10 JOFOC Chainalysis 5000217504_Redacted.pdf
PDF 952 KB Posted
- Attached to
- Chainalysis (JOFOC)
- Solicitation number
- 205AE9-23-C-00010
About this file
This document is a Justification for Other Than Full and Open Competition (JOFOC) for the Internal Revenue Service (IRS), Criminal Investigation Division. The IRS seeks to extend a six-month contract with Chainalysis, Inc. for cryptocurrency investigation tools and services, valued at $5,103,896.57. The extension will cover the period from 09/30/2025 to 03/29/2026 and is specifically for the Cyber & Forensic Services Section (C&FS) and Small Business/Self-employed (SBSE) Office of Fraud Enforcement.
The justification emphasizes the unique capabilities of Chainalysis' products, which provide critical investigative tools for tracking cryptocurrency in criminal investigations across international borders. The IRS notes there are no authorized resellers of the required full suite of tools, and the products are essential for advancing their mission in cryptocurrency investigations. The contract is being pursued under FAR Subpart 6.302-1 for "Only One Responsible Source", with market research supporting the sole-source decision. The procurement is classified as law enforcement sensitive and will not be publicly advertised to protect the investigative capabilities and strategies of the Criminal Investigation division.
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Text version
IRS Form (Rev. 6/21)
IRSAP 1006.3
B. DESCRIBE THE EFFORTS TAKEN TO ENSURE OFFERS WERE SOLICITED FROM AS MANY
POTENTIAL SOURCES AS IS PRACTICABLE, INCLUDING WHETHER A NOTICE WAS OR
WILL BE PUBLISHED AS REQUIRED BY FAR SUBPART 5.2 AND, IF NOT, WHICH
EXCEPTION UNDER FAR 5.202 APPLIES.
The proposed contract action is to execute a six month extension of services modification under 52.217-8, Option to Extend Services, and FAR Part 6.302-1, Only One Responsible Source.
The IRS continues to review cryptocurrency tools as they become available in the market. As each of these tools are unique in their proprietary software and each collects different types of data for cryptocurrency tracking. The IRS continues acquiring as many of these available tools as possible, to ensure full coverage of available cryptocurrency tracking information.
This is a Law Enforcement Sensitive requirement and should not be advertised or publicized. In accordance with FAR 5.202 (a)(1) this requirement should not be synopsized, as these cryptocurrency tracing tools will be used in the most sensitive and high-risk cases. Thus, such disclosure would reveal the details of CI’s operation capabilities and strategies which could put CI’s operations in danger, hindering the ability of CI to investigate individuals affiliated with various groups that support illegal activities.
Specifically, disclosure of the details of specialized and technical investigative techniques and tools such as the required products, would provide illicit actors an understanding of CI's investigative capabilities and thereby allow these actors to thwart the government's mission by staying steps ahead of known law enforcement capabilities.
These products also may be used in covert law enforcement activities. Therefore, in addition to providing illicit actors the details of CI's law enforcement tools and techniques, disclosure of law enforcement sensitive information could potentially jeopardize ongoing undercover operations which would result in life threatening situations for CI's undercover investigative agents.
C. DETERMINATION THAT THE ANTICIPATED COST TO THE GOVERNMENT WILL BE FAIR
AND REASONABLE.
The Contracting Officer will determine that the price is fair and reasonable based on previous award analysis, applicable price analysis techniques, and established commercial catalog prices.
Previous contracts for Chainalysis, Inc. Cryptocurrency tools are as follows:
• FY18 contract 2032H5-18-P-00363 which expired on 09/27/2019
• FY18 contract 2091JB-18-C-00030 which expires on 08/31/2021
• FY20 contract 205AE9-20-P-00138 which expired on 07/03/2021
• FY20 contract 2032H8-20-C-00041 which expired on 09/29/2021
• FY21 contract 205AE9-21-C-00008 which will expire on 09/29/2023
E. LIST SOURCES, IF ANY, THAT EXPRESSED, IN WRITING, AN INTEREST IN THE
ACQUISITION.
This is a law enforcement sensitive acquisition, and a notice of intent was not posted. Therefore, there were no parties who expressed a written interest.
F. LIST THE ACTIONS THE BUREAU WILL TAKE TO REMOVE OR OVERCOME ANY BARRIERS
TO PROMOTE THE COMPETITION ON ANY SUBSEQUENT ACQUISITIONS FOR SIMILAR
SUPPLIES OR SERVICES.
The Contracting Activity will continue to search the marketplace for potential sources by holding industry days, publishing acquisition forecasts, etc. For future requirements, the Requiring Activity will continue to conduct market research of the current environment, as well as investigate marketplace products and services, to ensure that competition remains available. Every opportunity will be taken to ensure that fair opportunity is achieved.
G. STATEMENT THAT REQUIREMENT DOES NOT RESULT FROM A LACK OF PLANNING OR
THE EXPIRATION OF FUNDS.
This acquisition does not result from lack of planning. Market research was conducted by IRS-CI Cyber Crimes Section (CCS) and a survey of the available products in this space. The results of the market research supported the government’s decision to obtain these services under a sole source basis.
O
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E. SENIOR
PROCUREMENT
EXECUTIVE (Name & Title)
[ ] APPROVE
[ ] DISAPPROVE
(Signature) (Phone No.)
(Date)
NOTE: Each review must be preceded by lower level approval(s). For example, actions over $75 million require all approvals.
IN NO CASE WILL AN INDIVIDUAL SIGN MORE THAN ONE APPROVAL LEVEL.
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