LSJ.73351020F0241 P00005.REDACTED.pdf

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LIMITED SOURCES JUSTIFICATION

FOR AN ORDER / BPA EXCEEDING

THE SIMPLIFIED ACQUISITION THRESHOLD

(AUTHORITY: FAR 8.405-6)

Task Order: 47QTCA20D007W / 73351020F0241 P00005

This acquisition is conducted under the authority of the Multiple Award Schedule Program.

1. Agency and contracting activity. Small Business Administration (SBA), Office of Performance, Planning and the Chief Financial Officer, Office of Financial Operations & Acquisition Management, Acquisition Operations Division, and the Office of Credit & Risk Management

(OCRM).

2. Nature and/or description of the action being approved.

This is a limited sources justification for an out-of-scope modification to task order 73351020F0241 for the PPP Technology and Loan File Compliance Processing Solution. This modification will be a sole source to:

FI Consulting, Inc.

1500 Wilson Blvd., 4th Floor Arlington, VA 22209 Tel: (571) 255-6900

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

In response to the COVID-19 global pandemic, the U.S. Congress passed the Coronavirus Aid, Relief and Economic Stimulus (CARES) Act, which established the Paycheck Protection Program (PPP) to provide economic relief to small businesses. The first phase of the PPP established funding of $349B and was fully utilized within 14 days. With subsequent legislation, Congress approved an additional $601B in PPP funding and extended the program through May 31, 2021. At of the end of May 2021, over 11.8 million PPP loans were approved by over 5,300 lenders for a total value of close to $800B.

Due to the exceptional volume of lending and extension of the program to May 2021, OCRM is still in need of additional support to monitor risk of the PPP portfolio at the loan and lender level. The department is responsible for lender oversight and risk management of the PPP program, including lender compliance assessments, conducting due diligence to ensure taxpayer dollars are protected, and monitoring overall portfolio risk. Oversight is imperative as a lack of compliance may result in additional cost to the taxpayer, harm to the borrowers, and reputational risk for the Agency. These tasks are ongoing since implementation of the PPP.

OCRM’s responsibility is focused on evaluating the compliance of PPP lenders, particularly those considered to be high risk. Evaluating these lenders requires a comprehensive approach to lender review, including loan file review to assess compliance with PPP program requirements, accuracy, and timeliness in loan reporting (e.g., Form 1502), and loan servicing capability for those loans with residual balances post-forgiveness. Due to the multiple extensions by Congress of the PPP and the changes made in program rules, timelines, internal SBA guidelines, and forgiveness processes throughout the term of the program, OCRM needs the vendor to continue to operate, maintain, and

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enhance the PPP Technology and Loan File Compliance Processing Solution currently in place, while this requirement is recompeted for a longer-term award. As the focus shifts from the forgiveness process, OCRM must be prepared to continue risk-based reviews of high-risk PPP lenders, with commensurate loan file reviews to evaluate compliance with program criteria.

SBA requires a period of performance extension from 09/15/2021 through 04/15/2022 to 09/15/2021 through 08/15/2022 to allow time for award of a competitive follow-on task order. A two-month optional extension period (08/16/2022 through 10/15/2022) will also be included through this modification to allow for compliance with FAR 52.237-3, Continuity of Services, clause. The total value of the order will be increased from $15,197,399.62 by $3,797,503.60 to $18,994,903.22.

PoP Extension (04/16/2022 – 08/15/2022) $2,531,669.07 Optional PoP Extension (08/16/2022 – 10/15/2022) $1,265,834.53

Total $3,797,503.60

4. Authority and supporting rationale. The following circumstance justifies limiting the source as supported below:

Only one source under the authority of FAR 8.405-6(a)(1)(i)(B) - Only one source is capable of providing the supplies or services required at the level of quality required because the supplies or services are unique or highly specialized.

This modification is for a short-term extension to ensure continuity of service while the SBA awards a competitive follow-on task order. This requirement is essential to implement the CARES Act and SBA regulations governing the PPP, including but not limited to a detailed review of lender performance, assessment of lender and loan level risk, and compliance with the statutory requirements for lender oversight and risk management as defined in the Small Business 7(a) Lending Oversight Reform Act of 2018 ("Act") in response to the COVID-19 national emergency.

During implementation of the new PPP program, in addition to the existing eligible lenders, SBA onboarded approximately 750 new federally regulated lenders and 70 non-bank lenders. OCRM's responsibility for oversight of all PPP lenders and the loans they originated has grown exponentially, requiring continued execution of the targeted lender review process that identifies loans with elevated risk profiles and assesses overall portfolio risk. This review process includes over 5,300 lenders that participated in PPP.

The timeline required to conduct a competitive procurement and facilitate an effective workload transfer to a new vendor, impairs OCRM’s ability to fulfill its oversight responsibilities under the PPP and as mandated in the Act. The harm that SBA would suffer if this award is not executed is that SBA may be unable to fulfill its statutorily mandated oversight role. Additionally, if this award is not executed, because more time is needed to conduct an adequate competition, it would increase the risk for potential fraud or misuse of taxpayer funds.

The only solution capable of meeting the timeline necessary to meet the requirements for adequate oversight and review is FI Consulting's Loan Review Tool (LRT). LRT can meet this need, as it is currently deployed at SBA as a tool for performing loan and lender reviews under the 7(a) Program.

It is also currently meeting the demands of this effort for the PPP program. Only by modifying the existing LRT platform would SBA be capable of meeting the severely condensed timeline required to provide adequate PPP loan oversight on residual balances. The projected timeline to facilitate a successful contractor-to-contractor transition is approximately 90-days after award. The new contractor must clear security and then successfully onboard. After that, the contractor must become familiar and proficient with SBA systems and processes while also receiving training regarding the LRT tool with the outgoing vendor.

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SBA is in the process of a competitive acquisition for a longer-term solution for this requirement. On February 2, 2022, an RFI was issued and resulted in responses from several interested vendors who provided extensive feedback. To properly consider this feedback, a short-term extension of this award is needed to continue these vital services.

5. Determination by the ordering activity contracting officer that the order represents the best value consistent with FAR 8.404(d).

As most of the requirements can be priced using FI Consulting, Inc.’s GSA pricing which has already been found fair and reasonable, and FI Consulting, Inc. has successfully performed this requirement since 2019, the Contracting Officer has determined that award of this task order extension under FI Consulting Inc.’s schedule provides best value to the Government.

6. Market research conducted among schedule holders (or reason market research was not conducted).

Market research was not conducted for this modification for the reasons indicated in Section 4.

7. Any other facts supporting the justification.

There are no other facts.

8. Actions, if any, the agency may take to remove or overcome any barriers that led to the restricted consideration before any subsequent acquisition for supplies and services is made.

Efforts to compete the follow-on of this requirement have already commenced. An RFI was issued in February 2022 and was left open for 30 days. Multiple vendors responded and provided feedback. Based on this feedback, changes were needed to the requirements documents. It is anticipated a competitive solicitation and award will be completed within the next 60 days. This short-term award is necessary to avoid a lapse in service while SBA conducts a competitive procurement for the longer-term award.

CERTIFICATION AND APPROVAL

9. Technical / Requirements Representative Certification. I certify that this requirement constitutes the Government’s minimum needs and the supporting data provided herein is accurate and complete to the best of my knowledge and belief.

Contracting Officer’s Representative Office of Performance Systems Management (OPSM)

EDWARD

LEDFORD

Digitally signed by

EDWARD LEDFORD

Date: 2022.04.29 13:50:14 -04'00'

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10. Contracting Officer’s Certification and Approval. I certify this justification is accurate and complete to the best of my knowledge and belief, and hereby provide approval.

Laura Saddison, Contracting Officer

11. Approval

Director, Acquisition Division

Competition Advocate

LAURA E

SADDISON

Digitally signed by LAURA E

SADDISON

Date: 2022.04.27 22:56:07 -06'00'

KIP

SHEPPARD

Digitally signed by KIP

SHEPPARD

Date: 2022.04.28 07:57:46 -04'00'

SARA SOEKA

Digitally signed by SARA

SOEKA

Date: 2022.04.28 08:12:16 -04'00'