LSJ For Kearney Bridge (RUFO-26-00092)_PAAC Approved_redacted.pdf

Limited Source Justification 41 U.S.C. 152(3) and 40 U.S.C. 501

LSJ No.: FY26-0144

LSJ No.: FY26-0144

Date: _June 8, 2026_____________ PR Number: ___RUFO-26-00092_______

Pursuant to the requirements of the Competition in Contracting Act (CICA) as implemented by the Federal Acquisition Regulation (FAR) 8.401, FAR Class Deviation 25-20 for FAR Part 81, and General Services Acquisition Manual/Regulation (GSAM/R) 538.7104-3(b)(i), “The need is of such unusual urgency that following the procedures would result in unacceptable delays in fulfilling that need ,2”as follows:

1. Agency and Contracting Activity.

The Department of Homeland Security (DHS), Office of Procurement Operations (OPO) prepared this justification for an exception to fair opportunity. DHS, Office of the Chief Financial Officer (OCFO), Office of Financial Management (OFM), Workforce Development Division, and Enterprise Financial Systems (EFS) has a continued requirement 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 DHS Component’s annual reporting activities.

2. Nature and/or Description of the Action being Approved.

Pursuant to RFO FAR 8.401(b), DHS/OPO intends to solicit and award a sole source bridge order to Kearney and Company PC for the procurement of Financial Management and Accounting as well as audit support services. This is a labor Hour (LH) Task Order with an estimated total value of for a seven-month base period and one (1) five-month optional period.

1 FAR Class Deviation 25-20, for FAR Part 8 was issued as part of the evolutionary FAR Overhaul (RFO), which was implemented in response to Executive Order 14275, Restoring Common Sense to Federal Procurement, signed April 15, 2025. Any subsequent citations to FAR Part 8 in this document will be cited as “RFO FAR” for brevity and are referring specifically to FAR Class Deviation 25-20 for FAR Part 8.

2 Class Deviation RFO-2025-FSS-GSAR-538: General Services Administration Acquisition Regulation (GSAR) Class Deviation, Federal Supply Schedule (FSS) Program Ordering Procedures

LSJ No.: FY26-0144

Description of Supplies/Services.

The services covered by this limited-source justification are currently being performed by Kearney & Company, P.C. under Task Order 70RDA225FC0000006. The Contractor shall provide a continuation of technical accounting and financial systems modernization audit support services to the Office of the Chief Financial Officer (OCFO), Office of Financial Management (OFM). The Contractor shall also perform Department Component–related tasks under the oversight of OFM, the Workforce Development Division, and the Enterprise Financial Systems (EFS) office. Support shall include auditing, remediation, expert technical accounting and consulting services; assistance in the preparation and validation of financial management business processes; and support for DHS Components’ annual financial reporting activities.

Specifically, the Contractor shall provide services to:

Ensure 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 Public Accountant (IPA) for the fiscal year ending September 30, 2026, including support for the Annual Financial Report due by November 15, 2026.

Support risk and financial management activities related to the Financial Systems Modernization Solution (FSMS), including external audit support (e.g., U.S. Government Accountability Office (GAO)) and internal assessment, oversight, and maintenance activities.

Mitigate audit, information technology general control (ITGC), and accounting-related risks impacting FSMS and the broader DHS Financial Systems Modernization (FSM) program.

Provide adequate coverage during the transition period to any follow-on contract, as applicable, including quality control/quality assurance (QC/QA), project status reporting, milestone management, and execution briefing support.

Support DHS OCFO’s annual planning process to define the scope of DHS financial management initiatives necessary to sustain a clean financial statement audit opinion, with the objective of achieving a clean internal control audit opinion.

Assist DHS OCFO and DHS Components in preparing the Agency Financial Report (AFR), including audited financial statements and other information required by OMB.

Prepare and review documentation and generate reports for Government review and approval to support compliance with the DHS Financial Accountability Act (FAA), OMB Circulars A-123 and A-136, and other financial reporting requirements identified by management.

3. Identification of Statutory Authority Permitting Other Than Full and Open Competition.

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

LSJ No.: FY26-0144 implemented by GSAM/R 538.7104-3(b)(i), “The need is of such unusual urgency that following the procedures would result in unacceptable delays in fulfilling that need.”

4. Demonstration that the proposed contractor’s unique qualifications or the nature of the acquisition requires use of the authority cited.

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.

70RDA225FC0000006 expires in the middle of several key audit activities to include the Financial Systems Modernization Solution (FSMS) audit readiness activities for the FEMA Financial management system implementation. Multiple government shutdowns in FY2026 (42-day lapse in Q1; 80-day lapse in Q2 delayed the recompete for the follow-on requirement. The Program Office began working to finalize the recompete documentation in summer of FY25, however, the Government shutdown that began in October 2025 disrupted these efforts and delayed completion of the procurement request (PR) package. The initial PR package was subsequently submitted in February 2026, but two subsequent shutdowns in Q2 further impacted the acquisition process and delayed progression of the recompete. The current task order ends on June 23, 2026, and there is insufficient time to conduct a full and open competition, complete transition-in, and achieve operational readiness with a new contractor without causing significant mission impact. The recompete is in process with an anticipated award in November 2026.

The incumbent contractor is currently providing essential support for the DHS-wide financial statement audit for Fiscal Year (FY) 2026. The FY 2026 audit, culminating in issuance of the Agency Financial Report (AFR) by November 15, 2026, is a major, time-sensitive requirement.

Due to shut down-related delays, the Independent Public Accounting (IPA) contract was not awarded until May 2026. The IPA audit work is now expected to commence in June–July 2026, significantly compressing the audit schedule. In this compressed environment, continuity of contractor support is critical. The incumbent possesses detailed, current knowledge of processes, prior-year audit findings, corrective action plans, and supporting documentation. Replacing the incumbent at the onset of the audit would introduce a steep learning curve, increase the risk of delays, incomplete or inaccurate audit support, and potentially jeopardize DHS’s ability to achieve a clean audit opinion

In parallel, FEMA’s Enterprise Financial Systems (EFS) team is in the midst of implementing a new modernized financial system, currently scheduled to go live in Q1 FY 2027. The incumbent contractor has been deeply involved in audit readiness and compliance activities directly tied to this implementation, including development and refinement of the accounting treatment manual, review of control design and documentation, and alignment of business processes to ensure the new system will be compliant and audit-ready at go-live. Introducing a new contractor at this stage would require significant onboarding time, rework, and knowledge transfer; this would materially increase the risk that the system will not be fully compliant and auditable when deployed.

This sole-source bridge action is strictly limited in scope and duration to the minimum period necessary to maintain continuity of services through completion of the FY 2026 audit cycle and critical pre–go-live activities for the new financial system, while the Government completes a

LSJ No.: FY26-0144 competitive acquisition for the long-term requirement. The bridge will not prejudice or preclude full and open competition for the follow-on requirement; rather, it is intended to stabilize operations during an extraordinary period of schedule compression and mitigate significant risk to FEMA’s financial management mission.

5. Determination by the Contracting Officer that the Anticipated Cost to the Government will be Fair and Reasonable.

The Contracting Officer has determined that the anticipated cost to the Government for the proposed task order to Kearney & Company, P.C. for system support technical services will be fair and reasonable and represents the best value to meet the Government’s needs.

This procurement will be conducted in accordance with RFO FAR 8.401(b), utilizing the established Financial Management & Operations (FMO) Support Services BPA for DHS OCFO, OFM, and EFS. DHS/OPO has previously determined that the BPA labor rates are fair and reasonable based on competition at the BPA level and analysis of underlying GSA Schedule pricing. For this bridge action, the Government will request additional discounts from those BPA rates, further enhancing price reasonableness.

Prior to award, the ordering activity will evaluate the contractor’s proposed level of effort and labor mix for the specific tasks to be performed and compare them to the Independent Government Cost Estimate (IGCE). This comparison will include a review of historical usage under the current task order and alignment with the defined scope of work. The combination of pre-competed BPA rates, any additional discounts obtained, and the confirmation that the proposed labor mix and hours are consistent with the IGCE, and historical experience provides a sufficient basis for the Contracting Officer to conclude that the total proposed price is fair and reasonable to the Government.

6. Description of Market Research.

The Program Management Office (PMO), in coordination with the Contracting Officer, conducted updated market research from May 4–13, 2026. This research included a review of the existing Financial Management & Operations (FMO) Support Services BPA, other DHS strategic sourcing vehicles, and available small business offerings to determine whether alternative sources could meet the Government’s continuing need for accounting and financial systems modernization audit support. The review focused on vendors’ capabilities to provide auditing, remediation, technical accounting and consulting services, and support for financial management business processes and DHS Components’ annual reporting activities.

The PMO also analyzed historical orders under Task Order No. 70RDA225FC0000006 to assess the actual level of effort, labor mix, and contractor performance, and compared these data to the Independent Government Cost Estimate (IGCE). The market research concluded that, due to multiple FY 2026 government shutdowns and resulting delays to the competitive follow-on acquisition, there is insufficient time to conduct a new competition, transition to another contractor, and achieve operational readiness before the current task order expires on June 23,