LimitSourceJustifCreditReformAccountServicesRedact_Redacted.pdf

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UNITED STATES DEPARTMENT OF EDUCATION

Office of Finance and Operations

Contracts and Acquisitions Management

Sole Source Justification

1. Identification of the agency and the contracting activity.

Agency: U.S. Department of Education

Contracting Activity: Contracts and Acquisitions Management (CAM)

2. Nature and/or Description of the Action

Background: On August 23, 2017, the Department awarded the Credit Reform Accounting Services for

Budget Service task order (Task Order 0002) to FMR Consulting, Inc. under the Blanket Purchase

Agreement (BPA) ED-CFO-17-A-0001. The task order work was primarily to support Budget Service, specifically the Cost Estimation and Analysis Division (CEAD) in the following areas including but not limited to:

• Implementation of detailed review procedures over the input of variables into the SLM, input of cash flows into the OMB calculator to avoid potential errors,

• Evaluation, analysis, and resolution of unexplained differences between the net present values of the future cash flows and adjusted debt balance and cash,

• Determination of whether balances in the Department’s financial records were supported by estimates from the SLM and the cohort reconciliation tool,

• Direct Loan and Federal Family Education Loan (FFEL) cohort analysis,

• Responses to numerous ad hoc queries regarding credit reform by the auditors, Credit Reform Accounting Services for Budget Service task order (ED-CFO-17-A-0001/0002) will expire on August 22, 2022. The audit kickoff meeting is approximately March 15th of each year. The audit is due on November 15th of each year, and so the busiest and most critical time in the contract is from

August through January. The audit is a complex months-long process. Work on it has already started and direct work will continue into November. Then there will be the post-audit follow ups depending upon the findings.

The contractor must be capable of fully understanding the automated tools that are either used by

Financial Management Operations (FMO) – Fiserv Frontier and Continuous Controls Monitoring

Software (CCMS); or are used by other offices to do similar types of analytic work, including Statistical

Analysis Software (SAS) and COGNOS Business Intelligence software (COGNOS). In addition, the contractor, must have access to our general ledger and financial management systems. Without the contractor having the proper equipment, security clearances, and access to the Department’s and Federal

Student Aid’s (FSA) system key critical deadlines will be missed.

3. A Complete Description of Services Required to meet the Agency’s Needs

A bridge purchase order will go to the incumbent, it will be awarded on a sole source, non-competitive basis. A bridge purchase order to the incumbent vendor will allow FMR Consulting, Inc. to support the

Department and Budget Service in the FY 2022 audit cycle. Only the incumbent has the proper security clearances and access to the general ledger during this critical time.

After the audit is complete the contractor must answer questions from the independent auditor. Therefore, the contractor needs access to the systems to pull data out of the accounting system and get it to the auditor within one day. A new vendor would need to go through the security clearance process which often takes two months.

Tasks include the cohort analysis for which the specific assistance is needed, and concerns found varies year-by-year or unplanned ad hoc analyses that will be required during the FY 2022 audit process to defend the Department’s credit reform estimates and balances challenged by the independent audit firm, respond to inquiries received from OMB and Department leadership. The contractor must access and understanding of the system already in place since the audit process has now begun, there is insufficient time for a new vendor to gain the necessary security clearances. In addition, because the concerns vary year to year, the contractor must be knowledgeable with the systems and have access from day one.

The estimated price is

4. An Identification of the Statutory Authority Permitting Other than Full and Open

Competition

STATUTORY AUTHORITY PERMITTING LIMITED SOURCES JUSTIFICATION: The procedures in FAR subpart 13.106-1 (b)(1) (i) were used.

5. A Demonstration that the Proposed Contractor’s Unique Qualifications or the Nature of the

Acquisition Requires use of the Authority Cited

Only one source can provide the services needed at the level of quality required because the services are highly specialized. Student loan estimates generated by CEAD are heavily audited and with the many student loan policies that are in flux this year, we anticipate that the scrutiny and scope of questions in the audit process will be intense. August to November is an intense period for the audit in a normal year and we expect a compressed timeframe to respond to questions because policies are still being resolved and estimates will need to be updated later in the process than usual.

The White House may announce a major policy change for student loans and that will increase the scrutiny and scope of questions received from the independent auditor and OMB. No one knows when this major policy change will occur, but access to the system and knowledge of system will become even more critical.

Education requires the incumbent staff who have access to our systems, including the general ledger that no one else in CEAD has. The incumbent is also familiar with our data, the loan programs, the history of our audit findings and program accounting. This is critical for the tight turn around to answer and defend audit findings.

The action must be a bridge purchase order because only one vendor (the incumbent vendor) has the specific knowledge of the system, our accounts, and programs to be able to manage the expected complexity and timing of this year’s audit, especially giving the potential major policy change. The contractor must have security access and knowledge of our systems from day one.

This small purchase order will be a bridge from the end of this current task order to the new contract to be awarded competitively in January of 2023. A new vendor will have time before the annual audit begins to settle in, arrange for systems access, and get familiar with CEAD’s processes and programs within the timeframe to complete the financial statement audit.

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 apples.

The existing task order was competed under a multi-vendor Office of Finance and Operations (OFO)

Blanket Purchasing Agreement (BPA). This is a bridge purchase order that is required to allow for a new potential small business to start at the beginning of the audit process and not in the middle. The proposed replacement order will be competed as a total small business set aside. This is a bridge purchase order that is required to allow for critically needed audit support from the current contractor. In accordance with

FAR 13.106-1 (b) (1) this bridge is not over the simplified acquisition threshold, and the contracting officer determines that the circumstances of the contract action deem only one source reasonable available.

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

It is anticipated that this bridge will be a hybrid like the current task order with firm fixed price elements for task 2 (the Cohort Analysis) and task 3 (Credit Reform Work Group Quarterly Summary). Task 1 and

4 – 7 will be time and materials. Since it is not known now exactly what questions or topics will be asked by OMB or the independent auditors; or the elements for prepared-by-client items for the audit, post-audit support, credit reform research, or assumptions development support. CEAD supplied the Contracting

Officer (CO) with an Independent Government Cost Estimate (IGCE) to assist in determining whether the price is fair and reasonable. The CO and Contract Specialist will conduct a price analysis of the vendor’s proposal before award to determine whether the price is fair and reasonable.

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

The Department conducted extensive market research at time of award. As stated previously this bridge is to complete the annual audit process including post audit findings. The incumbent is currently working on

Fiscal Year 2022 audit and has the access to our ledger system. It is not practicable to spend months getting a new vendor access to our systems. Only the incumbent vendor has the expertise, access to

CEAD’s systems, experience with CEAD’s needs in the audit process, and knowledge of the student loan programs to perform these tasks for this cycle especially when the student loan policy may be changing significantly.

9. Other Supporting Facts

None

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

Four small businesses submitted capability statements during market research for the recompete.

When the White House announced potential plans to significantly modify the student loan program during this fiscal year, it added several unknowns and complexities into an already complex audit cycle. A bridge purchase order will allow a new small business time to learn the process before the start of the audit cycle and time to be successful. Education will ensure the four firms are part of new competitive process.

11. Actions Taken to Remove or Overcome Barriers to Restricted Consideration for

Subsequent Acquisitions

There are no current actions required at this time. Performance under this task order will not continue past

January 2023. The Department will continue to monitor the market to foster competition on future requirements. There are multiple vendors interested in this work.

Any future actions for similar contractual services will be advertised through appropriate mediums (e.g., Inclusion in the Department’s annual Forecast of Contracting Opportunities and through posting on

SAM.gov, as appropriate).

12. The Ordering Activity Contracting Officer’s Certification that the Justification is

Accurate and Complete to the best of the Contracting Officer’s Knowledge and Belief

The CO certifies that the justification is accurate and complete to the best of their knowledge and the procurement is not a result of planning or expiration of funds.

Program Office Certification:

Hillary Perkins Date

Program Manager

Susan Chesley Date

COR

Contracting Officer Certification:

This is to certify that the data supporting this justification is the responsibility of the undersigned program office personnel, including verifying the Government's minimum needs or schedule requirements or other rationale for limited sources (pursuant to 8.405-6) or for other than full and open competition justification (pursuant to 6.303-2(b)) which form a basis for this justification, and that such data and rationale are accurate and complete.

Pamela W. Bone

Contracting Officer Date