IRS Form (Rev. 6/21)

IRSAP 1006.3

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, negotiations will be conducted with the indicated proposed supplier(s).

1. IDENTIFICATION OF THE AGENCY AND CONTRACTING ACTIVITY:

The requiring activity is the Internal Revenue Service (IRS), Criminal Investigation (CI), Cyber & Forensic Services Section (C&FS), and the Office of Fraud Enforcement (OFE).

The contracting activity is the IRS Office of Procurement.

2. NATURE/DESCRIPTION OF THE ACTION BEING APPROVED:

The purpose of this justification is to obtain approval to renew contract 205AE9-23-C-00010 by awarding a Firm Fixed Price (FFP) contract to Chainalysis, Inc. for the purchase of the brand name items described in Section 3 below. Contract 205AE9-23-C-00010 will expire on 03/29/2026. The need date for these items is 03/30/2026.

This is a base plus two (2) option years with a POP estimated as follows:

Base year: 03/30/2026 – 03/29/2027 Option Year 1: 03/30/2027 – 03/29/2028 Option Year 2: 03/30/2028 – 03/29/2029

*FAR 52.217-8, Option to Extend Services, will be include in the awarded contract.*

IRSAP 1006.3

WAS OR WILL BE PUBLISHED AS REQUIRED BY FAR SUBPART 5.2 AND, IF NOT,

WHICH EXCEPTION UNDER FAR 5.202 APPLIES.

In accordance with FAR 5.202(a)(13)(ii), the proposed contract action will be made through a means that provides access to the notice of proposed contract action through the GPE. Though there are a few authorized resellers of some of Chainalysis Inc.’s tools, there are no authorized resellers of the required full suite of tools, expertise, advanced techniques, training, contractor support and conferences passes all of which are critical in the advancement of IRS’ mission, specifically for its cryptocurrency investigative needs.

IRS-CI’s success relies on their ability to continuously protect proprietary, government-sponsored tools and techniques developed for criminal investigations, including current and active grand jury, international, national security, and sensitive tax investigations. The proprietary analytical tools offered by Chainalysis Inc are utilized in high-profile investigations, frequently featured in the news, and shared with foreign allies amidst current global conflicts.

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

AND REASONABLE.

The Contracting Officer will determine that the price is fair and reasonable based on previous award analysis, applicable price analysis techniques, and established commercial catalog prices.

Previous award analysis was performed using IRS-CI Contract #s as listed below. A copy of the previous contracts are part of the market research package.

• FY18 contract 2032H5-18-P-00363 which expired on 09/27/2019

• FY18 contract 2091JB-18-C-00030 which expires on 08/31/2021

• FY20 contract 205AE9-20-P-00138 which expired on 07/03/2021

• FY20 contract 2032H8-20-C-00041 which expired on 09/29/2021

• FY21 contract 205AE9-21-P-00206 which expired on 09/29/2021

• FY21 contract 205AE9-21-C-00008 which will expire on 09/29/2023

• FY23 contract 205AE9-23-C-00010 which will expire on 09/29/2025

The Government will ensure that the final negotiated price is fair and reasonable in accordance with FAR 12.201-2 and 15.404-1(b)(5), (6) and (7), The Government will compare proposed prices set forth by Chainalysis Inc with the Independent Government Cost Estimate, comparison of proposed prices with prices obtained through market research for the same or similar items, and analysis of data other than certified cost or pricing data provided by the offeror.

IRSAP 1006.3

E. DESCRIBE ANY OTHER FACTS TO SUPPORT THE JOFOC.

Chainalysis’ resellers will not be able to meet this requirement as they are not authorized by Chainalysis to resell the products/unique capabilities needed of this requirement. This is only provided by Chainalsysis. This means Chainalysis alone has a unique ability to provide updates and other maintenance, and support directly tailored to address for the needs of this requirement.

In addition, only direct contracts with Chainalysis can enable for faster resolution of issues and meet the needs by providing Chainalysis professional and advisory services and training, as the exclusive capabilities and access. Chainalysis is the sole provider to meet these capabilities.

These tools, advanced techniques, training, and contractor support are critical in the advancement of IRS CI & Treasury’s mission, specifically for its cryptocurrency investigative needs. Without them, some of the largest cyber and cryptocurrency crime cases, including those with national security implications, would be put at significant risk.

To avoid jeopardizing critical law enforcement investigations, it is imperative to maintain continuity with Chainalysis.

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

ACQUISITION.

Chainalysis Government Solutions, LLC

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 Contracting Activity will continue to search the marketplace for potential sources by holding industry days; publishing acquisition forecasts, etc. For future requirements, the Requiring Activity will continue to conduct market research of the current environment, as well as investigate marketplace products and services, to ensure that competition remains available. Every opportunity will be taken to ensure that fair opportunity is achieved.

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

OR THE EXPIRATION OF FUNDS.

This acquisition does not result from lack of planning. Market research was conducted by IRS-CI Cyber Crimes Section (CCS) and a survey of the available products in this space. The results of the market research supported the government’s decision to obtain these services under a sole source basis.

IRSAP 1006.3

O

VE

R

M

IL

LI

O N

E. SENIOR

PROCUREMENT

EXECUTIVE (Name)

[ ] APPROVE

[ ] DISAPPROVE

(Signature)

(Phone No.)

(Date)

NOTE: Each review must be preceded by lower level approval(s). For example, actions over $90 million require all approvals.

IN NO CASE WILL AN INDIVIDUAL SIGN MORE THAN ONE APPROVAL LEVEL.