SF1013_Redacted.pdf

Treasury Standard Form – 1013 (Rev 2/24)

Prescribed by Treasury: DTAP 1013.501 Tracking No.

DEPARTMENT OF THE TREASURY

SF 1013 - JUSTIFICATION & APPROVAL FOR FAR SUBPART 13.5 SOLE SOURCE

(INCLUDING BRAND NAME) ACQUISITIONS

1. Identification of the requiring activity and the contracting activity:

Requiring activity: Department of the Treasury, Internal Revenue Service (IRS), LB&I Deputy Commissioner, Director of Treaty & Transfer Pricing Operations, Director of Field Operations Transfer Pricing Practice, Practice Network Program.

Contracting Activity: Office of Business Solutions Acquisition (OBSA) / Northern Region / Western Section

2.a Nature and/or description of the action being approved:

The purpose of this sole source justification is to obtain approval to award a firm-fixed-price (FFP) contract with the vendor, S&P GLOBAL LLC, for the purchase of annual subscription license to their credit rating database system (RatingsExpress) described in section 3.a below.

The need date for this service is 09/13/2024. The period of performance will be a base year plus four (4) option years as follows:

Base year: 09/13/2024 – 09/12/2025 Option Year 1: 09/13/2025 – 09/12/2026 Option Year 2: 09/13/2026 – 09/12/2027 Option Year 3: 09/13/2027 – 09/12/2028 Option Year 4: 09/13/2028 – 09/12/2029

2.b Name of the vendor.

S&P GLOBAL MARKET INTELLIGENCE LLC

55 WATER STREET

NEW YORK, NY 10041

UEI:

BUSINESS SIZE: OTHER THAN SMALL BUSINESS

2.c Requisition No.:

5000193058

2.d Bridge contract: Yes No 2.e Brand name: Yes No 3.a A description of the supplies or services required to meet the agency’s needs:

Annual Subscription to Standard and Poor’s (S&P) RatingsXpress credit rating database system – This service allows LB&I to leverage other software/databases which we already have access to. RatingsXpress database system enables LB&I users to pull detailed loan or bond information from sources like LSEG Loan Connector or Bloomberg that have an S&P

Prescribed by Treasury: DTAP 1013.501 Tracking No.

Rating. S&P is the largest credit rating agency in the world, therefore the data they provide to other databases and software services is critical to LB&I.

3.b Includes IT: Yes No 3.c IGCE/Estimated dollar value:

The IGCE is inclusive of four twelve-month option periods. Refer to the IGCE for additional details.

4. Identification of the authority being used (Check the box that applies):

41 U.S.C. 1901 – Simplified acquisition procedures.

41 U.S.C. 1903 – Special emergency procurement authority.

5. A demonstration that the proposed contractor’s unique qualifications or the nature of the acquisition requires use of the authority cited:

There’s only one source reasonably available. S&P Global LLC (S&P’s) developed and owns the propriety software search tool and algorithms that are used to manipulate the data to meet our compliance needs and support the services specifically required for this acquisition.

Thereby the proposed source has the sole unique technical and other resources or qualifications required for this acquisition. No other type of supplies or services will satisfy agency requirement. Failure to access this unique credit rating database system will result in the loss of 50% of the market data reflecting outstanding loans which will affect the IRS practitioner’s capabilities to verify taxpayers’ compliance.

6. A description of efforts to ensure that offers were solicited from as many potential sources as is practicable, including whether a notice was or will be publicized as required by FAR subpart 5.2 and, if not, which exception under FAR 5.202 applies:

In accordance with FAR subpart 5.2, a notice of intent to award a sole source contract under the authority of FAR subpart 13.5 will be posted on the Government Point of Entry at SAM.gov | Duns - Sam UEI. This notice will afford an opportunity for all responsible sources to submit a capability statement which will be considered by the Government.

7. A determination by the contracting officer that the anticipated cost to the Government will be fair and reasonable:

The Contracting Officer determines that the anticipated price(s) will be fair and reasonable based on the comparison of the proposed price with the IGCE and recent award prices for similar subscription services.

8. A description of the market research conducted (see FAR part 10) and the results or a statement of the reason market research was not conducted:

Market research was conducting using different techniques by searching the Government-wide databases, reviewing similar requirements, and surveying knowledgeable and experienced practitioners and end-users in the Government and private credit rating industry.

Prescribed by Treasury: DTAP 1013.501 Tracking No.

The results show that there is only one reasonable available vendor, S&P Global LLC, who developed and owns the propriety software search tool and algorithms (RatingsExpress) to meet our requirements. No other vendors can provide this service.

There are only three private credit rating companies on the commercial marketplace which are Moody’s, Fitch, and S&P’s (S&P Global LLC). Moody’s and Fitch, combined, accounts for 50% of credit market data and S&P’s alone accounts for the other 50% of credit market data.

IRS practitioners have been using credit rating data from all the three credit rating companies above to price taxpayer intercompany loans and guarantee fees to verify taxpayer compliance and to make Section 482 transfer pricing adjustments where necessary. In addition, S&P RatingsXpress data is valuable in explaining and supporting the IRS position to taxpayers, other taxing authorities, and international taxing bodies.

RatingsXpress (database from S&P’s) loan and guarantee fee related credit ratings data were formerly available to the IRS via LSEG-Loan Connector with no additional fees. The data was and remains integral to IRS practitioner analysis both because S&P’s covers so much more of the market than any other vendor, and because taxpayers regularly use S&P ratings data to support their positions. Recently S&P began charging for data used through third-party applications like Loan Connector. S&P has offered a grace period for data access, but this will terminate without a contract commitment. Continued IRS data access via Loan Connector requires a new RatingsXpress license.

9.a Any other facts supporting this justification:

RatingsExpress credit rating database system includes only copyrighted information that can be received from S&P’s as it provides data from ratings they have performed. They are the largest credit rating service in the world. Taxpayers use S&P’s data and we need to be able to duplicate and critique what they have done.

9.b Attachments: Yes No

PWS, IGCE, Coding Worksheet, Acquisition Plan, Market Research

10. A listing of sources, if any, that expressed, in writing, an interest in the acquisition:

No other sources expressed, in writing, interest in the acquisition.

11. A statement of the actions, if any, the Requiring Activity or Contracting Activity may take to remove or overcome any barriers to competition before any subsequent acquisition for the supplies or services required:

The Requiring and Contracting Activity will continue to search the marketplace for other potential sources. As new alternate sources evolve, the Government will synopsize the requirements for full and open competition.

Prescribed by Treasury: DTAP 1013.501 Tracking No.

knowledge and belief, and representative of the Government’s need. Therefore, I hereby consent to the approval of this justification.

Name: Date:

Signature:

13.e Senior Procurement Executive (if over $75 million) (Contracting Activity). I have reviewed this justification and find it to be accurate and complete to the best of my knowledge and belief. Therefore, as the senior procurement official, I hereby approve this justification.

Name: Date:

Signature: