Solicitation 15M50020QA4400006 Question and Answers.pdf

Questions and Answers 15M500QA4400006

1. beta.sam.gov shows the solicitation was updated 4/28/20. Would you please confirm the only update was to the USMS address? If data related to the solicitation itself was updated, would you kindly provide details?

- The only update to the solicitation was the title as cryptocurrency was spelled incorrectly. The SF-30 for the modification will be included in the next update.

2. How will questions be answered - as they are submitted or all at once? And will all answers be posted to beta.sam.gov?

- They will be answered after the submission date of the questions, and they will be posted via an amendment to the solicitation. We will included these questions and answers at that time.

3. It is our understanding that the apparent regulator of Virtual Currency is the CFTC. Due to this will the government require the contractor to be licensed and registered with

CFTC/NFA?

- There is not a regulator of Virtual Currency. Regulatory agencies such as the SEC, CFTC, FDIC and FINCEN all monitor and regulate the activities under their purview that have to do with Virtual Currency. Registration with appropriate regulatory agencies is not a needed requirement to be a custodial contractor for Virtual Currency.

4. Will the government accept a dual party role that consists of advisor and custodian that maintains the segregated accounts (wallets)?

- Yes

5. Will the government execute new account documents that have been prepared, reviewed and approved for use as mandated by CFTC?

- No, the government will not be opening new accounts. The contractor would be opening the account c/o USMS.

6. In the dual arrangement, will net capital reporting of the custodian satisfy any bonding requirement, subject to acceptance?

- Yes.

7. In regards to the virtual currencies managed, is there a planned depletion/settlement rate that will result in the initial balance to be fully distributed by the end of the final contract year?

- No. Liquidation will depend on how long each case takes to go through the court process and grant a Final Order of Forfeiture (meaning the VC can then be liquidated).

8. Will the government want to include any type of hedging program that involves the use of futures and/or options on futures to protect the value of the virtual currencies from adverse market changes?

http://beta.sam.gov/ http://beta.sam.gov/

- No, liquidate as forfeiture orders come in.

9. If so, will the advisor be given limited power of attorney to manage this program?

- N/A

10. Are the virtual currencies to be maintained in segregated accounts? Will each account be given a separate name, along with its own unique tax id#?

- Each transfer will have its own asset ID. There will not be a tax ID with each asset. We recommend segregated accounts for cold storage.

11. Will the exchange of information regarding the accounts be permissible between all parties that are jointly involved in this contract?

- Yes

12. Will each of these parties business continuity plans be required to review?

- Yes, this will be reviewed at the post award conference.

13. Please specify the requirements for a site visit. Is it the expectation of the USMS that the contractor must submit to an on-site audit of the contractor's offline storage locations? If yes, will the USMS accept a recently issued SOC report in lieu of an offline storage site visit?

- Yes the USMS may request to view offline storage locations. The USMS may also accept a SOC report in lieu of an offline storage visit.

14. Would using a commercial cryptocurrency custodial platform that provides industrial and institutional investment grade auditing, security, multi-part authentication, multi-user accounts, SOC1 Type II and SOC 2 Type II certifications be an acceptable cryptocurrency management platform upon which to build our USMS solution?

- Yes, you are not required to build your own system.

15. Assuming the answer to the previous question is "Yes" and we are teamed with company X would Company X’s experience be viewed as acceptable for 1 or more Attachment 6 Past Performance Data Worksheet submission(s)?

- No, you will need to provide a contact and we will reach out to that POC to fill in a questionnaire about their experience.

16. Due to existing customer confidentiality agreements, we may have to redact portions of the Past Performance Data Worksheet. Is this/how much of this is acceptable?

- It is important that you at least provide the name of the contracting activity/organization, contract type, date of award, scope of the work completed and contact information (name, e-mail and phone number) of the person with whom we would reach out to for the reference.

17. Under the security section, regarding the use of multi-signature authority, will the DOJ become one of the private key holders? If so, will the contractor require the involvement of the DOJ for all actions of the virtual currency handling process? i.e. access of virtual currency, transmission of virtual currency, etc.

- No, the contractor will be able to work without the involvement of the USMS/DOJ when it comes to access, transfers, and disposals.

18. Under the storage section, regarding hard forks and airdrops, does the DOJ intend for the contractor to take any and all responsibility for tax obligations for virtual currency that is generated while under the custody?

- There should not be any tax obligations for DOJ or the contractor.

19. The PWS mentions main virtual currencies currently sized are Bitcoin, Bitcoin Cash, Bitcoin gold, Ethereum and Litecoin. Does the DOJ anticipate the contractor to expect additional types of virtual currencies to also be seized such as Monero, Ripple, etc.?

- Yes, the USMS anticipates the contract will need to accept additional virtual currencies.

The USMS currently holds the following types of VC:

1. Ark

2. Bitcoin

3. Bitcoin Cash

4. Bitcoin Gold

5. Burst

6. Cardano

7. DASH

8. Digibyte

9. DigitalCoin

10. Dogecoin

11. Ethereum

12. Ethereum Classic

13. Litecoin

14. Monero

15. Namecoin

16. NEO

17. Novacoin

18. Peercoin

19. Ravencoin

20. Reddoin

21. Shift

22. Siacoin

23. Stratis

24. Syscoin

25. Waves

26. XRP (Ripple)

20. Does the contractor have flexibility to convert the unpopular virtual currencies, with in accordance to full record management requirements, to a single type of popular virtual currencies such as Bitcoin in an effort to trivialize the liquidation process? If so, can the contractor use stable virtual currency such as USDT or USDC?

- Yes, the USMS will allow unpopular virtual currencies to be converted to other currencies, such as Bitcoin, when necessary to effectuate the liquidation. Note that this conversion cannot take place at custody as the original type of VC must be accepted and maintained in its native form either until the asset is forfeited, or authorization is given to convert the asset.

21. Is the contractor limited to using only U.S. based exchanges and are there any other restrictions regarding the use of cryptocurrency exchanges?

- No, however the contractor must receive COR approval before using an internationally based exchange. Our preference is a US based exchange, but we understand there are situations where this is not possible or practical.

22. We only had a single contract with the federal government, which is a Small Business Innovation Research Phase I program supported by Department of Defense (Decentralized Internet project: Will that satisfy the requirement for closely related past performance?

- We will use the information provided by the Past Performance reference responses to determine if the Past Performance requirement is met. A Past Performance rating in the case of an offeror without a record of relevant past performance or for whom information on past performance is not available, the offeror may not be evaluated favorably or unfavorably on past performance.

23. We have our own facilities and servers, but no insurance. Can we obtain insurance if we win the contract? Since our budget is very limited, we can't comply with this requirement prior to having a contract.

- Yes, you must provide a response that displays your company’s ability to obtain the insurance upon award such as providing a letter from your specified insurance company indicating they will accept your insurance requirements upon award. If you currently do have insurance you should provide your certificate of insurance. The phrase that you will have commensurate insurance upon award is not a satisfactory response to this evaluation factor pertaining to this question.

24. List of Items, Schedule of Requirements, Scope of Work, Terms of Reference, Bill of Materials required.

- Everything needed has been provided in beta.sam.gov

25. Soft Copy of the Tender Document through email.

- Everything needed has been provided in beta.sam.gov

26. Names of countries that will be eligible to participate in this tender.

- Countries that cannot participate are those with U.S. Government sanctions against them, such as those listed by Department of Treasury’s Office of Foreign Assets Control (OFAC).

27. Information about the Tendering Procedure and Guidelines

- Everything needed has been provided in beta.sam.gov

28. Estimated Budget for this Purchase

- We do not provided estimated budgets to the vendors, as our expectation is that each vendor will provide their estimate of the costs to accomplish the requirement that is specified.

29. Any Extension of Bidding Deadline?

- An extension has been granted until June 1, please see updated instructions to offerors.

30. Any Addendum or Pre Bid meeting Minutes?

- There are no Addendums or Pre Bid meeting Minutes at this time.

31. Company Y will like to request an extension.

- An extension has been granted until June 1, please see updated instructions to offerors.

32. If the offeror submits their response as a Joint Venture, can both parties to the JV submit three past performance references?

- Your joint venture can only result in one contract, so you would need to determine which company would be the prime and which would be the sub-contractor.

33. If the offeror submits their response as a Joint Venture, should one Offeror’s Information Page be completed representing the JV or should each firm that is a member of the Joint Venture complete and submit their own?

- Your joint venture can only result in one contract, so you would need to determine which company would be the prime and which would be the sub-contractor.

34. Are cover pages, cover letters, table of contents excluded from the page limit?

- No, as stated in the instructions to offerors, but the page limit has been increased from 25 to 30 pages.

35. Should each volume be submitted under a separate cover page and include its own table of contents?

- That would be a decision you would need to determine, but each of those pages will count towards the limit.

36. Attachment #7 PWS-Section 2.3.6 asks that the Contractor submit a proposed QASP for consideration. Is this required as part of the proposal submission or something that will be done post-award?

- It is required as part of the proposal.

37. Is the 25-page limit inclusive of all 3 volumes (Pricing aside)?

- Yes, the page limit has been increased to 30 pages.

38. Once the offeror completes the pricing in Microsoft Excel, is it acceptable to submit the final volume as a PDF?

- Per the instructions to offerors the Price Quote should be submitted “utilizing the attached pricing schedule. “

39. In which volume should the offeror place the signed Memorandum of Understanding or Lease Agreement for the Proposed Storage Facility? Is this memorandum included in the page limit?

- That would be a decision you would need to determine, but each of those pages will count towards the limit

40. Pg. 1-SF 1449 states that the size standard is $30,000,000, however, Pg. 2 of Attachment #1 states the size standard is $41,500,000. Please clarify which is the correct size standard.

- The size standard is $41,500,000.00, this has been corrected with this amendment.

41. Pg.2 of Attachment #3 discusses a Schedule for Site Visit. Please clarify if/how the contractor needs to address a potential site visit in our proposal.

- The vendor must be available if the government would deem appropriate to verify the physical and security aspects of your proposal.

42. Pg. 2 of Attachment #3 states that “Your workforce (including subcontractors) will meet the requirements of the SOW by providing professional certifications, if applicable, or educational background of all personnel.” Are the professional certifications and/or resumes provided to meet this requirement included in the page limit?

- Yes, the page limit has been increased to 30 pages.

43. Please confirm if providing an updated copy of the offerors registration in SAM is sufficient to meet the Representations and Certifications requirement of the proposal?

- Yes, per attachment #3.

44. (1449 Continuation Section 2) Does “insurance” in this section refer to USMS coin/token insurance? If so, where in the pricing schedule should insurance be reflected? What is the size of the portfolio?

- The USMS currently does not accept tokens so there is no portfolio for it. The insurance pricing should be included to your monthly management fee.

45. (1449 Continuation Section 3) The need for the contractor to “remain capable of taking custody of all types and quantities of cryptocurrency without limitation” represents both security and economic risks, for both the contractor and the USMS. The economic variables of this requirement for labor and materials are too unstable to permit a reasonable division of risk between the Government and the contractor, without an economic price adjustment option. How willing is USMS to consider variations of an FFP pricing model?

- We do not anticipate having to approve an economic price adjustment as we see each vendor pricing in the management fee the amount they deem to fulfill the requirement laid out in the PWS. The only price adjustment we would consider is for the insurance costs as they fluctuate with the quarterly inventory amounts. No other pricing model are being accepted for this solicitation, over time the DOJ may determine certain types of currency should not be resold by the USMS. Less liquid forms of VC can be converted into more common types of VC by the contractor to effectuate liquidation.

46. (Additional Clauses Section 8) Please confirm this section is NOT applicable to the contractor, rather to other federal entities seeking to leverage this IDIQ. If this section is applicable to the contractor, please clarify how.

- This section informs the contractor that there is a possibility that other federal law enforcement agencies at the direction of the USMS COR will issue their own task orders with the contractor and they will not be included in the USMS task order that will be issued.

47. (Additional Clauses Section 10.a) Can the USMS provide some clarification about how task orders will be issued (e.g., by initial intake and then by subsequent seizure/disposal action)?

- Yes, initial intake and then the court order allowing for disposal or return of the asset to the defendant.

48. (Additional Clauses Section 12.a.4) Please clarify intent for material cost submission under an FFP contract type.

- This verbiage will be removed, as this should not apply. But in the event a request is made for actual costs, we would expect there would be back up to the request.

49. (Instructions to Offerors Section 1.f) Would omission of proposed Project Plan, proposed QASP and draft Business Continuity Plan be considered an incomplete package? These three documents are not listed as one of the 7 documents required.

- The Business Continuity Plan is the only item that can be submitted at Post Award.

The Project Plan is required in the evaluation factors, and the QASP is a required document per the updated required documents list.

50. (Instructions to Offerors Section 1.f.3) If already registered in SAM.gov, must the Representations and Certifications be printed and submitted?

- Yes

51. (Instructions to Offerors Section 1.f.6) Is a Letter of Intent acceptable versus an MOU or Lease Agreement?

- Yes

52. (Instructions to Offerors Section 1.f.6) How flexible is USMS willing to be with securing adequate storage facilities by date of proposal submission?

- We understand the facility might be based on award. The MOU and/or lease agreement are required documents.

53. (Instructions to Offerors Section 1.f.7) Is the assumption correct that “Technical Capability Materials – one(1)” is synonymous to the Volume III package: Technical Capability / Written Proposal and Site Visit? If not, please clarify.

- Yes

54. (Instructions to Offerors Section 1.h) Certain costs are tied to variable and fluctuating items, most significant being the USMS portfolio value. How willing is USMS to consider variations of an FFP pricing model?

- No other pricing models are being accepted for this solicitation.

55. (Instructions to Offerors Section 1.h) Is USMS willing to consider industry-standard liability versus whole coverage, which is neither cost-effective nor practical?

- No, not at this time.

56. (Instructions to Offerors Section 1.i.2) Given photos do not count toward page count, is placing them in an attachment to the proposal acceptable? If not, please provide guidance as to the proper submission.

- Yes, photos should be a different attachment in your submission.

57. (Instructions to Offerors Section 1.i.2) Is it acceptable to have headers and footers within the 1” margins, respectively?

- Yes, the restrictions on font and format are found in attachment #3.

58. (Instructions to Offerors Section 1.i.2) Is it acceptable for titles, headings and captions to be Times New Roman, but varying sizes, as appropriate, to distinguish from normal 12-point text?

- Yes, we updated the instructions to indicate 12-point font as a minimum size, so you are able to use a larger font size.

59. (Instructions to Offerors Section 1.i.2) Is it acceptable for table content to be single space?

- No, the minimum font size is 12-point.

60. (Instructions to Offerors Section 1.i.B.i) Does “multi-signature” in this context refer to multiple layers of approval for various custody/management/disposal activities? If not, please clarify.

- Yes.

61. (Instructions to Offerors Section FAR 52.216-1) Does “Only (one (1) award will be made as a result of this notice.” indicate only one vendor will be on the IDIQ?

- Yes, this is a single award IDIQ contract.

62. (Evaluation Factors Section 2.b) Do floor plans count as photos?

- No, they have been included in the pages that do not count towards the page count, but they need to be attached separately or referenced in the proposal.

63. (Evaluation Factors Section 2.b) Do workflow diagrams count as photos?

- No, they have been included in the pages that do not count towards the page count, but they need to be attached separately or referenced in the proposal.

64. (Evaluation Factors Section 2.b) Do screenshots or website mock-ups count as photos?

- No, they have been included in the pages that do not count towards the page count, but they need to be attached separately or referenced in the proposal.

65. (Evaluation Factors Section 3.C.iv) What are the minimum technical specifications for DOJ.USMS for interconnected systems and portal interfaces?

- We envision something as simple as Excel is sufficient for our tracking purposes, if you plan to propose a portal interface you would need to adhere to the SECURITY OF INFORMATION AND INFORMATION SYSTEMS DOJ PGD 15-03 which is attachment #11.

66. (Evaluation Factors Section 3.B.v) How would you know if there are known issues with DOJ or flags with OCIO for technical services?

- Through review of the specs you provide for the system you propose, as well as through audits of systems used if your company is selected for the contract.

67. (Evaluation Factors Section 3.D.vii) What are the record management requirements that must be met?

- We envision something as simple as Excel is sufficient for our tracking purposes, we are open to your suggestions.

68. (PWS Section 1.3) Can the government provide the number of accounts, holdings and wallets, as it relates to the seizures of coins/tokens represented in the table?

- We are not currently holding any tokens.

69. (PWS Section 1.8) The USMS’s travel requirements are neither specified nor estimated.

Please provide anticipated travel requirements or clarify how travel is to be captured in the pricing schedule.

- We do not anticipate travel but might anticipate two meetings a year where the contractor would potentially need to come to our headquarters in Arlington, VA. The USMS will cover its own travel costs if meeting at the contractor on site.

70. (PWS Section 2.2.1 & 2.2.3) How willing is USMS to lengthen the number of days for standard disposals and returns to owner to ensure industry-standard custody security protocols?

- The USMS is currently managing standard disposals in the timeframe listed so we do not anticipate lengthening the number of days. If a specific issue came up while working on a disposal, we would address on a case by case basis.

71. (PWS Section 2.2.2) What is a “billable disposal”? How does it fit within an FFP pricing model?

- This has been updated and removed in the PWS, all costs or anticipated costs would need to be covered in your percentage for disposal. You should disposal of the cryptocurrency through an exchange or auction.

72. (PWS Section 2.3.5) Both the Proposed Project Plan and the Technical Capability / Written Proposal require Phase-In and Phase-Out plans. Please confirm the USMS wants the information duplicated. If not, is the USMS willing to consider high-level Phase-In and Phase-Out information in Proposal with more detailed information in Proposed Project Plan?

- This request has been updated in the PWS, and the project plan is required with the proposal submission and is an evaluation factor.

73. (PWS Section 2.3.7) Is the interpretation correct that the solicitation implies that two types of insurance are required: 1) Insurance on the portfolio value, and 2) Bond insurance? If so, please specify type of bond insurance required. (Relates to other questions regarding industry-related asset coverage.)

- We are not specifying what bond insurance is required. One insurance is acceptable if it covers the value.

74. (PWS Section 2.3.7) Under what circumstances would USMS deem the contractor to have caused a “devaluation” in cryptocurrency holdings?

- A “devaluation” would be caused by not following proper procedure to store the VC in cold storage, control access, etc.

75. (PWS Section 2.3.7) Since insurance cost can be variable and tied to the fluctuating portfolio value, what is the current value of the USMS cryptocurrency portfolio?

- Approximately $145 million.

76. (PWS Section 3.0) Table lists item 1, 5, 6, 7, 8 and 9. If items 2 – 4 are required, please provide details.

- Updated the deliverable section in the PWS.

77. (PWS Section 4.3) Is a Business Continuity Plan required of every vendor as part of proposal package? Or is it due only from awarded vendor at post award conference?

- The BCP is not a required document, but if you are selected as the winning vendor you will need to have this at the post award conference.

78. (PWS Section 5.0) The language preceding the table refers to a column labeled “Service Output” that is omitted in the table. Please provide clarification.

- This has been updated in the PWS to reflect the intended verbiage.

79. (PWS Section 5.0) The language preceding the table refers to a column labeled “Acceptable Quality Level” that is omitted in the table. Please provide clarification.

- This has been updated in the PWS to reflect the intended verbiage.

80. (PWS Section 6.0) Section 6.0 is omitted. Please confirm section is not required.

- This has been updated in the PWS.

81. (QASP 5.0, Row 6 (2.2.3)) Please confirm “Owner” in this instance equates to “Third Party” as referenced in PWS Section 5.0.

- Yes, this has been updated in the QASP.

82. (QASP 5.0, Row 7 (2.3.1)) Please identify the surveillance method for this service.

- This could be based on a site visit, audit, or self-reporting by the contractor.

83. (QASP 5.0, Row 11( 4.1.1)) The performance standard provided differs from that provided for same service in PWS Section 5.0. Please clarify.

- The language is consistent in both sections.

84. (QASP 6.0) Please clarify/detail payment deductions for performance defects that represent a loss in value to the USMS.

- Please refer to section 5.0 of the QASP.

85. (QASP 7.0) Please provide a copy of the Contract Discrepancy Report (CDR) template, if required.

- The CDR will be prepared as a word document as needed, and is Attachment #12.

86. (Pricing Schedule) Editing is locked. How does USMS want line items for insurance to de denoted?

- This will be a charge that is included in your management fee. The cells that you would input a price or percentage are not locked, the remainder of the sheet will calculate.

87. (Pricing Schedule) How willing is USMS to consider optional CLINs? If so, how can we add it if editing is locked?

- No, we have provided the updated pricing schedule.

88. (Pricing Schedule/Online Auction) Please confirm no online auctions are expected for base year given estimated sales cell is null.

- That is correct.

89. (Pricing Schedule) What is the USMS estimated sales for large disposals? Will USMS add a line to the pricing schedule for those sales?

- We updated the pricing schedule to include different tiers of sales.

90. (DOJ IT Guidance PGD 15-03 – Section II) Definitions of “covered information systems” and “DOJ information” are quite broad. Please clarify whether contractor IT systems would require an ATO.

- The contractor’s IT system will require ITD approval if the contractor’s system needs to connect to the USMS system. The USMS would consult with ITD to see if an ATO is required based on the winning proposal.

91. (Solicitation Pg 32 j) The transition to Unique Entity Identifiers in sam.gov will not be completed until June 2020. Sam.gov is also warning that requests are delayed beyond the normal ten day processing time. Will USMS allow the use of the offeror’s DUNS number and CAGE code in place of the UEI?

- You will need to provide your submission to SAM.gov that you have submitted the information required. Having a DUNs number is a key part in that process.

92. Is there an incumbent currently performing the required task?

- No, the USMS currently handles all VC in house.

93. If there is an incumbent, and should they not be selected, is there a transition timeline?

- N/A. Timeline will be proposed in your Project plan but will be finalized upon award.

94. Is the contractor required to maintain a physical office within the National Capitol Region?

- No.

95. In what format will the inventory typically be delivered? a. Hardware based key store;

b. Software based wallet; c. Recovery Key / mnemonic

- The custody of newly seized Virtual Currency will be transferred from the wallet of the seizing agency to the USMS VC contractor’s wallet over the blockchain. The contractor will create the custody wallet and assign encryption passphrases and maintain a record of the Private Key/Recovery Key/Mnemonic Seed.

96. In the case of physical custody transfer, where will the transfer take place?

- The contractor will not be asked to take physical custody of a seized wallet, only transfer of the seized VC over the blockchain.

97. Shall contractor assume that all inventory is delivered in a “readily transactable state”?

Will private keys, passphrases and any other mechanisms to protect the wallet will be furnished? Will the contractor at any time be responsible for defeating any of the system or wallet protections, cryptographically or otherwise?

- The contractor will create new encrypted wallets for acceptance of seized VC from seizing LE agencies. No, the contractor will not be needed to defeat encryption of wallets. Defeating encryption of target wallets in a seizure is a function of the seizing agency and not the USMS and thereby not a function of the USMS VC contractor.

98. Given that inventory must be prudently stored and protected: a. Shall the contractor assume that the inventory has been secured? b. May the contractor move inventory from a wallet that is inadequate to a platform that is better and meets the storage security objectives of the solicitation? c. Even if the seized asset is nominally secure, such as a hardware wallet, given that the distribution of the wallet mnemonic is unknown, may the contractor transfer the cryptocurrency to another wallet / vault platform that is known to be secure?

- A) The contractor will maintain their own inventory of self-created wallets. The contractor is not taking custody of seized wallets. B) The contractor will create their own encrypted wallets to accept custody of seized VC from a LE seizing agency. C) See answers to A & B, this is not applicable.

99. With USMS permission, may the contractor convert received crypto currency to another crypto currency? Reasons for the request may include: a. Received currency is a thinly traded, volatile currency, placing the asset at long term risk. b. Currency has known security vulnerabilities or lacks the ability to protect the asset cryptographically or physically.

- The conversion of seized cryptocurrency from its seized form is prohibited, unless authorization is provided by the DOJ or a Federal Court. Otherwise the seized cryptocurrency must be held in a contractor created encrypted wallet pending forfeiture. Post-forfeiture the contractor may convert thinly traded, volatile VC currencies into another currency with prior USMS approval.

100. Based on historical data, approximately how many transactions per month is it anticipated the contractor will support?

- The number of transactions per month depends on the number of seizures. We have seen an increase in the number of cases involving virtual currency in the past few years and we expect that trend to continue. The USMS is holding over 160 wallets with VC awaiting forfeiture or disposal. Almost all of those wallets were created in the past 3.5 years. This does not include the wallets already forfeited and disposed of in the past four auctions.

101. In the case of a direct exchange-based disposal, when is the 5-day disposal deadline considered complete? a. When the conversion order has been placed with the exchange?

b. When the crypto has been converted to USD? c. When proceed transfers to Treasury have begun? d. Or when all proceeds are posted in the Treasury Account?

- The five day disposal deadline will be considered complete when all proceeds are in the Treasury Account. This may require approval from the COR to extend the disposal timeframe depending on exchange-based disposal restrictions.

Section 2.2.1 of the PWS has been updated to include this information.

102. In the case of a direct exchange-based disposal, shall the contractor dispose of inventory at spot market rates (market order) or can the contractor sell at limit orders when beneficial to the Treasury? a. Are there any allowances by the COR for delayed disposals if it can be shown that the cryptocurrency is thinly traded with a shallow order book, making a sizeable order economically disadvantageous or perhaps impractical.

- No, all forfeited VC needs to be disposed of in the timeframe provided. The USMS does not adjust our disposals based on market influences. The forfeited VC is to be disposed of efficiently after forfeiture is approved at the prevailing market value.

103. In the case of an intermediate exchange-based disposal, is additional time allocated to complete the transaction? An example includes the need to convert one crypto currency to a more liquid currency prior to conversion to USD.

- Case by Case disposal complications will be considered, but the Contractor will be required to fully explain the variation from procedure and make it clear that no more efficient alternatives exist. It will be at the discretion of the USMS COR to authorize additional disposal times, based on the intelligence provided by the contractor.

- The five day disposal deadline will be considered complete when all proceeds are in the Treasury Account. This may require approval from the COR to extend the disposal timeframe depending on exchange-based disposal restrictions. Section 2.2.1 of the PWS has been updated to include this information.

104. Instructions suggest that the contractor will be responsible for all aspects of a sealed-bid auction. Are there any responsibilities that USMS wishes to retain, such as: a.

Marketing input and decisions. b. Approve authorized bidders (for example, are non-US persons or entities allowed to bid, must payments be made from US based banks, etc.)

- The USMS retains all approval of how forfeited assets are sold through a sealed-bid auction. The contractor will submit their plans for the sealed-bid auction to the USMS COR for consultation and approval.

105. Are there specific KYC (Know Your Customer) requirements placed on the contractor for sealed bid auctions aside from compliance with the Comprehensive Crime Control Act of 1984 and notifying potential bidders regarding this matter?

- Yes, all registered bidders will need to be submitted to the USMS COR to have a law enforcement style background check done on all controlling persons of the bidders.

The control persons will also be checked against the OFAC List.

106. Will USMS ever require a Standard Disposal (500 BTC or less) use a sealed-auction for disposal? If so, will the 5 day deadline to complete disposal and settlement still apply?

It is difficult to envision a successful auction including effective marketing, receipt of bids, receipt of payment, transfer of inventory and completion of transfer to Treasury in 5 business days. (See RFP Attachment #7, Paragraph 2.2.1)

- This requirement could change if the DOJ, MLARS or the U.S. Attorney’s Office mandates a separate sealed-bid auction be performed for a specific case/assets. The feasibility of such a sale would also depend on the market-value of the VC that is being disposed.

107. In the case of “Return to Third Party”, shall the transaction posted on the public ledger (where possible) constitute proof of transfer or are additional measures required including physical custody transfer?

- When returning VC, the USMS will require that written confirmation be provided by the receiving party (this can be via email), in addition to capture of the transaction on the blockchain.

108. Can the USMS share which cryptocurrencies and tokens have been seized over the past three years?

- Yes. The USMS is holding cryptocurrency coins only. The USMS has not taken custody of token cryptocurrency, though tokens are being held in custody by seizing agencies. The USMS currently holds the following types of VC:

1. Ark

2. Bitcoin

3. Bitcoin Cash

4. Bitcoin Gold

5. Burst

6. Cardano

7. DASH

8. Digibyte

9. DigitalCoin

10. Dogecoin

11. Ethereum

12. Ethereum Classic

13. Litecoin

14. Monero

15. Namecoin

16. NEO

17. Novacoin

18. Peercoin

19. Ravencoin

20. Reddoin

21. Shift

22. Siacoin

23. Stratis

24. Syscoin

25. Waves

26. XRP (Ripple)

109. With regards to the non-commingling requirement: a. Must a new USD bank account be set up for each transfer of funds to the Treasury account or can they originate from a single escrow transfer account dedicated for that purpose? b. For direct exchange-based conversions to USD, must a separate exchange account be set up for each conversion or can a common exchange account be used, provided that is the account’s sole purpose.

For example, can the contractor maintain a single master account with an Exchange for all transactions?

- Non-commingling is a requirement just for cryptocurrency in custody, not disposal.

The disposal of cryptocurrency can be commingled, but must be accurately accounted for and documented at every step of the process. The contractor may not have a master account to hold seized assets awaiting forfeiture. Seized assets held in custody must be held and separately accounted for at all times.

110. (Regarding the PWS) “In the event insurance cannot be obtained, the USMS will require an escrow of funds for the duration of the contract.” We are interpreting the above as follows: if insurance cannot be obtained the cryptocurrency inventory should be deposited with a qualified (insured, bonded, regulated, located in the United States) custodian. Is that a correct interpretation?

- No. The contractor will need to provide either adequate insurance or they must hold in escrow an amount of funds that equal the amount of insurance required by the USMS for the duration of the contract. The USMS will not accept third-party custodial assurance of protected value.

111. What is the expected number of cases per year?

- This is unknown and varies from year-to-year.

112. Who is eligible to participate in the disposal auctions? What kind of user verification is required (example: FINCEN guidance on KYC)

- Yes, KYC will be required for the contractor to hold an auction. The registered bidders will need to provide the auctioneer their PII to enable the USMS to perform adequate background investigation on each control person of each bidder. This will need to be part of the auction timeline. This requirement has been added to Section

2.2.2 Large Disposal of the PWS.

113. Can third-party custodians be used?

- Yes. For clarification, the USMS will not shared cost beyond your proposal pricing.

114. What is expected holding time of crypto? What are some of the longest holding periods of crypto last year (from seizure to disposal)?

- Holding times for seized cryptocurrency varies. It could be a few weeks or months, to several years. The USMS has held some wallets of seized cryptocurrency for 3+ years awaiting adjudication and forfeiture.

115. The cost of holding and insuring cryptocurrency can be substantial. We expect there will be periods where we are not performing disposals but still holding sizable amounts of cryptocurrencies. We’d like to itemize the Monthly Management Fee, CLIN0001 , into two separate values: 1) a flat management fee and 2) a fixed commission based on the estimated values of crypto held each month. This will still produce a fixed price, but will more transparently reflect the task and cost of holding and insuring cryptocurrency.

If this is acceptable, can you provide an estimated US value of crypto holdings per month? Example provided with question:

- No, The flat rate management fee is the cost for holding custody wallets, which does not vary the overhead cost of the contractor. All of your costs for managing the VC should be included in the monthly management fee.

116. Our company qualifies as a SDVOSB. Are there any advantages to seeking this designation for the purpose of this contract?

- This solicitation is Small Business only, it would help the USMS small business goals for the year, but that would be the only benefit but would not be taken into account in the evaluation phase of this solicitation.

117. We have three entities under one parent company: Should we apply as the parent company?

- Your joint venture can only result in one contract, so you would need to determine which company would be the prime and which would be the sub-contractor.

118. Will we also need to onboard USMS for each separately?

- N/A see answer to questions 117.

119. Where is the Standard Form SF-30 (submission item #2)?

- This is the modification to the solicitation document that is attached.

120. Where is Reps and Certs (submission item #3)? Is this reference to a beta.sam.gov profile?

- Yes

121. Where is Memo of Understanding (submission item #6)?

- That is an item you would include that has the MOU that you have with a proposed company doing a certain aspect of the contract for you.

122. Pricing schedule: what does “SOC” in rows 8 and 17 mean and what is it in reference to?

- This is the Spending Object Codes (SOC) that are available for use within the Unified Financial Management System by the United States Marshals Service.

123. (Technical Capability) Case file system: can you describe the current operational process for how digital assets are custodied and disposed at USMS? This will help us determine how best to architect a case file system that is compatible with your existing system.

- The USMS has both a Asset Tracking System database for all asset types and Cryptocurrency specific EXCEL inventory spreadsheets for each type of cryptocurrency in custody.

124. (Technical Capability) Are there forms to be filled out manually as part of your normal intake, storage, management, and disposal process that need to be included?

- No forms for the contractor to complete. The intake must be tracked and communicated to the USMS, but this can be done electronically.

125. (Technical Capability) Are there existing 3rd party integrations with your current system?

- No, the systems you potentially propose would be independent from the Marshals Service network.

126. (Technical Capability) What types of policies and governance controls are in place?

- Multiple layers of security and encryption are utilized. The encryption passphrases are known by multiple parties within USMS AFD and not held by any one individual.

The assets on hand are audited on a regular basis by both AFMS and by third-party auditors.

127. (Technical Capability) Are there any special considerations in place we should be aware of?

- No, other than the SECURITY OF INFORMATION AND INFORMATION SYSTEMS DOJ PGD 15-03 which is attachment #11

128. (Technical Capability –Storage – iv) “Describe how the contractor would control access to the data by users, systems, and services” - Do you mean control access by Contractor users or USMS users?

- Both Contractor users and USMS users.

129. (Technical Capability –Storage – vii) “Explain how the data will be tracked, exported and managed individually and in bulk to meet record management requirements; detail any limitations that would prevent full compliance.” - are the record management requirements the constraints section mentioned in the PWS document or somewhere else?

- It is the constraints mentioned in the PWS document.

130. (Technical Capability –Disposal) How does the USMS and US Government classify, view, or treat the tainted coins when they’re being stored on our system and after they’ve been disposed?

- AEC (Anonymity Enhanced Coins) are held in custody by the USMS and not authorized for disposal or conversion at any time. We are otherwise unfamiliar with this term.

131. Is Software as a Service (SaaS) an acceptable solution delivery platform?

- You must adhere to the SECURITY OF INFORMATION AND INFORMATION SYSTEMS DOJ PGD 15-03 which is attachment #11. If SaaS meets these requirements then yes it is an acceptable solution.

132. Are existing systems in place that require direct platform integration? At the API level?

- No.

133. Does the management scope include: Collaterialization solutions, e.g., Nexo, integration; Dynamic Stablecoin conversions; “Smart” selling arbitrage solutions across exchanges?

- Management scope includes the secure holding of seized cryptocurrency, accurate accounting of all cryptocurrency held in custody, efficient and market rate disposal of cryptocurrency upon forfeiture.

134. Crypto exchanges are notorious for a lack of liquidity and tend to impose extensive “cash”/fiat exit fees. How do you expect these quite often dynamically arising constraints to be dealt with?

- If a contractor chooses to use a third-party exchange, the costs associated with that exchange should be included in their proposal (including cash reserves or exit fees).

The USMS will not allow known costs by the contractor’s business model to be handled as variable pass-through expenses.

135. Do you expect to be able to accommodate ERC20, aka, “alt” coins? If so, at what stage of the project?

- The contractor will need to have the capability of handling the custody of seized tokens/alt coins that are seized in Federal law enforcement operations. The USMS does not determine when those assets are seized, so it can be done at any point in the stage of the project.

136. Do you expect to have to accommodate non fungible tokens (NFT)? If so, at what stage of the project?

- At any point. If a seizing FLE seizes tokens, the USMS contractor must be able to take custody of those assets and hold them in secure custody awaiting forfeiture.

137. Do you require a (literal) destruction, aka "burn" solution ?

- Not currently. For AECs the USMS is currently holding these assets in secure custody for an unspecified amount of time.

138. Is the sealed-bid auction to be conducted solely off-chain or is there a need for an on-chain option?

- The only part of the sealed-bid auction that is on-chain part is the transfer of the sold cryptocurrency to the winning bidder/bidders. The transfer of money (deposits/winning purchase funds) is all done off-chain.

139. Are (discrete) cryptographic proofs required for the sealed-bid auction?

- We are not clear what is meant by cryptographic proofs. This can be finalized after award.

140. What sealed-bid mechanisms, e.g., first price, second price, quadratic, are acceptable?

- The sealed-bid is constructed such that bidders are to submit bids for the assets. The prevailing bids are determined by the highest bid and for competing bids, the first bid received.

The USMS sealed-bid auctions do not have a minimum bid and the auctions are conducted as a pure market. The contractor can determine if they want to adjust the rules/structure and submit these requested changes and logic for the change to the USMS COR for consideration and approval. Section 2.2.2 Large Disposal has been updated to include this information.

141. (Trading/Selling) Are there restrictions in place with respect to the domicile of an exchange or trader?

- It cannot be a country in which the USA is prohibited from doing business – such as those on a sanctions list of the OFAC list.

142. Are there any other trading/selling restrictions in place?

- Yes, for example seized cryptocurrency cannot be sold to a known terrorist, criminal enterprise.

143. Are (third-party) custodial capabilities expected or desired?

- No expectation or desire. The cost of third-party custodians are not pass-through expenses to the USMS (ie not paying two contractors to do one function). The third-party custodian must be subject to the requirements of the contract with the USMS.

But any cost associated should be included within your proposed pricing.

144. Are (third-party) escrow capabilities expected or desired?

- No expectation or desire. The cost of third-party custodians are not pass-through expenses to the USMS (ie not paying two contractors to do one function). The third-party custodian must be subject to the requirements of the contract with the USMS.

But any cost associated should be included within your proposed pricing.

145. Do you expect to hold joint custody over assets with other agencies or forfeiture representatives?

- No expectation or desire. The cost of third-party custodians are not pass-through expenses to the USMS (ie not paying two contractors to do one function). The third-party custodian must be subject to the requirements of the contract with the USMS.

But any cost associated should be included within your proposed pricing.

146. Are you equipped to transfer existing holdings into SMC wallet(s)?

- Not familiar with SMC. Please provided an explanation in your proposal.

147. Does a lack of past performance history preclude a company from participating in the solicitation? If so, what are our options to participate as a blockchain and applied cryptography subject-matter expert (sub) contractor?

- Not having any past performace won’t hurt or help you. A company with past performace will have something to be evaluated rather than a company that has no past performance when evaluating past performance. When being evaluated with no past performace a company will received a neutral.

148. What is the average holding period (seizure phase) for seized cryptocurrencies before it is required to be disposed of?

- The holding periods of seized assets varies case-by-case and is influenced by a number of external factors.

149. What is the current amount (USD value) of cryptocurrencies being held by the USMS?

- About $145 million.

150. What is the USMS’ forward guidance regarding cryptocurrency seizures?

- The USMS does not provided guidance regarding cryptocurrency seizures. The USMS is not a seizing agency. The guidance for seizures is determined by the DOJ and then the individual seizing agencies.

151. What is the dollar value size threshold between a standard and large disposal?

- A large disposal is 501+ bitcoin, no dollar value is associated with it.

152. Does the USMS have a preferred method of disposal (sealed auction, market sell, etc)

- The USMS prefers that the majority of all disposals of cryptocurrency will be handled as market sales upon forfeiture of the assets. Sealed-Bid auctions are being reserved as an alternative method of disposal that will be utilized upon special request from the U.S. Attorney’s Office per the court order, as a recommendation of large forfeitures by the USMS, or by recommendation of the USMS contractor for large disposals/forfeitures.

153. What is the current/expected frequency of disposal requests?

- This cannot be determined as it depends when we receive Final Orders of Forfeitures permitting disposal.

154. How does the USMS currently handle disposal and custodial services and processes related to cryptocurrency?

- In-house custody and sealed-bid auctions.

155. Will USMS ascribe any additional value to a proposal for additional redundancy of available custodial services?

- No.

156. Does the USMS have a current process or utilize an existing system to transition the seized cryptocurrency to the contractor?

- Currently the USMS does not utilize a contractor for these services. All custody and disposal of cryptocurrency is handled in-house at the USMS.

157. What cryptocurrencies has USMS seized, and are there any trends…