JOFOC UNIFI Software Purchase _Redacted.pdf

Justification for Other than Full and Open Competition United States Department of Agriculture

Federal Acquisition Regulation (FAR) Part 6.3

Total Estimated Value:

Period of Performance: Dec 01, 2021 through Perpetuity NAICS 541519 Other Computer Related Services; PSC Code 7030 IT Software Source Code Purchase (Supply)

1. Identification of the agency and the contracting activity.

United States Department of Agriculture, Rural Development Procurement Management Office (PMO), 1400 Independence Ave, SW, Washington, DC 20250.

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

a. Acquisition purpose and objectives. The USDA proposes to enter into a contract on a basis other than full and open competition, and negotiate a sole source, firm fixed-price contract with FiServ, for UniFi, a web-based application used for loan origination.

b. Project background. USDA’s Rural Development (RD) mission area, Rural Housing Service (RHS), is the sub-agency which administers the Single Family Housing Direct Home Loans (SFHDHL) program, also known as Section 502 Direct Loan Program.

This program provides a path to home ownership for low- and very-low-income families living in rural areas, and families who truly have no other way to make affordable homeownership a reality. The Housing Act of 1949 as amended, 7 CFR, Part 3550, and the HB-1-3550 - Direct Single Family Housing Loans Field Office Handbook govern this program.

Fiserv's UniFi(R) PRO loan origination system (LOS) is a web based, commercial off the shelf product which has been tailored for RD purposes. Its functions include those financial and non-financial actions necessary to make sure that the portfolio of pre-qualifications and applications are managed and serviced in accordance with all applicable governing laws and in accordance with departmental policies, procedures, and regulations. It retains applicant information, makes complex computations, and maintains a central record of all activities associated with an individual application from the time of pre-qualification through loan closing.

UniFi was implemented in RD over 20 years ago, has reached its end of life, and is scheduled to sunset in December 2021. RD would be at a detrimental loss, which is expected to occur if this system based on the UniFi software becomes unavailable due to proprietary software rights as this is the only software system currently that will work for SFHDHL required tasks.

The only option available to RD until a replacement program is procured and transition into place, is to purchase the UniFi source code or a perpetual license, which will prevent immediate loss of the required SFHDHL Direct Loan Program functionality. The Unifi software is owned by the vendor, “Fiserv” and the Unifi software is proprietary to Fiserv.

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

a. Project title. UniFi Code Purchase/Perpetual License

b. Project description. To secure use of the UniFi code until a replacement system is procured and transitioned into service.

c. Total estimated dollar value and performance/delivery period. The estimate for procuring code, or a perpetual license to use, is .

governmentwide point of entry system, beta.SAM. There were 21 responses received, with wide ranging estimates and recommended solutions. At this time, none have been identified to meet the solution requirements without modification and enhancement. RD leadership is continuing to evaluate the market for the best solution.

RD is exploring potentially other commercially available loan origination systems, as identified in RD’s RFI #12SAD120R0024 (see Paragraph 11). At this time, none have been identified to meet the solution requirements without modification and enhancement. RD leadership is continuing to evaluate the market for the best solution. While ongoing analysis is being conducted, and a replacement system implemented, RD will need to maintain its use of the UniFi(R) PRO LOS.

Because of the proprietary nature of the software, FiServe is the only source for the continued use of the current SFHDHL Direct Loan Program system. However, it is anticipated that RD will develop a solicitation before the end of FY22 that has the objective of replacing the Fiserv's UniFi(R) PRO loan origination system with a competitive market solution because the Fiserv's UniFi(R) PRO loan origination system cannot be continued to be developed or maintained at a reasonable competitive cost.

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

Failure of RD to act by purchasing the Unified software or a perpetual license will result in RD’s inability to deliver the SFHDHL Direct Loan Program after December 2021. Purchase of the UniFi source code is required to support the Direct Loan Program as RD cannot deliver it without an automated solution in place. USDA Rural Development’s Section 502 Direct Loan Program provides a path to homeownership for low- and very-low-income families living in rural areas, and families who truly have no other way to make affordable homeownership a reality. Providing these affordable homeownership opportunities promotes prosperity, which in turn creates thriving communities and improves the quality of life in rural areas. Maintaining UniFi until a new solution has been implemented is critical to the USDA mission, goals, and objectives.

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

Fiserv, 255 Fiserv Drive, Brookfield, WI 53045

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

RD is continuing to analyze several potential replacement options for FiServ’s UniFi LOS for a new, modern, web-based LOS. This will be done by determining and selecting a solution which adequately replaces our existing system and still allows for growth for the next 10 years. Once selected, the project will replace our existing UniFi LOS in a phased implementation approach and be completed once the new system is operational and the legacy system is archived and no longer in use.

There are modern commercial off the shelf (COTS) LOS that support the highly complex loan origination process and are built specifically to support the regulatory environment which would mitigate risk for RD. A modern COTS LOS could quickly and easily be tailored to meet RD needs, compared to the inherent risk in building a fully compliant LOS from scratch due to the complex network of state, local, and national regulations with which residential lending systems must comply. COTS vendors already account for this changing patchwork of regulations, and the COTS product investment in research and development could be leveraged to avoid assuming this risk.