Redacted Attachment 1-FAR 13.5 Single Source Exceeding SAT.pdf

United States Department of Agriculture Sole Source (Including Brand Name) Justification under

Simplified Procedures for Certain Commercial Items (FAR 13.5) Control No. (if applicable) ______________________

1. Identification of the agency and the contracting activity.

The United States Department of Agriculture (USDA), Food and Nutrition Service (FNS) and Office of Contracting and Procurement, Procurement Operations Division, 301 S. Howes Street, Suite 321, Fort Collins, CO 80521.

2. The nature and/or description of the action being approved.

The USDA, FNS proposes to enter into a sole source, Firm-Fixed price contract to Fidelity National Information Services Inc. (FIS) using the simplified procedures for certain commercial items under Federal Acquisition Regulation (FAR) Part 13.5.

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

The Supplemental Nutrition Assistance Program (SNAP) issues SNAP benefits for use via electronic benefits transfer (EBT). FNS is responsible for policy related to SNAP retailer management and EBT benefit issuance; systems and contracts used to manage retailer participation and compliance; the operational and technical aspects of EBT issuance. Additionally, FNS performs the final USDA administrative review of appeals on SNAP retailer-related decisions.

Through EBT Gateway applications, EBT transactions are routed from Third-Party Processors (TPP) to a State’s EBT host processor. FNS has previously completed studies to assess the ability of creating its own system - SNAP EBT National Gateway Services (SENGS). See attachment 1 to this JOFOC. This would be a transaction system that would ultimately allow FNS to better detect and fight fraud and provide additional benefits for all EBT stakeholders. However, following the completion of the studies, FNS determined it did not have the legal authority to implement SENGS.

Subsequently, FNS will investigate whether the benefits that would be provided by SENGS could be obtained by working with the existing EBT gateway to make changes and gain real time access to EBT gateway transactions. The scope of this requirement is to provide FNS with the ability to view SNAP EBT transactions in real time, receive real-time alerts on specific transactions based upon predefined criteria through access to EBT Gateways, as well as enhance the agency’s ability to detect and fight fraud, assist in disaster relief efforts, and provide visibility into system outages.

It is estimated that the cost of establishing FNS’s connection to FIS’ Gateway will be:

4. The statutory authority permitting other than full and open competition.

41 U.S.C § 1901 - Simplified Acquisition Procedures up to $7.5 million, as authorized by FAR 13.500(a) and implemented by FAR 13.501(a).

5. A statement demonstrating the unique qualifications of the proposed contractor or the nature of the action requiring the use of the authority.

In today’s EBT environment, there are two EBT gateways that route transactions from Third Party Processors (TPPs) and retailers to the EBT processors for authorization and approval. FNS will need to contract to both companies to access the data, as the data is not prevalent in the marketplace. These EBT Gateway are currently operated by Fiserv Inc. (Fiserv). There are currently only two EBT TPP certified vendors for the Gateway. EBT TPP certification is important because they are entities that allow merchants to accept credit card payments, online payments, and any other cashless payment method without the need to set up their own merchant accounts. With out having a EBT TPP certification vendors cannot access the Gateway data legally. Therefore, FIS unique capability is that they have EBT Gateway TPP certification. EBT gateways interface with the various TPPs that support the retailers accepting SNAP EBT. The EBT transactions flow from the retailers to the TPPs and on to the EBT gateways. The EBT gateways route the transaction to the correct card issuer (EBT Host System) for authorization and approval for the purchase. Because there are only two EBT gateways currently existing today, TPPs have different options in how they want to route EBT transactions. The option selected often depends on the number of retailers being supported and the number of EBT transactions being processed by the retailers connected to the TPP. For a high volume TPP, connection to both EBT gateways will be necessary.

6. A description of efforts made to ensure offers are solicited from as many potential sources as is practicable.

A Sources Sought Notice was posted to SAM.gov on 7/17/2023 in efforts to identify other potential sources capable of providing EBT Gateway access (see additional information in section #8 below).

No other capable vendors were found. There will not be any additional requirements anticipated in the future for EBT transactions.

7. A determination by the Contracting Officer that the anticipated cost to the Government will be fair and reasonable.

The anticipated cost to the Government will be determined fair and reasonable based on multiple factors such as historical pricing on AG-3198-B-17-0001. It is not the exact work but similar.

USDA will request catalog pricing and/or list pricing. As well as negotiate pricing and seek additional discounts before placing an order. In closing, the CO will ensure to include a statement of price reasonableness in the contract file based off one or more of the following:

• Market research;

• Comparison of the proposed price with prices found reasonable on previous purchases;

• Current price lists, catalogs, or advertisements. However, inclusion of a price in a price list, catalog, or advertisement does not, in and of itself, establish fairness and reasonableness of the price;

• A comparison with similar items in a related industry;

• The contracting officer’s personal knowledge of the item being purchased;

• Comparison to an independent Government estimate; or

• Any other reasonable basis.

8. A description of the market research conducted and the results or a statement of the reason Market Research was not conducted.

A Sources Sought for access to EBT gateway was posted on 7/17/2023 to SAM.gov in effort to identify sources capable of offering EBT gateway aces The Sources Sought closed on 7/24/2023 and 3 responses were received. However, two of the three capability statements made statements regarding the ability to provide EBT Gateway access but showed no documentation demonstrating this capability. Upon further assessment, it was determined that these sources could not currently provided the required access. The third vendor submitted a capability statement but was ultimatly determined not capable because as this source could only provide EBT Gateway monitoring and not EBT Gateway access. As a result, all three respondents were found not capable of providing the access required. Based on the market research conducted, there are no other vendors that can provide EBT Gateway acess at this time.

FIS was identified as having access via email. Also through market research they were documented and verified to have EBT TPP certification and EBT Gateway access from the SNAP EBT Gateway Services Study.

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

The explanation of why the performance work statement for full and open competition is not available due to the unique nature of the EBT Gateway and how it operates. FNS needs a contract with both vendors to cover all EBT transactions. Each Gateway provider is the only company who has access to their systems and data; other companies will be incapable or unable to modify systems they do not have access to.

10. A listing of the sources, if any, that expressed a written interest in the acquisition.

Other than the submissions for the Sources Sought from ITCON, Valencia Management, and Raven Tek, no other sources have expressed written interest in the acquisition. All three vendors that responded to the Sources Sought were found not capable through the assessment of their submission.

11. A statement of actions, if any, the agency may take to remove or overcome any barriers to competition if subsequent acquisitions are anticipated.

USDA FNS will monitor the availability of any other EBT Gateway vendors to ascertain if any other vendors are capable to access the EBT Gateway during the period of the contract.