TAB - 06 REDACTED SF1009 Sole Source-5000083862 SIGNED.pdf

DEPARTMENT OF THE TREASURY

SF 1009 - FAR 13.106-1(b) SOLE SOURCE JUSTIFICATION FOR

ACQUISITIONS AT OR BELOW THE SIMPLIFIED ACQUISITION THRESHOLD

Treasury Standard Form – 1009 (Rev 10/18)

Prescribed by Treasury: DTAP 1013.106(b)

1. 1. Identification of the requesting activity and contracting activity. The requiring activity is the Internal Revenue Service (IRS) Criminal Investigation (CI) Cyber Crimes Unit (CCU) and the contracting activity is Operations Branch Southern Region Midstates Section.

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

The purpose of this sole source justification is to obtain approval to award a firm fixed price (FFP) contract Chainalysis for the purchase of the brand name items described in section 3.a below. The need date for these items is within 30 days of award. The period of performance will be for one (1) year from the date of license delivery. See to requisition no. 5000083862 for a copy of the statement of work.

2.b Name and business size of the vendor. Chainalysis - Small 2.c Requisition No. 5000083862 3.a A description of the supplies or services required to meet the agency’s needs:

The proposed acquisition is to acquire the following Chainalysis products:

Qty 1 - Annual Chainalysis Rumker Floating License (up to 5 users)

3b. IGCE/Estimated dollar value.

The portion of the IGCE amount that is for brand name requirement is $204,000.00

4.a Identification of the circumstances that preclude competition (Check the appropriate box that applies).

Urgency Exclusive licensing agreements Brand-name Industrial mobilization.

Other

4.b Supporting information and facts (i.e. the details surrounding the requirement that supports the selection made in 4.a).

Chainalysis was the first company in the United States that linked bitcoin transaction data and offered a user interface to allow users to analyze transactions made on the Bitcoin network. This data can only be collected at the time of transaction and Chainalysis has been collecting this data for the longest period of time, which enhances the functionality their products.

Chainalysis developed and owns the Rumker tool, which runs on proprietary source code and data, and it is not available from any reseller or in a similar product from one of their competitors. Their competitors offer tools that track a subset of the transactions that Chainalysis can track on the blockchain; Chainalysis furthermore conducts Network analysis that yields insights into the IP addresses that can be tied to specific Bitcoin transactions. This high-level Network analysis provided by the Rumker tool is not offered by any competitors, in any form.

Chainalysis currently offers several different types of licenses (Investigate, Orlando, All-Crypto Currency & the Rumker License) that all offer different levels of analysis and functionality. The Investigate license is the most basic form of Bitcoin investigation licenses they offer. It relies mostly on Open Source Intelligence (OSINT) data that they continuously scrape from the web to link together transactions of individuals and/or their associates. Since Chainalysis participates in the Bitcoin network, they have visibility into the Internet Protocol (IP) addresses of certain wallets. The information that is broadcast on the Bitcoin peer to peer (P2P) network is not stored in the blockchain. The messages being broadcast are collected and analyzed by Chainalysis to provide forms of IP data linked with Bitcoin wallets:

Prescribed by Treasury: DTAP 1013.106(b)

Every transaction that appears on the Bitcoin network is broadcast through the Bitcoin P2P network.

Chainalysis identifies which IP address first informed them about the broadcast of a specific transaction.

The Rumker Tool uses this IP data and creates a statistical likelihood of which IP address corresponds to the wallets in question. The Rumker tool is a web-based application to assist in the following:

• Mapping out the Internet Infrastructure supporting a large-scale criminal operation

• Provide high level coverage and analysis of a large network, that when combined with other data and/or the technical expertise of an operator can drive investigative decisions based on statistical likelihoods.

• Enhance the association of bitcoin transactions (aka clustering) and give a sense of geography/location in cases where there is no other way to get at this information.

• Help determine when there has been a change in control or use of a third-party service that can assist in tracing cryptocurrencies.

5. Any other important information.

Chainalysis is the sole manufacturer of the product “Reactor”, there are no resellers and therefore training on advanced techniques using the Reactor product can only be done by Chainalysis. The Rumker license is an add-on of the “Reactor” license.

This license (Rumker) was previously awarded under FY18 contract 2032H5-18-P-00363 which expired on 09/27/2019.

A query of the FPDS system on 11/18/2019 revealed the vendor, Chainalysis, had many other sole source contracts with other government law enforcement agencies.

A provider search in both GSA and NASA SEWP provided no results.

6. Certifications and Approvals.

6.a Program Office certification (Requiring Activity). I hereby certify that the supporting information and data provided, and which form the basis for this justification are accurate and complete to the best of my knowledge and belief.

Name: kirk peifer Date: 11-21-19

Signature:

6.b Contracting Officer approval. In accordance with FAR 13.106-1(b)(1), as a warranted contracting officer, I hereby determine that the circumstances of the acquisition make only one brand-name or source reasonably available for the reasons provided above; therefore precluding competition and supporting the Government’s determination to solicit as a brand-name requirement or solicit and award to the vendor stated in section 2.b.

Name: Karla Wheelan Date:

Signature:

02/21/20 https://www.acquisition.gov/?q=/browse/far/13 https://www.acquisition.gov/?q=/browse/far/13

Prescribed by Treasury: DTAP 1013.106(b)

Instructions for SF 1009 - FAR 13.106-1(b) Sole Source Justification for Acquisitions at or below the Simplified Acquisition Threshold

I. General instructions. Each Sole source justifications for acquisitions at or below the SAT shall contain sufficient information and data to justify the proposed action, thereby be able to stand on its own. This type of detail is critical in order to enable a reviewer and/or approver to clearly understand the requirement and the rationale supporting the justification. Simply copying and pasting information from a vendor’s website or marketing literature fails to support the use of such justification. Market research performed by the Requiring Activity and Contracting Activity should be used to support this document.

Given the majority of the information and data necessary to support this type of action resides with the Requiring Activity, they are the primary party responsible for completing this form.

However, the Requiring Activity shall seek assistance and input from the Contracting Activity/Contracting Officer (preferably in advance of submission of the procurement request).

It is also recommended the justification is not signed by the Requiring Activity until such time the Contracting Officer has had an opportunity to review, make necessary revisions and to include other necessary information or data to support the justification.

For Brand-name acquisitions keep in mind the justification is to cover only the portion of the acquisition which is brand-name and that that the document approval requirements only apply to that portion. However, it does not mean that details regarding the overarching requirement (i.e.

in the instance where the brand name is only a portion of an overall requirement) aren’t to be included in the document.

In the event of conflict between this form and applicable regulatory coverage (i.e. FAR and DTAR), the more stringent requirement shall be followed.

If the requirement involves classified or sensitive information, ensure the proper steps are taken to protect the information (e.g. marking).

Prior to distribution for signature: (i) delete all green text (which are examples), and (ii) consider converting the document to .pdf to support electronic signature and ease of retention.

The fields within this form are fluid and will change based upon input, therefore individuals completing this form need to be mindful of formatting prior to converting the document to pdf and submitting it for signature.

II. Field specific instructions.

Section 1. Identification of the requiring activity and the contracting activity. Provide the name of the requiring activity (e.g. BFS’ –IT Office) and the name of the contracting activity (e.g. BFS’s – Contracting Office for IT).

Prescribed by Treasury: DTAP 1013.106(b)

Section 2.a A description of the supplies or services required to meet the agency’s needs.

Provide a clear, concise description of the supplies or services to be procured. Include a statement regarding the delivery schedule and/or the period of performance, inclusive of all option periods and award terms. State the schedule and associated schedule category(ies) the supplies or services are being procured against. For supplies, include details such quantity and a brief description of the items (e.g. twelve (12) laptops).

For brand name, provide the name of the brand, model number and other specific details associated with the brand name item(s) to be procured; name(s) of known sources that can provide the brand name.

For modification describe the purpose of modification, including details such as proposed extension to the period of performance as well as the purpose of and type of the contract.

Section 2.b Name and business size of vendor. If applicable, insert the name of proposed vendor and the vendor’s business size (large or small business) to support whether 6.b is required. Vendor information can be obtained from the SAM database. If not applicable, enter “Not applicable”.

Section 2.c Requisition Number. If known, include the requisition number. If not applicable, enter “Not applicable”.

Section 3 IGCE/Estimated dollar value. Provide the IGCE/estimated dollar value of the anticipated award, inclusive of all options, award terms and any other monetary incentives.

For brand name provide the IGCE/estimated dollar value of the portion of the proposed acquisition, inclusive of all options, award terms and other monetary incentives, that is for the brand name item and the full IGCE/estimated dollar value of the acquisition.

For modifications provide the IGCE/estimated dollar value of the modification and the current total dollar value of the contract.

Section 4.a Identification of the circumstances that preclude competition. Check the applicable circumstance of the action that deems only one source reasonably available (see FAR 13.106-1(b)).

Section 4.b Supporting information and facts (i.e. the details surrounding the requirement that supports the selection made in 4.a). The rationale for the sole source must be thoroughly explained within this section. For example, explain why the vendor is the only one that can provide the product or service if using only one source (e.g. urgency, industrial mobilization, a patent, copyright, proprietary data, or exclusive licensing agreement). If urgency, explain what harm, monetary or schedule wise, (and include dollars that would be lost, time lost, etc.) that will result if an aware is not made to this vendor by a certain date.

Prescribed by Treasury: DTAP 1013.106(b)

For brand name, provide sufficient detail to describe the rationale for the brand name. For example, Why is this particular brand name needed? Why won’t another brand of product work?

For modifications explain why the modification is needed, the circumstances that support the modification, etc.

Section 5 Additional important information. Include, as applicable, any other important information that supports the justification. Note: If a market research summary report (e.g. SF 1010) was completed, this might be a good place to provide a summary of the findings/ determination along with a citation to that document so that a reviewer can refer to that document for greater detail.

Section 6 Certifications/Approvals. Obtain the signatures as indicated.

A supplemental justification is required if any of the following revisions occur between the approval of the original justification and the covered award or modification of the contract: an increase in dollar value beyond the authority approved in the justification; a change in the competitive strategy that further reduces competition; or any type of change in the requirement that affects the basis of the justification.