any information provided to support the program office's justification, the Contracting Officer shall provide:

• Documented results of any Federal Business Opportuity notices or explanation of why no notice was published.

• A statement of actions the Department may take to remove barriers to competition for subsequent acquisitions of similar services / supplies; and

• A determination that the anticipated cost / price is fair and reasonable.

(See FAR Subpart 6.3 for further guidance.)

The Contracting Officer signing the certification shall be the same individual who will sign the proposed acquisition action which is the subject of this justification.

PART 3 - Other Approvals The Contracting Officer shall obtain the approval for the dollar value ranges indicated.

If any person required to sign in these blocks disapproves this justification, he/she shall return it to the requesting activity with a written determination.

The requesting activity may obtain the name of the "Contracting Activity Competition Advocate" from the cognizant contracting office.

The "Head of Contracting Activity" is defined at Subpart 2402.1 of the HUD Acquisition Regulation (48 CFR Chapter 24). The cognizant contracting office may also provide the name of this individual.

form HUD24012 (12/2020)

Akinsola Ajayi Competition Advocate

9/13/2023 Digitally signed by: AKINSOLA AJAYI

DN: CN = AKINSOLA AJAYI C = US O = U.S. Government OU = Department of Housing and Urban Development, Office of the Chief Procurement Officer

Date: 2023.09.13 14:06:10 -04'00'

AKINSOLA AJAYI

U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

WASHINGTON, DC 20410-3000

OFFICE OF CHIEF PROCUREMENT OFFICER

Control Number 23-40

JUSTIFICATION FOR OTHER THAN FULL & OPEN COMPETITION:

TITLE: Home Equity Conversion Mortgage Business Service Provider (HECM-BSP)

(1) Identification of the agency and the contracting activity, and specific identification of the document as a "Justification for other than full and open competition."

Department of Housing and Urban Development (HUD)

Office of Chief Procurement Officer (OCPO)

451 7th Street S.W. RM 5256 Washington, DC 20410

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

This request is for approval to award a fixed-price sole source contract to Reverse Mortgage Insight Inc to provide Home Equity Conversion Mortgage Business Services (HECM-BSP) for the Office of Finance & Budget and the Office of Single-Family Housing. The type of funding to be utilized is 0183 Mutual Mortgage Insurance Program Account – Federal Housing Administration-HUD funds.

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

The Contractor shall provide business services for its HECM loan portfolio and insurance program.

Services include:

Providing a web-based, end-to-end business service to manage HUD’s HECM portfolio.

Providing business services for all active and historical loan level records; of ready access to data for financial, budgetary, user-generated reporting, and business intelligence and management reporting tools; of automated reconciliation support between loan balances and posted transactions between its HECM business services and FHAs business partners automated and/or manual HECM records; and of the ability to quickly adapt to legislative, regulatory, and other administrative changes in the policies and procedures based on industry best practices for financial management and reporting, Federal government and Credit Program accounting, auditing, state-of-the-art information technology, security standards, and project management.

Providing HECM business services Help Desk support services and training on HECM business services.

Estimated Value: $11,209,003.77

The estimated overall period of performance is from September 30, 2023, through September 29, 2024

OFFICE OF CHIEF PROCUREMENT OFFICER

Control Number 23-40

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

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

(5) A demonstration that the proposed contractor's unique qualifications or the nature of the acquisition requires use of the authority cited.

The Office of Housing currently has a contract with Reverse Market Insight Inc (RMI) to provide HECM business provider services. This contract with RMI expires on September 29, 2023. The business provider services provided by RMI are a central component to the administration and management of FHA’s HECM loan portfolio and insurance program. A break in service would be detrimental to the HECM program and adversely impact FHA’s ability to support HECM borrowers and industry partners.

If FHA was to abruptly lose services provided under the HECM BSP contract, the HECM program, a key FHA program to assist the elderly, would be severely crippled. The following significant harm to the government would occur:

Loss of system to manage HUD’s HECM servicing and accounting requirements and obligations

Loss of ability to make payments to HECM borrowers Reduced accountability and expertise due to limited or no SME support in all areas

(Servicing, Account, Claims, Originations, MIP Collections) Limited access to data for reporting and audit purposes, causing inability to respond to

Congressional and auditor requests. and Increased demand on HUD staff to address industry and servicer requests No ability to collect on FHA cases No ability to disburse of any premium refunds No accessible loan history data for active or terminated cases for HUD or Lenders No termination or mortgage record changes on any cases No ability to conduct to HECM vacant assigned note sales, a key tool used to increase recoveries for the MMI fund.

Unable to track down unpaid debit vouchers owed to HUD No daily interface file from HERMIT Servicing module to Accounting module, and from

Accounting Module to FHASL; FHA01/FHA02, Pay .gov, SAMS etc. Without this interface, FHA’s financial statements would be significantly impacted.

No support to resolve HERMIT system issues pertaining to FHASL manual journal entries.

No assistance on FHASL clearing account reconciliation between Asset Sales and HECM

Notes.

No monthly foreclosure file to reconcile HECM Notes foreclosure cases posted in SAMS system.

No monthly and quarterly files needed for Management Report and other reporting data.

No access to project level financial data and histories and reporting capabilities.

OFFICE OF CHIEF PROCUREMENT OFFICER

Control Number 23-40

Inability to process user application access requests for the Service Module, Accounting Module or SFTP server (1,800 users)

In addition to the explanation provided, a long-term break in service would negatively impact the agency’s mission of guaranteeing loans for a significant portion of the US housing market, as defined in Title 24 C.F.R.

RMI is the only source with the ability to provide the essential business and technical services in the time needed to mitigate a lapse in service. These business services are uniquely provided to FHA via software that is not owned or hosted by the Government. This software has been modified to support HECM business requirements during the performance of the contract and implementing an alternative solution would not be possible within the current time constraints. This presents distinct challenges and limitations for supporting the HECM insurance program.

Additionally, significant consideration should be given to the data replication and migration effort required to ensure FHA obtains the entirety of data currently housed within the contractor’s system.

Historically, FHA has only received a subset of data for reporting and reconciliation purposes. In the past, this data has never been fully defined or transferred to within HUD’s IT infrastructure. This critical action is needed to ensure a thorough and complete transition to a future alternative solution.

Based on past performance and technical knowledge of the requirement, completing a full data migration and replication effort between HUD and the contractor could take approximately 3-6 months.

The incumbent contractor has the necessary personnel and expertise required to deliver performance and reliability in the time needed to mitigate a lapse in service. No other contractor will be able to provide such quick services, technical and personnel expertise, full knowledge and performance of tasks required and successfully deploy a business service in this timeframe without creating a significant disruption in services.

RMI’s staff has completed the necessary security clearances and their staff is currently “PIVed” qualified and able to assume all required key personnel roles and responsibilities. This is advantageous to the Government since the average time to complete HUD’s PIV security process for employees of a new Contractor can extend for 60-90 days.

The Office of Housing is in the process of procuring new services. It will take approximately three to six months to transition in the new service once an award has been made. During this transition period, continued support for the HECM insurance program will be needed.

(6) A description of efforts made to ensure that offers are solicited from as many potential sources as is practicable, including whether a notice was or will be publicized as required by Subpart 5.2 and, if not, which exception under 5.202 applies.

No efforts were made for this action due to the time constraints and to mitigate a break in service. The Office of Finance & Budget and the Office of Single-Family Housing in collaboration with Housing’s Procurement Management Division (PMD) is in the process of working with CPO in the award of a new contract in FY 2023/2024. Past efforts included the issuance of multiple Sources Sought on

OFFICE OF CHIEF PROCUREMENT OFFICER

Control Number 23-40 www.sam.gov with responses from numerous vendors. It is assumed that future procurement initiatives will utilize a similar process to solicit from as many potential sources as practicable. In addition, a Notice of Intent to Sole Source will be published before award for the purpose of obtaining information from interested firms and their capability to perform the requirement.

(7) A determination by the contracting officer that the anticipated cost to the Government will be fair and reasonable

Prior to the issuance of any contract award, the Contracting Officer will conduct a price analysis to sufficiently determine the overall price represents a fair and reasonable price to meet the Government's needs.

(8) A description of the market research conducted (see Part 10) and the results or a statement of the reason market research was not conducted.

Market research was recently completed to identify capable firms that provide similar business services. The results were as follows:

An SBA search for potential suppliers yielded eight (8) results that could be solicited to provide the services required.

Vendors offering the same or similar services were also compared based upon the GSA Federal Schedule. The comparisons included small and large businesses.

The various market research methods included DSBS, SBA and GSA’s e-Library search tool.

Housing’s Office of Systems and Technology also met with the Office of Small and Disadvantaged Business Utilization and they provided a list of small businesses via a Dynamic Small Business search.

Based on the most recent Market Research conducted there are no known sources other than the incumbent contractor that has the existing capacity to provide service prior to contract expiration on September 29, 2023. Awarding a new contract would result in delays and cause an interruption in services.

(9) Any other facts supporting the use of other than full and open competition, such as:

The Reverse Market Insight Inc contract will expire on September 29, 2023, and has a 120-day transition-out period. Therefore, there is a critical need to obtain an award to RMI to mitigate the potential negative impact of a lapse in service and the loss of data that could occur until a new contract can be awarded and the transition in/out process can be completed. RMI has the necessary tools, processes, and personnel to continue providing the required and critical support services.

RMI’s unique qualification in providing the adequate staffing mix and required services illustrates not only the best value to the Government, but also the ability to maintain the essential technical and personnel expertise to deliver outstanding performance and reliability under this very important contracting effort.

OFFICE OF CHIEF PROCUREMENT OFFICER

Control Number 23-40

(10) A listing of the sources, if any, that expressed, in writing, an interest in the acquisition.

Potential Supplier Information

An SBA search for potential suppliers yielded eight (8) results under the competitive small business set-aside. Below are some examples of potential vendors known sources that could be solicited to provide the service required. Time constraints prevented the issuance of a sources sought notification. Therefore, no direct responses from potential vendors were considered.

Vendor Name Location Point of Contact

Socio-economic Category

Capability

DYNAXYS

UEI#

FFFSL3E5C792

11911 Tech Rd, Silver Spring, MD 20904

Cynthia Mumford; 301- 622-0900

Small business, Woman Owned Small Business

Provides all required services with consistent above average performance ratings. Substantial operations with HUD today.

Pyramid Systems, Inc.

UEI#

E7NQC6R9QG17

Prosperity Ave #700, Fairfax, VA 22031

Elizabeth El- Nattar; 703- 995-0120

Other than Small Business (Large Business)

GSA MAS (U.S.

General Services Administration Multiple Award Schedule)

Provides all required services with consistent above average performance ratings. Substantial operations with HUD today.

Verdi Consulting

UEI#

NJZLTTVX6U76

Leesburg Pike, Vienna, VA 22182

Marty Glantz;

703-584-7780

Small Business, Small Disadvantaged Business, Woman Owned Small Business

GSA MAS

Provides all required services with consistent above average performance ratings. Substantial operations with HUD today.

OFFICE OF CHIEF PROCUREMENT OFFICER

Control Number 23-40

IBIS SOFTWARE

CORPORATION

UEI#

WHLZDE5NNUZ3

CENTRAL

AVE,

ALAMEDA,

CA 94501-

Gerald C Wagner; 510- 217-8775

Small Business Provides the mortgage services today and seems to be capable per public information available.

Trade Street Advisors, LLC

UEI#

VCP1NJ8PGW14

121 W

TRADE ST

STE 3030,

Charlotte, NC 28202-

Nigel Long;

980-859-4296

Small Business, Small Disadvantaged Business

Provides the mortgage services today and seems to be capable per public information available.

SoftOpt Engineering LLC

UEI#

XYLCCCDBBA56

Harrison Road, Studio 1, Santa Fe, NM 87507-

Melissa Patterson- Kling; 562- 439-3634

Small Business, Small Disadvantaged Business, Woman- Owned Small Business

Due to the lack of information publicly available the capability of this vendor is unknown.

(11) A statement of the actions, if any, the agency may take to remove or overcome any barriers to competition before any subsequent acquisition for the supplies or services required.

Currently, the competitive requirement has been solicitated and proposals were due on September 5, 2023. The acquisition strategy for the competitive requirement is a small business set aside task order to be written from an IT GWAC contract vehicle.

OFFICE OF CHIEF PROCUREMENT OFFICER

Control Number 23-40

(12) Technical Certification

See HUD-24012, Part 1, Justification, Section Program Office Official’s Certification.

(13) Contracting officer certification that the justification is accurate and complete to the best of the contracting officer’s knowledge and belief.

See HUD-24012, Part 2, Contracting Officer’s Determination and Certification.