Limited_Jofoc_Signed_DU100R-16-T-00002.pdf

U.S. Department of Housing and Urban Development

Washington, D.C. 20410

OFFICE OF HOUSING

Visit our web page at http://www.hud.gov/offices/cpo/index.cfm

LIMITED SOURCE JUSTIFICATION AND APPROVAL

FOR FEDERAL SUPPLY SCHEDULE

TITLE: BUSINESS & NEEDS SUPPORT FOR OPIIS

(ON-LINE PROPERTY INTEGRATED INFORMATION SUITE)

(i) Identification of the agency and the contracting activity, and specific identification of the document as a “Limited-Sources Justification.”

Department of Housing and Urban Development (HUD)

Office of Chief Procurement Office

451 7 th

Street, Room 5256

Washington, DC 20410

This acquisition is conducted under the authority of the Multiple Award Schedule Program

(41 U.S.C. 251, et seq. and 40 U.S.C. 501) FAR 8.405-6(a) (1) (i) (C).

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

HUD is requesting a 6-month Task Order due to unusual and compelling urgency. HUD is statutorily required to comply with the Credit Reform Act of 1990.

The multifamily Online Property Integrated Information Suite (OPIIS) makes multifamily financial, physical inspection and program data available to Headquarters and field staff for use in monitoring multifamily program performance.

The goal of this procurement is to assist OE in its efforts to provide the multifamily program areas with the data and reports they need to improve program performance, prevent claims, reduce losses, and increase the effectiveness with which HUD can maintain and increase the supply of affordable rental housing and health care facilities.

Currently the department is conducting a competition for a new contract, Commercial Capital

Assessment Projections (CCAP) Integration to replace Multifamily Risk Assessment (MFRA) and the On-Line Property Integrated Information Suite (OPIIS). The CCAP contract is not expected to be awarded, based on recent updated information from the Chief Procurement

Officer (OCPO), until the summer 2016 timeframe. A new task order with the incumbent vendor is required by March 30, 2016 to meet the following needs:

1) Sufficient support to get HUD/Housing/FHA through the budget season, which stretches into spring 2016); and

2) Their technical guidance and support through the mandated Financial Statement audit process which begins in July 2016.

Therefore a short term six (6) month Task Order is needed for OPIIS requirement.

Market research revealed no new technology or services/supplies in the marketplace which would offer faster, better output and/or lower cost then what we presently have available. The new acquisition CCAP, once awarded will continue to provide compliance with Federal Credit

Reform Act (FCRA) of 1991.

The 6-month contract option is the most advantageous method of fulfilling the Government’s need when price and other factors are taken into consideration:

The price offered on the current Task Order represents best value to the government. No other vendor can perform the critical required services for multifamily risk assessment in such a short timeframe.

The 6-month short term Task Order helps to mitigate the risk and impact that a break in service would cause. The Government’s need for continuity of operations and the potential costs of disrupting operations would be felt throughout the HUD community.

The OPIIS contract provides monthly updated risk rankings for every property in the commercial portfolio. HUD asset managers are dependent on these risk rankings to prioritize those properties that are in the greatest probability of default. This allows the asset managers the ability to intervene and reduce the number of defaults and claims.

The OPIIS contract produces the insurance claims payout forecast and refinancing volumes that are input into the budget and cash flows required by OMB. The budget cycle runs from the beginning of November through the spring. Without OPIIS, HUD would be in direct dereliction of duty for fiscal responsibility and accountability in particular to the Federal Credit Reform Act. Without the services of the OPIIS contactor

HUD, at best, would be forced to produce unsupportable estimates.

The current contract expires 03/29/2016, and the new CCAP contract is scheduled to be awarded in the summer 2016 timeframe. This award date does not provide sufficient transition time for a new contractor to come in and understand the rationale, FHA’s historical experience supporting the construction of the models, or to sufficiently understand the code to respond to auditor questions.

There is no negative impact to HUD’s small business goals by exercising this short term award because the incumbent is a small business.

The 6-month contract must be awarded because the impact of not awarding a new contract would be detrimental to the gains FHA has made in credit risk of the commercial property portfolio. The Government’s need for continuity of operations and potential costs of disrupting operations is paramount. The services to be performed produce the risk ranking of every property. Without OPIIS HUD would be in direct dereliction of duty for fiscal responsibility and accountability. Without the services of the OPIIS contactor HUD at best would be forced to use outdated and misleading reports and information to improve program performance, prevent claims, reduce losses, and increase the effectiveness with which HUD can maintain and increase the supply of affordable rental housing and health care facilities.

(iii) A description of the supplies or services required to meet the agency’s needs

(including the estimated value).

The action is for a 6 month Task Order of the Business & Needs Support For OPIIS contract from March 30, 2016 to September 29, 2016 in the amount of $684,968. The purpose of OPIIS is threefold: 1) To disseminate the information generated by the Multifamily Risk Assessment

(MFRA) modeling to HUD’s Multifamily Headquarters Principal staff and Field Offices.

MFRA performs commercial portfolio risk analytics and conduct risk modeling in support of

HUD’s mission of providing affordable Multifamily housing and medical care services to underserved populations across the United States while safeguarding capital levels mandated by

Congress; 2) To make multifamily financial, physical inspection and program data available to

Headquarters and field staff for use in monitoring multifamily program performance; and

3) To assist in Housing’s efforts to provide the multifamily program areas with the data and reports they need to improve program performance, prevent claims, reduce losses, and increase the effectiveness with which HUD can maintain and increase the supply of affordable rental housing and health care facilities.

OPIIS makes annual financial statement and physical inspection data collected by the Real

Estate Assessment Center available to Headquarters and field managers for use in monitoring the performance of HUD's 30,000 actively insured and/or assisted properties. Individual asset managers in HUD's 18 Hubs and their field offices are responsible for monitoring the performance of as many as 60 properties each, including those with mortgage insurance, rental assistance, and direct loans and grants. OPIIS – formerly referred to as NASS-MF -complements the substantial investments that HUD continues to make in electronic collection of annual financial statement data from owners, and from regularly scheduled physical inspections, by making multi-year data available in easy-to-use reports. Asset managers can then focus upon working with owners of troubled properties rather than on preparing data. By accelerating the identification of troubled properties, OPIIS contributes directly to the reduction of mortgage insurance claims and to the increase in recoveries for properties that result in claim. Through its drill-down capability, OPIIS makes it possible to track HUD’s active properties by Hub, asset manager, or individual property, and to manage staff and other resources more efficiently.

Appraisers and underwriters also use OPIIS to access data on existing properties in order to gauge the accuracy of cost projections made for new housing projects. Future development plans for OPIIS include the addition of market analysis capability so that multifamily staff can make more informed underwriting decisions. The need for these services is compelling. The

$690,000 estimated value (price) on this proposed contract represents best value to the government with no qualifications. The period of performance is six months: March 30, 2016 until September 29, 2016.

HUD is currently conducting a competition to expand and enhance Risk Management of the commercial property portfolio contained in the GI, SRI and MMI funds. This acquisition is in the evaluation stage and is called Commercial Capital Assessment Projections (CCAP) and has the HUD Procurement # RCS-H-15-00016. The purpose of CCAP is to perform commercial portfolio risk analytics and conduct risk modeling in support of HUD’s mission of providing affordable Multifamily housing and medical care services to underserved populations across the

United States while safeguarding capital levels mandated by Congress. The scope of the SOO is all accumulated capital resources and cash flows and related risks associated with GI, SRI and some MMIF transactions. CCAP is expected to be awarded in the summer of 2016. However, the vendor whom is awarded this 5 year Small Business contract will require a month to six months to get up and running 100%. This is due to a variety of reasons including 1) the complexity of the Funds and its programs, 2) the unique factors that each of the Fund Housing

Programs contains, 3) the myriad of models that must be created and deployed for cash flows, budget, actuarial cohorts, and 4) the strict standard to Federal Accounting and Auditing guidelines in the source financial data.

(iv) The authority and supporting rationale (see 8.405-6(a) (1) (i) and (b) (1)) and, if applicable, a demonstration of the proposed contractor’s unique qualifications to provide the required supply or service.

HUD is statutorily required to provide Budget estimates and re-estimates to OMB each year.

Implementation of Federal Credit Reform requires FHA to maintain ongoing budget modeling capability in order to estimate the budgetary impacts of MMIF policy initiatives for OMB approval. Typically OMB requires up to 6 months approving a new budget model. Summit’s

Budget model is currently approved by OMB. In addition, HUD requires OPIIS input for preparation of its financial statements.

In accordance with FAR 8.405-6(a) (1) (i) (C), the source identified, TAC has been responsible for providing services since 2010. TAC has been performing the services satisfactorily. TAC is the only vendor that can provide required services identified in (iii) above. There are no other vendors that could perform the six months Task Order because:

1) of the level of knowledge and expertise the existing contractor TAC possesses;

2) TAC has developed OMB approved models mandatory to provide the budget estimates and these are the only models that can be used; and

3) No other contractor can provide the service requirements for $690,000 or less.

Furthermore it would take a new vendor 6 months to get past the learning curve of

OPIIS.

There is only one viable acquisition strategy: award a new Task Order with TAC for 6 months until CCAP is completed competition, awarded and operational.

(v) A determination by the ordering activity contracting officer that the order represents the best value consistent with 8.404(d).

The contracting officer determines that the anticipated prices will be fair and reasonable based on the IGCE, acquisition history and the Federal Supply Schedule price. Rates utilized will be the same rates already established in the Federal Supply Schedule and previous task order.

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

Our market research of the 6 month Task Order found no companies other than the incumbent that is capable of performing the tasks in the Performance Work Statement upon commencement of the award

(vii) Any other facts supporting the justification.

TAC is the only qualified contractor capable of performing these services with the required experience to prevent a serious lapse in service.

(viii) A 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 acquisition for the supplies or services is made.

Currently the Department is conducting a small business set-aside competition for a new acquisition (CCAP) which will bring HUD into compliance with FCRA of 1991. The contract is expected to be awarded in the summer of 2016.

ix) The ordering activity contracting officer’s certification that the justification is accurate and complete to the best of the contracting officer’s knowledge and belief.

See HUD 24013

(x) Evidence that any supporting data that is the responsibility of technical or requirements personnel (e.g., verifying the Government’s minimum needs or requirements or other rationale for limited sources) and which form a basis for the justification have been certified as complete and accurate by the technical or requirements personnel.

(xi) For justifications under 8.405-6(a) (1), a written determination by the approving official identifying the circumstance that applies.