LSJ GSA FSS Over SAT FAR 8.405_REDACTED_1.pdf

RFQ 140D0420Q0077 Page 1 of 6

United States Department of the Interior

INTERIOR BUSINESS CENTER

Washington, DC 20240

LIMITED-SOURCES JUSTIFICATION

OVER THE SIMPLIFIED ACQUISITION THRESHOLD

AUTHORITY: FAR 8.405-6 and 40 U.S.C 501

Solicitation 140D0420Q0077 - Federal Communications Commission (FCC) Financial Statement and FISMA Audits

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

1. Identification of the agency and contracting activity, and specific identification of the document as a “Limited-Sources Justification.”

Department of the Interior, Interior Business Center, Acquisition Services Directorate (AQD), Division V, Branch II, on behalf of the Federal Communications Commission (FCC) Office of Inspector General (OIG). This is a Limited-Sources Justification.

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

This is a one-year follow-on requirement for Auditing Services to be issued to Kearney & Company, P.C. (Kearney), 1701 Duke St, STE 500, Alexandria, VA 22314. Kearney is the incumbent vendor on the current General Service Administration (GSA) contract GS23F0092J Task Order D15PD00253. The Task Order included a five (5) -year period of performance (Base +4 Option periods) from 3/30/2015 expiring on 3/29/2020. The current Task Order was competed full and open on GSA, and five (5) quotes were received.

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

The objectives of the FCC are to obtain: (i) a full scope independent audit of the consolidated annual financial statement for the FCC and an audit opinion on the agencies submission for the Government-Wide Financial Reporting System (GFRS) financial statements; and (ii) an evaluation of the FCC information security program as required by the Federal Information Security Management Act (FISMA). The scope of this one-year follow-on requirement is the same as the current Task Order.

The estimated value is $843,523.06.

RFQ 140D0420Q0077 Page 2 of 6

4. The authority and supporting rationale (see 8.405-6(a)(1)(i) and (b)(1)) and, if applicable, a demonstration of the proposed contractor’s unique qualifications to provide the required supply or service.

FAR 8.405-6(a)(1)(i)C – In the interest of economy and efficiency, the new work is a logical follow-on to an original Federal Supply Schedule order provided that the original order was placed in accordance with the applicable Federal Supply Schedule ordering procedures. The original order or BPA must not have been previously issued under sole-source or limited-sources procedures.

During calendar year 2019 the FCC OIG Audits Division developed a revised audit plan that encompasses all mandated audits, including the Financial Statement and FISMA audits. Mandated audits are required by federal statute and are to be performed by an independent and qualified third party, such as Kearney. The FCC is in the process of developing an all-encompassing audit requirement, so that the audit process and responses are standardized and the same for all mandated audits.

While the FCC is developing this new audit requirement to cover all mandated audits, the FCC needs the subject one-year logical follow-on Task Order to ensure that the upcoming annual Financial Statement and FISMA audits are performed during calendar year 2020.

Given the technical complexity of the FCC’s operations and the manner in which accounting standards need to be uniquely applied to this environment, there is a significant risk that if a different audit firm attempted to complete the audit, an audit failure could occur. If an audit failure occurs, then the FCC will be out of compliance with Federal law requiring FISMA and Financial Statement Audits. As a result, the FCC would be at risk of having to shut down various FCC programs and/or its financial systems. Additionally, the FCC would have to report to Congress about the audit failure, which could impact its funding levels, put key FCC programs at risk, and cause embarrassment to FCC management.

Kearney has demonstrated the ability to identify and subsequently propose audit adjustments brought to the attention of the FCC by the Kearney team. The ability to do this requires a combination of both statistical expertise and knowledge of applying accounting standards to the FCC environment. No other firm possesses this institutional knowledge.

In addition to Kearney’s technical perspective, Kearney has provided exceptional staff continuity during its tenure at the FCC. For example, the three (3) most senior professionals leading Kearney’s team have been supporting the FCC since 2015; other key team members have been supporting FCC for each of the last three (3) years. This level of continuity is rarely seen in the audit industry. This brings unique capabilities and significant economy and efficiency to the FCC. From a technical perspective, the Kearney team possesses a Subject Matter Expert (SME) level understanding of the FCC's unique organizational structure and programs. This results in Kearney’s ability to

RFQ 140D0420Q0077 Page 3 of 6 begin each audit with a customized, risk-based audit approach and internally developed tools and templates that were built for the FCC’s environment and risks. From a project management perspective, the Kearney team has developed communication plans and techniques that have proven to be effective for the FCC. Also, the FCC OIG benefits by the efficiency of the working relationship that has been established with Kearney leadership and Kearney’s familiarity with OIG’s protocols and preferences.

It is anticipated that the FCC audit processes will be standardized during the upcoming 2020 calendar year. Consequently, in the interest of economy and efficiency and to minimize the risk of an audit failure, and due to Kearney’s unique familiarity with the FCC’s financial and operational environment, it is determined that a one-year logical follow-on to the current Task Order issued to Kearney, is the most economical and efficient method for the FCC to acquire the Financial Statement and FISMA audits for calendar year 2020.

Prior to the end of the one-year follow-on Task Order, the new audit requirement that encompasses all mandated audits will be fully competed for award estimated to take place in the second quarter of FY 2021

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

The CO has determined that the new Task Order represents best value and results in the lowest overall cost alternative (to meet the Government’s needs based on the following.

• Comparison with historical pricing for the current Task Order D15PD00253.

• Comparison with labor rate, mix and hours proposed pricing to in the

Independent Government Estimate (IGE)

• Comparison with labor rate pricing from the GSA’s Professional Services

Schedule (PSS) for the same or similar labor categories using the GSA CALC pricing tool. The PSS was searched since, the proposed new Task Order would be issued under Kearney’s PSS

6. A description of the market research conducted among schedule holders and the results or a statement of the reason market research was not conducted.

The CO reviewed the acquisition history and historical pricing and labor mix for Kearney, the incumbent GSA Schedule holder Kearney. The CO searched the SAM database and SBA’s Dynamic Small Business Search (DSBS) database using NAICS 54129 Other Accounting Services and PSC 704, Support – Management Auditing, and found that there are numerous large and small businesses that potentially could respond to an RFQ for a one-year Task Order for the subject requirement.

Additionally, the CO reviewed the acquisition history and historical pricing and labor mix, and conducted a search among vendors that hold GSA PSS schedules using the GSA CALC pricing tool in order to determine best value.

RFQ 140D0420Q0077 Page 4 of 6

7. Any other facts supporting the justification.

None

8. A statement of the 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.

The agency does not foresee any barriers to competition, as the follow-on requirement is expected to be competed using full and open coemption in the second quarter of FY 2021.

RFQ 140D0420Q0077 Page 5 of 6

9. 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.

I certify this justification is accurate and complete to the best of my knowledge and belief.

Louis Gilden Date Contracting Officer

10. Evidence that any supporting data that is the responsibility of technical or requirements personnel (e.g., verifying the Government’s minimum needs or requirements or other rationale for limited sources) and which form a basis for the justification have been certified as complete and accurate by the technical or requirements personnel.

I certify the technical data which forms a basis for this justification is complete and accurate and meet the Government’s minimum needs.

Lisa Goins-Berntsen Date Program Office/COR

11. For justifications under 8.405-6(a)(1), a written determination by the approving official identifying the circumstance that applies.

FAR 8.405-6(a)(1)(i)C – In the interest of economy and efficiency, the new work is a logical follow-on to an original Federal Supply Schedule order provided that the original order was placed in accordance with the applicable Federal Supply Schedule ordering procedures. The original order or BPA must not have been previously issued under sole-source or limited-sources procedures.

RFQ 140D0420Q0077 Page 6 of 6

12. Reviews and Approvals

Concur

Rebecca Fentzke Date Branch Chief

Concur

Christian J. Bisbano Date Division Chief

Approve

Glen A. Savory Date Bureau Competition Advocate