Sole Source Justification and Approval (50310224P0023) Redacted.pdf

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

STATION PLACE

100 F STREET NE

WASHINGTON, DC 20549-2000

OFFICE OF

ACQUISITIONS

JUSTIFICATION FOR SOLE SOURCE ACQUISITION

1. Identification of the agency and the contracting activity, and specific identification of the document as a “Justification for other than full and open competition.”

U.S. Securities and Exchange Commission Office of Acquisitions 100 F Street, NE Washington, DC 20549

This document serves a Justification for other than full and open competition.

2. Nature and/or Description of The Action Being Approved

The U.S. Securities and Exchange Commission (SEC) intends to award a sole source requirement for access to a database that provides standard and derived historical data on U.S.

common stocks, U.S. Government bonds, mutual funds, and basic market indices.

The contractor below is the only contractor that can provide the required services.

The Center for Research in Security Prices (CRSP) at the Graduate School of Business of the University of Chicago 05 West Adams Street, Suite 1700 Chicago, Illinois 60603

3. A Description of The Supplies or Services Required to Meet The Agency’s Needs

(Including The Estimated Value)

The SEC requires access to CRSP data as follow:

CRSP Daily/Monthly U.S. Stock Files - This dataset provides five kinds of information on individual securities dating back to 1925: Identity information, which includes complete name histories, all historical CUSIPs, share classes, tickers, SIC codes, and other identifiers.

1. Price histories and trading volumes for the period a security is traded on the NYSE, the AMEX, or the NASDAQ stock market.

2. Information on why a security stopped trading.

3. Complete distribution histories including all dividends, stock splits, and special distributions.

4. Shares outstanding values.

CRSP U.S. Indices & Deciles - This dataset contains market indices on a daily, monthly, quarterly and annual frequency. Information is available from a variety of indices: CRSP Stock File Indices, CRSP Cap-Based Portfolios, CRSP Indices for the S&P 500 Universe, CRSP Treasury and Inflation (CTI) Indices, and the Andex Treasury Indices. The data begins with 1925.

CRSP U.S. Treasury Database - This dataset contains returns and index levels on the U.S.

Government Bond Fixed Term Index Series, the Risk Free Rates File, and the U.S. Government Consumer Price Index. The US Treasury database begins in 1925 for month-end data and in 1961 for daily data. Over 1.6 million end-of-day price observations for 3,350 U.S. Treasury bills, notes, and bonds and over 101,500 prices for 5,300 month-end issues are included in the dataset.

CRSP/Compustat Merged Database - This dataset allows users to query both CRSP and Compustat historical databases. CRSP matches U.S. stock data with Compustat's fundamental (income statement, balance sheet, cash flow, and supplemental data items for active and inactive companies) data, using permanent identifiers shared by both services. The identifiers permit a seamless time-series examination of companies and securities, regardless of ticker or CUSIP changes.

CRSP Survivor-Bias Free U.S. Mutual Fund Database - This dataset includes a history of each mutual fund’s name, investment style, fee structure, holdings, and asset allocation. Also included are monthly total returns, monthly total net assets, monthly/daily net asset values, and dividends. Additionally, schedules of rear and front load fees, asset class codes, and management company contact information are provided. All data items are for open-end mutual funds and sets begin at varying times between 1961 and 2003, depending on availability, and continue into the present. The database is updated quarterly and distributed with a quarterly lag. The date shall be delivered in ASCII and SAS formats.

These data shall be delivered to the SEC via Wharton Research Data Services (WRDS), a web-accessible research platform that enables data to be retrieved and analyzed.

The period of performance is for a base period of twelve (12) months and four (4) twelve (12) month option years. The total estimated value of the contract is .

4. Identification of the exception to fair opportunity and the supporting rationale, including a demonstration that the proposed contractor’s unique qualifications or the nature of the acquisition requires use of the exception cited.

FAR Part 13.5 in accordance with 41 U.S.C. 1901, 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.

The SEC requires access to CRSP data. The minimum requirements are set forth in paragraph 3 above. The Center for Research in Security Prices at the Graduate School of Business of the University of Chicago is the only source that provides CRSP through the WRDS platform which provides the required service and capabilities that meet the SEC's needs.

CRSP is the only known source that can meet SEC’s requirement for access to a database that provides standard and derived historical data on U.S. common stocks, U.S. Government bonds, mutual funds, and basic market indices.

CRSP is the only known source that provides CRSP standard and derived historical data on CRSP U.S. common stocks, CRSP Indices & Deciles, CRSP U.S. Government bonds, CRSP mutual funds and provides access to CRSP/Compusat Merged database.

CRSP owns trademark of unique issue identifiers tracks a continuous history of securities, providing a seamless time-series examination of the issue’s history.

The CRSP/COMPUSTAT Merged Database combines COMPUSTAT company financial data with CRSP stock data, facilitating seamless time series examinations. CRSP is the only source that provides this information in collaboration with COMPUSTAT.

The Center for Research in Security Prices (CRSP) maintains the most comprehensive collection of standard and derived security data available for the NYSE, AMEX and Nasdaq Stock Markets going back to 1925.

SEC Division of Economic & Risk Analysis (DERA) has determined that having access to CRSP data described in #3 is critical to meeting its mission of providing economic analysis and support to the SEC’s Mission. DERA rely on CRSP data for reliable, verified, quality-checked daily market information on US-exchange-listed stocks to compute market valuations of individual companies and market-wide portfolio of companies as of a specific date, perform event studies to gauge market reaction to information being disclosed by companies, compute market-to-book ratios, examine changes in daily trading volume, bid-ask spreads (a key measure of liquidity), etc. Importantly, the use of CRSP ensures comparability of our analysis with the data that is most widely used in academic studies we cite as support for our claims in economic analysis, reports etc. Not having access to this data or the universe of US-exchange-listed equity securities, would significantly limit DERA ability to perform reliable analyses of these outcome variables and report data for rulemaking, studies and ad hoc requests from the Chairman Office and Division of Enforcement.

Additionally, not having access to data described in #3, which WRDS access delivers readily for the universe of US-exchange-listed equity securities, would significantly limit SEC ability to perform reliable analyses of these outcome variables and report data for studies, rulemaking, and ad hoc requests.