Justification_Exception_to_Fair_Opportunity_Exceeding_SAT _Hermits Peak TO_70FB8023F00000034.pdf

Justification for Exception to Fair Opportunity Exceeding the SAT pursuant to FAR 16.505(b)(2)(ii)(B)

U.S. Department of Homeland Security Federal Emergency Management Agency (FEMA)

JUSTIFICATION FOR EXCEPTION TO FAIR OPPORTUNITY

PA-TAC IV IDIQ 70FB8018D00000003

FAR Subpart 16.505 (b)(2)(ii)(B) Orders exceeding the simplified acquisition threshold. As a minimum, each justification shall include the following information and be approved in accordance with the FAR Subpart 16.505 (b)(2)(ii)(B):

1. Agency and Contracting Activity.

The U.S. Department of Homeland Security, Federal Emergency Management Agency (FEMA), Office of the Chief Component Procurement Officer.

Nature and/or description of the action being approved.

Nature of action: FEMA intends to modify the existing task order under the PA-TAC IV IDIQ, 70FB8018D00000003 - 70FB8023F00000034, for the provision of increasing the number of claims reviewers supporting the Hermit’s Peak/Calf Canyon Claims Office under the task orders Option Period 1, utilizing the allocated funding from the task orders Option Periods 2, 3, and 4.

Name and address of the contractor: CH2M HILL - CDM PA-TAC Recovery Services (CCPRS), 9191 S Jamaica St., Englewood, CO 80112 Contract type: Time and Material (T&M) and Cost Reimbursable (CR) CLIN Task Order.

Period of Performance: February 15, 2023 through February 14, 2025.

Estimated value of proposed action: No change to contract ceiling but moving the allocated amounts from Option Periods 2, 3, and 4 to Option Period 1 in the sum of $31 million.

Type of funding: Special Appropriation under the Hermit’s Peak Fire Assistance Act.

Year of funding: No-year funding.

Solicitation number: 70FB8023R00000005.

Background information about the requirement: The Hermit’s Peak Fire Assistance Act directs FEMA to compensate victims of the prescribed burn that resulted in the merged Hermit’s Peak and Calf Canyon Fires in New Mexico for losses and damages stemming from the fire on an aggressive, statutorily fixed deadline. The Hermit’s Peak/Calf Canyon fires resulted in 325,340 acres burned and 900 homes/structures destroyed. As of May 9, the Program Office has already received 12,253 Notices of Loss in option period 1 and those numbers continue to grow with one public facing office still receiving close to 1,000 walk-ins every week submitting additional claims. Due to the time associated with standup of the program and roll out of the policy and procedures, the majority of Hermit’s Peak workload has shifted to Option Year 1.

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

The requirement is to provide an increase number of claims reviewers to assist FEMA in providing expeditious consideration and settlement of claims for the Hermit’s Peak/Calf Canyon Fire Claims Office. Due to the increased claims-related work volume in Option Period 1, an increased number of staff is still needed to meet the workload. Despite a significant increase in workload, there remains $27 million in allocated funding under the Time and Materials (T&M) Contract Line-Item Number (CLIN) designated for claims reviewers for option periods 2, 3, and 4. Option Period 1, valued at $46 million, encompasses CLINs for Management & Administrative (M&A), Labor, Travel, and Miscellaneous expenses. The Labor CLIN, inclusive of claims reviewers, has a Not-To-Exceed (NTE) value of $29.5 million.

Recognizing the projected rise in claims-related activities, the Hermit’s Peak/Calf Canyon Claims Office seeks to 1) retain current Claims Review staff to ensure continuity in operations and claims processing through end of option period 1; and 2) source additional Claims Reviewers via a separate contract vehicle to accommodate projected influx of claims for Option Period 1 and beyond. To ensure the retention of current Claims Review staff through the end of Option Period 1 in February 2025, the Claims Office proposes reallocating $31 million from Option Periods 2, 3, and 4 to Option Period 1. Without additional funding, the contractor will need to demobilize more than half of the existing Claims Reviewers by July 2024 in order to stay within the contract's ceiling. This significant reduction in staff will greatly jeopardize the Claims Office's ability to process and pay claims within the required .

4. Identify the exception to fair opportunity and supporting rationale, including a demonstration that the proposed contractor’s unique qualifications or the nature of the acquisition requires use of the exception cited.

In accordance with FAR 16.505(b)(2)(i)(A), the agency need for the supplies or services is so urgent that providing a fair opportunity would result in unacceptable delays. Beyond the statutory requirements set forth by Congress, the Hermit’s Peak/Calf Canyon Claims Office is reimbursing compensable damage to victims, including but not limited to, those that continue to present life sustaining impacts on claimants, including providing food, shelter, medication, alternate living arrangements, and heating.

5. Determination by the contracting officer that the anticipated cost to the Government will be fair and reasonable.

It is estimated that the cost of this acquisition will be fair and reasonable because cost/price is consistent with rates provided in the base contract that were already determined to be fair and reasonable upon award. Additional actions anticipated to ensure reasonableness of the price will be accomplished with the procedures and criteria contained in the Federal Acquisition Regulation under Parts 30 – Cost Accounting Standards, and 31 – Contract Cost Principles and Procedures, and Subpart 15.4 – Contract Pricing, as appropriate. The contracting officer has also determined that the anticipated prices are fair and reasonable based on market research, including commercial pricelists and prior acquisition history.

6. Any other facts supporting the justification.

Not Applicable

7. A statement of the actions, if any, the agency may take to remove or overcome any barriers that led to the exception to fair opportunity before any subsequent acquisition for the supplies or services is made.

8. FEMA intends to post this requirement on SAM.gov pursuant to FAR 16.505(b)(2)(ii)(D).

9. Evidence that any supporting data that is the responsibility of technical or requirements personnel and which form a basis for the justification have been certified as complete and accurate by the technical or requirements personnel.

The Hermit’s Peak/Calf Canyon fires resulted in extensive damage and a high volume of claims, requiring urgent response. Between now and the end of the calendar year, the Claims Office anticipates more than 6,700 Notices of Loss (NOL) will age and not be acknowledged in a timely fashion by the end of the calendar year without further action. On average, each NOL comprises an average of 2 Proofs of Loss (POL) work packets, each requiring individual review, resulting in an associated 13,400 POLs. In April, the Claims Office processed a monthly all time high of 1,358 LODs, and must continue to multiply this production level in order to prevent an increasing backlog of claims. If the opportunity to add claims reviewers in early to mid-June passes, it will worsen the backlog. Staffing shortfalls also continue to contribute to the backlog.

Until this risk is mitigated, FEMA risks additional litigation due to Agency’s inability to process claims in a timely manner in accordance with regulatory timelines.

10. Technical/Requirements Personnel Certification.

Pursuant to FAR 16.505(b)(2)(ii)(B)(9), I certify that this requirement meets the Government’s minimum need and that the supporting data, which form a basis for the justification, are accurate and complete.

Technical Representative/COR Date

11. Contracting Officer Certification and Approval *

Pursuant to FAR 16.505(b)(2)(ii)(B)(8), I certify that this justification is accurate and complete to the best of my knowledge and belief and hereby determine that the circumstances for an exception to fair opportunity exist:

BRANDON D MCDONALD Digitally signed by BRANDON D MCDONALD Date: 2024.05.10 13:52:08 -06'00'

Contracting Officer Date

12. Approval.

Component Competition Advocate Date

Head of the Contracting Activity Date

ANTHONY J COLLINS JR Digitally signed by ANTHONY J COLLINS JR Date: 2024.05.10 15:52:04 -05'00'

KEECHA P ELLIOTT Digitally signed by KEECHA P ELLIOTT Date: 2024.05.13 15:43:57 -04'00'