Justification _ Approval_LGY Business Transformation and PMO Services_Sigma HC_FINAL_August 2020_REDACTED.pdf

JUSTIFICATION AND APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

Pursuant to FAR Subpart 6.302-1 – Only One Responsible Source

1. Contracting Activity: Department of Veterans Affairs (VA) Office of Procurement, Acquisition and Logistics

Strategic Acquisition Center - Frederick 5202 Presidents Court, Suite 103

Frederick, MD 21073

2. Description of Action:

The proposed action is a sole source for a one (1)-year, firm fixed price (FFP) contract with two 12-month option periods with Sigma Health Consulting, LLC, 204 Eldrid Drive, Silver Spring, MD 20904. This contract is in support of the Loan Guaranty Service (LGY) Business Transformation and PMO Services for the Department of Veterans Affairs (VA), Veterans Benefits Administration (VBA), Loan Guaranty Service.

3. Description of Supplies or Services:

The proposed requirement is for comprehensive business integration services and program management support to VBA’s LGY. The contractor shall provide the following support services:

Strategy Support related to LGY’s Vision (infographic), Roadmap, Strategic Plan, and

Performance Reporting Non-project specific Strategic Communications Conference Planning Support and Facilitation Program Management Office (PMO) Maturation and Execution Business Analysis support and Program Subject Matter Expertise (SME) for Information

Technology (IT) initiatives and projects Agile Change Management for initiatives and projects Policy Support Technology and System Requirements and Training Support Systems Requirement support Regulatory and Policy Support Project Management Support and Facilitation Data Analysis and Reporting Audit Support

Estimated Value: The total estimated value of the proposed action is $12,836,801.00 over the base and two option years.

4. Statutory Authority:

The statutory authority permitting other than full and open competition is 41 U.S.C.3304(a)(1), as implemented by the Federal Acquisition Regulation (FAR) Subpart 6.302-1 entitled, “Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.”

5. Rationale Supporting Use of Authority Cited Above:

The incumbent task order for VALERI-R support and business transformation services was awarded with Federal Acquisition Regulation (FAR) Subpart 16.505 procedures off the VA Agile Delivery of VA Strategic and Operational Requirements (ADVISOR) IDIQ suite of contracts. The current task order has a 3-year period of performance, expiring on September 20, 2020, with an additional 68-day option extension to November 28, 2020.

Sigma Health Consulting, LLC, possesses key expertise knowledge of the mortgage industry which is critical to VA’s Loan Guaranty program mission. Sigma’s staff include subject matter experts with a keen knowledge of the LGY transformation initiative to include project management, mortgage policy and mortgage technology. Sigma’s SME knowledge is very intuitive in nature to LGY which includes writing business requirements to line up with LGY’s 5+ year plan. Sigma has also provided the framework in creating the LGY roadmap, Planview implementation, data architecture, data management and governance. Sigma has expert staffing related to Mortgage Insurance Standards Maintenance Organization (MISMO) compliance to include implantation of data and strategic communications.

VA LGY program and transformation:

LGY began a highly complex transformation effort in 2017 with a Vision of completely overhauling the organization including the wholly unique VA Loan Lifecycle and all their supporting IT systems.

A large part of this effort began with the design and implementation of a completely cloud-based VA Loan Electronic Reporting Interface (VALERI-R) platform that is to serve as the foundation for all future business and IT investments.

VA’s Loan Guaranty program is one of the few guaranty programs that operate both externally and internally of a Government structure. It is a remarkably unique Government program providing critical benefits to Veterans with the support of lenders, servicers, appraisers, and realtors.

VA’s Loan Guaranty program’s mission is to assist veterans in obtaining, retaining and adapting homes, directly reducing Veteran homelessness.

LGY’s operations are highly specialized and includes a number of unique business lines such as the Special Adaptive Housing (SAH), Native American Direct Loans (NADL) and Vendee Programs.

In addition, during this timeframe, Sigma Health Consulting, LLC, in its three (3)-year task order, has developed many crucial deliverables and specialized system support capabilities for the formation of the VALERI-R system, which serves as the foundation of all future business and IT investments for the LGY program.

These deliverables include:

VALERI-R Infographic- Provides a standard understanding of the VALERI-R modernization strategies, priorities, and plans graphically. Sigma has identified information to include in the infographic by working with LGY Executive Leadership and applying their industry expertise to graphically represent the vision, mission, challenges, impacts, and future state of LGY’s VALERI-R modernization. Without Sigma’s support, there will be difficulty communicating and connecting vision to new staff and the DevSecOps contractor for the VALERI-R, with continuous updates to the infographic need to grow with the full scope of the loan lifecycle based on LGY’s ongoing efforts.

Business Roadmap- Defines priorities that will drive the program forward through increased Veteran transparency, improved collaboration with our industry partners, and innovative solutions to increase participation and reduce program risk. Sigma identified the need, information, and look and feel of the Business Roadmap which provides strategic themes of where the LGY program is going over the next five years utilizing business priorities. LGY Executive Leadership utilizes the roadmap in internal and external communications and briefings to show VA leadership and industry their path forward to meet their mission. Sigma provides a unique and unmatched understanding of LGY’s desired end state and priorities.

Sigma has an in-depth, comprehensive understanding of how they can help all levels of LGY to accomplish their goals. Without Sigma’s Subject Matter Expert (SME) reach back, strategic understanding and historical knowledge of the LGY vision, LGY (or a new contractor) will struggle to quickly, accurately and comprehensively make changes, delaying the implementation of the VALERI-R system and its changes. The Roadmap is used as a communication tool of a five-year plan and it will need to be revised as new business cases are approved so that LGY Executive Leadership can communicate the plan to their staff and communicate up to VA leadership and industry.

PMO Framework- Defines LGY PMO Framework including system of processes, groups and tools. Sigma provides recommendations of processes, group alignment, and tools to execute to support the PMO Charter. This includes processes for BL execution with the DevSecOps contractor. This includes providing Product Management expertise based on industry experience (Fannie Mae) to support LGYs understanding of the magnitude of the cultural change, position changes, and engagement with the DevSecOps contractor. Based on the PMO Charter, a framework is being developed to define standard operating procedures.

These procedures will be used to navigate the process for non-IT and IT ideas, change requests, and business cases to perform prioritization in preparation of entering it into Planview for project assignment. Due to Sigma’s Program and Project Management expertise accompanying with the gained LGY experience, the team is able to recommend and identify criteria, processes, and gaps of information to present to LGY Executive leadership for consumption and execution. Sigma is able to identify, define, recommend, and execute processes with limited feedback from LGY Executive Leadership because of the understanding of the program developed. Because of this knowledge, Sigma can execute without causing delay, which is critical giving the timing of the onboarding of DevSecOps and the rollout of the Safe Agile approach. The PMO Framework will continue to build upon the initiation iterations based on the LGY transformation effort, the DevSecOps contract and the Scaled Agile Framework (SAFe). It is critical to have consistency during the early stages of this work and framework to not cause delays or confusion among the business lines as the DevSecOps contractor success is dependent on the business.

Business Requirements Document (BRD) and Business Process Mapping- These are comprised of LGY’s Loan Origination and Valuation Business Requirements Document (BRD) and Supporting Business Process Flows, LGY’s Loan Servicing Analytics BRD, LGY’s Oversight BRD and Supporting Business Process Flows. Utilizing Sigma’s unique combination of broad mortgage industry and VA specific experience, Sigma facilitated the development of detailed business requirements and current/ideal state processes for most of the LGY BLs. While LGY relied on Sigma’s business analysis services, the team’s prior mortgage expertise and SME reach back were critical in refining and supplementing LGY’s business needs, This experience gives Sigma a unique and unmatched understanding of LGY’s desired IT transformation, both the overall vision of the program and the specific needs of each BL. This knowledge will be critical as these BRDs are further elaborated and developed with the new OIT DevSecOps contractor. Without Sigma’s historical knowledge of LGY’s business needs, LGY will be challenged to transcribe BRDs into Agile Business Cases, features, and user stories under the new OIT Safe Agile Product Line Management approach, which will delay the prioritization of development work to DevSecOps contractor.

Without Sigma’s SME reach back, business needs may be elaborated into incomplete and/or incorrect business cases, features, and user stories. While the completion of the BRDs was a significant accomplishment, the OIT transition to the SAFe Agile Product Line Management approach drives the need for agile, on-demand delivery of LGY prioritized business cases, features, and user stories to OIT on an ongoing basis. With the recent award of the DevSecOps contract and the ongoing transition to this new development approach, the elaboration of business needs will be critical to get the DevSecOps contractor working at full capacity.

Uniform Closing Dataset (UCD) Support Business Requirements and Supporting User Stories- These are comprised of Protocol Specifications for Lender Interaction, Internal VA LGY UCD Case Routing and Related Data Governance Requirements and Metric Definitions.

Sigma’ SMEs with their knowledge and direct experience supporting Uniform Closing Disclosure (UCD) in other parts of the industry, Sigma facilitated the development of detailed requirements and user stories. This effort is part of LGY’s multi-year efforts as the program moves towards an automated underwriting system and guaranty certainty, which is a top priority of the LGY Director. This experience gives Sigma a detailed understanding of LGY’s approach to implementing not only UCD, but the broader effort to achieve MISMO compliance and Guaranty Certainty. Without Sigma’s knowledge of LGY’s UCD business needs and approach, there will be challenges elaborating business needs into business cases, features, and user stories, which will create delays moving towards Guaranty Certainty, as well as VA’s plan to use this additional data to improve targeted loan review functionality, lender scorecards, data analytics, and dashboards for external stakeholders. Without Sigma’s knowledge of LGY’s UCD needs and approach, LGY may not be able to meet industry mandated timelines (e.g. MISMO compliance). UCD is part LGY’s overall approach to implement Guaranty Certainty, which is the LGY Director’s #1 Strategic Priority. Given the priority, this will be one of the first major efforts pursued with the new DevSecOps contractor, which will make the further elaboration of UCD features and user stories critical over the next six to twelve months.

Test Plans, Test Scripts, and Use Case specifications, Test Results- These are comprised of User Acceptance Testing (UAT) Plan, Scripts, and Reporting for the following VALERI-R releases: Increment 1, Increment 2, Increment 3, Increment 4, Increment 5, Increment 6, MVP Release v1.0, Increment 7, Release v3.0, Release v3.1, Release v3.2, Release v3.3, Release v4.0, Release v5.0 and Release v6.0. Leaning on the team’s experience supporting VA organizations and utilizing mortgage industry SMEs as needed, Sigma provided extensive support to one of LGY’s major IT transformation projects with the design, development and implementation of VALERI-R. This experience gives Sigma direct knowledge and experience supporting LGY’s first major IT transformation project under VALERI-R, including a detailed understanding of the system’s features, processes, etc. Given Sigma’s involvement in the development of this new system over the last 2.5 years, this knowledge is unique to Sigma. Without Sigma’s understanding of LGY’s VALERI-R system, there will be a delay in standing up and educating a new contractor on the VALERI-R system, which may delay ongoing, monthly releases of VALERI-R. LGY prioritized VALERI-R enhancements as one of the top priorities for the new DevSecOps contractor, which means work will begin almost immediately under the new contract. This will drive the need for ongoing UAT support for

LGY.

VALERI-R Organizational Change Management Plan and Supporting User Guides and Training Materials- These materials are comprised of Detailed Technician and Servicer User Guides, as well as Training Scripts and Documentation for the following VALERI-R releases:

MVP Release v1.0, Release v3.0, and Release v4.0. Utilizing Sigma’s extensive knowledge of VA Change Management and the VA 508 process, Sigma owned the development of VALERI-R User Guides and Training Materials, including ushering those materials through an extensive 508 compliance and approval process. Beyond building a unique understanding of VALERI-R, this experience further solidified Sigma’s detailed understanding of the required VA 508 compliance and approval processes. Without Sigma’s understanding of LGY’s VALERI-R system, there will be a delay in standing up and educating a new contractor on the VALERI-R system, which may delay future releases of updated user guides, as well as training materials to both the VA staff and large external Servicer user base.

Without Sigma’s extensive 508 knowledge, future releases of user guide and training materials may be delayed as new contractors face a steep learning curve with the VA processes. LGY prioritized VALERI-R enhancements as one of the top priorities for the new DevSecOps contractor, which means work will begin almost immediately under the new contract. This will drive the need for ongoing user guide and training support.

6. Efforts to Obtain Competition:

In order to glean a full understanding of what is offered in the competitive marketplace, a Request for Information (RFI) was posted to the government point of entry, Contract Opportunities, on June 26, 2020; the efforts and outcome are detailed in Section 8, titled “Market Research,” below.

The proposed action will be synopsized on Contract Opportunities in accordance with

FAR 5.201.

7. Determination of Fair and Reasonable Price:

No award will be made for this contract action until a fair and reasonable price determination can be made. This determination will be based on a comparison of the current contract pricing and a review of proposed labor rates in comparison to the independent government estimate.

8. Market Research:

Market research was conducted for this acquisition to validate that Sigma Health Consulting is the only company that can perform this work. An RFI was posted to Contract Opportunities on June 26, 2020, with a due date of July 10, 2020. There were four (4) responses, one of which was Sigma. The responders were:

The three (3) other responders besides Sigma were found not to meet the extensive needs of LGY.

while they all had certain capabilities to meet some of LGY’s needs, none of them were considered complete and competitive enough to fulfill LGY’s needs. thereby necessitating this Justification & Approval.

9. Other Facts:

Pursuing full and open competition and the awarding to a new contractor at this point would delay the implementation of VALERI-R by approximately six-months. This would result in delays to vital interfaces with other stakeholders that are essential to Veteran benefits and would have an adverse effect on the housing market and the larger U.S. economy.

10. List of Interested Sources:

11. Actions to Increase Competition:

At the end of the three-year contract period, an examination of the marketplace will be conducted to best ensure subsequent acquisitions can be competed.