Pages from JOFOC_HSFE70-15-C-0060_ 01-12-2021_Redacted.pdf

Justification for Other Than Full and Open Competition 2

e) Year of funding: Fiscal Year (FY) 2021

f) Other brief descriptive words and phrases: The contract extension for HSFE70-15-C-

0060 will serve to avoid a break in services for the NFIP.

3. Description of supplies/services.

The NFIP was created with the passage of the National Flood Insurance Act of 1968. The NFIP’s mission is to educate U.S. property owners about the risks of floods and provide flood insurance to accelerate recovery from floods, mitigate against future losses, and reduce the personal and national costs of flood disasters. The NFIP is a Federal program enabling property owners in participating communities to purchase insurance as a protection against flood losses in exchange for state and community floodplain management regulations that reduce future flood damages.

FEMA is committed to improving the NFIP by enhancing its efficiency and effectiveness of operation through well-defined strategic business priorities, enabled by well thought out business processes. To accomplish this, constant review and improvement of processes that support the NFIP are needed.

Optimal Solutions and Technology (OST) serves as the Contractor that provides support for the following NFIP activities:

• Provides actuarial support to develop the rate increases mandated by the Biggert-

Waters Flood Insurance Reform Act of 2012.

• Provides critical support and historical knowledge to FEMA when responding to high volumes of correspondence in both the underwriting and claims departments associated with the Biggert-Waters rate increases.

• Assists policyholders and FEMA in responding to the unprecedented number of claims appeals following Hurricane Sandy claims.

• Provides special assists with claims settlements and does the required reinspections to keep the Improper Payment Information Act (IPIA) rate below OMB mandated levels.

• Supports the management of prior term refunds, which if not addressed would result in significantly increased Congressional correspondence.

• Provides real-time claims data and polling information to FEMA and OMB for liabilities and borrowing decisions, so that FEMA can properly forecast budgetary needs in response to a disaster.

• Provides post flood event/disaster support by establishing and operating Flood Recovery Offices – in affected areas – to assist incoming claims activity and affected policyholders.

The capabilities that the Contractor provides to the NFIP and its stakeholders, especially commercial insurance agents, policyholders and WYO companies cannot discontinue. FEMA must continue to operate and maintain critical services that are essential to NFIP program.

Even a short interruption of actuarial, claims administration, correspondence, finance, flood disaster response, publications, regional office support, underwriting, WYO insurance

Justification for Other Than Full and Open Competition 3 company coordination, and policyholder support services would be likely to cause catastrophic failure of the NFIP.

4. Identification of statutory authority permitting other than full and open competition.

The statutory authority permitting other than full and open competition is FAR 6.302-1, use of the statutory authority under FAR 6.3 is justified by the following facts and rationale required under FAR 6.302-1: Only One Responsible Source and No Other Supplies or Services will Satisfy Agency Requirements, 41 U.S.C. 3304(a)(1).

5. Demonstration that the nature of the acquisition requires use of the authority cited.

FAR 6.302-1: Only One Responsible Source and No Other Supplies or Services will Satisfy Agency Requirements, applies because there is no other contractor in the United States that can provide the service. The capabilities the Contractor provides to the NFIP and its stakeholders, especially commercial insurance agents, policyholders and WYO companies cannot discontinue. FEMA must continue to operate and maintain critical services that are essential to NFIP program. Even a short interruption of actuarial, claims administration, correspondence, finance, flood disaster response, publications, regional office support, underwriting, WYO insurance company coordination, and policyholder support services would be likely to cause catastrophic failure of the NFIP.

Failure to extend this contract would result in the disruption of this major national insurance program for flood protection. This program is the largest and most widely available provider of flood insurance in the United States. Since structures located in special flood hazard areas must be insured for floods as a prerequisite for obtaining a mortgage with federally regulated lenders, disruption in service would impact real estate transactions nationwide. The unavailability of flood insurance would severely impact homeowners who would not be able to meet lenders’ requirements and protect themselves from the financial loss incurred in a flood. This would additionally increase federal disaster assistance costs resulting as homeowners would be forced to rely upon Treasury-funded assistance instead of premium-funded benefits.

OST, as the incumbent, is the only contractor that can satisfy the agency’s requirements in the short period of time in light of the protest. OST’s contract expires January 31, 2021.

OST has capabilities such as Claims Specialists, General Adjusters, Underwriting Specialists, Certified Actuaries, etc. Each labor category also has specialized experience in flood insurance.

If OST does not perform the work, the Program needs adequate time to onboard (6-8 weeks), vet experience (2-4 weeks) and train/transition (up to 12 weeks) the incoming contractor.

This has a high chance of causing severe delays and disruption.

6. Description of efforts made to ensure that offers are solicited from as many potential sources as is practicable.

Justification for Other Than Full and Open Competition 4

The work described under this J&A was competed under FAR Part 15 procedures but the award was protested. This short-term J&A is a bridge contract until the protest is resolved.

The agency shall make publicly available the justification required by 6.303-1 as required by 10 U. S.C. 2304(l) and 41 U.S.C. 3304(f). The justification shall be made publicly available within 14 days after contract award.

7. Determination by the contracting officer that the anticipated cost to the government will be fair and reasonable.

The Contracting Officer determines that the anticipated price will be fair and reasonable based on the total cost being comparable to the current contract rates, which were determined to be fair and reasonable.

8. Description of Market Research.

Market Research was previously conducted before the award of the protested contract. No additional market research was conducted for the purposes of this J&A.

9. Any other facts supporting the use of other than full and open competition.

The NFIP insures over $1 trillion in assets for more than 5.6 million policyholders in over 20,000 communities nationwide. Each year, the program collects over $3 billion in premiums and pays out an average of over a $2 billion in claims losses. The NFIP does not have the “in-house” resources and capability to service FIMA’s needs as the nation’s largest single-line, flood insurance carrier. Additionally, Contractor services are vital to effective Federal Disaster Response and Recovery operations, which require timely and accurate NFIP policyholder and claims information and processing. The Contractor assists the NFIP in supporting Federal, State, and local officials with mitigation activities designed to reduce future flooding and related damages..

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

Potential sources were not solicited for this one-month extension. Due to unusual and compelling circumstances, it was not known that an extension period would be necessary to the contract.

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 required supplies or services.

As indicated above, with respect to developing a more comprehensive NFIP systems and services framework, FEMA is in the process of migrating and transitioning the System of Record (SOR) from one contractor to another. During this effort, the NFIP IT Systems and Support (S&S) contract must remain in effect to ensure continuity and consistency of all