J&A_(50310219P0016).pdf

UNITED STATES

SECURITIES AND EXCtIANGE COMMISSION

~' 100 F STREET, NE

WASHINGTON, DC 20549

OFFICE OF

ACQUISITIONS

JUSTIFICATION FOR SOLE SOURCE ACQUtSI'TION

Upon the basis of the following justification, 1, as the Contracting Officer, hereby approve the use of limited competition of the proposed contractual action pursuant the authority of FAR Part

13.5 in accordance with 41 U.S.C. 1901, only one responsible source and no other supplies or services will satisfy agency Requirements.

1. Identification of the agency and the contracting activity, and specific identification of the document as a "Justification for other than full and open competition."

U.S. Securities and Exchange Commission 100 F Street, NE Washington, DC 20549

This document serves a Justification for a sole source justification.

2. Nature and Description of Action Being Approved:

The U.S. Securities and Exchange Commission (SEC) intends to award a contract on a sole source basis to Trustees of the University of Pennsylvania for subscription to the Wharton

Research Data Services (WRDS), a web-based data management system designed to retrieve and manipulate data from a wide variety of financial and economic sources.

3. A description of the supplies or services required to meet the agency's needs (including the estimated value).

This requirement is for enterprise-wide subscription to a web-based data management system designed to facilitate retrieval and manipulation of data from a variety of financial and economic sources. The service provides access through a common interface to databases in a consistent data format and provide specialized data analysis tools, database documentation, and data field definitions. It provides the ability to apply SAS, Fortran, or C code to data on the service's Unix server, or on the user's server, at the user's discretion. It enables users to research one company or several hundred companies simultaneously, and to select date ranges, output variables, and output format. The specific items required are as follows:

a) Access to the Wharton Research Data Services (WRDS) data management system.

The SEC requires enterprise-wide subscription to the web-based interface, and access to data sets. The data sets include those to which the SEC subscribes directly with the producers of the data, and those offered free to WRDS subscribers:

• Bank Regulatory Database, including, from the Federal Reserve Bank of Chicago: a) the

Commercial Bank Database, b) the Bank Holding Companies Database, and c) the Merger

Description Data; and from FDIC: d) the FDIC/OTS Deposit Database, and e) Research

Information System Database.

• Blockholders

• CBOE Indexes

• DMEF —Direct Marketing Educational Foundation

• Dow Jones Averages and Total Return Indexes

• Fama-French Portfolios and Factors

• Federal Deposit Insurance Corporation (FDIC) historical dataset

• Federal Reserve Bank reports

• Penn World Tables

• Philadelphia Stock Exchange Options

• SEC Disclosure of Order Execution

• TRACE —Trade Reporting and Compliance Engine OTC Corporate Bond Transaction

Data

b) Access to Mutual Fund Links (NIFLINKS).

MFLINKS is a tool that links mutual fund characteristics and return data to mutual fund equity holdings data, in order to analyze investment performance, investment decisions, trading patterns, and the returns generated by the holdings of the funds.

c) Access to WRDS SEC Analytics Suite.

SEC Analytics Suite is a database of structured data taken from SEC filings submitted to the

EDGAR system from 1994 to present, on a research platform for data analysis, export and linking with other financial databases.

d) Access to NYSE Euronext Daily Trade and Quote data via the WRDS microstructure computing cloud.

The data contains intraday trades and quotes for all securities listed on the New York Stock

Exchange (NYSE) and American Stock Exchange (AMEX), as well as Nasdaq National Market

System (NMS) and SmallCap issues, time-stamped, at minimum, to the second.

The SEC intends to award the contract for a base period of performance for of 12-months, and four (4) 12-month Option Periods. The total estimated value of the Base Period is

~, which will use FY l9 funds. The total estimated value of the contract is

4. An Identification of the statutory Authority for Other Than Full and Open Competition:

FAR Part 13.5 in accordance with 41 U.S.C. 1901, only one responsible source and no other supplies or services will satisfy agency requirements.

5. Demonstration that the proposed contractor's unique qualifications or nature of the acquisition requires use of the authority cited:

WRDS is the only known source for the consolidation of the data required by the SEC, both current and historical, from several sources in a format useful for researchers. WRDS receives the data directly from providers and posts the data to their system in SAS data sets.

Access is provided to subscribers over the Internet in a variety of output formats. By providing access to multiple data sources via a common interface, WRDS greatly simplifies data extraction and querying, which saves substantial time for SEC staff. For example, the CRSP/Compustat

Merged Database, produced by the Center for Research in Security Prices at the University of

Chicago's Graduate School of Business, provides historical financial, price and return data.

Without use of the WRVS platform, retrieving and reporting from these data would require the time-consuming creation and modification of a statistical program by an SEC computer programmer.

The following products are available only from WRDS:

1) Mutual Fund Links (MFLINKS) is a linking table which links identifiers from the CRSP

Survivor-Bias-Free US Mutual Fund Database with the identifiers from the Thomson Financial

CDA/Spectrum s12 data set for corresponding funds. The CRSP Survivor-Bias-Free US Mutual

Fund Database contains characteristic and return data such as investment style, fee structure, monthly total returns, monthly total net assets, and dividends. The Thomson Financial

CDA/Spectrum sl2 data set contains detail on mutual fund holdings in U.S. equities and some other securities. Using MFLINKS enables a user to gather detail on holdings for either particular funds or fund families and groups of funds at specific points in time. MFLINKS was developed by the Wharton Research Data Services with the assistance of Professor Russ Wermers of the

University of Maryland's Robert H. Smith School of Business, who has pioneered the use and analysis of linked mutual fund data. WRDS is the only source making this data linking tool available. It is a newly generated and unique data set, which provides for analysis that could not be performed before.

2) The SEC Analytics Suite provides access to current and historical filings and comment letters, with daily updates, so that users can build data sets according to user-defined criteria and search across multiple entity filings in one place. The Suite provides a comprehensive survivor-bias-free historical linking table of identifiers from Compustat, CUS1P, and SEC's CIK. It is available only via the WRDS platform.

6. A description of efforts made to ensure that of~'ers are solicited from as many potential sources as is practicable, including whether a notice was or will be publicized as required by Subpart 5.2 and, if not, which exception under 5.202 applies.

The SEC Office of Acquisitions (OA) posted a Synopsis on FedBizOpps on November

26, 2018 with notice of the SEC's intent to award a sole source procurement to Trustees of the

University of Pennsylvania in accordance with FAR 5.201. The SEC received one email response from ~ requirements.

therefore, it is determined that they do not meet the SEC's

7. Determination by the Contracting Officer that the anticipated cost to the Government will be fair and reasonable.

The anticipated cost to the government is determined to be fair and reasonable.

8. A description of the market research conducted and the results or a statement of the reason market research was not conducted:

Based on market surveys, including discussions with SEC economics and academic fellows who conduct economic research, and a survey of data subscriptions of leading US business schools, WRDS is the only source identified of capable of meeting the SEC's requirements.

9. Any other facts supporting the use of other than full and open competition:

None.

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

The following source expressed interest but was determined not capable of meeting the requirements. Any future sources that express interest will be added to a listing:

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

The SEC will perform market research for future acquisitions for the purpose of verifying the sole source nature of this requirement.

12. Required Signatures:

TECHNICAL & REQU]REMENTS CERTIFICATIONS: Icertify that the facts and representations which form the basis for this justification are accurate and complete.

CONTRACTING OFFICER CERTIFICATION: I certify that this justification is accurate and complete to the best of my knowledge and belief.

(Signature)