Redacted_JOFOC_2032H5-19-R-00012.pdf

As prescribed by FAR 6.3 3/2018

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

(JOFOC)

FAR SUBPART 6.3

I recommend the use of other than full and open competition for the acquisition of the following supplies or services. If this acquisition is to be made with only one source or a limited number of sources, ne otiations will be conducted with the indicated ro osed su lier s .

1. IDENTIFICATION OF THE AGENCY AND CONTRACTING ACTIVITY:

2. NATURE/DESCRIPTION OF THE ACTION BEING APPROVED:

To establish a new sole source Firm-Fixed Price (FFP) FY20 contract for the continued use of Bloomberg Bureau of National Affairs (BBNA) tax software products, training, software maintenance, plus associated adaptation, user and technical support services for one year. The Internal Revenue Service (IRS) currently uses the BBNA Corporate Tax Analyzer (CTA) and Income Tax Planner (ITP) software which has been adapted for the IRS ' system's efficiency. The required software and services needed are BBNA software and related services that are available from only one responsible source. This requirement includes the software product upgrades to most current version, software adaptation, as well as user and technical support.

BBNA has provided Corporate Tax Analyzer ("CTA'') and Income Tax Planner ("ITP") software and related services to the IRS for about 16 years. Period of Performance is Oct. 1, 2019 through Sept. 30, 2020.

3. DESCRIPTION OF SUPPLIES OR SERVICES

The Internal Revenue Service (IRS), Large Business and International Division, has an ongoing recurring integral purchase requirement in support of the Federal Tax Compliance initiative for the BBNA tax accounting software products along with its associated middleware software plug-in service. This contract shall provide BBNA software products and services for the following:

1. Qty: 750 BBNA Corporate Tax™ Analyzer (CTA) perpetual licenses and their annual renewals for individual license use.

2. Qty: 175 BBNA Income Tax™ Planner (ITP) perpetual licenses and their annual renewals for individual license use.

3. BBNA software combined user and technical support (ITP/CTA Technical Support (HELPDESK) for up to approximately 925 licensed users.

4. BBNA ongoing maintenance for IRS proprietary adaption with IMS Tax Engine Middleware (IMS M) software (including e-file ).

5. BBNA user and technical support for IRS proprietary adaption with IMS Tax Engine Middleware (IMS M) Plug-In software.

IRS Tax software upgrades and modifications to the Tax Engine Middleware Plug-in are necessary to integrate E-file Support and the latest version ofITP/CTA that is distributed to the IRS within the fiscal year as per the following. All Contractor services: consulting, on site visits, skill development work and materials necessary to complete the BBNA software support work statement requirements.

Continuation of IRS proprietary software or middleware interoperability development and maintenance that integrates the latest BBNA ITP/CTA software versions distributed to the IRS each fiscal year with both:

a) the IRS Issue Management System (IMS). IMS is a large case main audit reporting program used throughout the IRS large case division. This task is referred to as the IMS Middleware (IMS M) software. This also includes the BBNA interoperability IMS Adaptor that imports Extensible Markup Language (XML) tax return data into BBNA CTA thorough the use ofIRS Large Business (LB&I) Issue Management System (IMS). IMS is LB&I's main audit reporting program and is used by most LB&I Agents, Managers, Examining Technician and Secretaries.

b) the IRS Tax Engine. This is referred to as the Tax Engine Middleware Plug-in. It is necessary to integrate E-file Support with the latest version of ITP/CT A that is distributed to the IRS during each fiscal year.

Continue maintenance for IRS IMS Tax Engine Middleware plug-in, an adaption of the BBNA CTA software product to add or enable IRS Agent reports and log files, plus direct importation of files in Extensible Markup Language (XML) format including those maintained within IRS tax returns, such as electronic E-file returns and corporate returns. The Large Business and International (LB&I) Imaging Network (LIN) is the system in which LB&I maintains these e-file returns. BBNA CTA software has been adapted to import return information directly from the IRS LIN system thereby preventing manual return entry errors on complex large corporate returns.

Period of performance: October 1, 2019 to September 30, 2020

4. REQUISITION NO.

SC 5000047564

(Subject to Availability of FY20 Funds)

6. COST ESTIMATE

5. NAME(S) OF PROPOSED SOURCE(S)

Bloomberg Bureau of National Affairs (BBNA) Inc. , a Division of Tax Management Inc.

1801 South Bell Street Arlington, VA 22202

CERTIFICATION OF TECHNICAL OR REQUIREMENTS PERSONNEL

I hereby certify that any supporting information and data provided, which form the basis for this ·ustification, are accurate and com lete to the best of m knowled e and belief.

7. PROGRAM OFFICE (Signature) (Phone No.) (Date) (Requiring Activity) (Name & Title)

SMALL BUSINESS CERTIFICATION

I have reviewed this justification, including any attached documentation, if applicable, and concur IZ] / do not concur with the findin

8. SMALL BUSI NESS (Phone No.) (Date)

SPECIALIST

(Name and Title)

PROCUREMENT OFFICE CERTIFICATION

> This re uirement will X will not rovide for a brid e contract I certify that this submission is accurate and complete to the best of my knowledge and belief. This certification will serve as a roval, unless action exceeds $700K.

9. CONTRACTING OFFICER (Signature) (Phone No.) (Date) (Name) - Before requesting this procurement, state one statutory authority for this procurement to be conducted under "other than full and open competition" procedures. Provide narrative justification associated with the res ective state authorit in block number 17.

THE COMPETITION IN CONTRACTING ACT OF 1984 (P .L. 98-369)

(place 'X" in appropriate box)

10. 41 U.S.C. 3304(a)(1), FAR 6.302-1- Only one responsible source; or brand name X specification

11. 41 U.S.C. 3304(a)(2), FAR 6.302-2 - Unusual and compelling urgency

12. 41 U.S.C. 3304(a)(3), FAR 6.302-3 - Industrial mobilization, engineering, developmental, or research capability; or expert services

13. 41 U.S.C. 3304(a)(4), FAR 6.302-4 - International agreement

14. 41 U.S.C. 3304(a)(5), FAR 6.302-5 - Authorized or required by statute

15. 41 U.S.C. 3304(a)(6), FAR 6.302-6 - National Security

16. 41 U.S.C. 3304(a)(7), FAR 6.302-7 - Public Interest

17.JUSTIFICATION (ADD PAGES IF NEEDED)

A. DEMONSTRATION THAT THE PROPOSED CONTRACTOR'S UNIQUE QUALIFICATIONS OR

THE NATURE OF THE ACQUISITION REQUIRES USE OF THE AUTHORITY CITED.

The BBN A CT A and ITP software products are the most widely used by extremely large businesses for their tax purposes and are proprietary, copy right products. Use of CTA allows the IRS to read the large business tax return electronically without manual rekeying and conduct their highly technical case audit. BBN A is the only one responsible source that can perform the requirements of this acquisition. BNA is the sole distributor ofCTA and ITP software and related products and services. Only the BBNA CTA software developers have access to the CT A coding to make the middleware conversion changes for IMS interoperation. There are no resellers authorized to represent these products and services.

BNA's Corporate Tax Analyzer, Income Tax Planner, COTS Tax Engine Middleware, and associated Technical Support collectively comprise a comprehensive and unique solution that addresses IRS mission critical needs and requirements.

While there are other Tax/accounting software products, there are none that have features to equal the BBNA CT A product.

Corporate Tax Audit Software meets the IRS requirement for a single solution that performs the following requirements simultaneously in one software package. No other software can simultaneously do these:

automatically computes federal income taxes for domestic individuals from 1987 to present

(i) automatically computes federal income taxes for domestic corporations, from 1976 to the present that covers the following areas:

• Regular Tax

• Alternative Minimum Tax (AMT)

• Net Operating Losses (NOLs)

• Dividends-Received Deduction (DRD)

• Charitable Contributions Deduction (CCD)

• Short Years and 52-53-Week Years

• General Business Credit (GBC)

• Foreign Tax Credit (FTC)

• Overall Foreign and Domestic Losses (OFLs and ODLs)

• Foreign Taxes Deemed Paid

• Alternative Minimum Tax Foreign Tax Credit (AMT FTC)

• Foreign Oil and Gas Extraction Income (FOGEi)

(ii) automates and manages complex federal corporate income tax attributes over multiple years and across multiple scenarios (up to 20 side-by-side) to enable "what if' analysis and comparisons during audit

(iii) analyzes and "flags" discrepancies between taxpayer entered information and Federal Form

(iv) automates the calculation of carryforwards and carrybacks ofNOLs, FTCs, AMT, GBCs, charitable contributions and more, over multiple years

(v) provides built-in audit support including:

• Forms used by IRS examiners: e.g., Form 4549/4549-A, 4549-B, 5278, 5701, 870

• Coordinated Examination Program (CEP) paperwork

• Maintenance of Entity, IDR, and Proposed Adjustment Log

BNA is the only provider of a software solution (Corporate Tax Analyzer) that simultaneously provides all of the above requirements together in one software package, and)) that meets all of these IRS requirements, and more.

Again, it is the only software that includes the IRS Forms and incorporates multi-year calculations of carry back and carry forwards. Other software only calculates standalone years, which then have to be reentered.

The IMS Adaptor was made by BBNA to import the XML return data into CTA thorough the use ofLB&I's Issue Management System (IMS). IMS is LB&I's main audit reporting program and is used by most LB&I Agents, Managers, Examining Technician and Secretaries. BBNA has tailored its commercial CTA product to include IRS Revenue Agent reports and log files making it more useful to the Service. BBNA CT A also has been tailored to import files (corporate returns) in Extensible Markup Language (XML) format (electronic E file returns). The LMSB Imaging Network (LIN) is the vehicle in which LB&I receives these e-file returns.

BBNA CTA has been designed to import directly from the LIN system. Besides saving large amounts of time, the direct importing prevents errors due to manual return entry as corporate returns are quite large and simple transposing of numbers can cause serious problems with tax computations and reporting.

The IRS Issue Management System (IMS). IMS is a large case main audit reporting program used throughout the IRS large case division. This task is referred to as the IMS Middleware (IMS M) software. This also includes the BBN A interoperability IMS Adaptor that imports Extensible Markup Language (XML) tax return data into BBNA CTA thorough the use of IRS Large Business (LB&I) Issue Management System (IMS). IMS is LB&I's main audit reporting program and is used by most LB&I Agents, Managers, Examining Technician and Secretaries. This is referred to as the Tax Engine Middleware Plug-in. It is necessary to integrate E-file Support with the latest version of ITP/CTA that is distributed to the IRS during each fiscal year.

The IRS requires the middleware plug-in to support its taxpayer audit function. The IRS employs an internal system to automate and manage taxpayer issues relevant to domestic corporation audits. This system is referred to as the Issue Management System ("IMS"). A core requirement of the Government is that corporate tax audit software must be able to operate both stand-alone and connected to IMS. This thus requires that the selected software must support integration with IMS. Currently, the IRS uses integration software middleware labeled as the "IMS Tax Engine Adaptor" to achieve this objective. The IMS Tax Engine Adaptor is comprised of generic interfaces that connect with vendor specific plug-in connectors to translate generic data elements from IMS into vendor proprietary formats. BNA has developed a connection to the IMS Tax Engine Adaptor termed the COTS Tax Engine Middleware to complete the integration between IMS and the BNA Corporate Tax Analyzer. The COTS Tax Engine Middleware is licensed to the IRS and owned and maintained by BNA. The IRS requires licenses to the COTS Tax Engine Middleware Plug-in to ensure continued integration with IMS. BNA is the only provider of this software for use with the BNA Corporate Tax Analyzer.

To continue IMS, the IRS requires middleware adaptation of the BBNA CTA software product to add or enable IRS Agent reports and log files, plus direct importation of files in Extensible Markup Language (XML) format including those maintained within IRS tax returns, such as electronic E-file returns and corporate returns. The Large Business and International (LB&I) Imaging Network (LIN) is the system in which LB&I maintains these e-file returns. BBNA CTA software has been adapted to import return information directly from the IRS LIN system thereby preventing manual return entry errors on complex large corporate returns.

The IRS requires user technical support regarding the proper use of the COTS Tax Engine Middleware Plug-in. BN A is the only support resource for this software application that can provide clarification and software technical support describing tax computations and the rationale behind them, with specific references to the Internal Revenue Code, regulations and rulings; and how the audit software applies them.

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 SUBPART 5.2 AND, IF NOT, WHICH EXCEPTION

UNDER 5.202 APPLIES.

The Contracting Officer has issued a pre-solicitation synopsis notice of intent on FedBizOpps, as of August 16, 2019, describing the IRS' requirements and the unique qualifications of the BBN A that will satisfy those requirements. The Contracting Officer does not anticipate any responses to the synopsis, however if responses are received as a result of the synopsis, the justification document will be updated accordingly.

C. DETERMINATION THAT THE ANTICIPATED COST TO THE GOVERNMENT WILL BE FAIR

AND REASONABLE.

The Contracting Officer will determine that the anticipated cost will be fair and reasonable by performing price analysis and comparing historical pricing of the requirement along with the Government's cost estimate.

D. DESCRIBE THE MARKET RESEARCH THAT WAS CONDUCTED AND THE RESULTS OF

THAT SURVEY. IF ACTIONS WERE TAKEN BY PROCUREMENT PERSONNEL TO SATISFY

THIS REQUIREMENT SUCH AS A GPE SOURCES SOUGHT SYNOPSIS, PLEASE SPECIFY.

Acquisition Gateway was used to conduct Market Research. Researched Treasury Mandatory Sources and Best-in-Class vehicles as directed under DTAP 1008.002. No mandatory sources or BIC vehicles were found that could satisfy this requirement.

Queried Government-wide database and other Government and commercial databases ( e.g. FPDS-NG, F APIIS, and PPIRS). Queries in the Government-wide database and other Government and commercial databases (e.g.

Treasury mandatory source list, FPDS-NG, and FAPIIS did not provide another BBNA Contract or any usable contract for our requirements which are in FSC 7030, ADP software. It did show that Bloomberg has contracts for purchase of their publications or reference books but not for software or ADP professional support services.

Searched on-line for CTA and Tax software, and reviewed catalogs and other generally available product literature published by manufacturers, distributors, and dealers. Internet searches did not show any additional resellers or partnerships from whom we might get both the CTA and ITP software and related services.

Requestor conducted additional market research using both GSA e-library, government portal, and the internet.

This includes extraction of reports from government-wide contractor databases, Contract Directory, and GSA's e-Library, but could not determine any usable contracts for the ADP software items, such as BBNA Corporate Tax Analyzer and ADP consulting services that we require.

BNA provided a letter stating that they use no resellers and only their company can provide the software and the technical and maintenance support for it.

E. DESCRIBE ANY OTHER FACTS TO SUPPORT THE JOFOC.

Any change of tax software would cause increased high training overhead and decreased tax collection performance as well as new IRS software development costs for interoperability. The development costs alone for a new tax software application interoperability with our IMS system are estimated as follows based on a similar application Vendor pricing:

Initial cost to build Tax Software Middleware Plug-in for integrating with IMS: $1,485,000.

Project will take 12 months.

This does not include the increased overhead any change of software would cause for high training issues and the impact of reduced performance. A one-year loss of Large Case tax collections activity would mean a loss of millions of dollars for that non-performance year, plus increased risk of litigation issues. AND a key issue would be that IRS could no longer electronically read and audit the majority oflarge corporate case tax documents which are provided to us electronically in CTA Tax Software, because only CT A software can directly read a tax return created in CT A.

F. LIST SOURCES, IF ANY, THAT EXPRESSED, IN WRITING, AN INTEREST IN THE

ACQUISITION.

The Contracting Officer will update this section if sources express an interest in the acquisition, based upon the responses to the FBO synopsis of the proposed contract action.

G. 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 product and services are unique to BBNA and are currently a sole source to BBNA. In the future, the LB&I customer and the Contracting Officer will continue due diligence to perform market research to determine if other potential sources of the software and support with the required characteristics exists in the marketplace.

H. STATEMENT THAT REQUIREMENT DOES NOT RESULT FROM A LACK OF PLANNING OR

THE EXPIRATION OF FUNDS.

This requirement does not result from a lack of planning or the expiration of funds.

ADDITIONAL APPROVALS

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NOTE: Each review must be preceded by lower level approval(s). e.g., over $68 million all approvals are required. IN NO CASE WILL AN INDIVIDUAL SIGN MORE THAN ONE APPROVAL LEVEL.