P42 JOFOC 9-16-20.docx

U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

WASHINGTON, DC 20410-3000

OFFICE OF CHIEF PROCUREMENT OFFICER

U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

WASHINGTON, DC 20410-3000

OFFICE OF CHIEF PROCUREMENT OFFICER

Control Number 20-31

JUSTIFICATION FOR OTHER THAN FULL & OPEN COMPETITION:

TITLE: Home Equity Conversion Mortgage Business Service Provider (HECM-BSP)

(1) Identification of the agency and the contracting activity, and specific identification of the document as a "Justification for other than full and open competition."

Department of Housing and Urban Development (HUD) Office of Chief Procurement Officer (OCPO) Office of Finance and Budget Office of Single- Family Housing 451 7th Street S.W. RM 5256 Washington, DC 20410

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

This request is for approval to award a fixed-price sole source contract to Reverse Mortgage Insight Inc to provide Home Equity Conversion Mortgage Business Services (HECM-BSP) for the Office of Finance & Budget and the Office of Single-Family Housing. The type of funding to be utilized is 0183 Mutual Mortgage Insurance Program Account – Federal Housing Administration-HUD funds.

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

The Contractor shall provide business services for its HECM loan portfolio and insurance program. Services include:

· Providing a web-based, end-to-end business service to manage HUD’s HECM portfolio

· Providing business services for all active and historical loan level records; of ready access to data for financial, budgetary, user-generated reporting, and business intelligence and management reporting tools; of automated reconciliation support between loan balances and posted transactions between its HECM business services and FHAs business partners automated and/or manual HECM records; and of the ability to quickly adapt to legislative, regulatory, and other administrative changes in the policies and procedures based on industry best practices for financial management and reporting, Federal government and Credit Program accounting, auditing, state-of-the-art information technology, security standards, and project management.

· Providing HECM business services Help Desk support services and training on HECM business services.

Estimated Value: $9,315,183.23

The overall period of performance is from September 30, 2020 through September 29, 2021 defined as follows:

· Base Period – September 30, 2020 to March 31, 2021

· Option Period 1: April 1, 2021 – September 29, 2021

(4) An identification of the statutory authority permitting other than full and open competition.

The statutory authority is 41 U.S.C. 3304(a)(1) as implemented by 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.

The Office of Housing currently has a contract with Reverse Market Insight Inc (RMI) to provide HECM business provider services. This contract with RMI expires on September 29, 2020. The business provider services provided by RMI are a central component to the administration and management of FHA’s HECM loan portfolio and insurance program. A break in service would be detrimental to the HECM program and adversely impact FHA’s ability to support HECM borrowers and industry partners.

If FHA was to abruptly lose services provided under the HECM BSP contract, the HECM program, a key FHA program to assist the elderly, would be severely crippled. The following significant harm to the government would occur:

· Loss of system to manage HUD’s HECM servicing and accounting requirements and obligations

· Loss of ability to make payments to HECM borrowers

· Reduced accountability and expertise due to limited or no SME support in all areas (Servicing, Account, Claims, Originations, MIP Collections)

· Limited access to data for reporting and audit purposes, causing inability to respond to Congressional and auditor requests. and

· Increased demand on HUD staff to address industry and servicer requests

· No ability to collect on FHA cases

· No ability to disburse of any premium refunds

· No accessible loan history data for active or terminated cases for HUD or Lenders

· No termination or mortgage record changes on any cases

· No ability to conduct to HECM vacant assigned note sales, a key tool used to increase recoveries for the MMI fund.

· Unable to track down unpaid debit vouchers owed to HUD

· No daily interface file from HERMIT Servicing module to Accounting module, and from Accounting Module to FHASL; FHA01/FHA02, Pay .gov, SAMS etc. Without this interface, FHA’s financial statements would be significantly impacted.

· No support to resolve HERMIT system issues pertaining to FHASL manual journal entries.

· No assistance on FHASL clearing account reconciliation between Asset Sales and HECM Notes.

· No monthly foreclosure file to reconcile HECM Notes foreclosure cases posted in SAMS system.

· No monthly and quarterly files needed for Management Report and other reporting data.

· No access to project level financial data and histories and reporting capabilities.

· Inability to process user application access requests for the Service Module, Accounting Module or SFTP server (3,000 users)

In addition to the explanation provided, a long-term break in service would negatively impact the agency’s mission of guaranteeing loans for a significant portion of the US housing market, as defined in Title 24 C.F.R.

RMI is the only source with the ability to provide the essential business and technical services in the time needed to mitigate a lapse in service. These business services are uniquely provided to FHA via software that is not owned or hosted by the Government. This software has been modified to support HECM business requirements during the performance of the contract and implementing an alternative solution would not be possible within the current time constraints. This presents distinct challenges and limitations for supporting the HECM insurance program.

Additionally, significant consideration should be given to the data replication and migration effort required to ensure FHA obtains the entirety of data currently housed within the contractor’s system. Historically, FHA has only received a subset of data for reporting and reconciliation purposes. In the past, this data has never been fully defined or transferred to within HUD’s IT infrastructure. This critical action is needed to ensure a transition to any type of alternative solution in the future is even possible. Based on past performance and technical knowledge of the requirement, completing a full data migration and replication effort between HUD and the contractor could take approximately 6-9 months.

The incumbent contractor has the necessary personnel and expertise required to deliver performance and reliability in the time needed to mitigate a lapse in service. No other contractor will be able to provide such quick services, technical and personnel expertise, full knowledge and performance of tasks required and successfully deploy a business service in this timeframe without creating a significant disruption in services.

RMI’s staff has completed the necessary security clearances and their staff is currently “PIVed” qualified and able to assume all required key personnel roles and responsibilities. This is advantageous to the Government since the average time to complete HUD’s PIV security process for employees of a new Contractor is can extend for 60-90 days.

The Office of Housing is in the process of procuring new services. It will take approximately six months to transition in the new service once an award has been made. During this transition period, continued support for the HECM insurance program will be needed.

(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.

The Office of Finance & Budget and the Office of Single Family Housing in collaboration with Housing’s Procurement Management Division (PMD) is in the process of awarding a new contract in FY 2021. Past efforts included the issuance of multiple Sources Sought on FedBizOpps with responses from numerous vendors. It is assumed that future procurement initiatives will utilize a similar process to solicit from as many potential sources as practicable. In addition, a Notice of Intent to Sole Source will be published before award for the purpose of obtaining information from interested firms and their capability to perform the requirement.

(7) A determination by the contracting officer that the anticipated cost to the Government will be fair and reasonable

Prior to the issuance of any contract award, the Contracting Officer will conduct a price analysis to sufficiently determine the overall price represents a fair and reasonable price to meet the Government's needs.

(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.

Market research was recently completed to identify capable firms that provide similar business services. The results were as follows:

· An SBA search for potential suppliers yielded eight (8) results under the competitive small business set-aside that could be solicited to provide the services required.

· Vendors offering the same or similar services were also compared based upon the GSA Federal Schedule. The comparisons included small and large businesses.

· The various market research methods included DSBS, SBA and GSA’s e-Library search tool.

· Housing’s Office of Systems and Technology also met with the Office of Small and Disadvantaged Business Utilization and they provided a list of small businesses via a Dynamic Small Business search.

Based on the most recent Market Research conducted there are no known sources other than the incumbent contractor that has the existing capacity to provide service prior to contract expiration on September 29, 2020. Awarding a new contract would result in delays and cause an interruption in services.

(9) Any other facts supporting the use of other than full and open competition, such as:

The Reverse Market Insight Inc contract will expire on September 29, 2020 and has a 120-day transition-out period. Therefore, there is a critical need to obtain an award to RMI to mitigate the potential negative impact of a lapse in service and the loss of data that could occur until a new contract can be awarded and the transition in/out process can be completed. RMI has the necessary tools, processes, and personnel to continue providing the required and critical support services. RMI’s unique qualification in providing the adequate staffing mix and required services illustrates not only the best value to the Government, but also the ability to maintain the essential technical and personnel expertise to deliver outstanding performance and reliability under this very important contracting effort.

(10) A listing of the sources, if any, that expressed, in writing, an interest in the acquisition.

Potential Supplier Information An SBA search for potential suppliers yielded eight (8) results under the competitive small business set-aside. Below are some examples of potential vendors known sources that could be solicited to provide the service required. Time constraints prevented the issuance of a sources sought notification. Therefore, no direct responses from potential vendors were considered.

DYNAXYS

DUNS# 129652769

Provides all required services with consistent above average performance ratings. Substantial operations with HUD today.

Pyramid Systems, Inc.

DUNS# 956122402

GSA MAS (U.S. General Services Administration Multiple Award Schedule) Provides all required services with consistent above average performance ratings. Substantial operations with HUD today.

Verdi Consulting

DUNS# 118459325

GSA MAS

Provides all required services with consistent above average performance ratings. Substantial operations with HUD today.

Specialty Servicing Systems, LLC

DUNS# 080790998

IBIS SOFTWARE CORPORATION

DUNS# 099104593

Trade Street Advisors, LLC

DUNS# 829556260

SoftOpt Engineering LLC

DUNS# 879987576

(11) A statement of the actions, if any, the agency may take to remove or overcome any barriers to competition before any subsequent acquisition for the supplies or services required.

A notice will be publicized in beta.sam.gov to ensure the maximum extent practical competition will be achieved for the re-compete of this acquisition.

(12) Technical Certification

See HUD-24012, Part 1, Justification, Section Program Office Official’s Certification.

(13) Contracting officer certification that the justification is accurate and complete to the best of the contracting officer’s knowledge and belief.

See HUD-24013, Part 2, Contracting Officer’s Determination and Certification.

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