M02 HITS-CS JOFOC Justification.docx

EXHIBIT 1

U. S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD)

JUSTIFICATION AND APPROVAL FOR OTHER THAN FULL AND OPEN COMPETITION

HUD Information Technology Systems (HITS) Continuity of Services (CS) CONTRACT

1. IDENTIFICATION OF THE AGENCY AND THE CONTRACTINACTIVITY, AND SPECIFIC IDENTIFICATION OF THE DOCUMENT AS A “JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION.”

U.S. Department of Housing and Urban Development (HUD) Office of Chief Procurement Officer (OCPO)

Contracting Activity: Office of the Chief Procurement Officer, Headquarters

2. NATURE AND/OR DESCRIPTION OF ACTION BEING APPROVED.

The purpose of this justification is to request an increase to the total contract value for the purchase of additional security software support and license to comply with HUD’s software security requirements under the HITS CS contract. This HITS CS is currently being provided under contract 86615423C00001 by Perspecta Enterprise Solutions, LLC (“Perspecta”). The current contract has a period of performance ending 01/31/2025 and is a critical part of Office of the Chief Information Officer (OCIO) capabilities, encompassing most software licenses, subscriptions, hardware, cyber security, and monitoring services along with HUD’s secondary data center facility, providing the critical infrastructure and operational services necessary to HUD in fulfilling its mission.

· Method of Contracting: Modification to Contract

· Type of Contract: Firm-Fixed Price (FFP) & Time and Materials (T&M)

· Type of Funds: IT Funds are provided for this action

3. A DESCRIPTION OF SUPPLIES OR SERVICES REQUIRED TO MEET THE AGENCY’S NEEDS (INCLUDING THE ESTIMATED VALUE).

HUD requires continued provisioning of a stable, reliable enterprise-wide infrastructure to meet its strategic objectives and responsibilities under Federal legislation and executive orders. The contractor shall be responsible for the provisioning, management, storage, maintenance, backup, and operation of all infrastructure hardware, software, and support services to meet or exceed HUD’s current Enterprise Infrastructure core functions consistent with the assigned Contractor functions.

Requisition, RCS-Q-2023-00325, was established to purchase additional security software support and licenses so that HUD can be in compliance with the security requirements identified via an internal HUD audit. The estimated total value of this purchase is $161,112.33

Additional Software Cost

4. AN IDENTIFICATION OF THE STATUTORY AUTHORITY PERMITTING OTHER THAN FULL AND OPEN COMPETITION.

The statutory authority cited is FAR 6.302-1 “Only one responsible source and no other supplies or services will satisfy agency requirements.”

5. A DEMONSTRATION THAT THE PROPOSED CONTRACTOR’S UNIQUE QUALIFICATIONS OR THE NATURE OF THE ACQUISITION REQUIRES USE OF THE AUTHORITY CITED.

As the incumbent, Perspecta currently provides the provisioning, management, storage, maintenance, backup, and operation of all infrastructure hardware, software, and support services to meet or exceed HUD’s current Enterprise Infrastructure core functions that are critical. Their current contract 86615423C00001 includes the services for the Data Center services (labor and assets) which will expire 1/31/2025.

A 2015 HUD audit revealed a risk and need for an additional layer of encryption. A Plan of Action and Milestone (POAM) (“2016-DP-0002- 1C IBM Z/OS Mainframe file encryption at rest”) associated with this audit finding was developed and the cost estimated at $3,000,000 (this included the cost of an early Z12 upgrade in 2018 (cost of the refresh was planned for 2022 based on IBM End-Of-Life/End-Of-Service data) to support the new encryption solution). It was agreed that the cost of an early upgrade of the Z12 was prohibitive, and we would refresh according to our Technology Refresh Plan timeline.

The mainframe upgrade from the IBM Z12 model hardware to the IBM Z15 model hardware was executed per the Peraton submitted and approved Technology Refresh Plan – IBM mainframe upgrade was completed in January of 2022. At the time of upgrade, Peraton began assessing possible alternatives to meet the additional layer of encryption requirement. When the prior Risk Based Decision expired in April 2022, the additional layer of mainframe encryption became an active topic of discussion again. Perspecta engaged IBM to recommend a solution and to develop a Proof of Concept for the solution for the additional layer of mainframe encryption (EKMF and hardware compression feature). This was completed at the end of December of 2022. Perspecta is prepared to support the deployment of the recommended solution; however, there has never to date been an agreement by HUD to implement the solution for the additional layer of encryption recommended by the IBM Proof of Concept.

At this time, while HUD continues the competitive recompete of this requirement, Perspecta Enterprise Solutions LLC, located in Herndon, Virginia, is the only responsible source that can satisfy HUD’s HITS CS requirements without a potential disruption of service.

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 APPLIES.

Because of the length of the required transition period and PIVing requirements, Perspecta is the only source that can fulfill the agency’s requirements at this time. As a result, there were no other sources from which to solicit offers.

7. A DETERMINATION BY THE CONTRACTING OFFICER THAT THE ANTICIPATED COST TO THE GOVERNMENT WILL BE FAIR AND REASONABLE.

A price analysis conducted by the Contracting Officer will ensure a fair and reasonable price for the Government.

8. A DESCRIPTION OF THE MARKET RESEARCH CONDUCTED (SEE PART 10) AND THE RESULTS OR A STATEMENT OF THE REASON MARKET RESEARCH WAS NOT CONDUCTED.

Because of the lengthy required transition period and PIVing requirements, Perspecta is the only source that can fulfill the agency’s requirements at this time. As a result, no market research was conducted for this sole source bridge contract.

9. ANY OTHER FACTS SUPPORTING THE USE OF OTHER THAN FULL AND OPEN COMPETITION.

Without the critical infrastructure support currently being provided under the Perspecta contract, HUD would experience a detrimental impact to its enterprise information technology infrastructure. HUD would not be able to deliver on its mission to “create strong, sustainable, inclusive communities and quality affordable homes for all.” All HUD staff (HUD employees and contractors) who access the HUD network would not be able to perform their duties. This includes staff that support actions which include Housing Foreclosures, Fair Lending, Rental Assistance, and specific citizen needs from seniors, homeless, veterans, disabled, and low-income populations. HUD would no longer be able to manage timely payment of benefits to lenders and to the public from the various financial systems providing over $1.3 trillion in mortgage insurance through HUD’s Office of Housing, and by the Office of Community Planning and Development to administer grants to local organizations. In addition, HUD would not be able to communicate important program and agency information through websites to all external parties. This includes several items needed to ensure that HUD is functioning, including the Help Desk and Wireless Devices.

The impact of not implementing the mainframe encryption would be a risk to the agency’s security posture. The inability to implement the mainframe encryption could result in a data breach of the Department’s critical data center capabilities rendering HUD vulnerable to hacking and other exploits, including Personally Identifiable Information (PII) data being vulnerable to unauthorized disclosure and modification.

At this time, for the reasons discussed in this justification, Perspecta Enterprise Solutions LLC, located in Herndon, Virginia, is the only responsible source that can satisfy HUD’s IBM mainframe encryption requirements currently under contract.

10. A LISTING OF THE SOURCES, IF ANY, THAT EXPRESSED, IN WRITING, AN INTEREST IN THE ACQUISITION.

It has been determined that Perspecta is the only source that can fulfil the Governments requirement at this time. Capable of providing the software/licenses.

11. A STATEMENT OF THE ACTIONS, IF ANY, THE AGENCY MAY TAKE TO REMOVE OR OVERCOME ANY BARRIERS TO COMPETITION BEFORE ANY SUBSEQUENT ACQUISITIONS FOR THE SUPPLIES OR SERVICES REQUIRED.

The Office of the Chief Information Officer (OCIO) is currently pursuing a competitive acquisition for the DCIO IOO Operations and Maintenance (O&M) contract. HITS will be migrated to the DCIO IOO Operations and Maintenance (O&M) contract.

12. CONTRACTING OFFICER CERTIFICATION THAT THE JUSTIFICATION IS ACCURATE AND COMPLETE TO THE CONTRACTING OFFICER'S KNOWLEDGE AND BELIEF.

See certification at Part 2, Form-24012