Redacted DeLoitte Ceiling Increase LSJ (Final)s Rev1_.pdf

Limited-Sources Justification

United States Department of Agriculture

Pursuant to the authority of Section 201 of the Multiple-Award Schedule Program 41 U.S.C.

251, this justification is prepared in accordance with the requirements of Federal Acquisition

Regulation (FAR) 8.405-6(b) for the use of sources limited to fewer than those required in FAR

8.405-1, FAR 8.405-2, and FAR 8.405-3. The circumstance justifying restriction is under FAR

8.405-6(a)(1)(i) (B) through the following facts and rationale:

(1) Agency and Contracting Activity.

The United States Department of Agriculture (USDA), Food and Nutrition Service (FNS), located at 1320 Braddock Place in Alexandria, Virginia 22314, proposes to enter into a contract on the basis of a limited-sources justification.

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

(a) Nature of action:

FNS intends to limit competition by modifying Task Order AG-3198-B-17-

0008/AG-3198-K-17-0024 to increase the ceiling of Option Year 2 by

$7,250,000 from $7,200,000 to $14,450,000. The ceiling increase is needed to provide continuity of services in support of the Financial Management

Modernization Initiative under the option period until FNS can successfully compete the requirement. Although the current option will allow continued performance through August 30, 2020, the requirement for a ceiling increase is the result of higher than expected need for services during the initial exercise of the option (see revised PWS entitled: “Revised BPA PWS IPAS -

FMMI Support 2020.PDF”).

(b) Name and address of the contractor:

Deloitte Consulting LLP

1919 North Lynn Street

Arlington, VA 22209

(c) Contract type:

AG-3198-B-17-0008/AG-3198-K-17-0024 is a hybrid, firm-fixed-price and time and materials, Blanket Purchase Agreement (BPA) Call; with a one-year base period and four-one-year option periods (August 31, 2017 –

August 30, 2022) issued under the General Purpose Commercial

Information Technology Equipment Software and Services (FSS-Schedule

70).

(d) Total value increase: $7,250,000

The BPA Call ceiling is $50,000,000. To date, the total amount obligated under the task order is $36,100,000. Option year 2 was exercised on August

31, 2019 in the amount of $7,200,000. This action seeks to add $7,250,000 to

Option Year 2 for a grand total of $14,450,000. At the end of Option Year 2, the total obligated amount will be $43,350,000 with a remaining ceiling of

$6,650,000.

(e) Type of funding: Operations and Support funds

(f) Year of funding: Fiscal Year 2020

(g) Solicitation number: AG-3198-S-17-0048

(3) Description of Supplies/Services.

The acquisition provides USDA-FNS with continuing expert functional and technical support services to maintain the current mission critical read-only Integrated Program Accounting

System (IPAS) system, support FNS accounting operations associated with IPAS and Financial

Management Modernization Initiative (FMMI), develop and maintain specific FNS FMMI reports, support the BUDS (Budget User Desktop Solution), GIMS (Grants Information

Management System), and Accounts Receivable systems, including O&M and enhancements, and provide general IT support services and disaster recovery support. Specifically, the BPA call order includes support in the following areas:

• Systems maintenance of IPAS Performance Series software

• FNS financial systems development to integrate data into FMMI

• Assistance with FMMI implementation support including project planning, management, technical and administrative support, data integration, testing, report development, user training, and sustainment

• Expert assistance in the research, formulation, review, operations, and development of financial and accounting operating concepts, oversight, policies and procedures

• Assistance to financial management in reviewing, developing, drafting and finalizing financial statements, audit materials, supporting data, and related documentation

• Assistance in business process, system planning, strategy, and implementation

• Assistance with project planning, management, technical, and administrative support

The ceiling increase under Option Year 2 will allow FNS to continue functional, operational and technical support services to these systems and will be distributed as follows:

(4) Identification of the justification and the rationale.

This acquisition is being conducted under the authority of 41 U.S.C. 251 as implemented by the

Federal Acquisition Regulation titled: FAR 8.405-6(a)(1)(i) (B) – Only one source is capable of providing the supplies or services required at the level of quality required because the supplies or services are unique or highly specialized.

In May 2010, USDA mandated that all agencies within the Department migrate to and utilize

FMMI. On March 25, 2013, the Office of Management and Budget (OMB) directed all executive agencies to use a shared service solution for future modernizations of core accounting and mixed systems. USDA FMMI is one of four financial systems shared service providers approved by OMB. Specifically, FMMI integrates a majority of the financial capabilities of the

USDA. This integration allows for a single data entry into the system, which significantly decreases the number of manual reconciliations currently being performed throughout USDA.

The integration also improves planning, programming, budgeting and execution through the use of integrated output data from financial and non-financial sources. In May 2015, IPAS was formally turned into a read-only system when FNS went live in FMMI. IPAS is the official system of record for all historical transactional data for all FNS programs prior to June 2015 and must be maintained through 2021.

To comply with the above mandate, FNS Leadership must have a system of record that uses the approved financial management system to facilitate and improve overall financial management performance. The system provides online, real-time transaction capabilities and allows the agency to administer all its mission critical programs and allows it to be more financially accountable and transparent in its spending. Given the criticality of the FMMI system, a disruption in service would be detrimental to the FNS mission.

The Program Management Office indicated that the root cause of the cost increase is “when the

BPA was established in 2017, it was assumed that FNS would be transitioning data from the

IPAS accounting system to the department’s FMMI accounting system. It was anticipated that

FMMI would be fully functional in its Budget, Grants, and Accounts Receivable modules and only a simply transition of financial data would be needed. During the transition of data and testing, it became obvious that FMMI’s budget, accounting and grants management (Grantor) financial transaction modules were not capable of handling FNS program business. The extent and scope of the problems increased over time. Fixes to FMMI made by the Department caused other issues, and the sheer number of issues made this a long-term project to get FMMI fully operational”.

Additionally, Deloitte Consulting LLP developed the IPAS software system and maintains all proprietary rights. There are no authorized resellers or service providers for the commercial off-the shelf (COTS) product known as IPAS.

Deloitte has extensive knowledge and involvement with the financial system and no other alternate sources are able to provide the needed expert system enhancements in the limited timeline. Deloitte has been implementing and providing these upgrades to the system since 2017.

No other contractor would be able to meet or exceed the functionality of the financial system, due to the steep learning curve and time spent transitioning from one company to another.

Deloitte’s experience and familiarity with the FNS financial system will be key to successfully continuing operations while the follow-on contract is recompeted.

If FNS does not increase the ceiling on the current Call Order for Option Year 2, it would disrupt the continuity of services of the financial system and would be detrimental to FNS’ ability to account for and provide funding to its program grantees, such as Supplemental Nutrition

Assistance Program (SNAP), which provides electronic vouchers that help low-income people buy the food they need for good health. The financial system is central and makes it possible for

FNS to complete these transactions. Waiting until we have a new contract will put FNS at risk and unable to respond to its core mission.

Option Year 2 expires on August 30, 2020. Of the current funding obligated for Option Year 2, only $1.8 million remains. This ceiling increase is needed to avoid a lapse in service for these mission critical requirements.

(5) Determination by the ordering activity Contracting Officer that the anticipated order represents the best value consistent with 8.404(d).

The Contracting Officer has determined that the anticipated price(s) for the ceiling increase will be fair and reasonable, as they will be based on the current contract rates, which were previously determined to be fair and reasonable. The option year 2 ceiling increase will be placed in accordance with FAR 8.404(d). Supplies offered on the schedule are listed at fixed priced.

Services offered on the schedule are priced at a fixed price for performance of a specific task

(e.g., installation, maintenance, and repair). GSA has already determined the prices of supplies and fixed-price services to be fair and reasonable.

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

Market Research was conducted for the purpose of this ceiling increase and revealed that

Deloitte Consulting LLC is the only vendor capable of performing the requested services during the remainder of the option period (five months) without causing disruption to FNS systems.

(7) Any other facts supporting the justification.

N/A

(8) A statement of actions, if any, the agency may take to remove or overcome any barriers that preclude the agency from meeting the requirements of 8.405-1 and 8.405-2 before any subsequent acquisition for the supplies or services is made.

Parent BPA AG-3198-B-17-0008 is currently inactive because Option Year 2 was not exercised therefore, the remaining options on the BPA Call cannot be exercised. Based on the aforementioned, the government is planning to re-compete the requirements. The government will conduct market research prior to the issuance of a new award to determine if the required supplies and/or services can be attained competitively.

(9) Contracting Officer’s Certification.

In accordance with FAR 8.405-6(c)(2)(ix), 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.

KARA STITH

Contracting Officer Date

(10) Technical/Requirements Personnel Certification.

I certify that this requirement meets the Government’s minimum need and that the supporting data, which forms a basis for the justification, is accurate and complete.

HONGMEI “LUCY” LUO

Technical Representative/COR Date

(11) Advocate for competition for the procuring activity (if over $700,000, but not exceeding $13.5 million).

APPROVAL:

I have reviewed this justification and find it to be accurate and complete to the best of my knowledge and belief. Therefore, unless additional approvals are required as prescribed below, as advocate for competition for the procuring activity, I hereby approve this justification.

CHANTEL A. SMITH, CFCM

Competition Advocate Date

Food and Nutrition Service