Sole Source Justification - ASFR Risk Scoring Proof of Concept_CO Signed.pdf

SOLE SOURCE JUSTIFICATION

Risk Scoring Proof of Concept (Phase 1 Pilot) HHS Office of the Assistant Secretary for Financial Resources (ASFR), Immediate Office

Proposed Award to MorphWorks, Inc.

REVOLUTIONARY FEDERAL ACQUISITION REGULATION OVERHAUL (RFO) 8.401(b) and GSA FSS Ordering Procedures Subpart 538.71 and 538.7104-3 – Sole Source Justifications

May 19, 2026

Identification of the agency and contracting activity.

Requiring Activity/Program Office:

Assistant Secretary for Financial Resources (ASFR) Office of the Secretary (OS) Department of Health and Human Services (HHS) 200 Independence Ave SW Washington DC, 20201

Contracting Activity:

Office of Mission Acquisition Solutions (OMAS) Office of Acquisitions (OA)

Department of Health and Human Services (HHS)

The nature and/or description of the action being approved.

The Department of Health and Human Services plans to issue a task order on a sole source basis against MorphWorks, Inc.'s General Services Administration (GSA) Multiple Award Schedule contract number 47QTCA20D005U for a Phase 1 Risk Scoring Proof of Concept pilot in support of the HHS ASFR Immediate Office. The contemplated order is a firm-fixed-price, 90-day task order for the design, execution, validation support, and documentation of a six-state pilot intended to determine whether a standardized, explainable provider risk-scoring capability can materially improve ASFR's ability to identify and prioritize service providers presenting elevated improper payment or related program integrity risk.

Based on the current market research market research proposal, the estimated task-order value is $223,140.00. The Government's final IGCE for this pilot is $262,021.90, which places the market research proposal approximately $38,881.90, or 14.84 percent, below the Government estimate. That relationship supports the conclusion that the market research market research proposal is not overstated and provides room for the ordering activity to validate labor assumptions, ODC treatment, and the software-enabled matching component during negotiations. The proposed period of performance includes an initial kickoff and discovery phase, phased six-state deliveries during the pilot, and final findings, recommendations, and future-state planning deliverables by the end of the 90-day effort.

A description of the supplies or services required to meet the agency’s needs.

The Government requires an integrated pilot solution, not generic analytics support or labor-only augmentation.

The objective of the order is to enable ASFR to move from fragmented oversight data to a validated, decision-quality pilot capability that can identify, explain, and prioritize higher-risk health care service providers using referential matching, data quality improvement, and standardized provider risk scoring. The pilot is focused on service-provider analysis and provider record quality; it is not intended to process patient data, adjudicate fraud, or replace Government investigative authorities.

To satisfy the Government's minimum need, the task order must deliver a single accountable end-to-end capability that combines technical execution, mission alignment, and executive-ready reporting. At a minimum, the task order must produce the following non-waivable outcomes:

• Rapid discovery and stakeholder alignment sufficient to confirm mission outcomes, pilot users, validation workflows, decision points, and data dependencies.

• Preparation of the pilot data environment and ingestion or correlation of designated public and

Government-furnished data relevant to provider identity, exclusion, debarment, address quality, and improper payment oversight.

• Execution of provider/entity referential matching and explainable risk scoring capable of distinguishing higher-, moderate-, and lower-risk service providers across the six pilot states.

• Identification of anomalies, suspicious address relationships, duplicate or inactive entities, exclusion-related issues, and other data-quality or program-integrity indicators relevant to ASFR oversight.

• Delivery of Government-usable output files, methodology documentation, and findings summaries that support ASFR review and downstream use.

• Support to Government validation of results with ASFR and, as directed, OIG stakeholders, including iterative refinement of the scoring logic where warranted by Government review.

• Delivery of final findings, executive-ready recommendations, a future-state implementation roadmap, and a Rough Order of Magnitude for expansion beyond the initial six-state pilot.

The Government's end-state objective is to obtain a credible basis for whether and how to operationalize provider risk scoring more broadly across additional states, what data and security conditions would apply to a larger deployment, and what future acquisition strategy would best support long-term HHS program integrity objectives.

Identification of Authority and demonstration of contractor’s unique qualifications.

a. Authority In accordance with the Competition in Contracting Act (CICA), 41 U.S.C. § 3304(a)(1), and RFO 6.103-1 - Only One Responsible Source, the Government intends to award a sole-source task order to MorphWorks, Inc. for the HHS ASFR Risk Scoring Proof of Concept (Phase 1 Pilot). Orders placed against FSS contracts are exempt from the requirements of RFO part 6; however, an ordering activity must justify its action when awarding an order on a sole-source basis in accordance with Federal Supply Schedule Ordering Procedures 538.7104-3 - Sole Source Justifications. Because the contemplated task order exceeds the micro-purchase threshold but does not exceed the simplified acquisition threshold, this justification is prepared in accordance with Revolutionary Federal Acquisition Regulation (FAR) Overhaul (RFO) 8.401(b), GSA FSS Ordering Procedures Subpart 538.71, and 538.7104-3(a). Only MorphWorks is reasonably capable of providing the services and solution required at the level of quality required because the requirement is unique and highly specialized, demands an integrated 90-day pilot delivery model, and includes a referential matching capability that is central to the requirement and is available to the Federal market through MorphWorks' subcontracting partner, Euclidian Trust. MorphWorks also offers recent, relevant implementation experience and an immediately executable delivery construct aligned to ASFR's need for six-state pilot execution, weekly stakeholder coordination, validation-ready outputs, and a future-state roadmap within the required period of performance.

b. Demonstration of contractor’s unique qualifications

MorphWorks is the only known schedule contractor reasonably capable of satisfying this requirement at the level of quality required because the Government's need is for a highly specialized, tightly integrated pilot solution that must be delivered within a compressed 90-day performance window and must culminate in decision-quality outputs for ASFR leadership. The requirement is outcome-driven and non-severable for purposes of pilot success: the Government cannot accept separate, loosely coordinated vendors for discovery, data engineering, referential matching, scoring, validation support, and future-state planning without materially increasing performance and integration risk.

MorphWorks' market research proposal presents a delivery construct that is directly aligned to this requirement. The market research proposal describes a six-state pilot with weekly engagement with ASFR and OIG personnel, phased state-level deliveries in approximately Weeks 5 through 8, and final findings, recommendations, and planning outputs by the end of the pilot. That schedule and delivery model are integral to the Government's minimum need because the pilot is intended to test not only technical feasibility, but whether the Government can obtain timely, reviewable, and actionable results that inform immediate oversight decisions and a potential nationwide rollout strategy.

MorphWorks also proposes an established teaming arrangement with Euclidian Trust to provide the referential matching capability that underpins the proposed approach to provider identity resolution, address analysis, and risk scoring. The market research proposal represents that Euclidian Trust provides access to the Verato referential matching capability for the Federal market and that this capability is central to the proposed pilot. The Government's minimum need is not merely to purchase a software product or brand-name feature in isolation; rather, it is to acquire an integrated pilot solution in which high-fidelity referential matching is embedded in a broader service offering that includes stakeholder alignment, data preparation, scoring logic, anomaly detection, validation support, and executive-ready reporting. MorphWorks is the only known MAS contractor that has presented this combined, ready-to-execute delivery model for this specific requirement.

Further, MorphWorks has proposed a solution that directly addresses the Government's most consequential end goals: strengthening ASFR's ability to prioritize providers for follow-up; improving the usability of Single Audit-related oversight data; validating whether provider scoring results are accurate and operationally relevant; and generating a defensible roadmap and cost basis for future expansion. The market research proposal also demonstrates relevant experience in federal data integration and analytics modernization, including Department of Justice enterprise data work, U.S.

Trustees Program business intelligence and document-management planning, and a time-sensitive financial-risk proof of concept for the Bank of Montreal.

This determination is not based on brand preference alone. It is based on the Government's requirement for a single accountable task-order holder that can immediately deliver the complete pilot capability at the required level of quality, fidelity, explainability, and schedule performance. To the extent the requirement contains an item peculiar to one manufacturer, that aspect is limited to the Verato-enabled referential matching portion of the task order: the sole-source rationale for the order rests on the integrated services solution, Federal delivery path, implementation experience, and 90-day execution model. Based on the market research summarized herein, the Government did not identify another MAS contractor able to furnish this integrated capability set within the required period of performance without the Government materially relaxing its requirements, accepting a materially different solution, or assuming unacceptable integration and schedule risk.

c. Brand-name Software portion of the requirement

To the extent the contemplated task order includes an item peculiar to one manufacturer, that portion is limited to the Verato-enabled referential matching capability embedded in the pilot solution. The Government is not specifying Verato as a stand-alone software purchase for convenience or preference. Rather, the Government requires a specific identity-resolution and householding capability that is essential to the pilot's minimum outcomes: high-fidelity provider/entity matching, address relationship analysis, timely comparison against exclusion and debarment-related data, and production of validation-ready risk results within a 90-day period of performance.

The current record supports treating that software-enabled matching component as a limited brand-name portion of the task order. The market research proposal identifies Verato as the referential matching tool to be used for the six-state pilot and states that Euclidian Trust is the sole provider of the Verato referential matching tool to Federal agencies and the only authorized reseller of Verato's referential matching as a service platform in this context. Supplemental differentiator information further states that MorphWorks and Euclidian Trust maintain hands-on implementation experience operating the Verato identity-resolution engine and that substitution would create substantial schedule and performance risk. On the current record, market research did not identify another MAS contractor that demonstrated the same ready Federal access path, experienced staff, and ability to integrate that capability into the required fixed-price pilot model.

Accordingly, this justification is intended to serve not only as the limited-sources rationale for the task order, but also as the ordering activity's contemporaneous documentation for the brand-name portion of the requirement at the order level. The brand-name rationale applies only to the Verato-enabled matching component, not to the entirety of the analytics, program-management, reporting, or future-state planning services. If the acquisition strategy later changes to a competitive RFQ that still restricts consideration to this item peculiar to one manufacturer, the ordering activity should separately ensure compliance with the applicable MAS brand-name documentation and posting requirements for that portion of the order.

d. Additional core differentiators relevant to the determination

The Government also considered vendor-submitted core differentiator information in conjunction with the market research proposal and the market research record. Standing alone, vendor marketing assertions would not be sufficient. Here, however, the differentiator information materially reinforces the same specialized-capability conclusion reflected in the market research proposal: this pilot depends on a non-commodity referential matching capability, an established federal delivery partnership, and personnel with direct implementation experience in the underlying identity-resolution environment.

The supporting record states that MorphWorks has collaborated with Euclidian Trust since 2017 as its Federal partner, specifically focused on referential matching and identity resolution as part of an enterprise data-utilization strategy.

The market research proposal states Euclidian Trust is the sole provider of the Verato referential matching tool to federal government agencies and the only authorized reseller of Verato's referential matching as a service platform in this context. The core differentiator submission further states that MorphWorks and Euclidian Trust maintain hands-on experience operating and implementing the Verato identity resolution engine.

The core differentiator submission states that competitor firms do not have the necessary Verato access, authorization, or experienced staff, and that attempting substitution would create substantial schedule and performance risk. The Government views that statement as consistent with the market research proposal 's fixed-price structure, phased six-state deliveries, and need for validation-ready outputs during performance.

The supporting record further states that the core capability relies on Verato's referential matching engine, which is protected under U.S. Patent No. 11,899,632. This reinforces that the required capability is not a commodity analytics function readily recreated through generic labor categories during the pilot period.

MorphWorks also brings relevant, data-first federal implementation experience. The differentiator submission cites documented cost savings exceeding $120 million across multiple federal organizations, while the market research proposal separately documents large-scale DOJ modernization with $150 million in validated savings, USTP analytics modernization, and successful time-sensitive proof-of-concept delivery in the financial risk domain.

Taken together, these differentiators strengthen the Government's conclusion that the requirement is unique or highly specialized in practice, even though certain individual tasks, viewed in isolation, could be described as general analytics, project management, or data engineering.

The Government's determination does not rely on unsupported claims that other firms lack schedules or could never perform similar work. It is limited to the current requirement, the current record, and the current need for a single MAS source reasonably capable of delivering the required solution now.

e. Why another source would not satisfy the Government’s requirement

Award to another source would require the Government either to accept a materially different technical approach or to reconstruct a new prime/subcontractor arrangement for a pilot that is intentionally time-boxed and has high visibility.

Fragmenting the pilot across multiple vendors would blur accountability for data quality, matching logic, scoring methodology, validation results, and final recommendations, increasing both schedule risk and dispute risk.

The Government needs early pilot outputs during the performance period, not merely advisory analysis at the end of performance. A source unable to deliver phased state results and validation-ready findings would not satisfy the minimum need.

The Government requires a contractor capable of translating technical results into decision-ready recommendations for leadership and an actionable nationwide implementation roadmap. Generic analytics support alone would be insufficient.

A determination by the contracting officer that the order represents the best value.

Orders placed under the MAS program are intended to obtain best value, considering price and other factors, to meet the Government's needs. Here, issuance of the order to MorphWorks represents the best value because MorphWorks is the only known schedule holder reasonably capable of delivering the entire specialized pilot solution required. Award to MorphWorks will provide a single point of accountability for discovery, pilot execution, validation support, and future-state planning, thereby reducing administrative burden and substantially reducing the Government's performance, schedule, and integration risk as compared with attempting to assemble a comparable solution from alternative sources.

Although GSA has established schedule-level pricing for awarded labor categories, the ordering activity will still perform and document order-level fair and reasonable price analysis before award. The Government's final IGCE for this requirement is $262,021.90. Against that benchmark, the current market research proposal of $223,140.00 is $38,881.90, or approximately 14.84 percent, below the Government estimate. That variance supports a conclusion that the market research market research proposal is reasonably priced in relation to the IGCE; however, it also warrants confirming during negotiations that the contractor's labor assumptions, software-enabled matching costs, and other direct-cost assumptions fully cover the Government's requirement.

Subject to that validation, the market research proposal reflects a price position that is favorable to the Government.

For file-development purposes, the principal negotiation levers remain validation of the Business Analyst IV rate premium over the market median, confirmation of the basis and allowability of the Verato matching costs and other direct costs, and final confirmation of any subcontract or OLM support associated with Euclidian Trust. Subject to those validations and any further discounts obtained during negotiations, the Government currently has a defensible basis to conclude that award to MorphWorks would represent best value and that the resulting price can be found fair and reasonable at the task-order level.

A description of the market research conducted among schedule holders.

The requiring activity and contracting activity conducted market research focused on whether another MAS schedule holder could provide the same integrated pilot capability under a single accountable task order. The market research captured a review of: (1) GSA eLibrary and applicable MAS contractors under relevant SINs;

(2) contractor websites, capability materials, and available solution information relevant to provider identity, data integration, analytics, and program integrity support; (3) whether potential sources could provide the required referential matching capability as part of a ready-to-execute Federal pilot; and (4) whether any alternative schedule holder could deliver the complete scope within the required 90-day performance window.

The Government's research was not limited to identifying firms that could perform isolated tasks. Instead, it focused on whether a source could furnish the entire minimum capability set: rapid stakeholder alignment;

provider/entity referential matching; integrated scoring and anomaly detection; six-state phased deliveries;

validation support with ASFR and OIG stakeholders; future-state implementation planning; and, for the limited software-enabled portion of the requirement, the specific identity-resolution capability essential to the pilot.

Based on that market research, the Government did not identify another MAS contractor that could provide the same integrated capability at the required level of quality and schedule confidence.

The Government's supporting record shows no other identified source has been shown to satisfy that integrated combination at the required quality level.

Any other facts supporting the justification

• The requirement is intentionally limited to a Phase 1 proof of concept so the Government can validate the concept before investing in a larger national deployment.

• The pilot is high visibility and schedule-sensitive because it is intended to inform near-term oversight decisions and provide a basis for future rollout planning, not simply to produce a market survey or white paper.

• The proposed Phase 1 approach is limited to service-provider analysis and does not contemplate patient data processing, which reduces scope risk while still allowing the Government to validate the core analytic model.

• The market research proposal contemplates outputs in standard .csv format and executive-ready reporting, which supports Government review, portability, and future integration options.

The Government also considers it significant that the vendor-submitted differentiator information and the market research proposal are consistent on the same dispositive point: substitution is not simply a question of changing staff. It would require replacing the access path, operating knowledge, and implementation experience associated with the Verato-enabled referential matching capability while still meeting a short pilot schedule.

That is a material performance and schedule risk, not a routine transition issue.

• A single prime task-order holder is materially important to pilot success because it preserves accountability for data quality, analytic results, stakeholder coordination, and final recommendations.

Potential future continuity / logical follow-on planning statement. If Phase 1 validates the technical approach and the Government later determines that a short-duration continuity effort is necessary to preserve the validated scoring model, data mappings, configuration baseline, reporting logic, and institutional knowledge while a broader requirement is finalized, the Government may assess whether a subsequent order with the same MAS contractor would be in the interest of economy and efficiency under the facts existing at that time. This statement is included for acquisition-planning awareness only. The present justification does not rely on GSAR 538.7104-3(b)(1)(iii), and any later order would require its own contemporaneous facts, legal review, and independent justification or competitive strategy.

A statement of the actions, if any, the agency may take to remove or overcome any barriers to competition before any subsequent acquisition for the suppliers or services required.

This sole source action is limited to the Phase 1 proof of concept. Before any subsequent acquisition, the Government will use the pilot results to mature the requirement and to maximize competition to the extent practicable. At a minimum, the Government anticipates taking the following actions before any broader follow-on acquisition:

MARIA C.

MARIA C. CASSIDY -S

CASSIDY -S Date: 2026.05.20

• Refine the Government-owned statement of objectives, performance outcomes, evaluation factors, and acceptance criteria based on validated pilot results.

• Define the future-state data model, interfaces, security requirements, hosting considerations, and

Government rights in deliverables with greater precision.

• Determine whether uniquely specialized matching capabilities remain non-substitutable or whether the requirement can be modularized to increase competition.

• Separate, where feasible, commodity data engineering or sustainment functions from uniquely specialized analytic functions so future work can be competed more broadly.

• Use the pilot to establish performance metrics, cost drivers, and an updated ROM that supports a more precise acquisition strategy for any nationwide rollout.

• Conduct refreshed market research at the time of any follow-on acquisition to identify additional schedule holders or other sources that may then be capable of satisfying the matured requirement.

Program Official:

I certify that the facts and representations under my cognizance, which are included in this justification, and which form a basis for this justification, are complete and accurate.

Maria Cassidy ASFR Acquisition Program Lead Office of Acquisitions

Approval

Contracting Officer I hereby certify that this justification is accurate and complete to the best of my knowledge and belief. I approve this justification subject to availability of funds, and provided that the services and supplies herein described have otherwise been authorized for acquisition.

Fair and Reasonable Price/Cost Determination: As Contracting Officer, by my signature below, I hereby determine that the anticipated price/cost to the Government for this contract action will be fair and reasonable.

Keith R. Harding Contracting Officer Office of Mission Acquisition Solutions (OMAS) Office of Acquisitions (OA)

Department of Health and Human Services (HHS)