New Jersey Is an Equal Opportunity Employer • Printed on Recycled and Recyclable Paper

To: All Interested Bidders

Date: July 13, 2011

Re: RFP #: 12-X-21271 Administration of Deficient and Delinquent Tax Accounts Revised Bid Due Date: July 27 2011 (2:00 p.m.)

ADDENDUM #2

The following constitutes Addendum #2 to the above referenced solicitation. This addendum is divided into the following parts:

Part 1: Answer to bidder questions

Part 2: Additions, deletions, clarifications and modifications to the RFP

It is the bidder’s responsibility to ensure that all changes are incorporated into the original RFP.

All other instructions, terms and conditions of the RFP shall remain the same.

PART 1: Answers to Bidder Questions

DEPARTMENT OF THE TREASURY

DIVISION OF PURCHASE AND PROPERTY

P.O. BOX 230

TRENTON, NJ 08625-0230

CHRIS CHRISTIE

Governor

KIM GUADAGNO

Lt. Governor

ANDREW P. SIDAMON-ERISTOFF

State Treasurer

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1. General

What is the estimated or targeted contract award date for this RFP? Is that the same as the Contract Effective Date of December 1, 2011, which is listed on the Signatory Page?

The State is moving quickly and desires a contract award as soon as possible. The Contract Effective Date listed on the Signatory Page is just an estimate.

2. General

Will the State select more than one contractor?

While it is not the State’s intent to award more than one contract, the State reserves the right to do so.

3. General

Why are you combining the contracts being combined through this solicitation?

The State expects to achieve operational efficiencies by combining these very similar contracts.

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4. General

Have the current contracts gone full term and have all options to extend the current contracts been exercised?

No, the term of the existing contracts run through November 30, 2011. Extensions have been used, though the State has the ability to extend under the transition clause of each contract or Section 3.2 of the Standard Terms & Conditions to the existing contracts.

5. General

What is the average balance of accounts by category?

For the past 12 months, which is also representative of prior years:

Business Deficiencies averaged 49,000 cases with an average value of $114 million, Business Delinquencies averaged 136,000 cases with an average value of $110 million, and Personal Income Tax Deficiencies averaged 60,000 cases with an average value of $73 million.

6. General

What estimated or actual dollars were paid last year, last month, or last quarter to any incumbent(s)?

For the past 12 months, the current vendor was paid $11.4 million for tax debt collection services and $2.2 million for the homestead call center and services.

7. General

What has been the historical rate of return or liquidation rate provided by any incumbent(s), and/or what is anticipated or expected as a result of this procurement?

While not pertinent to this new RFP, the historical rate of return has varied from 10:1 to 16:1. There is no data for a liquidation rate and it will not apply to the new RFP.

8. 5 1.2

Are these two contracts being rolled up into one contract or two separate contracts requiring two separate bids?

One contract, one bid.

9. 5 1.2

What are the names of the vendors currently under contract and what is the physical street address location where the work is being done for these two contracts?

Pioneer Credit Recovery Inc. has both contracts and operates from 308 Route 38, Moorestown, New Jersey.

10. 5 1.2

What are the current contingency fee rates?

Current hourly rate? What are the current legal rates?

There are no contingency rates or legal fee rates within the present contracts. See the following for the current contracts hourly rates pricing schedules.

http://www.state.nj.us/treasury/ purchase/noa/contracts/t1426_08-x- 39175.shtml#vendinfo and http://www.state.nj.us/treasury/ purchase/noa/contracts/t1272_06-x- 37591.shtml#vendinfo

11. 5 1.2

How many individual and business tax accounts/dollars were updated for each system TULIPS, GENTS, CRAS, and TAX REG under each contract for years 2008, 2009, and 2010?

Statistics are not available concerning the number of system updates. System updates are part of the tax account administration function.

http://www.state.nj.us/treasury/

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12. 5 1.2

How many Full Time Employee (FTE) and Part Time Employee (PTE) hours were charged under each contract for years 2008, 2009, 2010?

The total number by contract of billable hours charged for calendar year 2010 was:

T1272 – 223,484 hours T1426 – 130,972 hours Total - 354,456 hours

The prior year was significantly impacted by the 2009 amnesty program.

13. 5 1.2

How many unpaid accounts/dollars list the debtor’s address in Mexico or Canada?

Negligible.

14. 5 1.2 How many accounts/dollars list debtor’s address in New Jersey?

Estimated to be more than 90%.

15. 5 1.2

How many accounts/dollars list debtor’s address outside of New Jersey but within the other 49 states?

Estimated to be less than 10%.

16. 5 1.2

What is the name of the bank and location where the State of New Jersey currently does business?

Not applicable since the contractor must submit taxpayer payments to the Division of Revenue in Trenton, NJ for processing.

17. 6 1.2.1

What collections efforts are performed by the State prior to placement with an outside collections agency?

Automated and manual initial notices of deficiency, delinquency and audit assessment are issued directly by Taxation.

Unresolved cases may be referred to the contractor.

18. 6 1.2.1

This Section states, “the contractor will receive an initial workload of at least 10,000 cases,” however, there are 100,000 cases available in TULIPS.

Will the 10,000 cases be new tax liabilities created in the 2nd quarter of 2010?

Will the revenue guarantee be adjusted if the vendor can show a delay in placements?

What is the estimated average balance per taxpayer for the each of the possible tax types?

The specific characteristics of the cases are not known at this time.

The volume and frequency of placements should provide ample means for the contractor to meet the revenue guarantee for each contract year. Concerns should be discussed with the State Contract Manager.

The average value of a case is about $1,200.00.

19. 6 1.2.1 When will all cases be recalled from the incumbent collection agency?

By the end of the transition period as per the current contracts.

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20. 6 1.2.1

Please confirm, is there a small business set-aside or small business subcontracting set-aside component for this RFP?

No.

21. 6 1.2.1

What is the age of the accounts at placement?

More than 105 days from initial Taxation notice of deficiency and otherwise as per Taxpayer Bill of Rights.

22. 6 1.2.1

What is the composition (audit assessment, deficiency, delinquency) and age distribution of the 100,000 available delinquent/deficient accounts?

For the past 12 months, which approximate prior years: Business Deficiencies averaged 49,000 cases with an average value of $114 million, Business Delinquencies averaged 136,000 cases with an average value of $110 million, and Personal Income Tax Deficiencies averaged 60,000 cases with an average value of $73 million.

23. 6 1.2.1

What is the average age of a case and the age of the oldest case?

Greater than 105 days from the initial Taxation notice of deficiency and otherwise per the Taxpayer Bill of Rights. The age of the oldest case is unavailable.

24. 6 1.2.1

Does the contractor have access to these 100,000 accounts, or only to the quarterly placements? If so, how/when?

At such time that the transition from the current contractor to the new contractor is complete, all applicable open cases will become available to the new contractor.

25. 6 1.2.1

What is the historical collection rate by type of tax liability (audit assessment, deficiency, delinquency)?

Statistics not available.

26. 6 1.2.1

What are the contingency fees currently paid to collection agencies?

None since the existing contracts pay hourly rates only.

27. 6 1.2.1

Will placements be consistent with Taxation's billing cycle so the awarded vendor will not be negatively impacted?

Cases will be available to the contractor on a quarterly or more frequent placement as created and permitted by Taxation’s systems.

28. 6 1.2.1

Will the revenue guarantee be adjusted if the vendor can show a delay in placements?

The volume and frequency of placements should provide ample opportunity for the contractor to meet the revenue guarantee for each contract year.

29. 6 1.2.1 What is the estimated average balance per taxpayer for the each of the possible tax types?

The average value of a case is about $1200.00.

30. 7 1.3.2

Please provide the ship-to address for overnight package delivery.

Division of Purchase & Property 33 West State Street th floor

Trenton, New Jersey 08625 Please see Section 1.3.2 for note on postal deliveries

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31. 8 1.3.4

Can a bidder request a site visit for the physical address locations where the work is currently being done by each vendor(s)?

32. 10 1.4.7

“If it is discovered that there is an arithmetic disparity between the unit price and the total extended price, the unit price shall prevail.” Is this statement applicable to this contract?

Yes.

33. 11 1.4.8

Can the prime vendor subcontract with a law firm?

Yes, although the State is unsure why it would be needed. Only the State’s Attorney General can select outside counsel to represent the State.

34. 11 1.4.8

Will the State allow the vendor to use civil legal enforcement remedies to collect on accounts?

35. 11 1.4.8

If legal enforcement is allowed by the State can the vendor submit a legal rate or will the State allow the vendor’s attorney to request attorney fees and court costs from the court?

Not applicable.

36. 11 1.4.8

Will the State allow the vendor’s attorney to file wage garnishments, liens on real property, bank levies, post-judgment debtor examinations?

No.

37. 11 1.4.9

Since there is a requirement for the winning vendor to establish a local office, will this section apply?

38. 12 2.1

All-Inclusive Hourly Rate – What is the hourly rate comprised of all direct and indirect costs including, but not limited to: overhead, fee or profit, clerical support, travel expenses, per diem, safety equipment, materials, supplies, managerial support and all documents, forms, and reproductions thereof. This rate also includes portal-to-portal expenses as well as per diem expenses such as food charged by the current vendor(s)?

For the hourly rates in the existing contracts, see:

http://www.state.nj.us/treasury/ purchase/noa/contracts/t1426_08-x- 39175.shtml#vendinfo and http://www.state.nj.us/treasury/

39. 12 2.1

Evaluation Committee – A committee established by the Director to review and evaluate bid proposals submitted in response to this RFP and to recommend a contract award to the Director and what are the names of those members and job titles?

In order to ensure the integrity of the process, the names of the members are not revealed prior to issuance of the Letter of Intent to award.

40. 13 2.2

Appointment of Taxpayer Representative:

how many of these were filed for years 2008, Statistics not maintained for this question.

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41. 13 2.2 Case – How many of these cases were updated for years 2008, 2009, and 2010?

Unable to answer this question as presented.

42. 13 2.2

Cost of Collection – How many of these were transacted for years 2008, 2009, and 2010?

An average per year of 10,000 cases handled by the current contractor incurred the cost of collection.

43. 13 2.2

Certificate of Debt (COD) – How many of these were recorded for years 2008, 2009, and 2010?

An average per year of 19,000 CODs were secured by the current contractor against individuals, businesses and responsible officers.

44.

2.2

Does the collection agency or Taxation add the 10% cost of collection fee to accounts with a COD?

The collection agency will add the cost of collection for each case for which it secures a Certificate of Debt.

45. 13 2.2 CRAS –How many were transacted for years 2008, 2009, and 2010?

Statistics are not available to reply to this question.

46. 13 2.2

FOIL –How many were transacted for years 2008, 2009, and 2010?

The contractor does not influence the FOIL process. Statistics not available to reply to this question.

47. 13 2.2

GENTS - How many payments were posted for years 2008, 2009, and 2010 by the vendor?

Payments may be electronic or paper.

Statistics are not available for this question.

48. 14 2.2

Master Cash Transfer - How many were transacted for years 2008, 20009, and 2010?

Statistics are not maintained for this item but the function is required for customer service.

49. 14 2.2

OMB Vendor Set-Off – How many were transacted by the vendor for years 2008, While the contractor’s collection employee may trigger the cross-matching process, the contractor does not control the results.

Statistics are not available.

50. 14 2.2

Referral Cost Recovery Fee – How many were assessed for years 2008, 2009, and 2010?

A fee is added by the TULIPS system for every item in every case assigned to a recognized collector employed by the contractor.

The requested statistics are not available.

51. 14 2.2

SOIL – How many did the vendor generate for years 2008, 2009, and 2010?

The contractor does not influence the SOIL process. Statistics not available to reply to this question.

52. 14 2.2

Taxation Liaison Group - Can you provide a copy of an audit report made listing the types of oversight items?

Such information may be made available to the successful bidder.

53. 14 2.2

TAXNET – Combination of primary Taxation computer systems including TULIPS, GENTS, CRAS and TAX REG that are accessible by computer conversations with specific functions.

Unable to discern the question.

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54. 14 2.2

Schedule of Liabilities – How many of these documents were generated for years 2008, 2009, and 2010 by the vendor?

An average per year of 45,000 Schedules of Liabilities were generated by the current contractor to be mailed to assigned taxpayers.

55. 14 2.2 Are these the only State Holidays that impact the vendor for both collections and tax administrative support services?

Yes.

56. 15 3.1.1

What if any workflow capabilities does TAXNET and TULIPS have for collection-related functions such as scheduling dun letters, scheduling follow-up telephone calls to debtors, tracking exceptions to promises to pay, etc.?

Scheduling is an available function of the TAXNET system.

57. 15 3.1.3

Will any adjustments to the collection guarantee be granted for accounts that are currently in the process of resolving their debt that may be recalled?

58. 16 3.2.1

The required hours of operation for Saturdays is “9:00 a.m. through 1:00 p.m.,” the current Saturday schedule is 8:00 a.m. through 12:00 p.m., would it be acceptable to keep this schedule?

59. 16 3.2.1

Is it sufficient for the home office to be located in New Jersey while collections operations are conducted out of state within 40 miles of Trenton?

60. 17 3.2.1.2 Would contractor personnel be able to fulfill this delivery requirement, or must a courier service be hired?

Contractor personnel may fulfill this requirement.

61. 17 3.2.1.3

Does the approximation of ten (10) on-site liaisons include the liaison from the tax administrative support services group?

62. 17 3.2.2

Does the disaster recovery site have to be within the 40-mile radius of Taxation’s office in Trenton referenced in Section 3.2.1?

63. 17 3.2.2

Are there any minimum distance requirements between the contractor’s business resumption site and the contractor’s primary site?

Does the contractor’s business resumption site have to be in the State of NJ?

Is call recording required at the contractor’s business resumption site?

64. 18 3.2.4 Does the contractor have to provide real-time monitoring and call recording for the Tax administration support services (Section 3.7)?

65. 18 3.2.4 Does Telephone Monitoring Access apply to Tax Administrative Support Services only?

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66. 18 3.2.4

Will the contractor be required to provide telephone monitoring access in its disaster recovery site?

67. 18 3.2.4 If there is an outage caused by a Taxation issue, will the contractor remain liable for the disruption and/or stoppage?

Yes.

68. 18 3.2.7

Can you elaborate on “oral English language skills”?

Collection and Call Center agents should demonstrate the ability to clearly and effectively explain simple and complex tax matters by telephone in the English language as spoken in New Jersey.

69. 18 3.2.8

“On a monthly basis, submit a report as specified by the State Contract Manager.”

Can Taxation please elaborate in detail what monthly reports will be due directly to the State Contract Manager?

The monthly report to Taxation will be composed of narrative for problems and solutions, unusual situations and highlights as well as a statistics section to demonstrate productivity and customer service.

70.

3.2.9.1

“Failure to adhere to the federal Fair Debt Collection Practices Act.” As tax collection does not fall under the purview of the federal Fair Debt Collection Practices Act, will this be applicable?

71. 20 3.3 Does the contract operation date commence the first day after the transition period?

Please refer to Section 2.2 of the RFP for contract specific definitions.

72. 20 3.3.2

Should all active cases in TULIPS be merged prior to initial taxpayer contact?

If so, how does the contractor merge cases that have not surpassed the statutory bill date?

Does this supersede, Page 44 Section 5.22.1, where it states “the contractor will not receive compensation for payments with an applied date less than 15 days after of statutory due date of that payment/return”.

The onsite Taxation Liaison Group will provide guidance to clarify such procedures for the new contractor so that there are no violations of the NJ Taxpayer Bill of Rights.

73. 21 3.3.2.2

What is the projected number of files historically stored over a six-month period?

About 32,000.

74.

3.3.3.2

Related to requirements for outbound calls, does your current contractor utilize any automated voice response systems at the front end of the call?

If yes, can you provide the scripting for the automated portion?

Can you provide scripting that is currently utilized for live agent calls currently utilized by your current vendor?

No, automated voice response systems are not utilized for outbound calls.

Such information will be developed with the successful bidder.

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75. 22 3.3.3.2 Will the vendor be permitted to use an off-site third party letter vendor?

76. 22 3.3.3.2

Will the vendor be permitted to utilize its own collection system or will all collection efforts be performed using Taxation's systems?

No, use of Taxation’s systems is required.

77. 22 3.3.3.2

Please confirm, are all dun letters and outbound telephone calls to debtors performed by the Contractor in the State’s name (i.e., first-party collections), as opposed to in the Collection Agency’s name (i.e., third-party collections)?

The contractor’s employees shall identify as employees of the contractor contracted by the State of New Jersey.

78. 23 3.3.3.6

Is it required that all accounts (residential taxpayers) be reviewed by the Taxation Liaison group before they are sent to the field?

79. General

For each of the current contracts, please provide the dollars collected, and the contractor’s recovery rate.

Collections are:

FY 2011 $136 million to May 31, 2011 FY 2010 $123 million FY 2009 $128 million

The recovery rate is not applicable to the existing contracts.

80. 16 3.2.1

What is the address of the current contractor’s office in New Jersey where work is performed for the current contracts?

308 Route 38 Moorestown, NJ

81. 18 3.2.8

For each current contract and for each of the labor classifications (i.e., Manager/Assistant Manager, Supervisor, Call Agent/Assistant Supervisor, and Clerical/Support), please describe current staffing levels utilized by the current contractor to perform the current contracts. Please break out this data by contract.

Collections Only

T1272 T1426

Manager 3 2

Supervisor 9 5

Collector 120 60

Clerk 6 5

Call Center T1426

Manager 1

Supervisor 1-6

Call Agent 10-80

Clerk 1

82. 25 3.7 Will the contractor be compensated for State holidays for the tax administration support services?

Compensation is based on authorized actual hours of work for the tax administration support services.

83.

3.7

Will the selected vendor provide outbound calling campaigns?

None anticipated for this contract.

84.

3.7

Please provide historical call volumes for the last two years

1/2009 - 12/2009 225,920 calls 1/2010 - 12/2010 155,384 calls 1/2011 - 06/2011 66,378 calls

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85.

3.7

Please provide additional information regarding types of calls that the vendor will handle for NJ Call Center Overflow Service based on prior programs and anticipated programs for contract term.

The call center overflow program currently handles calls pertaining to the State’s Homestead Benefit Program. Calls involve assisting taxpayers with their questions regarding the program. This requires a thorough understanding of who is eligible for the program, how to file to receive the benefit, how to determine the amount of the benefit, and how to navigate the Taxation’s computer system and make adjustments to the taxpayer’s application when necessary.

Additional tasks performed by call agents include researching taxpayer addresses in an effort to forward returned mail and researching lists of ineligible taxpayers to prevent incorrect payment of benefits. Initial training is provided by Taxation personnel.

86.

3.7

Will the selected vendor provide email responses to NJ resident email inquiries?

Contractor employees will, at times throughout the contract, be required to provide responses to e-mail inquires about the Homestead Benefit program. E-mail inquiries are similar in nature to phone inquires and require the same knowledge and understanding of the program, in addition to knowledge of Taxation’s e-mail system. Training will be provided by Taxation personnel. As with phone calls, e-mail inquiries increase with the mailing of benefit applications and the payment of benefits. There may be periods during an annual program cycle when little or no e-mail inquiries are assigned.

87.

3.7

Does the State still provide the Homestead Rebate/Benefit program?

Yes. The State Budget appropriated $458 million for the Homestead Benefit Program for Fiscal Year 2012. We have received more than 450,000 applications for FY12 program and anticipate receiving another 650,000 by November 1, 2011. Based on the program’s eligibility requirements, we expect to pay benefits to almost 1 million New Jersey homeowners by May 2012.

88.

3.7

What labor classification(s) (as defined in RFP Section 3.2.8) encompasses call center services?

1 Manager/Assistant Manager

2-7 Supervisors

10-70 Call Agents/Assistant Supervisors

1 Clerical Support

89.

3.7

Are there any service level agreements in place with your current contractor for call center services? If yes, please describe.

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90.

3.7

What are the anticipated monthly timeframes for call center overflow programs and what months does the State anticipate ramping to 80 agents?

Timeframes for maximum staffing are driven by call volume which increases when benefit applications are mailed and benefit payments are made. 2009 benefits were paid in May of 2011 and 2010 benefit applications were mailed in June of 2011 necessitating increased staffing during those time periods. 2010 benefits are currently scheduled to be paid on or before May 2012. Staffing for calendar year 2010 began in January with 19 phone agents, 2 supervisors, 1 project manager and 1 clerk and remained at that level until the end of June 2010 when staffing was reduced to 4 phone agents, 2 supervisors, 1 project manager and 1 clerical. Additional hiring took place from August 2010 through October 2010 increasing staffing to 62 call agents, 6 supervisors, 1 project manager and 1 clerk. Staffing was reduced in mid- December 2010 down to 35 call agents, 6 supervisors, 1 project manager and 1 clerical. An additional reduction took place in late January 2011 reducing call agents down to 20 with 2 supervisors, 1 project manager and 1 clerk. Hiring began again in March of 2011 increasing the number of call agents to 61 with 6 supervisors, 1 project manager and 1 clerk. Since that time, staffing has decreased, mostly through attrition, down to 49 call agents with no change in the supervisory/clerical staffing levels. At this time, call volume continues to decrease and we anticipate a reduction in staffing to begin as early as July 2011.

91. 25 3.7

Will there be strict service level agreements written up and agreed upon by both Taxation and the contractor, establishing the expectations and acceptable error rates for each project assigned?

If necessary to supplement the RFP text, additional documents will be crafted.

92. 27 4.3.1

Section reads, “if the bidder is submitting an eBid, hard copy submission is not required but is requested.” Is one original hard copy sufficient?

The State requests hard copy even if the bidder submits an e-BID. In such case, the State prefers one original copy, six exact copies, and one unbound copy at the time of bid opening.

93. 30 4.4.3.2 a)

Are sample reports required with the proposal?

If so, can these be an attachment not included in the 25-page limitation, as each report would take up at least one page?

No, but a bidder may include such examples within its proposal.

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94. 28 4.4

Does the 12-point font requirement also apply to text located in graphs or tables?

95. 28 4.4

We would like to include a sample implementation plan approximately six pages in length. Is it acceptable to insert this as an “exhibit,” so that it does not count toward the 25-page limit of the Technical Proposal section?

96. 28 4.4

We would potentially like to include as part of our Technical Approach a flowchart on legal size paper. Is it acceptable to include a page that is legal size? Could this be as an Exhibit not counting toward the 25-page limit?

97.

4.4.1.5

Does the State have small business requirement for this procurement?

Does the state have a web portal for list of qualified MBE/WBE firms in the state of NJ

For each current contract, what certified MBE / WBE subcontractor(s) does your current contractor utilize, if any?

None.

98. 32 4.4.4.1

We are in the process of identifying potential suitable sites to meet the State’s requirement for a location within 40 miles of the address specified above. If we do not have a site firmly identified by time of proposal submission, is it acceptable to indicate the address is “to be determined,” as long as we assure the State that we will have the site operational by the required date? Or is it a firm requirement that we identify an address in the proposal?

Evidence of a suitable and specific New Jersey site available for timely occupancy is a necessary component.

99. 33 4.4.5

For each current contract, what is the current contractor’s pricing?

See the following for the current pricing schedules.

http://www.state.nj.us/treasury/ purchase/noa/contracts/t1426_08-x- 39175.shtml#vendinfo and http://www.state.nj.us/treasury/

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100.

5.2 5.21.1

In reference to Section 5.2 as it applies to Section 5.21.1:

Can Taxation clarify if the two, one-year extensions will be paid at a fee rate of the fourth year or the fifth?

The fifth year, please refer to Part 2, #2 of this Addendum.

101.

5.2 5.21.1

If the contract resulting from this RFP is extended for the two, one-year extensions, does the minimum revenue guarantees from the fourth or fifth year apply?

The fifth year, please refer to Part 2, #2 of this Addendum.

102.

5.9.2 5.9.3

Is there any account data that contains protected health information which would trigger the need for compliance with HIPAA?

103. 37 5.9.2, 1.B

First bullet, “The contractor shall be subject to the same security and infrastructure review processes that are required by NJOIT and its partner Departments and Agencies.”

Are the security and infrastructure review processes documented? Is this documentation available for our review?

Yes, the SAR process is accessible at the following url:

http://www.nj.gov/it/reviews

104. 40 5.13.3

Would this only apply to the tax administrative services portion of the contract?

105. 41 5.16

How would the reduction of the scope of work or the suspension of work impact the guaranteed minimum revenue levels?

A pro-rata adjustment in the revenue minimum would be negotiated.

106. 41 5.16

If the scope of work is reduced, will there be a reduction or pro-rate of the minimum revenue guarantee for that year?

Yes, a pro-rata adjustment in the revenue

107. 41 5.16

In the event of a Tax Amnesty Program, will Taxation adjust the minimum guarantees to reflect the gross revenue collected for this type of a program?

An amendment to the contract would be negotiated based on the nature of the amnesty program and the services to be provided by the contractor.

108. 41 5.16

Will Contractor’s commission rates be adjusted in the event of a tax amnesty?

An amendment to the contract would be negotiated based on the nature of the amnesty program and the services to be provided by the contractor.

109. 41 5.19 In reference to Page 41, Section 5.19, is prevailing wage applicable for this contract?

http://www.nj.gov/it/reviews

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110. 43 5.21.1

Can Taxation please verify that the yearly revenue performance standards are calculated by the total (gross) collections on the contract for the coinciding year?

No, the performance standards are as provided.

111. 43 5.21.1

On which dates does each contract year commence?

On the contract effective date as defined in section 2.2 for year one plus 12 months for each successive contract year.

112. 43 5.21.1

Can Taxation please clarify how actual net revenue is defined and calculated?

The revenue eligible for compensation is described in Section 5.22.1.

113. 43 5.21.1

In the event that the contract is terminated prior to completion, will the minimum guarantees be pro-rated reflecting the termination date for each 12-month contract year?

Yes, a pro-rata adjustment in the revenue

114. 43 5.21.1

If the contractor exceeds the revenue performance standard in any 12-month period, will the additional money collected be credited to the revenue performance standard for the following 12-month period?

115. 43 5.21.1

Will taxation provide the contractor a report that will include the following information:

Record Number, Effective Date, Transaction Type code, Post Date, Payment Amount, Taxpayer ID, Collection Case ID, Tax Type, Physical State, Fee Percentage, Agency Fee, ADJ / NSF Post Date, ADJ/NSF Amount, and ADJ/NSF Fee?

A monthly report is in development that should include all payment and related details for assigned cases that will be the basis for determining revenue eligible for compensation. The report will be delivered electronically to the contractor each month for the prior calendar month.

116. 44 5.22

Can you clarify the type of supporting documentation Taxation is looking for contractors to submit with their invoice forms for the revenue calculation?

should include all details related to payments for assigned cases that will be the basis for determining revenue eligible for compensation. The report will be delivered electronically to the contractor each month for the prior calendar month.

Prior to or with the monthly invoice form, the contractor will have to document any item(s) of discrepancy or disagreement with the report for consideration by the State Contract Manager.

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117. 44 5.22.1

Will taxation provide the contractor a report listing all payments, rejected funds, FOIL/SOIL/TOP payments and account adjustments?

payments for assigned cases that will be the basis for determining revenue eligible for compensation. The report will be delivered electronically to the contractor each month for the prior calendar month.

118. 44 5.22.1

Will Taxation provide to the contractor a report by the 2nd business day of each month that will include the contractor’s earned billable fee in accordance with the pricing schedules?

payments and credits for assigned cases that will be the basis for determining revenue eligible for compensation. The report will be delivered electronically to the vendor each month for the prior month. The billable fee may then be calculated by the contractor as per the price schedule.

119. 44 5.22.1

How will the contractor be notified of the revenue NOT eligible for compensation?

payments for assigned cases that will be the basis for determining revenue eligible for compensation. The report will be delivered electronically to the contractor each month for the prior calendar month.

120. 44 5.22.1

Will the contractor have the ability to generate a posting report from the TAXNET system to reconcile total payments?

121. 44 5.22.1

Transfer of other monies: If a contractor through their due diligence transfers a payment from an ineligible taxpayer, will they receive credit for that collections if it meets all other criteria?

A determination as to compensation eligibility will be made by Taxation for contested monies on an item by item basis from the facts provided by the contractor.

122. 44 5.22.1

Over payments: Will the contractor receive fee on electronic checks, which generate over payments that are due to recovery fees being applied to tax periods?

contested monies on an item by item basis from the facts provided by the contractor.

123. 44 5.22.1

How will the revenue compensation be calculated?

The contractor shall be paid the applicable contingency for the revenue it collects. The revenue eligible for compensation is described in Section 5.22.1.

124. 44 5.22.1

SOIL/TOP/OMB set-offs are generated from the work that was performed by contractor by progressing the case to the demand cycle.

Would Taxation consider allowing these set-offs to be fee eligible, or at least included in the minimum revenue guarantees, as these collections are directly correlated to the contractors efforts?

Only OMB set-offs may be considered fee eligible by Taxation based on the facts provided by the contractor for each item in question.

SOIL/FOIL/TOP will not be eligible for compensation.

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125. 44 5.22.1

“Revenue NOT eligible for compensation to contractor shall be: Payments with an applied date (original or adjusted) less than 15 days after the statutory due date of that payment/return”. If these items are split into our existing case, will they be fee eligible?

Since it may violate Taxation’s policies and procedures to split such items into an existing case, the contractor should consult with the Liaison Group before such action.

126. 44 5.22.1

How will the contractor be compensated for payments collected on eligible items that do not show up on the monthly production numbers? For example, monthly payments on quarterly returns are not currently reflected on the State reports.

contested monies on an item by item basis from the facts provided by the contractor.

127. 44 5.22.1

Of those collections, what were the total collections associated with the below exceptions for each period that the awarded contractor will not receive contingency fee for by year?

FOIL

OMB Vendor set-off

SOIL

TOP

Adjustments/corrections Accounts that were not assigned

Such statistics are not available.

128. 44 5.21.1

As the revenue minimums are specified by contract year, is there a minimum annual placement amount?

The volume and frequency of placements should provide ample opportunity for the vendor to meet the revenue guarantee for each contract year.

129. 44 5.21.1

During the last contract period, what were the revenue performance standards for each year?

What were the contractor collections for each year?

Year 1 T1272 $38M T1426 $18M Year 2 T1272 $57M T1426 $27M Year 3 T1272 $67M T1426 $36M

FY07 T1272 $68M T1426 N/A

FY08 T1272 $101M T1426 $28M

FY09 T1272 $96M T1426 $32M

FY10 T1272 $88M T1426 $35M

130. 44 5.21.1 Can you provide a projected year one placement amount?

Please refer to the answer provided to Question #5 of this Addendum.

131. 44 5.21.1

Will the amount quoted as the minimum standard will be based on net back numbers (gross collections minus contingency fees) or on gross revenue collected?

Please refer to Part 2, #3 of this Addendum. The revenue eligible for compensation is described in Section

5.22.1 will also be the source for the minimum revenue performance guarantee for each 12-month period of operations. The revenue minimum standards are before application of the respective contingency fee.

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132. 44 5.21.1

Can you provide historical annual inventory increases?

133. 44 5.21.1

Can you provide the total placement amounts that generated the current $150 million in recoveries?

134. 44 5.22.1

How will the revenue compensation be calculated?

The contractor shall be paid the applicable contingency for the revenue it collects. The revenue eligible for compensation is described in Section 5.22.1.

135.

5.25

Are bidders required to download the MacBride Principles Certification Form from the State's website and return with the proposal? If so, it is not included in the required forms section for ebid, should it just be uploaded as an attachment?

This Form is not required at time of bid submission but may be included within a bidder’s proposal and uploaded as an attachment.

136. 49 6.4.2

Please specify what the “predetermined points” are (i.e., how many points will be used)?

This information is confidential and is not available for public review until a Letter of Intent to Award is issued to all bidders.

137. 49 6.4.2

What is the greatest possible score for the Technical Evaluation? For the Price Proposal?

1,000 for the Technical Evaluation, please refer to the above answer for the points to be awarded for the Pricing Proposal.

138. 49 6.4.2

Is use of MWBE certified New Jersey based subcontractors worth any points in the evaluation? If yes, how many points?

139. 49 6.4.2

Please provide the evaluation weight percentage and/or greatest score possible for each of the Technical Proposal sections.

Please refer to Section 6.4.1 of the RFP.

All required sections of a bidder’s technical proposal are evaluated under this rubric. The total possible number of points for a technical proposal is 1,000.

140. 57 Price

Schedules

We do not understand what the State is looking for in the table on Page 57, please clarify.

The Price Schedule on page 57 is the document to be completed by each bidder to reflect the requested contingency fee as a percentage of revenues collected in each $50 million tier.

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141. 57 Price

Schedules

What does the asterisk refer to in the column headers above the dollar signs? (Is it referring to footnote #1?)

The asterisk represents a multiplication sign. The intended calculation would be a percentage times revenues equals the price/fee.

142. 57 Price

Schedules

Will the fee rates in year 1 of this contract apply to recoveries on accounts that may have been received prior to these contract dates?

Will these recoveries also count toward the Year 1 guarantee?

143.

Price

Schedules

For RFP Section 3.7: Does chart follow Federal Circular A-87 guidelines?

Not applicable.

144.

Is the Affirmative Action form required to be submitted with the proposal? If it is required, please confirm whether it is form PB-AAF.1 R5/26/09, which we found at http://www.state.nj.us/treasury/purchase/forms/AA _%20Supplement.pdf (which is not the same link as what is listed on the Signatory Page – that link did not appear to have an Affirmative Action form listed as a required form for this RFP).

No, not at time of bid submission.

However, the form is required before the a contract may be executed. The form you cite may be used and uploaded as an attachment.

145.

In the online ebid section, there is a place to upload the Terms and Conditions along with the required signature forms. Are contractors required to sign the Terms and Conditions or upload a statement regarding the Terms and Conditions?

Can you clarify what is required here?

The PIN number received upon enrollment into eBid meets the signature requirement. The Standard Terms & Conditions form must be included with a bidder’s submission.

http://www.state.nj.us/treasury/purchase/forms/AA_%20Supplement.pdf http://www.state.nj.us/treasury/purchase/forms/AA_%20Supplement.pdf

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Reference Question Answer

146.

During the previous procurement for 2006-X- 37591 in Addendum 1 the following Q&A was included.

#58. Section 4.4.3.1. - This requires that the location where the employees will actually perform the work be within a 40 mile radius of Taxation's main office in Trenton. Are all contract operations required to be performed at the contractor's New Jersey office? For example, can notice printing and mailing be performed by the contractor's consolidated mail processing center outside of New Jersey? Certain of our IT infrastructure including our collection system, dialers and IVRs are housed in a central secured location outside of New Jersey with secure access by our various offices, including our proposed office in New Jersey, is this approach acceptable?

Answer:

1) The contractor shall have an office location where staff perform the work required by this contract within a 40 mile radius of Taxation’s main office in Trenton. All contractor employees who require training by the State will be physically located within the 40 mile radius. All training will be conducted on site at the contractor’s office location(s). The contractor’s office location does not have to be in New Jersey but must be within a 40 mile radius of Taxation’s main office in Trenton. Printing and mailing may be performed at some other contractor location within the continental United States (See Executive Order 129 Source Disclosure Certification Form).

2) Call Center personnel must also be stationed within a 40 mile radius of Taxation’s main office in Trenton. Call Center infrastructure may be located in a central secured location outside this radius but within the continental United States. The location must have a DSL line with the ability to transfer data at a speed of 1.544 mbps.

Will the State reaffirm this response applies to the current procurement Section 3.2.1?

No, the Addendum to Solicitation 06-X- 37591 does not apply to this RFP.

All pertinent and related tax collection and call center functions, physical plant and employees, including IT and mailing, must be located in New Jersey within a 40-mile radius of Trenton, New Jersey.

The State retains the right to require the contractor to provide a DSL line with the ability to transfer data at a speed of

1.544 mbps or faster, predicated upon the existing technology available.

147.

Additionally, given the advancement in technology (especially around networking and the ability to monitor and manage call centers remotely) in the years since the award of the existing contract, would the state allow call center personnel to reside outside of the 40 mile radius, but within the continental United States with the following constraints?

- An office is maintained within 40 miles to manage the contract and the call center and work with the Taxation Liaison Group

- The contractor includes in its bid price periodic

All pertinent and related tax collection and call center functions, physical plant and employees, including IT and mailing, must be located in New Jersey within a 40-mile radius of Trenton, New Jersey.

site visits for Taxation oversight

- The contractor includes in its bid price travel to the Trenton area for key call center staff that will be trained for the contract

Allowing for call center activities to be performed entirely or in part outside of the 40 mile radius will attract more competition, bring the state new ideas on how to increase the revenue collected, and reduce the cost of revenues collected for this contract.

PART 2: Additions, Deletions, Clarifications and Modifications to the RFP

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1 8 1.3.3

The first sentence which reads:

1.3.3 ELECTRONIC BIDDING (EBID)

The Division is pleased to announce its electronic procurement modernization process. This RFP provides to the bidder the opportunity to electronically submit its bid proposal. A new electronic bidding – “eBid” – application is being made available to vendors to promote an easier, more efficient method to submit bid proposals. The State thanks the bidder in advance for its anticipated participation. Instructor-led and online training sessions are available, as explained below. In the next several months, the Division will be moving to eBid-only submissions, i.e., paper proposals will no longer be accepted by the Division. It is strongly recommended that all bidders attend an instructor-led training session prior to the scheduled bid opening date and at least once before attempting to submit an eBid. It will be the bidder’s responsibility to ensure that the eBid has been properly submitted.

IMPORTANT NOTE: Bidders who wish to submit an eBid must be pre-registered for a Business Registration Certificate from the NJ Division of Revenue. The bidder is required to have the Contractor’s Certification number located on the Division of Revenue certificate in order to electronically submit a bid. This certificate may be obtained by visiting the following website:

http://www.state.nj.us/treasury/revenue/busregcert.shtml.

On-line Training Sessions:

If the bidder cannot attend an instructor-led training session, online training for the eBid process is available on the web at http://www.state.nj.us/treasury/purchase/index.shtml.

Is deleted and replaced with:

1.3.3 ELECTRONIC BIDDING (eBID)

The Division is pleased to announce its electronic procurement modernization process. This RFP provides to the bidder the opportunity to electronically submit its bid proposal. A new electronic bidding – “eBid” – application is being made available to vendors to promote an easier, more efficient method to submit bid proposals. The State thanks the bidder in advance for its anticipated participation.

In the next several months, the Division will be moving to eBid-only submissions, i.e., paper proposals will no longer be accepted by the Division.

On-line Training Sessions:

Online training for the eBid process is available on the web at http://www.state.nj.us/treasury/purchase/index.shtml. The bidder is strongly encouraged to utilize the on-line training session before attempting to submit an eBid. It will be the bidder’s responsibility to ensure that the eBid has been properly submitted.

http://www.state.nj.us/treasury/purchase/index.shtml

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2 34 5.2

The second paragraph which reads:

The contract may be extended for two (2) additional periods of up to one (1) year, by mutual written consent of the contractor and the Director at the same terms, conditions and pricing of contract Year 4. The length of each extension shall be determined when the extension request is processed.

Is deleted and replaced with:

The contract may be extended for two (2) additional periods of up to one (1) year, by mutual written consent of the contractor and the Director at the same terms, conditions and pricing of contract Year 5. The length of each extension shall be determined when the extension request is processed.

3 43 5.21.1

Section 5.21.1 is deleted and replaced with:

The revenue generated from the scope of work under this contract is a critical element of the compliance efforts of Taxation that benefit the State’s general revenue fund. To protect the fiscal interests of the State of New Jersey, the contractor shall guarantee the State the following minimum revenues:

At the conclusion of the first 12 months, after the Contract Effective Date, the contractor shall produce revenue eligible for compensation, as described in section 5.22.1, in an amount not less than $56 million. If the eligible revenue collected during this period does not equal or exceed $56 million, the contractor shall pay to the State the difference between $56 million and the eligible revenue collected, within 180 days of the end of the period.

For the next 12-month period of operations, the contractor shall produce revenue eligible for compensation, as described in section 5.22.1, in an amount not less than $84 million. If the eligible revenue collected during this period does not equal or exceed $84 million, the contractor shall pay to the State the difference between $84 million and the eligible revenue collected, within 180 days of the end of the period.

For the third 12-month period of operations, the contractor shall produce revenue eligible for compensation, as described in section 5.22.1, in an amount not less than $103 million. If the eligible revenue collected during this period does not equal or exceed $103 million, the contractor shall pay to the State the difference between $103 million and the eligible revenue collected, within 180 days of the end of the period.

For the fourth 12-month period of operations, the contractor shall produce revenue eligible for compensation, as described in section 5.22.1, in an amount not less than $115 million. If the eligible revenue collected during this period does not equal or exceed $115 million, the contractor shall pay to the State the difference between $115 million and the eligible revenue collected, within 180 days of the end of the period.

For the fifth 12-month period of operations and all extension periods, the contractor shall produce revenue eligible for compensation, as described in section 5.22.1, in an amount not less than $125 million. If the eligible revenue collected during this period does not equal or exceed $125 million, the contractor shall pay to the State the difference between $125 million and the eligible revenue collected, within 180 days of the end of the period.