P42 LSJ for SFIS Combined documentCASigned.pdf

U.S. Department of HousingLimited Source Justification -and Urban Development

Federal Supply Schedule Orders Office of the Chief Procurement Officer

Exceeding the Simplified Acquisition Threshold

PART 1 – JUSTIFICATION (to be completed by requesting office)

This acquisition is conducted under the authority of the Multiple Award Schedule Program, the statutory authorities for which are Title III of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 251, et seq.) and Title 40 U.S.C. 501, Services for Executive Agencies.

Services or supplies to be ordered [describe]:

Total estimated cost of this order [include all costs of the proposed acquisition, e.g., options, systems life costs, etc. ; total will determine the approval level needed]: $

Limiting Consideration from Required MAS Ordering Procedures (see FAR 8.405-1 & 8.405-2) Consideration for this Federal Supply Schedule order should be limited to the following source(s) [provide names, addresses and points of contact or attach separate sheet as needed]:

Circumstances justifying restriction of sources for consideration [select appropriate]:

An urgent and compelling need exists, and following ordering procedures would result in unacceptable delays (see FAR 8.405-

6(a)(1)(i)(A)).

Only one source is capable of responding due to the unique or specialized nature of the work (see FAR 8.405-6(a)(1)(i)(B)).

The new work is a follow-on to an original Federal Supply Schedule order that was placed in accordance with applicable Federal

Supply Schedule procedures (Note: The original order must not have been previously issued under sole source or limited source procedures (see FAR 8.405-6(a)(1)(i)(C)).

Attachments [provide the following information]:

A complete description of the circumstances that justify the above restriction.

Demonstration/description of the proposed contractor's unique qualifications to provide the required supply or service (if consideration is to be limited to one schedule contractor).

A description of the market research conducted among schedule holders and the results or a statement of the reason market research was not conducted.

A statement of the actions, if any, the Department may take to remove or overcome any barriers that led to the restricted consideration before any subsequent acquisition for the supplies or services is made.

Consideration Limited to Sources Providing Particular Brand, Product, or Product Feature

Sources to be considered for this order should be limited to those offering the following item(s) peculiar to one manufacturer (e.g., a particular brand name, product, or a feature of a product, peculiar to one manufacturer) [list and describe fully, or attach detailed description of the product or critical characteristics of the product]:

Attachments [provide the following information]:

If brand name, product, or product feature is the basis for the restricted consideration, the program office must describe why it is essential to the Government’s requirements, and demonstrate how the attached market research supports the determination that other companies’ similar products, or products lacking the particular feature, do not meet, or cannot be modified to meet, the Department’s need.

A statement of the actions, if any, the Department may take to remove or overcome any barriers that led to the restricted consideration before any subsequent acquisition for the supplies or services is made.

Previous edition unusable Page 1 of 3 form HUD-24013 ref. FAR 8.405-6 ( /20 )

Single Family Insurance Systems (A43), Single Family Insurance Systems-Clains (A43C)- Title 1

$ 1,923,720.24

Pyramid Systems Inc, 2677 Prosperity Ave., Ste 700, Fairfax VA 22031

J&A Number 20-45

If the order contains brand name specifications, the requirement has been posted unless one of the following exceptions applies (see FAR 8.405 [check applicable exception]:

Disclosure would compromise the national security (e.g., would result in disclosure of classified information) or create other security risks. The fact that access to classified matter may be necessary to submit a proposal or perform the contract does not, in itself, justify use of this exception;

The nature of the file (e.g., size, format) does not make it cost-effective or practicable for contracting officers to provide access through e-Buy; or

The senior procurement executive has made a written determination that access through e-Buy is not in the Government’s interest.

Program Office’s Supporting Data

The following information has been provided to support the limitation of sources or specific brand name, product , or product feature (e.g., verification of the Government's minimum needs or requirements or other rationale for limited sources) [list and describe; attach additional pages if needed]

Program Office Official’s Certification

I certify that the information provided in support of this justification is complete and accurate to the best my knowledge and belief.

Head of Program Office [name] Title/Name of Office:

Signature: Date: For additional information contact:

X

PART 2 – CONTRACTING OFFICER’S DETERMINATION AND CERTIFICATION

I hereby determine that:

The order represents the best value to HUD consistent with the requirements of FAR 8.404(d), 8.405-2, and 8.405-4 (price evaluation is attached); and, If a particular brand name, product, or product feature is requested, I hereby determine that it is essential to the Government’s requirements, and as demonstrated by the attached market research, other companies’ similar products, or products lacking the particular feature, do not meet, or cannot be modified to meet, the Department’s need.

I certify that the information contained in this justification is accurate and complete to the best of my knowledge and belief. In accordance with FAR 8.405-6(d)(1), this certification serves as approval of this limited source justification for orders up to $700,000.

Name: Signature: Date:

X

PART 3 – APPROVALS

For orders greater than $700,000 up to $13.5 million – Competition Advocate

Name Signature Date X

For orders of $13.5 million to $68,000,000 – Head of the Contracting Activity or Designee

Name Signature Date X

For orders over $68,000,000 million – Senior Procurement Executive

Name Signature Date X

Previous edition unusable Page 2 of 3 form HUD-24013 ref. FAR 8.405-6 (03/2020)

David C. Chow Chief Information Officer, OCIO

DAVID CHOW Digitally signed by DAVID CHOW Date: 2020.09.22 16:17:47 -04'00'

LaShayla Hopkins 202-402-5419

Donald S. Hadrick

H50640 Text Box Akinsola A. Ajayi

EXHIBIT 1

Limited Source Justification-Federal Supply Schedule Orders Exceeding the Simplified Acquisition Threshold

Single Family Insurance System (SFIS/A43), Single Family Insurance Systems – Claims (SFIS-C/A43C), Title 1 Insurance and Claims (TIIS/F72)

System Operations & Maintenance, Development, Modernization, and Enhancement, and Transition Support Services

1. IDENTIFICATION OF THE AGENCY AND CONTRACTING ACTIVITY, AND

SPECIFIC IDENTIFICATION OF THE DOCUMENT AS “LIMITED -SOURCES

JUSTIFICATION.”

AGENCY:

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

451 7th Street SW, RM 5184 Washington, DC 20410

Contracting Activity: Office of the Chief Procurement Officer (OCPO)

Program Office: Office of the Chief Information Officer (OCIO)

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

The purpose of this justification is to request a new task order under GSA IT Schedule 70 for a six (6) month base period with a six (6) month option period bridge contract for continuity of services. The current contract number 86615319C00009 has a period of performance ending 9/29/2020. This new task order award is to maintain Operation and Maintenance service for the Single-Family Insurance System, Single Family Insurance System – Claims, and the Title 1 Insurance and Claims systems.

Method of Contracting: New GSA Task Order Award

Type of Contract: Hybrid-Fixed Price and Time and Materials Task Order

Type of Funds: IT Funds are provided for this action

J&A Number 20-45

3. DESCRIPTION OF SUPPLIES/SERVICES REQUIRED TO MEET THE

AGENCY’S NEED (INCLUDING THE ESTIMATED VALUE).

The Contractor shall provide support for O&M and DME services for the Single-Family Insurance System (SFIS/A43), SFIS-Claims Subsystem (CLAIMS/A43C) and Title I Insurance and Claims (TIIS/F72) systems. The estimated dollar value for this action is $1,923,720.24 for the six (6) month base period and six (6) month option period of September 30, 2020 through September 29, 2021. The proposed cost is based upon the analysis of twelve (12) month period of performance. The estimated value details are as follows:

CLIN Service Description Qty UOI 6 Month Base

Price 1 Operations and Maintenance (O&M) - A43 SFIS 12 MO $275,997.98 2 Corrective Maintenance -A43 SFIS 12 MO $109,562.45

Operations and Maintenance (O&M) - A43C - Claims 12 MO $306,905.21

4 Corrective Maintenance -A43C - Claims 12 MO $96,275.90 5 Operations and Maintenance (O&M) - F72- TIIS 12 MO $78,581.06 6 Corrective Maintenance -F72- TIIS 12 MO $38,137.52 7 Transition Services 1 LOT $56,400.00

TOTAL for 6 Month Base Period $961,860.12

CLIN Service Description Qty UOI 6 Month

Option Period 8 Operations and Maintenance (O&M) - A43 SFIS 12 MO $275,997.98 9 Corrective Maintenance -A43 SFIS 12 MO $109,562.45

Operations and Maintenance (O&M) - A43C - Claims 12 MO $306,905.21

11 Corrective Maintenance -A43C - Claims 12 MO $96,275.90 12 Operations and Maintenance (O&M) - F72- TIIS 12 MO $78,581.06 13 Corrective Maintenance -F72- TIIS 12 MO $38,137.52 14 Transition Services 1 LOT $56,400.00

TOTAL for 6 Month Option Period $961,860.12

Total $1,923,720.24

4. THE AUTHORITY AND SUPPORTING RATIONALE (SEE FAR 8.405-6(a)(1)(i) and (b)(1) AND IF APPLICABLE, A DEMONSTRATION OF THE PROPOSED

CONTRACT’S UNIQUE QUALIFICATIONS TO PROVDIE THE REQUIRED

SUPPLY OR SERVICE.

The statutory authority cited is “Only one source is capable of responding due to the unique or specialized nature of the work” (see FAR 8.405-6(a)(1)(i)(B)).

As the incumbent, Pyramid Systems, Inc. 2677 Prosperity Ave. Ste. 700 Fairfax, VA 22031, (GSA Schedule #47QTCA19D00LJ) has extensive experience in successfully providing expedited and efficient support services under the past and existing HUD contract. PSI has demonstrated an in-depth knowledge of HUD's IT infrastructure, inclusive of a clear understanding of HUD's single-family modernization standards. Only this contractor can meet this requirement due to the lack of time available to make a new contract award by September 29, 2020. In addition, only this contractor can meet the current operations and maintenance support needs of the Single-Family Insurance System, Single Family Insurance System – Claims, Title 1 Insurance Systems and Claims systems because they possess the unique knowledge, skills, and abilities. This contractor also possesses the unique technical capability to perform support of this complex legacy system that has 42 separate system interfaces associated with it and a multitude of downstream system impacts. The requirement is essential because the SFIS systems are major and mission critical applications, contains Personally Identifiable Information (PII), and provides the backbone infrastructure for processing the majority of FHA’s insurance programs.

A lack of system support for A43 would have a definitive impact on the safety of HUD’s underserved borrower population to include low income, elderly, families, and the disabled. The data in A43 is used by A43C to validate the claims data presented in A43C therefore, if A43’s tables and processes are not functioning, neither is functionality for A43C. In turn, A43C provides data to SAMS and by extension P260. SAMS assigns Field Service Managers to HUD-acquired properties based on the claim data supplied by A43C.

If A43C does not provide that data, the properties are not secured, and HUD will suffer financial losses if the properties are damaged.

Similar to A43 and F72, A43C support also has an impact on the safety for HUD’s underserved borrower population. Loss mitigation is utilized to minimize economic impact and assists borrowers in avoiding foreclosure. If loss mitigation options are not available, borrowers will be put at risk of injury, danger, or loss of life increases due to loss of adequate housing. Claims/A43C is necessary to provide the mission critical function of processing single family forward mortgage claim payments, thus contractor support is needed to ensure this function is accomplished.

5. DETERMINATION BY THE ORDERING ACTIVITY CONTRACTING

OFFICER THAT THE ORDER REPRESENTS THE BEST VALUE CONSISTENT

WITH FAR 8.404 (d).

In accordance with FAR 8.404(d) the ordering activity, the Contracting Officer will determined that the order represents the best value and results in the lowest overall cost alternative to meet the Government’s needs by conducting the appropriate price analysis utilizing the Independent Government Cost Estimate and historical pricing from the previous contracts and modifications in which similar services were acquired.

6. A DESCRIPTION OF THE MARKET RESEARCH CONDUCTED AMONG

SCHEUDLE HOLDERS AND THE RESULTS OR A STATEMENT OF THE

REASON MARKET RESEARCH WAS NOT CONDUCTED.

The competitive process for the follow-on competitive is currently underway. The original market research conducted on the competitive award indicated that there are potential small business sources that were interested in the requirement and twelve companies responded to the RFI posted. Additional market research was not conducted for this 12-month bridge task order. PSI is the only vendor that can provide the service during this short time frame.

7. ANY OTHER FACTS SUPPORTING THE JUSTIFICATION

There are no other alternatives than to provide continued support. The impact of a break-in-service would result in immediate halted support for three critical systems.

The Single-Family Insurance System (SFIS/A43) is a mixed financial system that provides the calculations for monthly billing for single family forward mortgages. Monthly bills are calculated in A43 and sent to approximately 7,000 active lenders. Lack of vendor support for A43 could endanger HUD’s ability to generate proper monthly bills for over 6.4 million loans and collect mortgage insurance premiums (MIPs) for $750 million monthly. Also, A43 calculates distributive share (DS) payments and unearned upfront MIP refunds that homeowners are entitled to receive. The lack of vendor support for this application could affect homeowners from receiving much needed DS payments or MIP refunds timely. The current vendor provides support of these systems by:

� Performing numerous manual functions and processes pertaining to the nightly batch run applications.

� Support Office of the Inspector General’s findings and Office of Management and Budget’s requirement that includes generating monthly files and report required for monthly systems reconciliation and generating monthly files to meet the Data Act requirement.

� Possessing the necessary system access and having undergone the PIV process to have that required access.

� Possessing the required knowledge of the applications and the knowhow to research and correct any problem that occurs immediately.

� Being present to answer the phone at 2 AM, respond and correct issues when the Single-Family Claims Subsystem (SFC/A43C) nightly cycles conflict with other system interfaces which cause the system to come to a halt. The current vendor possesses the knowledge to correct those frequent issues immediately.

� Being present to answer daily inquiries from the Program Staff Office and mortgage lenders regarding various topics that require a response normally within one to two business days.

� Providing technical support to lenders that use batch processing for submission of mortgage record changes and terminations of insurance and addressing system downtime issues and ensuring system availability for HUD staff and clients.

� Performing testing for system upgrades or HUD and other agencies’ releases.

A lack of system support for A43 would have a definitive impact on the safety of HUD’s underserved borrower population to include low income, elderly, families, and the disabled. The data in A43 is used by A43C to validate the claims data presented in A43C therefore, if A43’s tables and processes are not functioning, neither is functionality for A43C. In turn, A43C provides data to SAMS and by extension P260.

SAMS assigns Field Service Managers to HUD-acquired properties based on the claim data supplied by A43C. If A43C does not provide that data, the properties are not secured, and HUD will suffer financial losses if the properties are damaged.

Similar to A43 and F72, A43C support also has an impact on the safety for HUD’s underserved borrower population. Loss mitigation is utilized to minimize economic impact and assists borrowers in avoiding foreclosure. If loss mitigation options are not available, borrowers will be put at risk of injury, danger, or loss of life increases due to loss of adequate housing. Claims/A43C is necessary to provide the mission critical function of processing single family forward mortgage claim payments, thus contractor support is needed to ensure this function is accomplished.

Title II of the National Housing Act provides insurance on mortgages for borrowers who otherwise might not be able to own their home. Moreover, a break-in-service puts at risk:

� More than 125,000 loss mitigation options worth $1.5 billion, assisting with keeping at risk borrowers in their home.

� More than 67,000 home disposition claims worth $5.8 billion, providing needed funding for new loan originations. Without contractor support, the loss mitigation options, and home disposition claims would not be funded.

The Single-Family Claims Subsystem (CLAIMS/A43C) receives, edits, controls, monitors, and authorizes payment for Single Family mortgage insurance claims benefits. This directly contributes to the liquidity of the mortgage financing market.

Claims are disbursed daily and impact the housing market and the economy by returning funding to mortgagees to be used for new loan originations. Loss of contractor support impacts FHA’s mission by reducing funding availability to potential homebuyers. This will also result in loss of revenue to FHA-insured lenders which could have an especially devastating effect on smaller lenders that depend on timely initial claim payment. In addition, this could fracture lender trust in HUD to provide anticipated claim funds as expected. In FY 2019, Claims/A43C processed more than $6.4 billion in Single Family claim payments to FHA-approved lenders.

HUD has recently issued several Mortgagee Letters aimed at providing relief to borrowers affected by COVID-19 via the COVID-19 National Emergency Forbearance Claim and Standalone Partial Claim. These new disaster claims will result in an increase in the number of loss mitigation claims submitted for payment. In the 3rd quarter of this fiscal year alone, Claims/A43C has processed 33,799 loss mitigation claims totaling $480,399,844.89. With lenders now able to submit these claims in bulk via FHA Catalyst, contractor support is vital to ensure Claims/A43C continues to function properly so these claims are paid timely and avoid any systemic problem that will cause the claim payment process to come to a halt.

The F72 Title I Insurance and Claims System (TIIS) is a mixed financial system and provides support to all insurance and claims functions for the Title I loan program. The insurance activities supported include examination and acceptance of new loans for insurance, premium billing, and collection, maintaining insurance-in-force and claim processing. The Title I program insures both property improvement loans designed to improve and maintain the nation’s housing stock and manufactured home loans which provide safe and affordable housing to underserved individuals.

� Maintains insurance-in-force for over 30,000 active Title I loans totaling over $870 million.

� Bills and collects premiums of approximately $9 million per year.

� Supports the processing of approximately 750 claims totaling over $6 million per year.

Additionally, all three systems are legacy systems hosted on the IBM mainframe. A break-in-service would immediately result in a lack of support for these systems that directly impacts Housing’s IT Modernization project. Housing and OCIO are currently executing an overall modernization of systems and Congress has appropriated $20 million to fund this effort. Support for the underlying systems, A43 and A43C, directly impacts this development effort. A break-in-service will delay development of the modernization project due to lack of integration support and can potentially delay key deliverables to the mortgage industry and undermine the project plan and milestones shared with OMB and Congress. These systems are the authoritative source for the financial reporting that is required by regulation to FHASL. The contractor is responsible for developing and providing these reports to HUD for submission. If the support is not continued past the current end date of the contract, HUD will be unable to meet their mandatory required financial reporting.

8. STATEMENT OF THE ACTIONS, IF ANY, THE AGENCY MAY TAKE TO

REMOVE OR OVERCOME ANY BARRIERS THAT LED TO THE RESTRICTED

CONSIDERATION BEFORE ANY SUBSEQUENT ACQUSITION FOR THE

SUPPLIES OR SERVICES IS MADE.

The competitive acquisition is in the evaluation stage and is hoped to be awarded and transitioned prior to the end of the requested task order period of performance.

9. THE ORDERING ACTIVITY CONTRATING OFFICER’S CERTIFICATION

THAT THE JUSTIFICATION IS ACCURATE AND COMPLETE TO THE BEST

OF THE CONTRATING OFFICER’S KNOWLEDGE AND BELIEF.

See certification at Part 2 of the HUD Form 24013.

10. EVIDENCE THAT ANY SUPPORTING DATA THAT IS THE

RESPONSIBILTIY OF TECHICAL OR REQUIREMENTS PERSONNEL (E.G

VERIFYING THE GOVERNMENT’S MINIMUM NEEDS OR REQUIREMENTS

OR TOTHER RATIONALE FOR LIMITED SOURCES) AND WHICH FORM A

BASIS FOR THE JUSTIFICATION HAVE BEEN CERTIFED AS COMPLETE

AND ACCURATE BY THE TECHNICAL OR REQUIREMNTS PERSONNEL.

The information provided as supporting data which forms the basis for this limited source justification has been certified as complete and accurate by the Chief Information Officer (CIO) as evident by this signature on Form HUD-24013 Part 1.

11. FOR JUSTIFICATIONS UNDER 8.405-6(a)(1), A WRITTEN

DETERMINATION BY THE APPROVIG OFFICAL IDENTIFYING THE

CIRCUMSTANCES THAT APPLIES.

The written determination identifying the circumstances that apply has been provided as evident by the Approving Officials signature on Form HUD-24013 Part 3.