Sole Source Justification_Redacted.pdf

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LIMITED SOURCE JUSTIFICATION

(FOR ORDERS AND BPAs UNDER FSSs)

Contracting Organization: Pension Benefit Guaranty Corporation (PBGC) / Procurement Department (PD)

Requisition Number: RQ-37-21-000023

Procurement Action Type: Follow-on Order

Federal Supply Schedule GS-00F-022DA (FSS) Number:

Order or BPA Number: N/A

Contractor Name or Brand Name Product: Dun and Bradstreet FSS and Severe Risk Alerts

Supplies or services to be procured:

This procurement is for a one source web-based subscription product that provides essential data that is critical to completion of PBGC’s Audited Financial Statements and CFRD's core risk mitigation mission.

Specifically, the product must: 1) Give CFRD access to DNB Fnancial Stress Score ™ information of up to 1000 public and private companies twice a year. 2) Provide real-time Severe Risk Alerts on 22,000 public and private corporate entities 3) Allow for special data research projects using the vendors data NTE $25,000

Supplies: Quantity and estimated value of each item to be procured: OR Services: Period of performance and estimated value of each service to be procured:

Base Year: April 26, 2021 – April 25, 2022 - $108,867

• Option Year 1: April 26, 2022 – April 25, 2023 - $112,222

• Option Year 2: April 26, 2023 – April 25, 2024 - $115,711

• Option Year 3: April 26, 2024 – April 25, 2025 - $119,339

• Option Year 4: April 26, 2025 – April 25, 2026 - $123,113

Total Estimated Value: $579,252.00

Explain why only the selected contractor or brand name product can satisfy this requirement:

1. AGENCY AND CONTRACTING ACTIVITY

2. NATURE AND/OR DESCRIPTION OF THE ACTION BEING APPROVED

3. DESCRIPTION OF THE SUPPLIES OR SERVICES REQUIRED TO MEET THE AGENCY’S NEED

4. AUTHORITY AND SUPPORTING RATIONALE OF THE PROPOSED CONTRACTOR’S UNIQUE

QUALIFICATIONS TO PROVIDE THE REQUIRED SUPPLIES OR SERVICES

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CFRD requires the DNB Financial Stress Scores ™ (FSS) to be provided twice a year for the completion of the June 30th and September 30th PBGC financial statements. The FSS predicts the likelihood of business failure over the next 12 months. The FSS rating system is a proprietary risk modeling system, developed by DNB using statistical models of their own design. Specific to the PBGC, the FSS have probabilities of default assigned to them which PBGC needs to classify companies as “Reasonably Possible” or “Remote” based on generally accepted accounting standards. The FSS are an integral part of completing PBGC’s audited financial statements. The FSS have been thoroughly back-tested, vetted, and approved by PBGC’s Chief Financial Officer and internal and external auditors for use in completion of PBGC's financial statements. As the FSS are the only ratings numbers approved for PBGC financial statement purposes, we cannot use another company’s numbers/rating system until and only if another rating system is reviewed, back-tested and approved. This would be time consuming and cost prohibitive. We would have to commission a review and study of any new model/rating system to fully understand how the system works, how it compares to the DNB FSS, and backtest the model against past years of our financial statements. Based on past experience, such a review process would take at least one year and would cost upwards of $250K to $300K.

Also, the costs involved to test IT security on a different vendor's product would be in the range of $300,000, which is also cost prohibitive at this time. We do not have budgetary authority to undertake such a project, and no identifiable business reason to do so. Further, we would be required to obtain approval from the CFO and our internal auditors and external auditors to make such a change, and since there is no identifiable business justification to change our financial statement process, such approval would be unlikely. In the meantime, we must provide data to the CFO within the next few months, per our procedures, to ensure we receive a clean audit opinion on our financial statements.

GSA Statement: GSA has already determined the prices of supplies and fixed price services, and the rates for services offered at hourly rates under FSS contracts to be fair and reasonable. Therefore, there is no need for the Contracting Officer to make a separate determination of fair and reasonable pricing.

Basis for Pricing:

Efforts Taken:

Market Research regarding this requirement is conducted on a regular basis to determine whether other vendors can provide an equivalent service. The primary methodologies used when conducting the market research include internet searches and comparison with schedule holders, such as an analysis of the company website and their subscription terms in addition to information gathering through communications with potential vendors. In conducting the Market Research, historical data of past contracts and pricing was also reviewed and analyzed.

Other facts supporting the use of Limited Source:

Dun & Bradstreet has been fully vetted by PBGC internal and external auditors for use in our Agency financial statements. Changing to a different source at this time is cost prohibitive and not feasible. A change to a different rating system/model would require an intensive Agency review process requiring approval and testing by the CFO,

5. DETERMINATION BY THE ORDERING ACTIVITY CONTRACTING OFFICER THAT THE ORDER OR BPA REPRESENTS THE BEST VALUE CONSISTENT WITH FAR 8.404(d)

6. DESCRIPTION OF THE MARKET RESEARCH CONDUCTED AMONG SCHEDULE HOLDERS AND THE

RESULTS OR A STATEMENT OF THE REASON MARKET RESEARCH WAS NOT CONDUCTED

7. ANY OTHER FACTS SUPPORTING THE JUSTIFICATION

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CFRD principally subscribes to DNB for its coverage on approximately 18,900 companies and their assignment of a Financial Stress Score (“FSS”). While other firms may have their own version of the FSS, Dun & Bradstreet (“DNB”) is the only company that provides comprehensive financial stress scores on almost all companies with pension plans covered by PBGC and more importantly, is accepted by PBGC’s auditors as a measure of risk and serves as a reason for non-enforcement under PBGC’s 4062(e) program governed by H.R. 83.

CFRD relies on the DNB FSS to be provided twice a year for the completion of the June 30th and September 30th PBGC financial statements. The FSS rating system is a proprietary risk modeling system, developed by DNB using statistical models of their own design. Specific to the PBGC, the FSSs have probabilities of default assigned to them which PBGC needs to classify companies as “Reasonably Possible” or “Remote” based on generally accepted accounting standards. DNB’s FSSs are an integral part of identifying the risk of plan sponsors for PBGC’s audited financial statements. The FSSs have been thoroughly tested, vetted and approved by the PBGC’s Chief Financial Officer and internal and external auditors for use in completion of PBGC’s financial statements. .

Actions taken or to be taken to foster competition:

CFRD will compete this contract when a business reason to change has been identified, tested by the CFO, internal and external auditors and IT Security has been fully vetted, and funding is available. At this time, changing to a different source is cost prohibitive and not feasible.

I hereby certify that this Limited Source Justification, and all supporting data, are accurate and complete to the best of my knowledge and belief.

Aerica Lake Program Office/COR

03/15/2020 Signature Date

I hereby certify that this Limited Source Justification, and all supporting data, are accurate and complete to the best of my knowledge and belief.

Christopher Jenson Contracting Officer

Date Signature Date

I have reviewed this Limited Source Justification, and all supporting data, and find it to be accurate and complete to the best of my knowledge and belief.

8. STATEMENT OF THE ACTIONS 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

9. TECHNICAL OR REQUIREMENTS PERSONNEL’S CERTIFICATION

10. CONTRACTING OFFICER’S REVIEW OR APPROVAL

11. COMPETITION ADVOCATE’S REVIEW OR APPROVAL

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Enter Name Competition Advocate

Date Signature Date

I approve this Limited Source Justification.

Enter Name Senior Procurement Executive

Date Signature Date

12. SENIOR PROCUREMENT EXECUTIVE’S APPROVAL (For Justifications that exceed $13.5M)