LSJ_HHSP233201700002B_75P00120F37004.pdf

FEDERAL SUPPLY SCHEDULE

LIMITED-SOURCES JUSTIFICATION

Acquisition Title: Professional services contract extension for FMP’s Accounting Services and Financial Reporting Services with Ca

Agency: PSC

PSC Divisions: ASA - Assistant Secretary for Administration

Acquisition Year (FY): 2022

Author: Igor Perfylev

2. Description of Action:

Nature: New Requirement Follow-on Requirement

Modification to Existing Purchase Order/Contract Number: HHSP233201700002B / 75P00120F37004

Pricing: Firm-Fixed Price Time & Materials Cost

Other:

Funds: OMA Other Funds: 75X5745, 75X5442

Name of Proposed Contractor(s): Castro & Company LLC

Street Address: 1635 King St

City, State, Zip: Alexandria, VA 22314

3. Description of Supplies and Services to Include Contract Vehicle/Number Utilized:

The purpose of this acquisition is to extend contract HHSP233201700002B / 75P00120F37004 with Castro & Company LLC (Castro) in support of Program Support Center (PSC) Accounting Services (AS), Financial Reporting Services (FRS), and Debt Collection Center (DCC). The contractor provides technical accounting support for a variety of accounting functions that enables timely production of accurate, complete, and auditable financial statements as required by the Chief Financial Officer’s Act of 1990 (Public Law 101-576), subsequent legislation, and related Government-wide regulations and standards in order to maintain PSC’s certification as a Treasury Designated Debt Collection Center. The period of performance for the current contract ends on May 3, 2022. A seven-month extension to the current contract is required for the contractor to complete the projects they are working on for DCC and for a new contract to be awarded for the support required by AS and FRS.

The estimated value of the proposed action, including all options, is $ 687,120

This is a modification to extend the period of performance of the professional financial accounting services contract. The period of performance for the extension is May 4, 2022 through December 3, 2022 (7 months).

The tasks under this contract include:

1. Document Standard Operating Desk Procedures for Accounting and Financial Operations and the Debt Collection Center

2. Produce financial statements and footnotes

3. SF133 Reconciliation to Statement of Budgetary Resources

4. Financial Statement Line Item Reconciliations

5. Assist in preparation of OPDIV Cycle Memos to support the HHS Audit

6. Debt Collection Support

7. Special Projects

8. Meetings, Communications and Workshops

9. Training Staff

4. Authority:

ORDER AGAINST FSS: Authority of the Multiple Award Schedule Program, Title III of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 251, et seq.); Title 40 U.S.C. 501, Services for Executive Agencies; and Section 803 of the National Defense Authorization Act of 2002 (PL 107-107) and implemented by FAR 8.405-6. Mark the applicable exception and for each discuss how the cited authority applies in accordance with FAR 8.405-6(c)(2)(iv).

An urgent and compelling need exists, and following the procedures would result in unacceptable delays (FAR 8.405-6(a)(1)(i)(A));

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

Castro & Company LLC is the only source capable of completing projects currently in progress and providing continuous financial accounting services to FMP/AS and FMP/FRS. Using another source could jeopardize FMP’s ability to provide services to customers. High quality customer service is required for FMP to recover its full costs and avoid a budget shortfall and violation of the Anti-Deficiency Act.

The current contract task order can be broken into two major components: debt collection and accounting and financial reporting services. Utilizing another source could have significant impacts to each of the two separate components.

Debt Collection Center: A primary function of this task order’s work with the Debt Collection Center revolves around documentation. The PSC Debt Collection Center is the only Treasury designated debt collection center in the government, but its designation expires in less than a year (January 2023). It is imperative that the PSC continue to streamline, automate, and find efficiencies in its processes to secure a re-designation from Treasury.

Documentation, such as that included in this task order, is critical to PSC’s Treasury designation as it is incumbent upon PSC to display its effectiveness in receiving, reviewing, processing, and beginning collection efforts for debts, to Treasury for its re-designation consideration. Castro has completed 19 standard operating procedures (SOPs) and has approximately 18 SOPs in process. To be prepared for January 2023 re-designation, FMP requires a majority of these 18 SOPs to be completed by 10/31 to allow time for review and finalization. Using another source could delay this process and impact re-designation. This delay would be exacerbated even further if new contractors were required to be trained and on-boarded during the next 7 months.

Failure to obtain a re-designation would cause a multi-million-dollar budget shortfall for the Debt Collection Center and would cause PSC’s customer base to have to perform collection services that they are not prepared or qualified to do.

Accounting Services and Financial Reporting Services: A primary function of this task order revolves around reconciliation and journal voucher work. The Financial Control Branch and Financial Reporting Services are both plagued with high turnover. For example, the General Ledger Section has an authorized staffing plan of 7 but is currently staffed with 2 employees with 1 leaving in the summer of 2023 and the other taking extended leave in summer 2023. Effectively, there will be no federal staff to oversee these functions in the summer of 2023, except for the Director of Accounting Services, who is responsible for 3 additional branches and a wide range of duties.

To assist with high turnover, Castro has recently overhauled and automated numerous reconciliations, including property, inventory, and transfers by leveraging their expertise with Microsoft Excel macros to save time for federal employees and contractors. However, the full scope of the changes has not been finalized, tested, and documented. It is estimated that this requirement will be met in October to November of 2022. Using another source for this contract would cause FMP to have to dedicate resources to restoring the old manual processes while attempting to redesign and reconstruct the modernized reconciliations with a new contractor. These are federal resources that FMP simply does not have. Almost every leadership position over Accounting and Financial Reporting Services is vacant – the Director of Financial Reporting, Financial Control Branch Chief, Chief of General Ledger, and the Chief of Disbursement Services, in addition to various staff vacancies.

Reconciliation and journal voucher work is critical for a successful audit of financial statements throughout the year and at year-end. Reconciliations provide assurance to auditors that HHS’ financial statements can be relied upon, as they give confidence that substantial accounting transactions are reflected in our numbers. HHS continues to receive unqualified audit opinions due to its quality processes around reconciliations and journal vouchers. Any impacts to the reconciliation process could jeopardize HHS’ ability to receive an unqualified audit opinion and failure to do so would be devastating for the organization in both internal and external perspectives. It is imperative that FMP be able to continue with its current path of modernizing reconciliations with Castro to be able to achieve its core mission.

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 (FAR 8.405-6(a)(1)(i)(C)); or

An item peculiar to one manufacturer can be a particular brand name, product, or a feature of a product, peculiar to one manufacturer). A brand name item, whether available on one or more schedule contracts, is an item peculiar to one manufacturer. (FAR 8.405-6(b)).

5. Market Research:

A sample of companies from the GSA professional services schedule was reviewed to determine if the services provided by the incumbent are competitive. The market research showed that the incumbent offers significantly (15%+) lower rates for comparable labor categories and qualifications.

6. Actions to Increase Competition:

PSC/FMP is currently conducting preliminary research and planning for a competitive follow-on requirement.

7. Any other facts supporting the justification:

8. Technical / Requirements Certification: By my signature below, I certify that the supporting data under my review which is included in this Limited-Sources Justification is accurate and complete.

Program Manager

Name: Igor Perfylev

Position Title: COR, Accounting Services

Email address: igor.perfylev@psc.hhs.gov

Phone: 301-492-4669

Program Manager Supervisor (or one level above Program Manager)

Name: Matthew Muller

Position Title: Director, Accounting Services

Email address: matthew.muller@psc.hhs.gov

Signature:

Date:

9. Best Value Determination: By my signature below, after review of the relevant documents, I have determined that the order subject to this Limited-Sources Justification represents the best value for the Government as set forth in FAR 8.404(d), and constitutes a fair and reasonable price. The basis for my determination is as follows:

The cost proposal shall be evaluated from a technical standpoint to determine the reasonableness of the quotes, including whether the prices in the quote are reasonable for the work to be performed; whether the prices reflect a clear understanding of the requirement; and whether the prices proposed are consistent with the various elements of the technical quote. Additionally, the Contracting Officer will review the loaded rates against the established BPA, the contractor’s current GSA schedule and against other GSA rates for the same or similar labor categories.

10. Contracting Officer's Approval (Required for proposed contract not to exceed $700,000 (value calculated including all options)): I hereby certify that this justification is accurate and complete to the best of my knowledge. I approve this justification subject to the availability of funds, and provided that the services and supplies herein described have otherwise been approved for acquisition.

Name: Victoria Estabrook Phone: (301) 492-4729

Signature: Date: 5/3/2022

11. Legal Review:

12. OPDIV Competition Advocate Approval (Required for proposed contract over $700,000 but not exceeding $13.5 million (value calculated including all options)):

I have reviewed this justification and find that it adequately supports limiting sources.

Name: Phone:

Signature: Date:

13. Office of Small and Disadvantaged Business Utilization:

I have reviewed this justification and find that it adequately supports limiting sources.

Name: Phone:

Signature: Date:

14. OPDIV HCA Approval (Required for proposed contract over $13.5 million but not exceeding $68 million (value calculated including all options)):

Name: Phone:

Signature: Date:

15. Department Competition Advocate:

Concur: Non-Concur:

Name: Phone:

Matthew J. Muller -S Digitally signed by Matthew J. Muller -S Date: 2022.05.03 18:12:34 -04'00'

Digitally signed by Victoria W. Estabrook -S DN: c=US, o=U.S. Government, ou=HHS, ou=PSC, ou=People, 0.9.2342.19200300.100.1.1=2000119096, cn=Victoria W. Estabrook -S Date: 2022.05.03 20:53:15 -04'00'

Signature: Date:

(The below approval paragraph is required if the cumulative contract value, including all options, exceeds $68 million.)

16. HHS Senior Procurement Executive (SPE) Approval:

Based on the foregoing justification, I hereby approve limiting sources for the above stated procurement, subject to the availability of funds, and provided that the services herein described have otherwise been authorized for acquisition.

State supplies/services being procured:

State the full statutory authority and FAR cite and title, consistent with paragraph 4, e.g. 41 U.S.C. 3304:

Name: Phone:

Signature: Date: