JA - ATCH 1 - Justifciation for Sole Source - FAR 13.5-Moody's Subscription Licenses 9-26-23-Final_Redacted.pdf

JA No. 23-47

86614623Q00013 – Moody’s Apartment Market Data Subscription

RCS-R-2023-00116

JUSTIFICATION

FOR SOLE SOURCE

IAW FAR 13.501(a)

86614623Q00013

Moody’s Apartment Market Data Subscription

1. REQUIRING AGENCY: U.S. Department of Housing and Urban Development

Office of the Chief Procurement Officer

307 W. 7th Street, Suite 1000

Fort Worth, TX 76102

PRISM Requisition Number: RCS-R-2023-00116

2. NATURE/DESCRIPTION OF ACTION BEING APPROVED: HUD will award a sole source contract to Moody’s Analytics, Inc. to provide subscription licenses of apartment market data for up to 50 users. This award is issued under Federal Acquisition Regulation (FAR) section

13.501(a)(1)(ii). Due to the unique and highly specialized nature of the requirement, only the sources identified above are capable of providing these services at the level of quality required by the government.

NAICS Code: 519290 – Web Search Portals and All Other Information Services

PSC Code: DA10 – IT and Telecom – Business Application/Application Development Software as a Service

Background

The Department of Housing and Urban Development (HUD) insures multifamily rental projects worth billions of dollars each year. In doing so, it evaluates the market absorption potential for these projects and how they relate to existing projects in the market. HUD has two objectives.

One is to avoid financing projects in markets where it is anticipated there will be an excess supply of rental units by the time the project is completed, thereby reducing the risk of default for the proposed project. The other is to avoid increasing vacancy levels above desired levels in the market to reduce the risk to financial viability of existing rental projects, some of whose mortgages HUD may have insured.

Most of HUD’s multifamily mortgage business is concentrated in metropolitan areas, especially large, fast-growing areas. Detailed information on the location, type, rents, and vacancy rates of existing and newly developed multifamily rental projects is highly valuable in estimating the impacts and potential absorption of rental projects applying for HUD mortgage insurance or subsidy assistance. A limited amount of rental vacancy rate data is available from the Bureau of the Census. This information, generally updated to the previous quarter or month, is collected in greater detail for multifamily rental projects by a limited number of firms that sell it to interested parties in a standardized format. HUD is interested in purchasing such data to assist it in carrying out its market analysis functions.

This procurement was previously procured through a subscription agent that was limited to 12 months as the individual publishers would not allow for option year pricing. This new requirement that directly contracts with the publisher will provide for a 12-month base period and four 12-month options.

3. DESCRIPTION OF SERVICES REQUIRED TO MEET AGENCY’S NEEDS

(INCLUDING ESTIMATED VALUE):

HUD has a requirement for subscription licenses from a national provider of apartment market data. The Subscription licenses need to include access to apartment market data through an online world-wide-web-based interface and available 24 hours a day, with the exception of necessary periods for data updating/reloading to include system maintenance. Data must be available by metropolitan statistical areas (MSAs), and in submarkets within MSAs, when applicable. Data should be available for overall apartment market conditions, and in relevant markets, for college student housing, senior housing, and affordable rental housing markets. Data must include historic trends going back as far as practicable, and in all cases data must be available at least as old as 2010. Data should be available in monthly and quarterly increments.

Data must include average asking rents, vacancy rates, concessions offered, and include estimates of units under construction or in planning, commonly referred to as “pipeline” reports.

HUD will require access to the online database for a maximum of 50 users. The subscription licenses vendor will need to make online training available for HUD staff as needed.

The subscription licenses will be utilized by HUD staff in monitoring apartment market conditions throughout the United States. EMAD is responsible for maintaining current information on housing needs, market conditions, and existing programs, as well as conducting research on priority housing and community development issues, and is charged with updating the Secretary of HUD and the Congress on such conditions. The data collected through the subscription licenses allows EMAD staff to make recommendations on applications for insurance for multifamily development proposals submitted to the department.

The Contractor shall provide subscription licenses to gain access to a database that supports the needs of multiple HUD staff engaged in multifamily underwriting and housing market analysis.

The contractor shall provide a database which is current, complete, and accurate for general and detailed data requirements.

The government estimates the value of this acquisition to be for a 12-month base period of performance and four 12-month option years.

4. IDENTIFICATION OF STATUTORY AUTHORITY PERMITTING OTHER THAN

FULL AND OPEN COMPETITION:

FAR 13.501(a) Simplified Procedures for Certain Commercial Items - 41 U.S.C. 1901- Sole

Source (including brand name) Acquisitions.

5. DEMONSTRATION THAT PROPOSED CONTRACTOR’S UNIQUE

QUALIFICATIONS OR NATURE OF THE ACQUISITION REQUIRES USE OF

AUTHORITY CITED:

This is a new requirement that was changed from a previously procured requirement. PD&R has procured apartment data for many years. The data was procured through the use of a single 12 month contract where a third party vendor served as the liaison between EMAD and multiple data publishers/providers. Currently, the data is provided to the third party vendor from a small number of regional data providers, and nationally from three national data providers: RealPage, Inc.; ALN Data Systems; and Moody’s Analytics. These three national firms all provide roughly similar data and licenses, but they differ from each other in important ways, including geographic coverage. The data subscription from Moody’s provides the following the other two national vendors do not:

a. Delineates submarkets by natural, economic, and manmade boundaries.

b. Forecast data is 10 years.

c. Minimum number of units for sample universe: Usually 40, but as low as 20 in

California and Arizona.

d. Typical size of property surveyed: There is no typical size.

e. Users may search for all properties anywhere in the 50 states, but the survey work is directed at the 275 count of top metropolitan areas based on population.

f. Universe includes affordable rental properties.

g. Regional analysis is available for 5 geographies as defined by Reis.

h. Example: Charlottesville MSA: Moody’s-Reis: report the 2Q23 vacancy rate at

4.3% and the average asking rent as $1,578. This is out of 8,043 units. REIS includes Harrisonburg in its definition of Charlottesville, whereas ALN and Real

Page do not. As a comparison with ALN, the Charlottesville MSA has a current vacancy rate of 6.0%. This is out of 13,542 units. ALN does not report asking rent. As a comparison with Real Page, the Charlottesville MSA has the lowest number of units surveyed in this market at 6,691. Asking rent for 2Q23 was

$1,743 and the vacancy rate was 3.1%.

This requirement involves the following subscription and the respective publisher:

Name Publisher

Reis Rental Market Data Moody’s Analytics/Reis, Inc.

The national publisher of apartment market data listed above fulfils the Government's requirements.

The specific minimum requirements for Moody’s are as follows:

Subscription: Publisher

Moody’s/Reis Rental Market Data (Online Edition, Moody’s/Reis, Inc.

up to 45 users)

Minimum Need: Detailed occupancy (historical and current occupancy rate data), and rent rate (historical and current rent amounts being paid by occupants) for market areas across the country and national statistics. The ability to retrieve bulk data downloads for each market area for which vendor has data, in

Excel or other database format to facilitate large data transfers. Data, where available, on the pipeline of units/developments in planning or under construction. A table or file that defines market area geographic boundaries used by the vendor, commonly referred to as "Shape File," and notification if those boundaries change. Include two online training sessions, 30 to 60 minutes long each, to train EMAD staff in the database use and interface, to be scheduled within 60 days of the contract beginning.

6. DESCRIPTION OF EFFORTS MADE TO ENSURE THAT OFFERS ARE

SOLICITED FROM AS MANY POTENTIAL SOURCES AS 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:

One Notice of Intent (NOI) to Sole Source was posted to SAM.gov on 24 April 2023 with no responses received.

7. DETERMINATION BY THE CONTRACTING OFFICER THAT THE

ANTICIPATED COST TO THE GOVERNMENT WILL BE FAIR AND REASONABLE:

The Contracting Officer will ensure that the prices received are deemed fair and reasonable in accordance with FAR 13.106-3(a)(2). It is anticipated that the government will receive fair and reasonable prices when compared to the prices offered to the contractor’s commercial and noncommercial customers.

8. DESCRIPTION OF MARKET RESEARCH EFFORTS CONDUCTED AND THE

RESULTS OR A STATEMENT OF THE REASON MARKET RESEARCH WAS NOT

CONDUCTED:

03-7-23 -The Contracting Officer’s Representative (COR) submitted an initial List of subscription publishers that PD&R identified filled their need.

04-24-23 – CPO published an NOI to sole source on SAM.gov and received zero responses

(NAICS 513120 – Periodical Publishers)

04-26-23 – After the NOI was published and zero vendors responded, the COR and OCPO concluded with the determination to award sole source contracts directly to the publishers identified that filled PD&R’s subscription needs.

04-25-23 – CPO sent a Request for Information email to publishers to verify their ability and avenues they contract with the Government. The results of those responses are as follows:

Publisher RFI Response

Moody’s

Analytics/Reis, Inc.

Currently contracts with federal government under

UEI J3ESM7FWLTK3

9. ANY OTHER FACTS SUPPORTING THE USE OF OTHER THAN FULL AND

OPEN COMPETITION: (i) Explanation of why technical data packages, specifications, engineering descriptions, statements of work, or purchase descriptions suitable for full and open competition have not been developed or are not available. (ii) When 6.302-1 is cited for follow-on acquisitions as described in 6.302-

1(a)(2)(ii), an estimate of the cost to the Government that would be duplicated and how the estimate was derived.

(iii) When 6.302-2 is cited, data, estimated cost, or other rationale as to the extent and nature of the harm to the

Government.

There are no other facts other than the facts stated in paragraphs 5 – 8 above.

10. LISTING OF THE SOURCES, IF ANY, THAT EXPRESSED, IN WRITING, AN

INTEREST IN THE ACQUISITION:

N/A

11. STATEMENT OF ACTIONS TO REMOVE OR OVERCOME ANY BARRIERS TO

COMPETITION BEFORE ANY SUBSEQUENT ACQUISITIONS:

The Office of the Chief Procurement Officer (OCPO) will work closely with PD&R to monitor the commercial market for new sources that become available to provide subscription agent services.

12. CONTRACTING OFFICERS CERTIFICATION:

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

Prepared/Approved By:

Cathy J. Baker

Contracting Officer h19627 Cathy Baker