4.15 JA - 24-112 - FSA TIP - Redacted.pdf

DEPARTMENT OF THE NAVY

NAVSUP FLEET LOGISTICS CENTER NORFOLK

1968 GILBERT STREET SUITE 600

NORFOLK VA 23511-3392

IN REPLY REFER TO

J&A 24-112

JUSTIFICATION AND APPROVAL

FOR USE OF OTHER THAN FULL AND OPEN COMPETITION

1. Identification of Agency and Contracting Activity.

The requiring activity is Field Support Activity (FSA), Washington Navy Yard, DC 20374. The contracting activity is NAVSUP Fleet Logistics Center (FLC) Norfolk, Contracting Dept., Pentagon Directorate, 700 Robbins Ave. Bldg. 2B Philadelphia, PA 19111-5083

2. Description of the Action Being Approved.

This procurement action supports Benefit Distribution Services for the Transportation Incentive

Program (TIP) that are currently performed under contract N0018923CZ113. This contract was awarded on a sole source basis to Edenred Benefits, LLC, (Edenred) a large business; and expires 30 September 2024. This Justification and Approval is seeking authority to award a follow-on, firm fixed price type contract, on a sole source basis, to Edenred for a period of performance of one base year, plus four options years, and one 6-month option.

3. Description of Services.

The FSA Program Office is designated as the Office of Primary Responsibility for the

Department of the Navy (DoN) Mass Transit Benefit Program outside the National Capital

Region (ONCR); or the TIP as titled internally by DON. Based on eligibility requirements, TIP provides fringe benefits to military and civilian employees to offset mass transit commuting costs to reduce their daily contribution to traffic congestion and air pollution, as well as expand their commuting alternatives. TIP specifically pays for mass transit costs incurred by personnel in their local commute between their residence and duty station. Currently, FSA provides oversight for benefit disbursements to approximately 8,000 DON employees.

ONCR is defined as the 50 states, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands. ONCR excludes the

District of Columbia; Montgomery, Prince George's, and Frederick Counties in Maryland;

Arlington, Fairfax, Loudoun, and Prince William Counties in Virginia; and all cities now or hereafter existing in Maryland or Virginia.

The scope of this requirement is for a contractor to provide fringe benefit disbursement services and program support to the FSA TIP Program Office. To adequately support DON ONCR TIP, contract support services are required to provide distribution services including but not limited to: multiple disbursement methods via credit or debit cards, paper vouchers, etc.; 24-hour access to real-time disbursement data for TIP Program Office, local support offices, and participants;

program and financial audit support; dedicated customer service support staff, integration of

DON ONCR TIP application system with technical support; comprehensive financial and program reporting provided in a timely manner.

Source Selection Information – See FAR 2.101 and 3.104

The FSA TIP Program Office is seeking a long-term strategy for supporting the estimated 8,000 enrolled and expanding DON employees under the Mass Transit Benefit Program. Therefore, a base plus four-option year contract is anticipated, with a period of performance from 01 October

2024 through 30 April 2030. The total estimated value including all options is $87,932,118.

Performance Year Disbursements Fees Total

Base $12,176,308 $465,353 $12,641,661

Option Year 1 $13,430,468 $513,284 $13,943,752

Option Year 2 $14,813,805 $566,153 $15,379,958

Option Year 3 $16,339,628 $624,466 $16,964,094

Option Year 4 $18,022,610 $688,786 $18,711,396

Option Year 5 $9,912,435 $378,822 $10,291,257

Total $84,695,254 $3,236,864 $87,932,118

The resultant contract will be funded with FY25 Navy Operations & Maintenance (O&MN) appropriations. Options will be funded utilizing appropriations (O&MN) of the fiscal year in which the option year is exercised.

4. Statutory Authority Permitting Other Than Full and Open Competition.

The statutory authority permitting other than full and open competition is 10 U.S.C. 3204(a)(1) -the supplies or services needed by the agency are available from only one responsible source and no other type of supplies or services will satisfy agency requirements, as implemented by FAR

6.302-1.

5. Rationale Justifying Use of Cited Statutory Authority.

The above statutory authority permitting other than full and open competition applies to the proposed procurement due to the unique capabilities required to provide support to the TIP benefit disbursement service.

To fully support the required distribution services the FSA TIP requires a vendor having an existing and relatable electronic transit system for an established fringe benefit distribution program. The customer service technical capability of a plugin-play dedicated support team who is readily available to manage the traffic of the program participants without a disruption in benefits is required. Multiple disbursement methods via credit/debit and paper voucher supportability.

An extensive market research analysis was performed with the intention of seeking out qualified fringe benefit distribution providers that had the unique technical capability and business infrastructure supportability of fulfilling the FSA TIP requirements. For the reasons addressed in this section, and further substantiated in Section 6, Edenred Benefits, LLC is the only known vendor capable of fulfilling the requirements to support the FSA TIP for FY25-FY30.

6. Description of Efforts Made to Solicit Offers from as Many Offerors as Practicable, including a Description of Market Research, if applicable, and a List of Interested Sources, if any.

Market research was performed through discussions with the FSA activity, a review of previous acquisitions of a similar nature, publishing formal requests for information, and communication among industry. FSA evaluated the marketplace to identify firms possessing the requisite expertise to provide the required Transit Benefit Program services. A single vendor was identified as being technically capable of providing the required fringe benefit distribution services.

The FSA presented two vendors including the current FSA TIP service provider. As a result of the unique requirements needed to effectively provide fringe distribution services for a federal mass transit program, the market options for service providers were limited. The vendors researched were (1) TranBen, a private sector company that provides limited benefit disbursement services. (2) Edenred Benefits, LLC, the current contracted service provider of the

FSA TIP.

TranBen does not have the capability to disburse multiple forms of payment as required by the

Performance Work Statement (PWS). TranBen only has paper voucher supportability. TranBen also does not have an electronic information technology system to manage the collection and storage of participant data as required by the PWS.

Edenred is the current service provider for the TIP and has proven to meet all of the unique technical capabilities required by the PWS. Edenred provides electronic distribution through credit/debit cards, and have the supportability of paper vouchers. Edenred also has an electronic information technology system that can collect and store participant data that conforms to the

PWS requirements.

Further market research was conducted by the contracting office for the FY25 requirement by posting a sources sought/RFI to SAM.gov. The posting opened 02 May 2024 and remained opened for one week to identify if any further sources, both small and large businesses, could potentially be capable of providing the required services. The Sources Sought provided a draft

Performance Work Statement (PWS). A total of four sources expressed interest by submitting a capability statement as requested by the sources sought notice.

Two of four interested sources included Echelon Services and SRR International. The FSA reviewed the websites and the capability statements for Echelon Services and SRR International.

Of these two sources, both specialize in system and technology services. They offer and speak to capabilities regarding general data management and analysis, system integration, application development, IT and cybersecurity maintenance. None of the sources have information on their website or capability statement that they can support a fringe benefit distribution service via multiple payments methods such as debit/credit cards, or paper vouchers. Nor did they specifically address the tasks of the PWS.

A third source, QED Enterprises, expressed interest by submitting a capability statement. QED was evaluated and was further asked by the contracting office via email dated 25th June 2024 if they could support a benefit distribution service via multiple payments methods such as debit/credit cards, or paper vouchers. QED stated in email dated 27th June 2024 that they reviewed the PWS and concluded they would not have a fully capable application system that could align and integrate with FSA TIP as required by the PWS. QED also did not mention any capability on multiple disbursement methods.

A fourth source Atrium Technologies LLC expressed interest on 27th May 2024 by responding to the closed sources sought notice. The contracting office evaluated Atrium’s capability statement and was further asked by the contracting office via email dated 25th June 2024 if they could support a benefit distribution service via multiple payments methods such as debit/credit cards, or paper vouchers. Atrium’s response dated 26th June 2024 did not include paper voucher supportability which is required by the PWS for multiple disbursement methods. After review by

FSA, Atrium’s core competencies and past performance only speaks to providing general benefits distribution and other non-payroll disbursement services. Based on their capability statement and the contract negotiator’s follow up, they only offer one form of fare media (debit card). The PWS requires the contractor to provide at a minimum three forms of payment to include paper vouchers and WMATA SmartBenefits. Atrium’s enrollment and delivery capabilities for credit/debit card products is also done via Secure File Transfer Protocol (SFTP).

In accordance with DoD Instruction 8170.01, FSA cannot use non-DOD-Controlled electronic messaging services to process non-public DOD information. Additionally, the capability statement does not mention an electronic information technology system to facilitate the distribution of transit benefits, manage billing information, and maintain a history of records at the participant level in support of audit requirements. The system if established would also be subject to accreditation policy per the PWS scope.

For the reasons addressed in this section Edenred Benefits, LLC is the only known vendor capable of fulfilling the requirements to support the FSA TIP for FY25-FY30.

7. Determination of Fair and Reasonable Cost.

The Contracting Officer has determined that the anticipated cost to the Government of the supplies/services covered by this J&A will be fair and reasonable.

8. Actions to Remove Barriers to Future Competition.

The market research above confirms that Edenred is the only known source that can meet the unique technical needs of this requirement for FY25-FY30.

In accordance with PGI 206.302-1(d), a sources sought notice / RFI was posted to the

Government-wide Point of Entry (GPE) (SAM.gov) on 02 May 2024 – 09 May 2024 discussed above, four vendors responded to the posting. The Requiring Activity reviewed the information provided by each firm in response to the sources sought notice / RFI to ascertain whether any of the responders were capable of meeting the Government’s minimum need for this requirement.

Based on that review, a determination was made that none of the responders possess the technical capability to perform the required tasks and meet the government’s need for the TIP.

FSA, with support from NAVSUP FLC Norfolk, Contracting Department, Pentagon Directorate, plans to conduct market research, should a follow-on effort be required. If another potential source emerges, FSA will assess whether competition for future requirements is feasible.

Pursuant to DFARS PGI 206.303-2(b)(i) and 206.304(a)(S70), “(f)or a non-competitive follow-on to a previous award for the same supply or service supported by a justification for other than full and open competition citing the authority at FAR 6.302-1, the approval official must determine whether the planned actions to remove barriers to competition were completed.

The approving official has reviewed the previous justification which indicated market research would be conducted to identify if other firms may be able to perform the required services.”

The approving official has reviewed the prior justification and has considered the market research performed on for this follow-on action, and has determined that the actions to attempt to remove the barriers to competition have been completed.

Despite attempts of the above-mentioned actions, the barrier to competition remains. No other source has proven to be able to provide the technical capability that Edenred can.

9. Contracting Point of Contact

The point of contact at NAVSUP Fleet Logistics Center Norfolk, Pentagon Directorate is

Matthew Pizzarelli, Code 270.1, who can be reached at matthew.f.pizzarelli.civ@us.navy.mil.

mailto:matthew.f.pizzarelli.civ@us.navy.mil.