Sole_Source_Justification_Refinitiv_Syndicated_Loans_VFinal.pdf

FOR OFFICIAL USE ONLY

Source Selection Information – See FAR 2.101 and 3.104

JUSTIFICATION AND APPROVAL

CFTC intends to solicit on a sole-source basis for the licenses described below. The following rationale is provided in accordance with the requirements of FAR 6.302-1.

Agency and Contracting Activity

The Financial Management Branch (FMB) of the Commodity Futures Trading Commission (CFTC) seeks to buy two user licenses for the Refinitiv LoanConnector (LC), Loan Pricing Corporation (LPC) Collateral, and Business Development Corporation (BDC) Collateral products to support research projects.

Nature and/or description of the action being approved

The CFTC ODT proposes to directly award a contract to Refinitiv, a wholly owned subsidiary of Thompson Reuters.

Description of Supplies/Services & Estimated Value

The proposed contract action is for a sole-source award to Refinitiv to procure two user licenses for the three above named product offerings.

CFTC has a responsibility to ensure market integrity in the futures and swaps markets. CFTC is also responsible for systemic risk monitoring as part of FSOC membership. In order to fulfill its mission, CFTC is interested in identifying and analyzing the relationship between the global syndicated loan market and the derivatives markets. CFTC is part of the President’s Working Group on leveraged lending. To perform working group research and to support regulatory functions, the CFTC requires both primary and secondary global syndicated loan market data.

CFTC also requires the loan data to support rule making and to examine swaps in connection with bank lending to customers.

The Refinitiv product offering has the following features, all of which are required by CFTC:

Loan Level Data Requirements The vendor product shall provide loan data covering the complete syndicated loan market to include the leveraged loan data.

The vendor product shall provide current borrower ratings on individual loans as well as ratings at close where available.

The vendor product shall provide secondary market information at the loan level including bid, ask and spread. The vendor product shall specify broker/dealer who contributed to the secondary market price wherever applicable.

CLO Data Requirements The vendor product shall provide the various tranches underlying the CLO. It shall provide the information on the holders of tranches wherever applicable.

The vendor product shall provide pricing information on the CLO including average bid, average ask, high bid and low bid.

The vendor product shall provide underlying collateral at the loan level for each CLO tranche. Functionality is required to navigate from the CLO level information to the underlying loan level detail.

Product Graphical User Interface (GUI) Requirements The user interface shall feature robust search functions to search across all loans using multiple filtering combinations.

Estimated contract value for the base year is $75,000.00. The contract will have four option years. Total lifecycle contract value is estimated to be $400,000.00.

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

The Description of Marketing Research Section identifies all of the CFTC requirements for this data. Refinitiv was the only vendor that met all the requirements. The Description of Supplies/Services & Estimated Value section identifies those requirements met only by Refinitiv.

Identification of Authority Permitting Other Than Full and Open Competition

The authority permitting the acquisition that uses a brand-name description or other purchase description to specify a particular brand-name, product, or feature of a product, peculiar to one manufacturer is 6.302-1 -- Only One Responsible Source and No Other Supplies or Services Will Satisfy Agency Requirements.

A description of efforts made to ensure that offers 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.

A pre-solicitation notification of intent to issue a sole-source contract was posted on July 12, 2019 with a response date of July 26, 2019 in accordance with FAR 5.2. The Government received questions in response to this posting, from a vendor (Bloomberg) seeking information as to whether this was a new or existing requirement, and if there was an incumbent contractor.

CFTC provided a response to these questions (that this was a new requirement, and that there was no incumbent contractor). Bloomberg did not ask any additional questions or otherwise indicate that it was capable of performing the solicited requirements. CFTC received no other responses to the pre-solicitation notification..

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

The Contracting Officer will review commercial pricing offered by Thompson Reuters / Refinitiv (other than certified cost or pricing data, in accordance with FAR 15.403-3) to ensure that quoted prices are fair and reasonable . The Contracting Officer will ensure prices offered to CFTC are equal to or lower than commercially available pricing.

Description of Market Research

Market Research was conducted in accordance with FAR 10.001.

Market research activities included

• Review of vendor websites, marketing brochures, and research reports.

• Interviews and demos with vendor sales and marketing personnel wherever applicable.

• Trial license to evaluate product offering wherever applicable.

CFTC performed a detailed evaluation of the S&P Global LDC product offering against the Refinitiv LC, BDC Collateral and the LPC Collateral offering. In addition the CFTC considered the Federal Reserve’s Shared National Credit (SNC) Database and the Loan Syndicated and Trading Association (LSTA) data offering. These two offerings were quickly eliminated from further evaluation because they did not include BDC and CLO data.

The comparison of the S&P offering and the Refinitiv offering relied most heavily on CFTC product evaluation conducted using the trail licenses issued by the vendors. The four tables below identify CFTC product requirements. Only Refinitiv met all requirements.

In summary Refinitiv contained the information and data elements required both at the detail and aggregate level, as follows in the chart below:

Loan Connector Req.

ID

Requirement Description

Loan Level Requirements 1 The vendor product shall provide loan data covering the complete syndicated loan market including the leveraged loan data.

2 The vendor product data set shall include both primary loan terms and secondary market information at the loan level.

3 The vendor product shall include tranche and deal level loan data.

4 The vendor product shall provide data on the amendments to active loans.

5 The vendor product shall provide comprehensive, reliable historical deal information from 1990 forward.

6 The vendor product shall provide loan data by region and by market segment.

7 The vendor product shall provide current borrower ratings on individual loans as well as ratings at close where available.

8 The vendor product shall provide the total deal amount and the original deal amount.

9 The vendor product shall provide secondary market information at the loan level including bid, ask and spread. The vendor product shall specify broker/dealer who contributed to the secondary market price wherever applicable.

10 The vendor product shall provide call protection and upfront fee information at the loan level wherever applicable.

11 The vendor product shall specify whether the loan is secured or not.

12 The vendor product shall provide loan search functionality for filtering by borrower, tranche, borrower rating, tranche rating, secondary market pricing and optionality in the contract.

CLO Data Requirements 13 The vendor product shall provide the various tranches underlying the

CLO. Information on the tranche holders shall be supplied wherever applicable.

14 The vendor product shall provide the reinvestment end date, legal maturity date, aggregated principal balance, issue date, trustee and manager information for each CLO.

15 The vendor product shall provide pricing information on the CLO including average bid, average ask, high bid and low bid.

16 The vendor product shall provide underlying collateral at the loan level for each CLO tranche. Functionality is required to navigate from the CLO level information to the underlying loan level detail.

17 The vendor product shall have functionality to show CLO holdings by manager and by borrower.

18 The vendor product shall have search functionality to search CLO deals by trustee, manager, currency, year of issue and by active/inactive flag.

BDC Data Requirements 19 The vendor product shall provide a list of active BDCs.

20 The vendor product shall include the total assets, total debt, total investments and current cash holdings of each BDC. The price of BDC shall be provided whenever applicable.

21 The vendor product shall provide the industry and security type concentration of each BDC.

22 The vendor product shall provide historical asset holding information for each BDC.

23 The vendor product shall have a robust search function that provides the ability to look for BDCs based on the investees. It shall also provide the ability to search for BDCs based on industry segment.

GUI Requirements 24 The user interface shall feature robust search functions to search across all loans using multiple filtering combinations.

Any Other Facts Supporting the Use of Other Than Full and Open Competition

None.

A Statement of the Actions, if Any, the Agency May Take to Remove or Overcome Any Barriers to Competition Before Any Subsequent Acquisition for Supplies or Services Required

Should additional competitors in the future enter into the requirements area, the requirement would be competed amongst eligible vendors.

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

None.

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.

Should additional competitors in the future enter into the requirements area, the requirement would be competed amongst eligible vendors.

Certifications and Approvals – Refinitiv Loan Connector

Technical Personnel Certification

I certify that evidence and any supporting data which form a basis for this justification are complete and accurate.

Caroline Quintarelli Date IT Specialist Commodity Futures Trading Commission

Contracting Officer’s Certification

I certify that the data supporting the recommendation to solicit and award on a sole-source basis is accurate and complete to the best of my knowledge and belief.

Benjamin Van Wormer Date Contracting Officer Commodity Futures Trading Commission

9/18/2019

09/18/2019