JEFO 27-011 GF Acceleration_Redacted.pdf

Source Selection Information – See FAR 2.101 and 3.104

Document # 27-011

JUSTIFICATION FOR AN EXCEPTION TO FAIR OPPORTUNITY (ABOVE SAT)

1. Identification of Requiring Activity and Contracting Activity.

The requiring activity is the Office of the Assistant Secretary of the Navy, Financial Management & Comptroller (ASN (FM&C)), Washington, DC. The contracting activity is NAVSUP Fleet Logistics Center (FLC) Norfolk, Contracting Dept., FM&C/BUMED Directorate.

2. Nature and description of contract action.

This acquisition is conducted under the authority of 10 U.S.C. 3406(c)(5). This action is an exception to the fair opportunity process to be awarded as a modification of an existing order. The placement of a Firm-Fixed Price (FFP) modification is anticipated. This procurement action supports the provision of additional Working Capital Fund (WCF) Tiger Team support services that are currently performed under Contract number N0018925FZ759.

Contract number N0018925FZ759 was awarded on a competitive basis to Kearney and Company (Kearney), a large business. The existing contract expires on 5 March 2028. This modification would fall under the Financial Improvement Program (FIP) IV indefinite-delivery indefinite-quantity multiple award contract (IDIQ MAC)

N0018922DZ014.

3. Description of Required Supplies/Services to meet the agency’s needs.

The proposed acquisition is to issue a modification to an existing task order awarded to Kearney. The requirement is to expand the DON Tiger Team support to the General Fund in support of achieving an accelerated unmodified audit opinion for the DON General Fund in FY27.

The primary purpose of the proposed increase is the DON’s decision to accelerate the FY 27 General Fund audit-opinion target by 12 months, from FY28 to FY27. This accelerated deadline was not anticipated when the Task Order was awarded and requires increased integrated support to complete priority audit response, remediation, validation, risk mitigation, and issue resolution activities before the accelerated deadline. The proposed modification provides additional capacity necessary for Kearney to support coordinating, prioritizing, and accelerating the work required to support an unmodified “clean” FY27 General Fund audit opinion.

The contractor shall provide audit subject-matter expertise; support Budget Submitting Offices and other audit stakeholders in resolving complex audit issues; perform root-cause analysis of audit exceptions; identify trends and risks to the General Fund audit opinion; support timely, accurate, and complete audit responses; and provide real-time risk mitigation during critical phases of the audit and audit closing. The contractor shall also oversee the schedule and milestones for related audit-remediation efforts and identify risks to the overall General Fund opinion for Government action.

The Contractor shall provide a DON Tiger Team with the goal to achieve the accelerated unmodified opinion by FY27 for DON GF in order to:

Serve as Audit SMEs with expertise to propose solutions and remediate complex audit issues, bridging the gap between traditional audit response and high pace, high volume audit testing.

Collaborate with BSOs and other Audit Stakeholders and meet regularly in person, as often as feasible, to review complex samples directly with the Independent Public Accountant (IPA) and receive immediate feedback allowing for challenges to be addressed promptly to reduce the number of follow-up question(s) and/or exceptions in the test work.

Perform Root Cause Analysis of issued exceptions and compile analysis brief identifying trends and key business processes/cycles which received high volumes of exceptions issued by IPA during the FFSA.

Play a key role in supporting BSOs and troubleshooting complex audit issues, driving delivery, accuracy, consistency and completeness across audit requests.

Deliver real-time risk mitigation strategies during critical phases of the audit and during closing of the audit. Guide field personnel through complex or atypical transactions, and identify necessary adjustments.

Resolve issues, ensure risks are contained, and momentum is maintained through the most critical phases of the audit.

Contractor will rely upon the work of other vendors for end-to-end processes remediation and response support for Real Property, UAE, Tridents, EDL, Note 8 Disclosures, OMS-Ordnance and OMS-Remainder (with the exception of OMS-R End User Accounting). Additionally, Contractor will rely upon the work of the government for Contingent Legal Liabilities. Contractor will have oversight of the schedule and milestones of these areas as they relate to the overall GF opinion and will identify risks to the opinion in these areas to the government based on that oversight.

The period of performance for this contract modification would be 18 months from 10 November 2026 to 21 April 2028. This would extend the current contract expiration date from 5 March 2028 to 21 April 2028. This modification will increase the contract value by from to , a increase to contract.

4. Identification of the Exception to Fair Opportunity and Supporting Rationale - Including Demonstration of Contractor’s Unique Qualifications.

The statutory authority that permits not providing each awardee a fair opportunity to be considered for each order exceeding the micro-purchase threshold issued under a multiple award contract is 10 U.S.C. 3406(c)(5), as implemented by FAR 16.507-6(b). The applicable exception to the fair opportunity process for this justification for the award of an order exceeding the simplified acquisition threshold is:

The exception to the fair opportunity process is FAR 16.507-6(b)(3), The order must be issued on a sole-source basis in the interest of economy and efficiency as a logical follow-on to an order already issued under the contract, provided that all awardees were given a fair opportunity to be considered for the original order.

Over the past several years, the DON has established a robust Financial Improvement and Audit Remediation Program (FIAR) that encompasses all DON Major Commands and crosses numerous functional components including service provider interface and coordination.

In the FY2024 National Defense Authorization Act, Congress has mandated that all components of the DoD be auditable by FY28. In early 2025, the Secretary of the Navy has named Audit as a top challenge, included Audit as a priority, and indicated the need to achieve a clean audit “as soon as practicable.” In June 2025, the Secretary of Defense signed a memorandum reiterating the urgency of this goal, stating that anything less than achieving the 2028 goal as “unacceptable” and establishing audit readiness as an “immediate imperative.” A recent mandate (August 2026) by the Secretary of the Navy has accelerated the General Fund Full Financial Statement Audit to FY27. The SECNAV’s recent memorandum1 establishes the Department’s directive to accelerate the achievement of an auditable financial statement opinion for the DON General Fund to Fiscal Year (FY) 2027—one full year ahead of the Department of War statutory benchmark of FY 2028. As this accelerated deadline approaches, DON and DoD leadership have also made financial health and audit a renewed point of priority, which has driven increased urgency in achieving audit goals.

1 Acceleration of the Audit Opinion on Navy General Fund Financial Statements to Fiscal Year 2027, published 28 October, 2026.

Based on the foregoing, the services are deemed to be available only from Kearney because the award of these highly specialized services to any other source would result in substantial duplication of cost to the Government that would not be recovered through competition and in unacceptable delays in fulfilling the agency's requirements.

Awarding to a firm other than Kearney would result in schedule delays, degradation or breakdown of services, and harm the agency’s mission. The Task Order has a period of performance ending on 5 March 2028. The modification proposes a 1.5-month extension of the performance, in order to secure Kearney’s Audit Response services through April 2028. Maintaining Kearney’s support for the additional 1.5 months will directly align with the SECNAV’s recent memorandum, which directs the DON to sustain progress and ensure that no prior year progress is lost and will allow Kearney to continue supporting BSOs and other stakeholders, allowing them to resolve complex audit issues, drive delivery, accuracy, consistency, and completeness across audit requests.

5. Determination of Fair and Reasonable Cost.

In accordance with FAR 16.507-6(d)(2)(v), the contracting officer has made the determination that the anticipated cost to the Government will be fair and reasonable.

6. Any other facts supporting the justification.

This procurement uses a MAC and will be solicited and awarded in accordance with FAR Subpart 16.507. The original Task Order N0018925FZ759 was awarded utilizing fair opportunity procedures under contract N0018922DZ014, satisfying the prerequisite condition for this logical follow-on exception.

7. Actions Taken to Remove Barriers to Competition.

This task order will conclude all activities associated with this requirement. The incumbent company was chosen out of five (5) MAC IDIQ holders. The incumbent, who was competitively selected, is completing a continuation of their prior work, which was extended due to unforeseen circumstances. Upon completion, no further requirements or follow-on activities are planned as of the time of this document. Thus, as this concludes the effort entirely, it poses no barriers to future competition.