JOFOC-Redacted.pdf

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

(JOFOC)

Pursuant to the requirements of the Competition in Contracting Act (CICA), the following facts and rationale justify the basis for a noncompetitive contract.

1. I recommend that the Federal Housing Finance Agency (FHFA) use other than full and open competition for the acquisition of Bloomberg Desktop Terminals, Bloomberg Anywhere licenses, and an associated Bloomberg Data Licenses. The estimated price, including any options is $4.7M

2. Nature and/or description of the action being approved.

FHFA’s Office of Chief Financial Officer (OCFO) intends to negotiate and award a contract to Bloomberg Finance L.P. on the basis of other than full and open competition. The anticipated period of performance for this contract is a one-year base period plus four one-year option periods, scheduled to commence on September 1, 2026.

3. A description of the supplies or services required to meet the agency’s needs.

The Office of Chief Information Officer (OCIO) manages Bloomberg access on behalf of the rest of the agency, with the primary office end user being the Division of Bank Regulation (DBR). In order for DBR to continue its in-depth continuous monitoring of the Federal Home Loan Banks’ (FHLB) Liquidity, Sensitivity to Market Risk, and Asset Quality, DBR requires Bloomberg’s online subscription and associated data services. The required subscription and data services include six (6) Bloomberg Desktop Terminals, fourteen (14) “Bloomberg Anywhere” Licenses, one

(1) Data Usage License (Master Data and Derivatives Data and Analytics). The data usage license is needed to use the data described above in the OCIO’s server environment, due to Bloomberg’s licensing restrictions.

The requested Bloomberg terminals are licensed subscriptions that are directly associated with particular workstations, while the Bloomberg Anywhere licenses are licensed subscriptions that are associated with a particular end user, regardless of the workstation used. The data usage license line item provides for the transfer of financial data from Bloomberg to FHFA’s PolyPaths’ desktop system, within the OCIO server environment.

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

41 U.S.C. 3304(a)(1), FAR 6.302-1, Only one responsible source and no other supplies or services will satisfy agency requirements.

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

DBR requires Bloomberg Desktop Terminals and Bloomberg Anywhere licenses to:

Monitor changes in yield curves, index rates, interest rate volatility, and the terms of FHLB investment securities and outstanding debt;

Monitor issuance activity of the U.S. Treasury, agencies, corporates, and super-sovereigns;

Monitor and model collateral pledged to the FHLBs;

Monitor and evaluate modeled member credit ratings of members of the

FHLBs;

Obtain security prices/yields/spreads from the rates and dollar funding markets that are critical to daily monitoring reports and weekly division-wide reports;

Validate yield curve, index rates, and volatility used in evaluating and benchmarking risk models;

Produce market risk shocks which the FHLB’s use to calculate market risk-based capital requirements and retained earnings targets based on historical and current data on yield curves, index rates, interest rate volatility, and mortgage spreads; and

Produce Countercyclical Mortgage Asset Stress Test (CMAST) paths which the FHLB’s use to calculate credit risk-based capital requirements for single family mortgage assets held in portfolio and to determine Acquired Member Asset Investment (AMA) Grade requirements for member-provided credit enhancement in the AMA programs.

DBR requires both Bloomberg Desktop Terminals and Bloomberg Anywhere licenses because DBR examiners and analysts are not always at Constitution Center to access Bloomberg Desktop Terminals as they are required to travel on-site to the FHLB.

DBR requires the Bloomberg Data Usage license(s) because the Data Usage software is currently integrated with FHFA’s PolyPaths’ system and enables interest rate risk and credit risk modeling within that system. DBR uses Bloomberg subscriptions primarily to obtain daily yield curve, index rate, and volatility data from the financial markets. This data allows DBR to calculate the market value and earnings sensitivity of FHLB asset, liability positions in current and historical market environments.

These calculations provide DBR with independent verification of market values, market value sensitivities, earnings projections, and credit risk sensitivity of the FHLBs’ asset and liability positions.

Only one source (Bloomberg L.P.) can provide comprehensive data for yield curves, index rates, volatility, investment and debt securities, price/yield/spreads on the rates and dollar funding markets, and additional financial data and analysis tools needed to support FHFA on an all-inclusive platform, while integrating with existing FHFA systems (PolyPaths and Microsoft Excel). Bloomberg has the superior coverage of financial market data FHFA requires, due to the company’s long presence as a provider of data, analytical tools, and models.

Other vendors, such as Intex, can compete in some areas of financial data provision, including data on mortgage-backed pass-through securities that is similar to data available through Bloomberg. However, Intex does not provide the same level of detail, analytical functionality or breadth of integrated market coverage as Bloomberg. For example, Bloomberg provides daily/weekly/monthly reports for U.S.

Agency Mortgage-Backed Securities (MBS), a U.S. MBS Index that is a mortgage industry benchmark powered by Bloomberg Agency Prepayment Model (BAM) and inclusive of Uniform Mortgage Backed Securities specified pools (spec cohorts), scenario analyses, attribution reports, and hedging performance reports. FHFA has been unable to identify any vendor that is integrated with PolyPaths that can provide the same depth and breadth of coverage of financial markets as Bloomberg.

In addition to the financial market coverage and analysis tools, Bloomberg provides access to 24/7 support representatives for any analytical or technical issue via instant message or through Bloomberg’s support line, as needed. This support enables FHFA staff to receive immediate assistance with market functions, data sourcing, or API configurations. They also help with the development of special formulas, features and trading solutions, and provide training on advanced analytical, trading and screening features, all minimizing operational disruptions and ensuring uninterrupted access to critical financial information and analytical tools. This support provides FHFA with a “turn-key” solution by having one platform that provides full integration with existing systems, while also providing support for that one platform, instead of multiple database subscriptions and different levels of support for each.

The Federal Home Loan Banks also use Bloomberg due to the depth and breadth of Bloomberg’s coverage of financial markets. FHFA’s surveillance of the financial markets using Bloomberg enables real-time discussions with the regulated entities during both normal and stressful market conditions. The regulator can ‘speak the same language,’ and reference specific data series.. This alignment improves the accuracy, consistency, and timeliness of supervisory oversight, enhances communication during periods of market volatility, and reduces the risk of misunderstandings or delays caused by differing data sources, analytical models, or platform limitations.

Finally, DBR has invested substantial time and funding to integrate and automate Bloomberg data and tools into its operational processes and moving to multiple potential alternative data and modeling providers would severely disrupt the supervision and examination work. Given that no single competitor aggregates the same breadth of data, multiple specialized vendors would be required under separate contracts, resulting in increased cost and fragmented information. Introducing other solutions would require at least twelve (12) months to implement and train the staff on the new UI, leading to significant reductions in productivity and reporting.

6. A description of efforts made to ensure that offers are solicited from as many potential sources as is practicable.

A notice will be publicized via SAM.gov in accordance with FAR 5.2. If a firm believes it can meet the requirements listed, the firm may submit a written response in accordance with the stated due date. Information will be considered by the Government, however a determination by the Government not to compete the proposed acquisition based on responses to the notice is solely within the discretion of the Government.

7. A determination by the Contracting Officer that the anticipated cost to the

Government will be fair and reasonable.

The Contracting Officer will make a determination regarding price fairness/reasonableness based upon consultation of Bloomberg L.P.’s published commercial pricing and comparison to historical data, including the prices paid under the current order with Bloomberg L.P., 95314321C0002.

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

Bloomberg has superior coverage of a variety of financial market data due to the company’s long presence as a provider of data and analytical tools. DBR explored the capabilities of LSEG Workspace and FactSet. Though other vendors can compete in some areas (for example, Intex provides similar data as Bloomberg on mortgage-backed pass-through securities), market research did not identify any vendor that provides the same depth and breadth of coverage of financial markets and asset/liability securities as Bloomberg.

Additionally, FHFA regularly meets with Numerix (acquired PolyPaths in 2023), and did not identify any other options for this requirement that is integrated with PolyPaths’ software for the purposes of automatically downloading financial market data inputs that serve as a required data input in the PolyPaths’ model system. FHFA would need to adopt a manual process, or build in solutions from multiple vendors, in order to use financial market data input from other vendors.

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

Previous acquisition history demonstrates that this requirement has been awarded on a sole source basis to Bloomberg L.P. 95314321C0002. Only Bloomberg L.P. can furnish an online subscription that integrates with FHFA’s PolyPaths’ desktop system and provides an all-inclusive platform that contains all the financial data and analytical tools needed by FHFA.

Should other vendors be selected, the manual process of downloading the data and preparing the data for use in PolyPaths’ model would take approximately two (2) hours once a procedure was established. Given the fact that data is downloaded daily to support various surveillance and monitoring work, at least several hours of labor per day would be necessary to prepare the data for use with PolyPaths’ software. This labor-intensive process would not be an efficient nor effective use of Government resources, considering this time is otherwise spent validating the data to check for errors and outliers that could skew FHFA’s analysis. This manual process would not provide complete coverage of the market data that is needed for PolyPaths’ model.

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

None

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.

FHFA will maintain awareness of market capabilities and will engage in an open competition if additional products become available that meet all of FHFA’s requirements.

CERTIFICATIONS

I certify that this justification is accurate and contains complete data necessary to support the recommendation for other than full and open competition.

Date Kirsten Landeryou

Market Risk Branch

I certify that this justification is accurate and complete to the best of the Contracting Officer’s knowledge and belief. Also, I hereby (1) determine the circumstances cited as the statutory authority apply to this action, (2) determine the anticipated cost to the government will be fair and reasonable, and (3) approve this action.

I certify that this justification is accurate and complete to the best of the Contracting Officer’s knowledge and belief. Also, I hereby (1) determine the circumstances cited as the statutory authority apply to this action, (2) determine the anticipated cost to the government will be fair and reasonable, and (3) recommend approval for this action.

Date Matt Marshman

Contracting Officer

I determine that this submission is legally sufficient to justify the basis for a noncompetitive contract award.

Date Carly Malamud

Assistant General Counsel Office of General Counsel

Senior Procurement Executive Approval

Date Kristin Salzer

Senior Procurement Executive

Contracting Activity Competition Advocate

Date Edom Aweke

Competition Advocate