JA - Moodys REDACTED.pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

Credit Risk Scorecard Model Validation

CONTRACTING ACTIVITY

US International Development Finance Corporation 1100 New York Avenue, N.W. Washington, D.C. 20527

NATURE AND DESCRIPTION OF ACTION BEING APPROVED

This action is for the award of a sole-source Firm-Fixed-Price contract for Credit Risk Scorecard Model Validation, including model validation, scorecard enhancement, and implementation of approved methodology within the existing Moody’s CreditLens environment.

The period of performance will consist of one 12-month base period from the date of award.

DESCRIPTION OF SUPPLIES OR SERVICES TO MEET THE AGENCY’S NEEDS

The Government requires a contractor to validate its risk rating scorecards, loss given default methodology, and master rating scale, and to implement approved changes in its operational credit risk platform.

The requirement consists of three integrated stages:

Stage 1 – Model Validation and Master Rating Scale Suitability Assessment Stage 2 – Implementation of Model Enhancements to Excel-Based Prototypes Stage 3 – Programming and Deployment of Updated Scorecard Methodology

Under Stage 1, the contractor shall assess the conceptual soundness, calibration, and statistical performance of the scorecards, loss given default methodology, and master rating scale, and recommend improvements.

Under Stage 2, the contractor shall implement approved enhancements in Excel-based scorecard prototypes and prepare the updated methodology for deployment.

Under Stage 3, the contractor shall program, configure, test, deploy, and support the updated methodology within the existing Moody’s CreditLens environment, including necessary changes to scorecards, reference tables, business rules, reports, and related components across DEV, TEST/Staging, and PROD environments.

The Government’s minimum need is an integrated effort from validation through deployment in the existing production environment. The estimated value of this requirement is $1,250,000.00.

STATUTORY AUTHORITY PERMITTING OTHER THAN FULL AND OPEN

COMPETITION

41 U.S.C. 1901, Only one responsible source and no other supplies or services will satisfy agency requirements.

DEMONSTRATION OF CONTRACTOR’S UNIQUE QUALIFICATIONS

The Government’s minimum need includes Stage 3 implementation within its currently licensed and operational Moody’s CreditLens environment.

The Government confirmed that:

Moody’s owns and controls the CreditLens platform and related configuration and programming rights

Only Moody’s may modify or configure the required CreditLens components in the Government’s environment

No third party is authorized to perform Stage 3 implementation in CreditLens without Moody’s proprietary access, tools, or licensing rights

Accordingly, Moody’s is the only source identified as capable of performing the required implementation work in the existing production environment.

EFFORTS MADE TO SOLICIT AS MANY POTENTIAL SOURCES AS PRACTICABLE

The Government reviewed firms with capabilities in credit risk model validation, scorecard analytics, and related platform support. Market research included review of commercial literature, vendor materials, vendor presentations, technical discussions, and consultation with Risk Management and IT personnel.

The Government considered Deloitte, FI Consulting, Summit Consulting, S&P Global, and Moody’s Analytics. These firms were evaluated against the full requirement, including all three stages.

The principal vendor interactions were:

November 18, 2025 – S&P Global presented an approach primarily addressing Stages 1 and 2.

November 20, 2025 – Moody’s Analytics presented an approach covering all three stages.

March 11, 2026 – Follow-up discussion with S&P Global regarding Stage 3.

Ongoing – Risk Management and IT reviewed vendor capabilities, platform constraints, security implications, and implementation risks.

A notice of this proposed action will be publicized in accordance with FAR Subpart 5.2.

DETERMINATION THAT THE ANTICIPATED COST TO GOVERNMENT WILL BE FAIR

AND REASONABLE

The Contracting Officer will determine the final price to be fair and reasonable through review of the contractor’s detailed proposal, comparison to the Independent Government Cost Estimate, and comparison with historical pricing for similar services.

The IGCE reflects the effort required for model validation, Excel prototype enhancement, CreditLens programming and configuration, DEV/TEST/PROD testing, deployment, training, documentation, and post-implementation support.

Price analysis will include review of labor categories, level of effort by stage, and available commercial pricing information.

DESCRIPTION OF THE MARKET RESEARCH CONDUCTED

Market research was conducted to identify sources capable of performing all three stages of the requirement. The research confirmed that the commercial marketplace includes vendors that provide credit risk analytics, scorecards, portfolio risk tools, and related implementation support.

Market research found that multiple firms may be capable of performing portions of the requirement, but only Moody’s was identified as capable of performing the full requirement within the existing Moody’s CreditLens production environment.

Deloitte, FI Consulting, and Summit Consulting appear capable of providing analytical or advisory support, but market research did not identify evidence that they can implement approved changes within CreditLens.

S&P Global has relevant commercial credit risk capabilities and could potentially support portions of Stages 1 and 2. However, S&P could not perform Stage 3 implementation within CreditLens and instead proposed an external API-based alternative. The Government determined that approach would introduce unacceptable implementation, schedule, data-handling, and operational risk.

ANY OTHER SUPPORTING FACTS

The following facts further support this justification:

The Government currently licenses and operates Moody’s CreditLens as its production credit risk platform.

Direct Stage 3 implementation requires proprietary system access, tools, and rights controlled by

Moody’s.

No third party was identified as authorized to modify or configure the required CreditLens components in the Government’s environment.

Any non-Moody’s approach would require an external interface, separate hosted service, or other workaround rather than implementation within CreditLens.

Splitting the requirement between analytical and implementation contractors would increase handoff risk, rework, schedule risk, and accountability gaps.

A description suitable for full and open competition can be developed for Stages 1 and 2. However, a competitively usable description for Stage 3 is not available because the required platform access, configuration rights, and implementation capability are controlled by Moody’s.

SOURCES THAT EXPRESSED INTEREST IN THE ACQUISITION

The following sources expressed interest in the acquisition during market research: S&P Global and Moody’s Analytics. No other written expressions of interest were received.

ACTIONS TO OVERCOME BARRIERS TO COMPETITION

The Government will continue to conduct market research for future requirements to determine whether similar work can be structured to permit competition. If future needs can be separated in a manner that does not require implementation within a proprietary production platform, or if market conditions change such that additional sources can satisfy the Government’s minimum need, competitive acquisition strategies will be considered.

TECHNICAL AND REQUIREMENTS PERSONNEL CERTIFICATION

I hereby certify that this document is accurate and complete to the best of my knowledge and belief.

CONTRACTING OFFICER CERTIFICATION

I certify that this justification is accurate and complete to the best of my knowledge and belief

COMPETITION ADVOCATE APPROVAL

Based on the foregoing justification, I hereby approve the use of other than full and open competition for this acquisition