Hermits Peak - JEFO - 70FB8023F00000034 CO Signed.docx

U.S. Department of Homeland Security Federal Emergency Management Agency (FEMA)

JUSTIFICATION FOR EXCEPTION TO FAIR OPPORTUNITY PA-TAC IV IDIQ 70FB8018D00000003

FAR Subpart 16.505 (b)(2)(ii)(B) Orders exceeding the simplified acquisition threshold. As a minimum, each justification shall include the following information and be approved In accordance with the FAR Subpart 16.505 (b)(2)(ii)(B):

1. Agency and Contracting Activity.

The U.S. Department of Homeland Security, Federal Emergency Management Agency (FEMA), Office of the Chief Component Procurement Officer.

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

a) Nature of action: FEMA intends to modify the existing task order under the PA-TAC IV IDIQ, 70FB8018D00000003 - 70FB8023F00000034, for the provision of increasing the number of claims reviewers supporting the Hermit’s Peak/Calf Canyon Claims Office under the task order’s Option Period 1, utilizing the unliquidated funding from the task order’s Base Period.

b) Name and address of the contractor: CH2M HILL - CDM PA-TAC Recovery Services (CCPRS), 9191 S Jamaica St., Englewood, CO 80112

c) Contract type: Time and Material (T&M) and Cost Reimbursable (CR) CLIN Task Order.

d) Estimated value of proposed action: No change to contract ceiling but moving the estimated remaining balance from Base Year to Option Period 1 in the estimated sum of $14 million.

e) Type of funding: Special Appropriation under the Hermit’s Peak Fire Assistance Act.

f) Year of funding: No-year funding.

g) Solicitation number: 70FB8023R00000005.

h) Background information about the requirement: The Hermit’s Peak Fire Assistance Act directs FEMA to compensate victims of the prescribed burn that resulted in the merged Hermit’s Peak and Calf Canyon Fires in New Mexico for losses and damages stemming from the fire on an aggressive, statutorily fixed deadline. The Hermit’s Peak/Calf Canyon fires resulted in 325,340 acres burned and 900 homes/structures destroyed. The Program Office anticipated processing most of the claims in the base year of the contract, but due to the time associated with standup of the program and roll out of the policy and procedures, the majority of Hermit’s Peak workload has shifted to Option Year 1.

Justification for Exception to Fair Opportunity Exceeding the SAT pursuant to FAR 16.505(b)(2)(ii)(B)

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

The requirement is to provide and increased number of claims reviewers to assist FEMA in providing expeditious consideration and settlement of claims for the Hermit’s Peak/Calf Canyon Fire Claims Office. Due to lower-than-anticipated claims-related work volume at the beginning of the Base Period, the contractor initially deployed a staff sufficient to meet the workload.

Despite a significant increase in workload during the latter part of the year, there remains an estimated surplus of $14 million in unliquidated funding under the Time and Materials (T&M) Contract Line-Item Number (CLIN) designated for claims reviewers. Option Period 1, valued at $18 million, encompasses CLINs for Management & Administrative (M&A), Labor, Travel, and Miscellaneous expenses. The Labor CLIN, inclusive of claims reviewers, has a Not-To-Exceed (NTE) value of $15.5 million.

Recognizing the projected rise in claims-related activities, The Hermit’s Peak/Calf Canyon Claims Office seeks additional Claims Reviewers for Option Period 1. To address this need, the Claims Office proposes to reallocate approximately $14 million from the base period to the option period 1. Additionally, there is a request to augment the option period 1 funding by an additional $14 million to accommodate the hiring of 75-100 extra claims reviewers required to efficiently process the anticipated surge in claim submissions from the months of March – June 2024.

4. An identification of the exception to fair opportunity and the supporting rationale, including a demonstration that the proposed contractor’s unique qualifications or the nature of the acquisition requires use of the exception cited.

In accordance with FAR 16.505(b)(2)(i)(A), the agency need for the supplies or services is so urgent that providing a fair opportunity would result in unacceptable delays. Beyond the statutory timeframe requirements set forth by Congress, the Hermit’s Peak/Calf Canyon Claims Office is reimbursing compensable damage to victims, including but not limited to, those that continue to present life sustaining impacts on claimants, including providing food, shelter, medication, alternate living arrangements, and heating.

5. A determination by the contracting officer that the anticipated cost to the Government will be fair and reasonable.

It is estimated that the cost of this acquisition will be fair and reasonable because cost/price is consistent with rates provided in the base contract that were already determined to be fair and reasonable upon award. Additional actions anticipated to ensure reasonableness of the price will be accomplished with the procedures and criteria contained in the Federal Acquisition Regulation under Parts 30 – Cost Accounting Standards, and 31 – Contract Cost Principles and Procedures, and Subpart 15.4 – Contract Pricing, as appropriate. The contracting officer has also determined that the anticipated prices are fair and reasonable based on market research, including commercial pricelists and prior acquisition history.

6. Any other facts supporting the justification.

Not Applicable

7. A statement of the actions, if any, the agency may take to remove or overcome any barriers that led to the exception to fair opportunity before any subsequent acquisition for the supplies or services is made.

The agency will evaluate the results from March through June and may consider additional competition based on workload and performance evaluation.

8. FEMA intends to post this requirement on SAM.gov pursuant to FAR 16.505(b)(2)(ii)(D).

9. Evidence that any supporting data that is the responsibility of technical or requirements personnel and which form a basis for the justification have been certified as complete and accurate by the technical or requirements personnel.

The Hermit’s Peak/Calf Canyon fires resulted in extensive damage and a high volume of claims, requiring urgent response. The Claims Office anticipates the need to handle 1,874 Notices of Loss (NOL) during February, March, and April of this year. On average, each NOL comprises

1.9 Proofs of Loss (POL) work packets, requiring individual review, resulting in a total of just over 3,500 POLs. This workload is distributed, averaging 1,100 per month for February, March, and April. The challenge lies in the time required to compete a new contract compared to the timeframe before a significant surge in workload is expected. The Claims Office is currently facing a backlog, and if the opportunity to add claims reviewers in early to mid-February passes, it would potentially worsen the existing backlog. Staffing deficiencies have created a condition that results in the inability to process claims within the mandated statutory timeline of providing a letter of determination within 180 days from receipt of notice of loss. Until this risk is mitigated, we will continue to invite additional litigation. The fact that staffing deficiencies have created a condition that results in the ability to process claims within the mandated statutory timeline of providing a letter of determination within 180 days from when the notice of loss was acknowledged. Until this risk is mitigated, the program will continue to invite additional litigation.

10. Technical/Requirements Personnel Certification.

Pursuant to FAR 16.505(b)(2)(ii)(B)(9), I certify that this requirement meets the Government’s minimum need and that the supporting data, which form a basis for the justification, are accurate and complete.

BRANDON D MCDONALD

Digitally signed by BRANDON D MCDONALD Date: 2024.03.28 14:07:06 -06'00'

Technical Representative/COR Date

11. Contracting Officer Certification and Approval

Pursuant to FAR 16.505(b)(2)(ii)(B)(8), I certify that this justification is accurate and complete to the best of my knowledge and belief and hereby determine that the circumstances for an exception to fair opportunity exist:

Digitally signed by ANTHONY J COLLINS JR Date: 2024.03.28 15:40:34 -05'00'ANTHONY J COLLINS JR

Contracting Officer Date

12. Approval.

Over $750,000 but not exceeding $15 million Date Component Competition Advocate