FM Audit Readiness

Added: Sep 29, 2015 3:03 pm

Federal Acquisition Regulation (FAR) Part 8

Limited-Sources Justification

Defense Security Service Audit Readiness and Financial Improvement Support

1. Identification of the Requiring and Contracting Activity.

a. Requesting Activity:

Defense Security Service (DSS)

27130 Telegraph Road

Quantico, VA 22314

b. Contracting Activity:

Defense Security Service (DSS)

Office of Acquisitions

27130 Telegraph Road

Quantico, VA 22314

2. Nature and description of action being approved.

The purpose of this document is to obtain the necessary approvals for a limited

source acquisition in accordance with FAR Part 8.405-6. "Limited Source" in this case

pertains to the restriction of competition in the interest of economy and efficiency, the

new work is a logical follow-on to an original General Services Administration (GSA)

Federal Supply Schedule (FSS) order that was placed in accordance with the applicable

FSS ordering procedures.

Per FAR 8.401, this acquisition is being conducted under the authority of the

Multiple Award Schedule Program, Title III of the Federal Property and Administrative

Services Act of 1949 (41 U.S.C. 251, et seq.) and Title 40 U.S.C. 501, Services for

Executive Agencies.

The procurement strategy is to issue a solicitation through GSA Financial and

Business Solutions (FABS) to PricewaterhouseCoopers, LLP (PwC) under GSA FSS GS-

23F-165N for a Firm Fixed Price Level-of-Effort (FFP-LOE) order for the continuation of

DSS audit readiness and financial improvement efforts and will be negotiated for a oneyear

base period plus a one-year option period.

3. Description of supplies or services required to meet the Agency's needs.

The DSS requires continuation of audit readiness and financial improvement

support service for the DSS Business Enterprise (BE) Financial Management (FM)

Directorate. The previous contract (HS0021-12-F-0009) was awarded competitively as a

FFP-LOE delivery order. The main objective is to maintain continuity of effort in

completing DSS audit readiness activities, as required by the Office of the Under

Secretary of Defense (Comptroller) (OUSD(C)).

The contract will include a one-year base period plus a one-year option period.

The estimated cost for the base period is estimated cost for the

total contract is

4. Identification of statutory authority permitting other than full and open competition.

Per FAR 8.405-6(a)(1)(i)(C), the work being acquired is a logical follow-on to an

original GSA FSS order that was awarded competitively in accordance with FAR Part

8.405 procedures. The current award was competitively solicited and awarded under

GSA Schedule GS23F0165N, Task Order HS0021-12-F-0009.

Currently, there is no other contract vehicle in place for the purpose of DSS audit

readiness and financial improvement support. This contract is necessary to maintain

consistency in the approach, execution, and conclusion of the 10-year audit readiness

effort across the agency. In early 2015, the Department of Defense (DoD) decided to

change the manner with which the required audits would be completed after the

requirement was first published. This has delayed the original audit schedule by

approximately one (1) year. Due to the unique nature of the audit requirements and the

criticality of the work to be performed over the next twelve (12) months, it is imperative

that there is no break in service or transitional delay attributed to knowledge and data

transfer. The current contractor, PwC, has detailed knowledge of the current status of

DSS audit readiness and financial improvement efforts and is best suited to maintain the

immediate short term requirements to be accomplished while a competitive acquisition is

completed. The Government is considering various acquisition strategies for the recompete

effort, which are detailed in Section 6, Efforts to Obtain Competition.

As efforts have progressed on the existing contract, the audit readiness approach

has transitioned from a focus on the key business processes and internal controls

associated with financial statements to the development of a sustainable infrastructure for

the key business processes and internal controls and the integration of the OMB Circular

A-123, Management Internal Control Program (MICP) to include Internal Controls over

Non-Financial Operations (ICONO), Internal Controls over Financial Reporting

(ICOFR), and Internal Controls over Financial Systems (ICOFS). The sustainment of the

audit readiness activities/past successes and integration of the ICONO, ICOFR, and

ICOFS has been determined to be critical for management in sustaining the significant

amount of Government resources, both time and dollars, that have been dedicated to audit

readiness over the previous ten (10) years.

In addition, the OUSD(C) is initiating the DoD TI-97 Defense Wide Financial

Statement (DFWS) audit over the Statement of Budgetary Activity (SBA) in fiscal year

2016. DSS is a participant in the TI-97 SBA audit and will be required to participate in

various meetings with OUSD(C) and the auditors and must respond to external auditor

requests for DSS supporting documentation (e.g. contracts, military inter-agency purchase

requests (MIPRs), timesheets, personnel records, evidence of internal controls operating

effectively, business process documents, general ledger system reconciliations, and

system listings of transactions) beginning as soon as October 2016. The risk to DSS of

having a new contractor start in August 2015 is extremely high. This could cause the

agency to fail to meet requests for documentation that will affect the TI-97 SBA audit.

The amount of duplicative time and cost for a new contractor to become trained and

familiar with DSS business processes, internal controls, supporting documentation,

Defense Agency Initiative (DAI), other relevant systems, and the previous efforts and

successes is significant. PwC has been performing audit readiness efforts for DSS for

over 3 years in preparation for TI-97 financial statement audit and has gained extensive

knowledge of the DSS operating environment. Pursuing a full and open competition for

this interim solution would affect the critical period of being able to transition from an

audit readiness environment to a sustainable program and being able to fully support the

TI-97 financial statement audit. A new firm will be in a learning mode and would have to

embrace an approach that may not necessarily align with their corporate approach, which

will cause them to perform additional audit readiness discovery efforts and prolong the

transition to a sustainable environment.

The current contractor has the existing workforce and specialized capability

already in place and can ensure continued performance without any delay because of their

existing program knowledge, understanding of DSS procedures, and access to the current

projects being worked. The current contractor's performance has been deemed

acceptable by the Contracting Officer Representative (COR).

5. Determination of Best Value.

Based on a solicitation issued against the GSA FSS, it is anticipated the pricing

will be fair and reasonable, as determined under the terms and conditions of the

solicitation to be submitted to the GSA FSS holder. DSS expects to obtain additional

discounts from GSA price lists, where pricing has already been determined to be fair and

reasonable, and will be further documented in the Price Negotiation Memorandum.

FAR 8.404(d) (Deviation) states, "Supplies offered on the schedule are listed at

fixed prices. Services offered on the schedule are priced either at hourly rates, or at a

fixed price for performance of a specific task (e.g., installation, maintenance, and repair).

GSA has determined the prices of supplies and fixed-price services, and rates for services

offered at hourly rates, to be fair and reasonable for establishing the schedule contract.

GSA's determination does not relieve the ordering activity contracting officer from the

responsibility of making a determination of fair and reasonable pricing for individual

orders, BPAs, and orders under BPAs, using the proposal analysis techniques at 15.404-1.

The complexity and circumstances of each acquisition should determine the level of

detail of the analysis required." Based on the justification to continue with its current

service provider, market research conducted via both open market and GSA's FSS, and

by utilizing the streamlined procedures under FAR Part 8, the Office of Acquisitions has

determined that the solicitation will result in an order that represents the best value to the

Government at the lowest potential cost.

These required services are available from multiple providers and the contracting

officer will compare the prices provided from the solicited contractor to other GSA FSS

and open market prices for similar services. Based on market research, it is anticipated

that GSA pricing will be lower than open market pricing.

Leveraging DSS' current use of the services provided by PwC, along with the

competitive pricing under GSA, as well as an open market price comparison, the

Contracting Officer is confident in obtaining the best value for DSS.

6. Description of Market Survey / Efforts to Obtain Competition.

The market research demonstrated the similar requirements are commercially

available from at least three (3) large businesses. However, due to the logical follow on

nature of this requirement, consistency and value added, issuing a logical follow on to

PwC is in the best interest of the Government. PwC offered significant discounted rates

to DSS, minimizing cost while maintaining consistency and efficiency through

completion of the audit readiness efforts as the agency moves to the sustainment phase

Audit Readiness and Financial Improvement Support.

7. Any Other Supporting Facts.

The current FM projects that are being completed within the DSS will be

discontinued without the provided support and resources that are needed to continue the

critical processes and projects, which would result in undue harm to the DSS and the

missions the DSS supports.