JA LIPAS II - Final_Redacted.pdf

Life Insurance Policy Administration Solution Control Number VA-23-00022178

JUSTIFICATION

FOR AN EXCEPTION TO FAIR OPPORTUNITY

1. Contracting Activity: Department of Veterans Affairs (VA)

Office of Procurement, Acquisition, and Logistics Technology Acquisition Center 23 Christopher Way Eatontown, NJ 07724

2. Description of Action: The proposed action is for a sole source Task Order (TO), issued under the Transformation Twenty-One Total Technology Next Generation Contract (T4NG) VA118-16-D-1003 with Government CIO, LLC (referred to herein as GCIO), 101 Constitution Ave, NW Suite 101 West, Washington, DC 20001. The proposed action is for a 12-month base period, with two 12-month option periods and three optional tasks for the renewal of brand name EXL LifePro Commercial-off-the- Shelf (COTS) software and associated configuration services. In addition, VA requires support services for Life Insurance Policy Administration Solution (LIPAS).

3. Description of the Supplies or Services: LIPAS was built by a suite of software including EXL LifePro, LifePro Digital Suite which requires renewal and maintenance of each of the EXL licenses each year to ensure seamless support. VA Office of Information & Technology, Software Product Management Office, Benefits and Memorials Services Portfolio currently use LIPAS to maintain Veteran life insurance policies, perform policy maintenance actions, and generate letters, emails, and Short Message/Messaging Service Text notifications to communicate with customers about their policies. VA recently completed a multi-year conversion from its legacy mainframe and client server technologies to the LIPAS Solution. The environments are presently hosted in the VA’s enterprise cloud hosting environments. The initial LIPAS system has been implemented, with all data and policies converted from the legacy mainframe to LIPAS. There is, however, a great deal of work that still needs to be done to modernize the existing LIPAS system to further automate business processes involving repetitive manual tasks.

In order to continue providing Veterans with the world-class service they deserve, it is crucial that the newly implemented LIPAS system is sustained and further enhanced and configured to integrate with VA’s existing and planned web self-service features on VA.gov, to automate business processes to improve processing time and reduce employee manual actions, and to modernize interfaces with other VA enterprise financial management and document management systems.

The support services include project management, application sustainment, product compliance, training, business process and automation support, and helpdesk to meet all specified service level agreements, producing training materials and providing train the trainer training, and manage and execute all batch processes and scheduled tasks required to maintain and upgrade the current LIPAS system.

The period of performance for this proposed action shall consist of a 12-month base period, with two 12-month option periods and three optional tasks to provide additional LIPAS integration and enhancement services to assist in managing and integrating a diverse range of software and services. For example, LIPAS may need to implement new data exchange requirements in response to new or updated integration partners, ornew business requirements. In addition, the optional tasks can cover any enhancements to LIPAS that will need to be developed to meet VA’s business process automation requirements. The total estimated value of the proposed action is inclusive of all option periods and optional tasks.

4. Statutory Authority: Pursuant to Federal Acquisition Regulation (FAR) 16.505(a)(4), the following sole source requirement is being justified and approved as an exception to fair opportunity under the statutory authority of Section 41 U.S.C. 4106(c)(2) as implemented by FAR 16.505(b)(2)(i)(B), entitled “Only one awardee is capable of providing the supplies or services required at the level of quality required because the supplies or services ordered are unique or highly specialized.”

5. Rationale Supporting Use of Authority Cited Above:

The original TO was awarded to GCIO as a result of a competitive action under the T4NG Indefinite Delivery Indefinite Quantity contract. In the initial TO, GCIO developed and implemented the Minimum Viable Product of the LIPAS Solution utilizing the EXL brand LifePro solution’s native workflow within VA and adapted the Insurance Service business processes to that workflow. No other brand name software, other than the EXL LifePro, can meet all of VA's technical requirements or all of VA’s interoperability and compatibility requirements without a significant redesign and redevelopment of LIPAS.

Extensive effort was completed over a four-year period to modernize and migrate VA’s Mainframe Insurance System to the Cloud Infrastructure. Significant data manipulation and business rule management was conducted over this period in order to successfully migrate hundreds of thousands of policies and data from the Legacy IBM Mainframe to LIPAS. There are also VA managed systems that were configured to work with the LIPAS Solution and EXL brand name software during this period. Some of these systems include Electronic Insurance, the Insurance public facing website, Insurance Payment System, and the Veterans Insurance Claims Tracking and Response System.

The LIPAS system has been heavily customized to work with these VA systems which took extensive configuration, redesign and redevelopment efforts.

EXL LifePro has been customized for VA with regular maintenance releases to meet requirements that are unique to VA. Examples of this customization include, enabling Veterans Benefit Administration (VBA) Insurance to use the system in the Classic desktop version or Web User Interface version as well as include functionality and customizations for the congressionally managed Veterans Affairs Life Insurance (VALife) program and Veterans Mortgage Life Insurance (VMLI). These enhancements allow the Insurance Service to leverage LIPAS to support Veterans that meet the eligibility requirements for VALife to be automatically and instantly approved for VMLI to be paid directly to the bank or other lender that holds a Veterans mortgage and deploy Service-Disabled Veterans Life Insurance functionality, which enabled VBA Insurance to offer new policies in LifePro.

Since the existing LIPAS solution comprised of EXL LifePro software has already been customized as part of the competitive award, custom interfaces that currently exist would require re-development and integration if VA were to utilize any alternative software solution. Moreover, EXL owns all the rights to the intellectual property/source code for the underlying software that LIPAS is built upon. No other software, other than the EXL LifePro software, can meet all of VA's requirements without a significant redesign and redevelopment of LIPAS.

GCIO has an exclusive teaming agreement with EXL for LIPAS to support VA, VBA Insurance requirements. EXL LifePro retains limited rights in the technical data and restricted rights in the COTS software that powers LIPAS. The intellectual property rights for EXL LifePro are unique and highly specialized services needed for the continued development and sustainment for the follow-on effort; thus, making GCIO and EXL the only source capable of providing the required services. Without access to the intellectual property rights of the EXL LifePro software, no other source could provide the renewal of LifePro software and associated development services related to EXL LifePro. Access to the intellectual property rights for the LifePro software is also required to ensure all services provided are properly configured. Only GCIO can provide the support services for the LIPAS system as GCIO is the only vendor authorized to utilize the EXL LifePro data.

GCIO is the only source that is permitted to work with the underlying EXL software code, which is necessary for the development and sustainment of LIPAS and integration of EXL LifePro. This includes development for customized business rules and other VA specified abilities. Specifically, a redesign of these features and functionality would result in redevelopment and reconfiguration of thousands of lines of code, redevelopment of existing unique functionality, remapping of extensive business rules to ensure data integrity and accurate alignment of user supplied content to Veteran profile pages. Additionally, GCIO has been responsible for the underpinning of conversion and migration from the mainframe to the cloud and the design and fielding of LIPAS in integrating the EXL software which is the heart of LIPAS.

There will be instances where development services for the EXL software will have to occur simultaneously with support services for LIPAS. Only GCIO and EXL can ensure those services are provided due to its access to the intellectual property/source code.

Additionally, to achieve the same capabilities, another vendor’s software code would need to go through a significant redevelopment effort to meet the customized business rules for VA and to support the current level of code being provided. VA technical experts estimate that any other source would require at least a 36-month redevelopment effort. During this time, VA also would need to concurrently maintain a GCIO sustainment contract in order to sustain the current LIPAS, which would result in one TO to maintain and perform break fixes, and one TO dedicated to the redevelopment of LIPAS utilizing an alternative software solution. Reimplementing LIPAS using any other software would result in duplication of costs already invested and incur additional costs to VA that requires support for such elements, as VA Enterprise Cloud hosting, development of Application Programming Interface, data integrations, data mappings, security controls, moderation and administrative modules and platform optimization that are part of the overall LIPAS. Ultimately, only GCIO can ensure that VBA Insurance receives the EXL software and associated development services as well as the support services for LIPAS that it requires without substantial duplication of cost.

More specifically, VA technical experts estimate the cost for VA to pivot to any alternate vendor would be approximately . These duplicative costs would not be recovered through competition. Additionally, while the duplicative work is taking place, LIPAS would be subject to estimated program delays of approximately 36 months.

These estimates of duplicative costs and time are based on the customization, configuration, business reprocess engineering, and integrations on the current contract.

The intellectual property rights for the EXL software are unique and highly specialized services needed for the continued enhancement and sustainment for this follow-on effort, and GCIO is the only source capable of providing the required services.

Currently VALife as well as LIPAS is a minimal viable product in its infancy stage.

Enhancements are required over the next 36 months to further build out a complete system. Additionally, enhancements and additions to existing workflow processes are required to reduce accounting errors. Automation to several manual tasks, such as posting loan payments and suspense items are needed to reduce manual errors and increase overall efficiency. Additionally, new integrations are required to complete LIPAS and VALife functionality, including a new integration with Veterans Benefits Management System (VBMS), eFolder, migration of documentation from the current in-house document repository to eFolder, and integrations with Enterprise Management of Payments, Workload, and Reporting System (eMPWR) and Integrated Financial and Acquisition Management System to replace current integrations that third party partners are sunsetting.

Based on the current LIPAS roadmap, VA estimates that LIPAS will be fully stabilized and fully deployed in 2026. Between now and full deployment, there are interdependent activities that need to begin immediately upon award and run concurrently throughout the next 36 months. Only GCIO has the knowledge and experience to complete these activities in the time required. The current LIPAS Roadmap accounts for completion of closed programs, deployment of credit card service for payments in LIPAS, and automated central mail in FY2023. Additionally, in FY2024, it is anticipated that deployment of paperless billing function in LIPAS, paperless billing and credit card payments, initial integration with eMPWR and iFAMS will occur. In FY2025, VA anticipates deployment of the death claims function, initial integration with VBMS eFolder, completion of migration from Finance and Accounting System to eMPWR and completion of migration from FMS to iFAMS. Lastly, in FY2026, VA estimates completion of migration to VBMS eFolder, In-Force Policy Administration, Annuities functionality which would provide full deployment of capabilities.

In conclusion, if LIPAS were to move away from the brand name EXL software provided on a sole source basis from GCIO, it would impose hardship on Veterans due to substantial delays and issues with Insurance policies and processing, including delays in payments to Veterans and their beneficiaries. The continuation of this support will allow GCIO to continue this critical work and is the only avenue for VA to avoid spending an estimated in duplicative costs and requiring approximately 36 months for duplicative efforts.

6. Efforts to Obtain Competition: Market research was conducted, details of which are in Section 8 below. This effort did not yield any additional sources that can meet the Government’s requirements. There is no competition anticipated for this acquisition. In accordance with FAR 5.301 and 16.505(b)(2)(ii)(D), the award notice for this action will be synopsized on the Contracting Opportunities Page and the justification will be made publicly available within 14 days of award.

7. Actions to Increase Competition: The Government will continue to conduct market research to ascertain if there are changes in the marketplace that would enable future actions to be competed. Specifically, the government will continue to make efforts to obtain direct license of EXL so that all future TOs for integration and support services can then be competed under fair opportunity.

8. Market Research: The Government technical experts continuously perform web-based market research to keep current on technologies in the field of memorialization software. Specifically, market research was done in November 2022 by Government technical experts by researching known software products that provide similar functionality as EXL LifePro. Specifically, the Government technical experts researched Oracle Insurance Policy Administration for Life and Annuity and Pega FIS Compas.

Based on the market research, the Government technical experts concluded that these products do not meet all of the VA’s interoperability and compatibility requirements and cannot avoid the duplication of cost and time as outlined in Section 5 of this justification.

In an attempt to maximize competition, in November 2022, the VA conducted additional market research and reached out to EXL to inquire if any sources, other than GCIO, could provide sustainment, configuration, and enhancement of the COTS product, EXL LifePro. EXL explained that it does not currently do business directly with the Government, and confirmed it has an exclusive teaming agreement with only GCIO for the EXL software related to the government LIPAS effort.

Further, a draft Performance Work Statement (PWS) was issued under Request for Information (RFI) number 36C10B23Q0092 to SAM.gov on December 16, 2022. The RFI closed on January 2, 2023, with capability statements received from Accenture Federal Services (AFS), Booz Allen Hamilton (BAH), and Clear Vantage Point Solutions, LLC (CVPS). Both BAH and AFS proposed contingencies that require either VA managing EXL software licenses or a hybrid approach for dual management of the licenses. However as stated in Section 5, GCIO has an exclusive teaming agreement with EXL for LIPAS to support VA and does not license the software directly to the government. Thus, neither BAH or AFS can meet VA’s requirements as VA cannot implement the scenario required for ASF and BAH’s successful performance capability.

An amendment was posted to the RFI on 17 March 2023 specifying the government’s intended acquisition strategy described in para. 5, above. CVPS began pursuit of the Life Insurance Policy Administration System (LIPAS) Phase II opportunity with intention of submitting a bid as a prime. CVPS reached out to the current OEM (EXL) and received a response from their Vice President of Business Development stating GCIO is in an exclusive relationship with the current prime for this work and they were not exploring alternative partnerships for this bid. Based on this information, on December 27, 2022, CVPS notified the TAC they would no longer be pursuing this opportunity.

AFS also indicated that they were unable to compete because of the exclusive teaming agreement between EXL and GCIO.

9. Other Facts: None.

10. Technical and Requirements Certification: I certify that the supporting data under my cognizance, which are included in this justification, are accurate and complete to the best of my knowledge and belief.

Date: ________________________________

Program Manager Signature: ____________________________

11. Fair and Reasonable Cost Determination: I hereby determine that the anticipated price to the Government for this contract action will be fair and reasonable based on an analysis of proposed level of effort and mix of labor that will be conducted and subsequent negotiations held as necessary. Additionally, price discounts will be sought.

Procuring Contracting Officer Signature: ____________________________

12. Procuring Contracting Officer Certification: I certify that this justification is accurate and complete to the best of my knowledge and belief.

Procuring Contracting Officer Signature: ____________________________

Approval

In my role as Head of the Contracting Activity, based on the foregoing justification, I hereby approve the acquisition of a sole source FFP TO to be issued under T4NG Contract Number VA118-16-D-1003 with GovernmentCIO, LLC for the renewal of brand name EXL software and associated development services and support services for LIPAS on another than fair opportunity basis pursuant to the authority cited in Section 4 above, subject to availability of funds, and provided that the property and services herein described have otherwise been authorized for acquisition.

Date: ____________ Signature: __________________________________

Head of the Contracting Activity Technology Acquisition Center Office of Procurement, Acquisition and Logistics