JA SDVOSB Sole Source - Environmental Social Governance_SIGNED_Redacted.pdf

DEPARTMENT OF VETERANS AFFAIRS

Office of Procurement, Acquisition and Logistics (OPAL) Strategic Acquisition Center- Frederick

5202 Presidents Court, Suite 103 Frederick, MD 21703

Justification and Approval for Other than Full and Open Competition

6.302-5 -- Authorized or required by statute

1. Identification of the agency and the contracting activity.

This Justification and Approval (J&A) for Other Than Full and Open Competition is executed by the Strategic Acquisition Center- Frederick (SAC-F), on behalf of the Department of Veterans Affairs (VA), Veterans Benefits Administration (VBA), Loan Guaranty Service (LGY).

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

This activity proposes to negotiate a non-competitive Firm Fixed Price (FFP) Contract (sole-source) award with First Environment, Inc (First Environment), a Service-Disabled Veteran-Owned Small Business (SDVOSB), for the procurement of the delivery of Environmental, Social Governance (ESG) consulting information and analytics support.

LGY has experienced substantial growth and significant program changes over the last several years. More Veterans, servicemembers and mortgage professionals have realized the advantages that the home loan benefit provides. Congress passed several pieces of legislation that has expanded access and eligibility and added operational complexity to the program. Additionally, LGY had to make significant adjustments because of the COVID-19 pandemic. Despite these challenges, LGY has experienced an increase in the operational tempo during Fiscal Years (FYs) 20 and 21 and is on track to have back-to-back record years exceeding over one million loans guaranteed each year.

Since all VA-guaranteed loans are traded in Ginnie Mae (GNMA) Mortgage-Backed Securities (MBS), it is important to understand how VA loans influence pricing on GNMA MBS and mortgage investor behavior. On May 20, 2021 the President issued an Executive Order on Climate-Related Financial Risk: Executive Order on Climate- Related Financial Risk. The Executive Order requires the Secretary of Veterans Affairs to integrate climate-related financial risk into underwriting standards, loan terms and conditions, and asset management and servicing procedures for lending policies and programs. Understanding and incorporating aspects ESG concepts in LGY policies, Strategic Acquisition Center- Frederick procedures, and operations will assist with goals of the Executive Order and will ensure the program is prepared to meet the housing needs in sustainable and responsible manner. LGY will be tasked with providing VA senior and administration officials, Congress, mortgage industry, and Veterans with information regarding ESG as it affects LGY. LGY seeks to understand these and other operational challenges which will change the landscape of future performance of VA-backed lending.

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

ESG analytics and data will provide VA LGY Senior Management with the information to make programmatic decisions on policy, enforcement, and guidance to support the goal to achieve a sustainable ESG environment. This effort will enable VA to further fulfill its mission to serve the Veteran and ensure that it is well positioned in understanding the current Secondary Mortgage Market.

The estimated value for this acquisition is $4.9M and the period of performance is a base year with two (2) option years.

4. An identification of the statutory authority permitting other than full and open competition.

The statutory authority permitting other than full and open competition is 41 U.S.C.

§ 3304(a)(5) as implemented by the Federal Acquisition Regulation (FAR) Subpart 6.302- 5(a)(2)(i) entitled, “Authorized or required by statute.” “Veterans First Contracting Program” outlined in 38 USC § 8127(c).

5. A demonstration that the proposed contractor’s unique qualifications or the nature of the acquisition requires use of the authority cited.

VAAR 819.7007 states explicitly, “A determination that only one SDVOSB can meet the requirement is not required,” and that using this authority, the following must be verified:

(1) The anticipated award price of the contract (including options) will not exceed $5 million;

The estimated not to exceed value is $4.9M and does not exceed $5M.

Strategic Acquisition Center- Frederick

(2) The justification prepared pursuant to FAR 6.302-5(c)(2)(ii) is posted in accordance with FAR subpart 5.301(d);

This J&A will be posted on the Governmentwide Point of Entry, Contract Opportunities, after award.

(3) The SDVOSB concern has been determined to be a responsible source with respect to performance;

First Environment is a registered and verified Service-Disabled Veteran-Owned Small Business (SDVOSB). First Environment can perform the requirement.

First Environment has earned a reputation for analyzing and resolving complex environmental challenges facing the VA and other federal, state, and local clients. They are committed to encouraging adaptation and resilience planning among public entities and sharing updates from the climate science community to educate and empower their clients to make changes. First Environment pioneered the field climate science, some of first projects in the U.S. that tackled complex climate change challenges and related societal implications via reliance on extensive analytics. In the estimation of the contracting officer, contract award can be made at a fair and reasonable price that offers best value to the Government

(4) In the estimation of the contracting officer, contract award can be made at a fair and reasonable price that offers best value to the Government

This is a new requirement. The proposed rates will be verified using the Independent Government Cost Estimate (IGCE) which was developed as a result of a Request for Information (RFI) conducted by Veteran Benefits Administration (VBA) Contracting staff in April 2021. A fair and reasonable price determination will be made prior to award.

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.

IAW VAAR § 819.7007 Sole source awards to service-disabled veteran-owned small business concerns (b), “The contracting officer’s determination whether to make a sole

Strategic Acquisition Center- Frederick source award is a business decision wholly within the discretion of the contracting officer. A determination that only one SDVOSB concern is available to meet the requirement is not required.”

An exception applies to Subpart 5.202, in accordance with Statute.

7. A description of the market research conducted (see Part 9) and the results or a statement of the reason market research was not conducted.

Market research was conducted in April 2021 by VBA Contracting in anticipation of this new requirement VBA Contracting placed the RFI against VA’s Veterans Intake, Conversion and Communication Services (VICCS) which is an internal VBA Indefinite Delivery Indefinite Quantity (IDIQ) contract. The VICCS IDIQ is made up of six (6) large companies, the following four (4) companies demonstrated interest: McKinsey, Deloitte, Actualize, and IBM. However, none of these companies have experience doing this form of work for VA.

Once VBA received its funding for this effort in late July 2021, VBA Contracting realized they did not have the Contracting Staff to take on this extra requirement. That is when VBA Contracting reached out to the Strategic Acquisition Center – Frederick (SAC-F) for contracting support. Once SAC-F received the package and upon its initial review of potential interested contractors, SAC-F recognized First Environment. First Environment is the only SDVOSB company performing ESG analytics and data support.

First Environment has done business with VA in the past for similar work, receiving past performance ratings of very good and exceptional.

First Environment has been determined to be a responsible source with respect to performance. They are registered and certified in VetBiz.gov as an SDVOSB with the NAICS code for this requirement, which in accordance with Public Law 109-461 Section 502(c), meets the requirements of this statute to sole source to a SDVOSB. In addition, a review of their Representations and Certifications was conducted in the System for Award Management (SAM) and First Environment represented that they are an

SDVOSB.

In addition, the Federal Awardee Performance and Integrity Information System (FAPIIS) was reviewed and FAPIIS shows no reports for First Environment that would

Strategic Acquisition Center- Frederick indicate defective pricing, instances of contractor fault or recipient not-qualified, terminations for cause, default or material failure to comply, or non-responsibility of the contractor.

8. Any other facts supporting the use of other than full and open competition.

In accordance with Public Law 109-461, codified at 38 USC § 8127, in order to increase contracting opportunities for small business concerns owned and controlled by veterans and small business concerns owned and controlled by veterans with service-connected disabilities, contracting officers of the VA are given specific statutory authority to award a contract to a small business concern owned and controlled by veterans using procedures other than competitive procedures (i.e. a “sole source” contract). The contracting officer may do so in accordance with VAAR 819.7007.

To iterate: First Environment has done business with VA in the past for similar work, receiving past performance ratings of very good and exceptional, as well as subcontracting with CoreLogic, a mortgage company that has completed mortgage efforts and support contracts for LGY.

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

First Environment 10 Park Place Building 1A,STE 104 Butler, NJ 07405

10. 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.

All future requirements will be handled on a case-by-case basis. Toward the expiration of this contract, consideration will be given as to whether the future acquisition should be competitive.

11. Certifications / Signatures.

Strategic Acquisition Center- Frederick

Technical Representative Certification:

I certify that the foregoing justification is complete and accurate to the best of my knowledge and belief.

tt Date

Chief, Contract Assurance Unit Loan Guaranty Service

Contracting Officer Certification:

Pursuant to (FAR 6.303-2(a)(12)), I certify that this justification is accurate and complete to the best of my knowledge and belief.

y Date

Contracting Officer Strategic Acquisition Center- Frederick (SAC-F)

09/14/2021

Strategic Acquisition Center- Frederick

Competition Advocate Approval:

Competition Advocate Approval

Upon the basis of the above justification, I hereby approve, as advocate for competition for the procuring activity, the solicitation of the proposed procurement described herein using other than full and open competition, pursuant to the authority of 38 U.S. Code 8127(c).

Date

Competition Advocate Director, Strategic Acquisition Center (SAC)- Frederick