JOFOC_ID11170026.pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

PROJECT NUMBER ID11170026

1. Identification of the Agency and Contracting Activity:

Contracting Activity Customer Agency

General Services Administration Department of Housing and Urban Development Federal Acquisition Service Government National Mortgage Association National Capital Region Office of Enterprise Risk Assisted Acquisition Services Operational Risk Division 301 7th Street, S.W. 550 12th St. S.W.

Washington, D.C. 20407 Washington, DC 20410

2. Nature and Description of the Action Being Approved:

This justification authorizes and approves the award of a firm fixed price contract on a sole source basis to The University of Chicago on behalf of its Center for Research in Security Prices at Chicago Booth (CRSP). The procurement is for subscription services for the CRSP 1925 US Stock and US Treasury Databases. The period of performance is a one (1) year base period from the date of award with four (4) 1 year option period.

3. Description of supplies or services required to meet the agency’s needs (including the estimated value):

Ginnie Mae’s Office of Enterprise Risk has a requirement for a five-year subscription for the CRSP 1925 US Stock Database and the 1925 US Treasury Database. Both the CRSP Databases have a number of unique features that the Economic Modeling Division (EMD) within Ginnie Mae's Office of Enterprise Risk critically needs to enhance Ginnie Mae’s budgetary models and ensure continued compliance with the GAO performance audit recommendations.

The Contractor shall provide the following services:

a. The contractor shall provide monthly delivery of the data from the databases to EMD via managed file transfer (cloud server-based data transfer). The data will be presented in binary and ASCII files and will consist of monthly and daily stock prices, U.S. Treasury bond prices, and related data.

b. The Contractor shall provide software tools to facilitate access to the data in the CRSP US Treasury and US Stock Databases; these tools consist of a graphical user interface program called CRSP Sift and modifiable access programs written in SAS, C++, and Fortran.

c. The Contractor shall provide technical support for the CRSP US Stock and Treasury Databases.

The Government’s total estimated price for the contractor support is $383,666.76 for the base year and four (4) year option periods.

4. An identification of the statutory authority permitting other than full and open competition:

This sole source contract will be awarded pursuant to the authority of 10 U.S.C. 2304(c) (1), as implemented by FAR 6.302-1 - Only One Responsible Source and No Other Supplies or Services will Satisfy Agency Requirements.

5. A statement demonstrating that the proposed contractor’s unique qualifications or the nature of the acquisition requires use of the exception cited:

The CRSP offers a number of different equity, fixed income, and mutual fund pricing databases.

The services provided by CSRP for this subscription are unique and are only provided by them.

CRSP is the only data vendor that produces this type of economic forecasting, stock market research, and financial analysis data required by Ginnie Mae. These services are critical to Ginnie Mae’s operations and are essential for the continued viability of the program.

The CRSP U.S. Stock Database and the CRSP US Treasury Database have a number of unique features that the Economic Modeling Division (EMD) within Ginnie Mae's Office of Enterprise Risk critically needs to enhance Ginnie Mae’s budgetary models and ensure continued compliance with the GAO performance audit recommendations. The unique specific features are as follows:

a. The Federal Reserve and CRSP have jointly developed a special unique dataset called the "CRSP-FRB" that allows one to map the identification numbers for those financial institutions that are subject to United States federal financial regulatory bodies to the CRSP internal identification numbers (called "PERMCO"s) for those institutions. Thus, the "CRSP-FRB" link facilitates correct association of data within the banking research datasets compiled by the federal financial regulators with CRSP stock price and return data. Since most of Ginnie Mae issuers fall under the purview of United States federal financial regulators, the "CRSP-FRB” has excellent coverage of the issuers of interest for the Economic Modeling Division. As a result, the CRSP-FRB link is critical to EMD’s combined use of accounting and stock data to assess the likelihood of Ginnie Mae issuer default. This combined use of stock and accounting data is currently extensively featured in the econometric models utilized in the Ginnie Mae Credit Subsidy estimates that are provided to Congress in the congressional budgetary process. CRSP is the only data vendor that produces such a stock price dataset.

b. CRSP has implemented a variety of unique features within its CRSP 1925 US Stock Database product that greatly enhance its value and make it unique, and those features are as follows:

1. The CRSP 1925 U.S. Stock Database contains daily individual firm stock price and related fundamental data based on securities listed on the New York Stock Exchange (NYSE) since December 31, 1925; American Stock Exchange (AMEX) since July 2, 1962; the National Association of Securities Dealers' Automated Quotations (NASDAQ) since December 14, 1972, and the New York Stock Exchange Arca (NYSE Arca) since March 8, 2006. CRSP is the only data vendor that presents both total and price appreciation returns as far back in time as 1925 at daily frequency for both individual securities and stock indices which is required by Ginnie Mae.

2. CRSP is the only data vendor that provides permanent unique identification numbers for both stock issues and companies (the PERMCO/PERMNO enumeration systems), which is critical for tracking firms over time accurately despite name changes and changes in corporate structure (due to splits and mergers, for example).

3. CRSP provides delisting information that is used in identifying firms (such as Ginnie Mae issuers) that are in financial distress and pinpoints at what point the firms entered financial distress.

4. CSRP stock return data is automatically adjusted for changes in number of shares due to stock splits and repurchases.

This combination of extensive historical depth and quality adjustments is unique to the CRSP 1925 US Stock Database. The uniquely high quality of the stock data from the CRSP 1925 US Stock Database ensure Ginnie Mae’s auditors and other external parties of the quality and integrity of the EMD’s estimates used in Ginnie Mae’s Credit Subsidy and other budgetary estimates.

c. CRSP has also implemented a variety of unique features within its CRSP 1925 US

Treasury Database product that greatly enhance its value and make it unique, and those features are as follows:

1. The CRSP US Treasury Database goes back to 1925 for monthly data and 1961 for daily data. The uniquely long time-series history at high frequency is critical in Ginnie Mae's Credit Subsidy econometric modeling. The length of the time-series history ensures that this data captures interest rate and term structure behavior in a wide variety of economic conditions, including periods of recession and high volatility that are often marked by significant increases in the rate of financial institution default. The extent to which the CRSP US Treasury data reflects periods of heightened financial institution default rates enhances the precision of EMD's Ginnie Mae issuer default rate predictions which are used in EMD's Credit Subsidy estimation process for budgetary analyses. This augmentation in predictive precision is crucial in fulfilling the GAO's request of Ginnie Mae for econometric modeling enhancements in its budgetary reporting.

2. The CRSP U.S. Treasury Database is the most comprehensive and accessible source of historical U.S. Treasury Bond when-issued price data, with over 1.6 million end-of-day price observations for 3,350 US Treasury bills, notes, and bonds and over 101,500 prices for 5,300 month-end issues.

3. The CRSP data has accurately adjusts for embedded options and tax features inherent in many Treasury bonds. The accuracy of the CRSP data and its wide usage allow Ginnie Mae’s auditors to ensure the integrity of the BEMD estimates used in Ginnie Mae’s Credit Subsidy and other budgetary estimates. The combination of historical depth of the Treasury bond data and the bond data quality adjustments CRSP employs make the CRSP US Treasury Database unique and critical for us in EMD’s analyses in support of Ginnie Mae’s mission.

6. 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 Sources Sought Notice was posted, from April 13, 2017 through April 20, 2017 on FedBizOpps.Gov. The objective of this notice was to see if any other businesses were capable of providing a CRSP or equivalent database subscription. Despite being posted for 7 days, not a single vendor responded to the Sources Sought Notice.

In accordance with FAR 5.201, a notice of proposed contract actions will be published on FedBizOps.gov.

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

The Contracting Officer will use price analysis techniques and procedures in accordance with FAR 15.404-1 to ensure a fair and reasonable price.

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

Market research was conducted to identify potential sources (large and small business) for the same or similar services. A comprehensive search of GSA e-Library, Government GWACS and the Internet failed to discern any comparable product to that of CRSP. However, market research revealed that the University of Chicago on behalf of its Center for Research in Security Prices at Chicago Booth is the only data vendor that produces the type of economic forecasting, stock market research, and financial analysis data required by Ginnie Mae.

Additionally, Rachanna Haffner (Sr. Account Manager, CRSP) asserted in writing that CRSP is the sole source to purchase the US Stock and US Treasury databases and there are no other data vendors or resellers of them. This document has been included in the contract file.

https://www.acquisition.gov/far/html/Subpart%205_2.html#wp1107980 https://www.acquisition.gov/far/html/Subpart%205_2.html#wp1107990 https://www.acquisition.gov/far/html/FARTOCP10.html#wp266706

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

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

10. Any other facts supporting the justification:

There are no other known facts to support this justification.

11. A statement of the actions, if any, the agency may take to remove or overcome any barriers that led to the restricted consideration before any subsequent acquisition for the supplies or services is made:

The commercial market place will be reviewed on an annual basis prior to exercising option periods to determine if there is any comparable product that can fully support Ginnie Mae.

12. Contracting Officer’s Certification:

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

Approval:

Daniel Miller Contracting Officer

FAS NCR AAS