I_4 JOFOC_epayments IRS_Redacted.pdf

IRS Form (Rev. 6/21)

IRSAP 1006.3

10. JUSTIFICATION

(add pages if needed)

DEMONSTRATION THAT THE PROPOSED CONTRACTOR�S UNIQUE QUALIFICATIONS OR

THE NATURE OF THE ACQUISITION REQUIRES USE OF THE AUTHORITY CITED.

The Government issued solicitation no. 2032H5-19-R-00005 and awarded two no-cost contract(s) for e-payment services in June 2021. However, due to the protests filed, those awards had to be cancelled. The Government is in the process of recompeting these requirements. The re-compete solicitation was issued on Sam.gov on May 13, 2022. Given the timeline of the acquisition process, the awards are not expected to occur in time to cover the remaining 2022 filing season between July 1, 2022, through December 1, 2022, and filing season 2023. As a result, the IRS needs multiple short-term bridge contracts to prevent a lapse in these critical electronic tax payment services.

It is anticipated that even if the current solicitation is awarded by September 2022, any new contractor�s credit card processing payment system must pass the testing and evaluation phase before commencing services of collecting and processing card transactions. The process for testing and evaluation phase occurs between May to December of each calendar year. It is a fixed schedule that would significantly and unreasonably burden the government and external stakeholder to adjust to accomplish the testing by Science Applications International Corp (SAIC), an Independent Verification and Validation (IV&V), and an onsite (s) assessment review by IRS Cyber-Security Team. Further, the system and physical location(s) must be compliant with all IRS applicable directives, guidelines, and security and functional requirements and all employees must successfully pass the background verification security requirements. No other contractors can provide these services without having undergone extensive required Independent Verification & Validation (IV&V) and IRS Cybersecurity testing to ensure that the IRS e-Payment Credit Card Program requirements are met without delay for the upcoming filing season. This testing process takes up to eight (8) months. It is essential that the IRS review and approve the vendor�s functional and security documentation and applications prior to the upcoming filing season beginning January 2024. Contractors also need to complete testing and certification through the Treasury Financial Agent, Bank of America. A new vendor cannot provide services until January 2024 because of the required testing process.

Only the existing vendors can provide uninterrupted support that will ensure the U.S. taxpayers have access to the approved and required web, phone, mobile and tablet applications support.

The three current contractors collectively possess 26 years of experience with Federal electronic tax payment services and all three contractors are currently performing at satisfactory level. The proposed contractors currently already possess the IRS specific and relevant knowledge to immediately support the services specifically required for this acquisition and have successfully passed the IV&V and Cybersecurity testing and are currently collecting payments for the 2022 filing season. Marketing for filing season 2022 has already been submitted through IRS.gov/e-pay and IRS tax products and materials. The current card processors have already submitted their Marketing Plan to e-Pay and have begun marketing efforts for 2022. Also, their e-Pay information is already available via the IRS.gov website and cannot be changed during the filing season due to the IRS strict policies and procedures of the IV&V testing process.

Interruption of the e-payment services will critically impact the IRS� ability to electronically

IRSAP 1006.3

collect tax revenue from American taxpayers. The IRS� existence is based on the collection of tax obligations, as well as the application of tax law with integrity and fairness to all.

Specifically, it would result in a decrease in payment compliance, a significant increase in paper handling, processing and storage, and an increase in misapplied payments. The program offers guaranteed funds and expedited funds to Treasury�s General Account. As the number of card payments increase, paper payment processing and related cost decreases.

Without the Credit Card Program, the IRS loses the opportunity to remove over 5 million paper checks and related vouchers out of the lockbox and service center inventories. As of February 2022, the IRS is in receipt of 1,035,000 payments totaling over $1.2 billion via credit and debit card payments. IRS projects that over 7.3 million card payments will be made by web, phone, mobile and tablet for 2023. If IRS is unable to accept card payments submitted by taxpayers beyond June 11, 2022, this will have an adverse impact on actual receipts and the IRS goal to increase the volume of payments received electronically. Further, the continuance of the electronic tax payment services by means of the three contractors has already been communicated to the public through IRS.gov/e-pay and IRS tax products and materials. They have been informed of the availability of these services for the 2022 filing season and reasonably expected the services to continue to be available for the 2023 filing season.

Discontinuation/interruption of service would result in taxpayer frustration and confusion. The risk is extremely high that taxpayers would not be aware of such a work stoppage. This confusion could result in late payment penalties and interest and impact to the Government�s reputation. Ultimately, it would adversely affect the U.S. taxpayer�s ability to satisfy their tax obligations through this electronic medium, possibly resulting in taxpayer complaints to Congressional Representatives, which in turn would generate Congressional inquiries.

B. DESCRIBE THE EFFORTS TAKEN TO ENSURE OFFERS WERE SOLICITED FROM AS MANY

POTENTIAL SOURCES AS IS PRACTICABLE, INCLUDING WHETHER A NOTICE WAS OR

WILL BE PUBLISHED AS REQUIRED BY FAR SUBPART 5.2 AND, IF NOT, WHICH

EXCEPTION UNDER FAR 5.202 APPLIES.

The initial procurement for these services was the result of competition. However, due to the circumstances as described in Section 10 of this document, the Government is unable to solicit other sources as this resultant contract action would serve as a stop gap measure while the re-competitive efforts are in progress. This notice will be published to Sam.gov.

C. DETERMINATION THAT THE ANTICIPATED COST TO THE GOVERNMENT WILL BE FAIR

AND REASONABLE.

These will be no-cost contracts. The contractor is paid through fixed rate convenience fees charged to the taxpayer when they use the payment service (see Treasury Regulation 301-6311-2).

The cost estimates provided within this JOFOC represent total estimated fee received by the contractors from the transaction fees collected from the taxpayers to use the services based on historical information. Based on the strict policies and procedures for the e-payment credit card program, it is expected the rates for the credit card and debit card fees will remain the same as the current 2022 filing season rates. Any increase for the optional periods will be evaluated to ensure the rate increase is fully supported and justified.

IRSAP 1006.3

D. DESCRIBE THE MARKET RESEARCH THAT WAS CONDUCTED AND THE RESULTS OF

THAT SURVEY. IF ACTIONS WERE TAKEN BY PROCUREMENT PERSONNEL TO SATISFY

THIS REQUIREMENT (SUCH AS A GPE SOURCES SOUGHT SYNOPSIS), PLEASE SPECIFY.

Market Research for this action was limited to verifying that the current vendors are still viable sources for performing these services.

E. DESCRIBE ANY OTHER FACTS TO SUPPORT THE JOFOC.

The other facts that support this justification are the Independent Government Cost Estimate (IGCE), Performance Work Statement, and Market Research Summary Report.

F. LIST SOURCES, IF ANY, THAT EXPRESSED, IN WRITING, AN INTEREST IN THE

ACQUISITION.

G. LIST THE ACTIONS THE BUREAU WILL TAKE TO REMOVE OR OVERCOME ANY BARRIERS

TO PROMOTE THE COMPETITION ON ANY SUBSEQUENT ACQUISITIONS FOR SIMILAR

SUPPLIES OR SERVICES.

A Sources Sought Notice (2032H8-22-N-00001) was published on SAM.gov in January 2022 for the recompete. The notice resulted in responses from one (1) small business, eleven (11) large businesses, and two (2) vendors not registered in SAM. As a result, a new solicitation for the e-payment requirement was posted on SAM.gov on May 13, 2022, as a full and open acquisition.

H. STATEMENT THAT REQUIREMENT DOES NOT RESULT FROM A LACK OF PLANNING OR

THE EXPIRATION OF FUNDS.

As a result of the protests filed, it was necessary for the Government to reassess its requirements and reissue a new solicitation. In addition, due to significant programmatic staffing shortages, the timing of completing the reassessment process was heavily impacted. As such, this action is not the result of lack of planning or the expiration of funds.