J_A_22-19_Redacted.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, Vance T. Morris Associate General Deputy Assistant Secretary

Maria Martinez 03/28/2022

ANTHONY REEVES Digitally signed by ANTHONY REEVES Date: 2022.03.28 16:39:19 -04'00'

Digitally signed by: MARIA MARTINEZ

DN: CN = MARIA MARTINEZ C = US O = U.S.

Government OU = Department of Housing and Urban Development, Office of the Chief Procurement Officer Date: 2022.03.28 17:15:49 -04'00'

MARIA MARTINEZ

J&A Log Number #22-19

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)

NicoleJackson Alternate Competition Advocate

NICOLE JACKSON Digitally signed by NICOLE JACKSON Date: 2022.03.29 09:22:07 -04'00'

U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

WASHINGTON, DC 20410-3000

OFFICE OF CHIEF PROCUREMENT OFFICER

Exhibit 1

J&A Log # 22-19

JUSTIFICATION FOR OTHER THAN FULL & OPEN COMPETITION

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."

Agency: Department of Housing and Urban Development (HUD) 451 7th Street S.W., Room 5256 Washington, DC 20410

Contracting Activity: Office of Chief Procurement Officer (OCPO), Headquarters

Program Office: Office of Finance and Budget and the Office of Single-Family Housing

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

A sole source contract is being requested to obtain uninterrupted Home Equity Conversion Mortgage Business Service Provider (HECM-BSP) services for the Office of Finance & Budget and the Office of Single-Family Housing.

Method of Contracting: New contract award (Bridge contract) Type of Contract: Firm Fixed-Price Type of Funds: 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).

HUD’s Office of Finance and Budget and the Office of Single-Family Housing requires HECM BSP services for its HECM loan portfolio and insurance program to ensure continuity of services. 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; ready access to data for financial, budgetary, user-generated reporting, and business intelligence and management reporting tools; automated reconciliation support between loan balances and posted transactions between its HECM business services and FHA’s business partners automated and/or manual HECM records; and 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.

OFFICE OF CHIEF PROCUREMENT OFFICER

Providing HECM business services Help Desk Support services and Training on HECM business services

Estimated Total Dollar Value:

Period of Performance: March 30, 2022 through March 29, 2023 (12 months)

(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 incumbent contractor, Reverse Market Insight Inc. (RMI) located at 34232 Pacific Coast Hwy, #D4, Dana Point, CA 92629-3856 is the only responsible source that can satisfy the Department’s requirement within the established timeframe and with the specialized knowledge.

RMI currently provides the required HECM BSP services through their HECM BSP contract with HUD. The contract with RMI expires on March 29, 2022. The HECM BSP 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.

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.

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 Subject Matter Expert (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 Increased demand on HUD staff to address industry and servicer requests

OFFICE OF CHIEF PROCUREMENT OFFICER

No ability to collect on FHA cases No ability to disburse 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 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 Inability to process user application access requests for the Service Module, Accounting

Module or SFTP server (1,800 users)

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

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 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 current 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 the timeframe needed without creating a significant disruption in services.

The Office of Housing is currently working on the recompete acquisition for HECM BSP services. It will take approximately three to six months to transition in the new service once a contract award has been executed. During this transition period, continued support for the HECM insurance program is essential.

OFFICE OF CHIEF PROCUREMENT OFFICER

(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.

The requirement for this Bridge action was not solicited. RMI is the current contractor and for this proposed Bridge action, is the only responsible source capable of providing the required services in the timeframe required for continuity of service of HECM BSP which is a critical support service for HUD’s Office of Finance & Budget and the Office of Single-Family Housing.

A notice will be published as required by Subpart 5.2.

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

Prior to the execution of a Bridge 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 for the recompete, competitive HECM BSP acquisition 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.

However, based on the most recent Market Research conducted there are no known sources other than the current contractor that has the existing capacity to provide services upon expiration of the current contract on March 29, 2022. Awarding a new contract to a new vendor at this time would result in delays and cause an interruption in services.

OFFICE OF CHIEF PROCUREMENT OFFICER

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

The current HECM BSP contract expires on March 29, 2022 and has a 90-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.

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

No sources have expressed, in writing, an interest in this sole source acquisition.

(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.

The Office of Finance & Budget and the Office of Single-Family Housing in collaboration with Housing’s Procurement Management Division (PMD) are currently working with OCPO on the re-compete competitive acquisition for HECM BSP services. The follow-on acquisition will be a competitive acquisition allowing proposal submissions from as many potential sources as practicable. A new contract award is anticipated in FY 2022/2023.

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

The Contracting Officer’s certification that the justification is accurate and complete to the best of the Contracting Officer’s knowledge and belief is evident by the Contracting Officer’s signature at Part 2, Contracting Officer Review and Certification on the Form HUD-24012.