PHEAA Justification_11-15-2021_Loan_Servicers_FINAL signed.pdf

JUSTIFICATION & APPROVAL

FOR OTHER THAN FULL AND OPEN COMPETITION

Title IV Loan Servicing and Specialty Services

FAR 6.302-5 – Authorized or required by statute.

1. Identification of Agency and Contracting Activity

United States Department of Education (ED), Federal Student Aid (FSA).

2. Nature/Description of Action Being Approved

Consolidated Appropriations Act, 2021 (H.R. 133) provides FSA with the authority to extend the current Title IV loan servicing task order periods of performance by up to two years from the current end dates. These proposed extensions will allow FSA to continue services while properly planning a competitive procurement for the future of loan servicing.

3. Description of the Services Required to Meet the Agency’s Needs (including the estimated value)

In 2009 and 2012, FSA awarded two 10-year multiple-award contracts for Title IV loan servicing. In 2019, FSA issued final task orders with the potential to extend performance out two years. These contracts are to acquire efficient and effective commercial contract services to manage all types of Title IV student aid obligations, including, but not limited to, servicing, specialty programs, and consolidation of outstanding debt. Loan servicers act as a conduit between borrowers and the government.

The requested extension of services will include the same services that are currently being provided under the current contracts. The following table includes the proposed actions and estimated cost by vendor.

Vendor Name Period of

Performance 1 Year 2nd Year Total

OSLA 1/1/22-12/31/23 $ 25,879,873 $ 28,425,852 $ 54,305,726

MOHELA 1/1/22-12/31/23 $ 162,326,011 $ 233,579,853 $ 395,905,864

EDFINANCIAL 1/1/22-12/31/23 $ 102,072,049 $ 123,730,906 $ 225,802,956

NELNET 12/15/21-12/14/23 $ 208,417,582 $ 246,784,008 $ 455,201,590

NAVIENT 12/15/21-12/14/23 $ 176,435,255 $ 214,750,606 $ 391,185,861

GREAT LAKES 12/15/21-12/14/23 $ 215,516,342 $ 236,718,147 $ 452,234,490

PHEAA 12/15/21-12/14/22 $ 97,895,207 N/A $ 97,895,207

$ 988,542,320 $ 1,083,989,373 $ 2,072,531,694

Wesley.Beemer Highlight

Wesley.Beemer Highlight

4. Identification of the Statutory Authority Permitting Other Than Full and Open Competition

The procurement actions will be awarded in accordance with 41 U.S.C. 3304(a)(5), authorized or required by statute.

5. Demonstration that the Proposed Contractor’s Unique Qualifications or Nature of Acquisition Requires Use of the Authority Cited:

The original plan was to move loans from current servicers to the competitively procured Interim Servicing Solution (ISS) contract. However, the Consolidated Appropriations Act required FSA to suspend awarding of any ISS contract for not less than 90 days after enactment of the Act. Due to the 90-day pause, mandated loan servicing performance improvement requirements, and ISS schedule delays based on time needed for account migration activities, this procurement effort was cancelled, which created the need for the proposed extension to continue to provide loan servicing without disruption to over 40 million borrowers. The proposed extensions will allow FSA to continue services while properly planning a competitive procurement for the future of loan servicing.

6. Description of Efforts Made to Ensure That Offerors are Solicited from as Many Potential Sources as is Practicable

This is not applicable because the extension is justified by statute as stated under item 4 above.

7. Determination of Anticipated Price Reasonableness

The proposed modification to extend loan servicer contracts includes the same pricing as the current contracts that were established through competitive procurements.

8. Description of Market Research Conducted

9. Other Facts

None.

10. List of Interested Sources

11. Actions to Promote Future Competition

FSA will conduct market research to identify industry capabilities and acquisition strategies that will deliver customer service outcomes for borrowers as well as promote equitable opportunities for businesses in FSA contracts, including small businesses and businesses in underserved communities. FSA is seeking to issue a solicitation for the future state of loan servicing within the next six months.

12. Technical Certification of Accuracy and Completeness

This is to certify that the portions of this justification developed by the undersigned program office personnel, including supporting information and data verifying the Government’s minimum needs, schedule requirements and other rationale for other than full and open competition, are accurate and complete.

Chris Greene, Deputy Chief Operating Officer Federal Student Aid, Student Experience and Aid Delivery

Date

13. Acquisitions Office Certification of Accuracy and Completeness

I certify that the data supporting the recommended use of other than full and open competition is accurate and complete to the best of my knowledge and belief.

Wesley J. Beemer, Contracting Officer Federal Student Aid, Acquisitions Directorate

14. Approving Official's Signature:

Approve:

Phillip Juengst Deputy Assistant Secretary for Acquisition and Grants Administration Deputy Chief Acquisition Officer/Senior Procurement Executive U.S. Department of Education