SAMS Limited Sources Justification Exhibit 1 - Redacted.pdf

Exhibit 1 J&A Log #20-18

Limited Sources Justification

For Single Family Acquired Asset Management System (SAMS)

1. Identification of the Agency and the contracting activity, and specific identification of the document as a “Limited Source Justification.”

Agency: U.S. Department of Housing and Urban Development (HUD) 451 7th Street SW, RM 5184

Washington, DC 20410

Contracting Activity: Office of Chief Procurement Officer, Headquarters

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

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

A six-month contract extension to contract 86615319F00008 is requested to maintain Operation and Maintenance service for the Single Family Acquired Asset System

(SAMS).

Method of Contracting: Contract Modification Type of Contract: Hybrid - Firm Fixed Price and Labor Hour Type of Funds: This contract action will be funded with Information Technology (IT) funds.

3. A description of the supplies or services required to meet the agency’s need (including the estimated value).

Contractor support is required for Operations and Maintenance for SAMS to ensure continuity of services for the Office of Single-Family Asset Management Division.

Performance Period: 04/1/2020 through 9/31/2020 Estimated Total Dollar Value: $1,604,304.00

4. 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.

FAR 8.405-6(a)(1)(i)(A) An urgent and compelling need exist and following ordering procedures would result in unacceptable delays.

As the incumbent, Perspecta Enterprise Solutions LLC, located at 13600 EDS Dr., Herndon, Virginia 20171, has extensive experience in successfully providing efficient support services under the past and existing HUD contract. Perspecta has demonstrated an in-depth knowledge of HUD’s Single Family acquired Asset System and inclusive of clear understanding of its complex components.

Federal Housing Administration (FHA) relies upon for financial management and financial control of real property assets under the Single-Family Mortgage Insurance Program. SAMS accounts for the sale of over 60,000 properties per year valued at over $5 billion and related property expenses totaling nearly $1 billion. In addition, it records costs and cost recovery from FHA’s real property management activity, SAMS generates the financial transactions that FHA relies upon for federal accounting, reporting, and funds control. SAMS processes disbursements to Management and Marketing (M&M) contractors, vendors, taxing authorities, and homeowner’s associations. SAMS supports headquarters staff, Home Ownership Center (HOC) staff, and M&M contractors in recording the financial results of property management events from acquisition through maintenance and repair to resale or other disposition.

Perspecta Enterprise Solutions, LLC is the only contractor that can meet this requirement with the unique priority software. SAMS was developed exclusively for HUD by Perspecta Enterprise Solutions, LLC (then Electronic Data Systems) in 1994 to provide the Department with a management system to record, track and report HUD-owned properties. The Department does not own the source code for SAMS and does not have the ability or expertise to provide operations and maintenance support for the system. SAMS is a legacy system written in proprietary code. Only the suggested source can furnish the requirements, to the exclusion of others because the department does not have the ability or expertise to provide support for this system.

Awarding this support service to a new vendor would be impractical. A new vendor would have to develop a completely new source code and then transfer all data from I SAMS to a new system. In addition, it would have to conduct extensive testing to ensure that accurate and complete accounting/financial data would be maintained and readily available to the Department and others. Also, because of the time and cost constraints associated with the steep learning curve needed to learn the FHA business/program requirements and governance, and HUD’s complex infrastructure environment (much of which is old, outdated, non-integrated technology and systems), it is impractical for another vendor to provide the required services in the timeframe needed.

The current contract expires March 31, 2020. However, in October 2019, the acquisition strategy was changed to determine if other vendors are capable of performing the requirements, which required revisions to the procurement supporting artifacts. A competitive process is currently underway for the re-procurement of this acquisition. The impact of a delay in this contract not awarded by March 31, 2020, there will a disruption in service and major business impact to the Housing finance industry.

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

The Contracting Officer will make a determination that the anticipated cost to the government will be fair and reasonable based on the Independent Government Cost Estimate (IGCE) founded on historical pricing for the same or similar services and on the GSA Schedule labor rates under the current contract.

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 completed for the original acquisition and prior execution of this Justification and Approval (J&A) request. In October 2019 a team meeting was held, in which new plans for an RFI were discussed. As a result of the meeting and the previous market research conducted, it was suggested to perform an RFI as alternative to fulfill the requirement. The team in conjunction with OCPO is in the process of completing an RFI to determine if the requirement can be performed by other business and appropriately develop an acquisition strategy based on the outcome of the RFI analysis results. The anticipated date for posting the RFI is the 3rd quarter of 2020.

7. Any other facts supporting the justification.

If the Single Family Acquired Asset Management System experiences a break in service the business impact includes critical business functions being severely compromised, such as the inability to process accurate and complete accounting/financial data. And the data may not be readily available to others within the Department. If this contractor support is not continued past the current end date of the contract, FHA, and subsequently HUD, may be unable to meet its financial reporting obligations which may have a negative impact on FHA’s and HUD’s audit and may result in adverse internal controls findings by OIG.

Perspecta Enterprise Solutions, LLC is the sole manufacturer and distributor of the INCASE TOOL Software and many add in software programs. SAMS is a major system that FHA relies upon for financial management and financial control of real property assets under the Single-Family Mortgage Insurance Program. Without the availability of continued contract support from Perspecta Enterprise Solutions, LLC, HUD's ability to perform SAMS mission critical financial oversight activities in support of the Department's Single-Family Property Disposition (SFPD) Program (Section 204(g)) will be jeopardized. SAMS tracks and reports on HUD homes for sale, and processes all financial transactions related to their repair, lease, listing, and sale, including payments for contractor services, taxes and homeowner association and condominium fees. SAMS is integral to managing the portfolio of HUD homes, acquired at the rate of 50,000 to 100,000 properties per year with an estimated value of $3 to 6 billion dollars. HUD’s inability to make payments to the thousands of private business partners that provide such property protection services would cause severe financial strain on those business partners, potentially leading to millions of dollars of financial losses and even bankruptcy. Failure to maintain HUD’s owned properties would dramatically decrease the property values, dramatically increase their carrying cost and sale time, and potentially result in hundreds of millions of dollars of losses upon their sale.

SAMS interfaces with 15 other HUD systems and business partners that exchange data daily, monthly and quarterly, upon which the entire mortgage finance industry depends to convey foreclosed property that was collateral for defaulted FHA insured loans. Without the availability of continued ongoing software and maintenance for SAMS, it will adversely impact the mortgage industry's ability to convey foreclosed property to the department, the department's ability to manage the preservation, protection, marketing, and sale of the current Real Estate Owned inventory, and the proper financial management and accounting of the department's property portfolio.

This requirement for SAMS will be for a sole source for six-month extension. Soliciting proposals from additional sources would seriously injury the government and is therefore not practical due to the need for continuous services (to avoid serious financial and operation injury as detailed above). In this case, if a contract were to be awarded to any other vendor or entity other than the incumbent, a training requirement (lasting a minimum of 6 months) would be necessary for new contractor employees to be PIV’d and receive training , become knowledgeable of the system would take time and delay the projects and the mission critical activities required daily by housing stakeholders and other system interfaces processes that are not automated that require the vendor’s expertise.

8. 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.

A competitive acquisition was initiated; however, due to a change in acquisition strategy the requirements documentations is being revised. This change in the acquisition strategy was confirmed close to the current contract end date, thus the request for an extension of services to avoid a break in service.

9. 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 certification, Form HUD-24013, Part 2.

10. Evidence that any supporting data that is the responsibility of the technical or requirements personnel (e.g, verifying the government’s minimum needs or requirements or other rationale for limited sources) and which form the basis for the justification have been certified as complete and accurate by the technical or requirements 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 as evidenced by his signature on the Form HUD-24013, Part 1.

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

A written determination identifying the circumstance that applies has been provided as evident by the Approving Official’s signature on Form HUD-24013, Part 3.