05-RFP - 26-2108 - Schedule A - Statement of Work.docx

Schedule A – Statement of Work

RFP 260000002108

Financial Examination / Analysis Services – Pre-Qualification This schedule identifies the anticipated requirements of any Contract resulting from this RFP. The term “Contractor” in this document refers to a bidder responding to this RFP, as well as the Contractor who is awarded the contract. The term “bidder” is used to identify where specific responses to the RFP are required. Yellow fields are also used to identify areas where a bidder response is required.

The Contractor must respond to each requirement or question and explain how it will fulfill each requirement. Attach any supplemental information and reference it appropriately within your response.

Background This is a Request for Proposal (RFP) to solicit proposals from bidders to establish a pool of pre-qualified Contractor(s) who can provide financial examination and analysis services (esp. of insurance companies) quickly to allow the Department of Insurance and Financial Services (DIFS) to meet the responsibilities listed in Section 1.0 Requirements, other State Departments and MiDEAL Members (authorized local units of government).

Pre-qualified Contractor(s) will be required to submit a proposal per project that DIFS issues through a second-tier Request for Proposal (RFP) by email. The scope of work will cover financial examinations or analysis for companies doing business in the State of Michigan, potentially including companies that are located outside the State of Michigan. Financial examinations and analysis could include completing the entire examination or just completing certain tests on information or data maintained in another state. Additionally, insurance companies that are currently located in Michigan may possibly move their books and records out of state and may need examinations (the determination of whether to assign these examinations will be made on a case-by-case basis).

· DIFS regulates a wide range of entities including, but not limited to, the following:

· Full and single line Health Maintenance Organizations (HMOs).

· Blue Cross and Blue Shield of Michigan.

· Multiple Employer Welfare Arrangements (MEWAs).

· Property, Casualty, Life and Health Insurance Companies.

· United States Branches of Canadian Insurers.

· Limited Liability Pools.

· Reciprocal Exchanges.

· Municipal Pools.

· Legislatively Created Entities.

Specifically, DIFS is responsible for regulating the financial solvency and compliance with Michigan insurance laws, regulations, bulletins and NAIC requirements.

DIFS Program Objective:

A primary program objective for DIFS is to ensure that insurance companies doing business in the State of Michigan remain solvent and able to fulfill their contractual obligations to policyholders.

DIFS’s regulatory responsibilities include ensuring company solvency and policyholder protection and maintaining National Association of Insurance Commissioners (NAIC) accreditation standards. To accomplish this, DIFS must review insurance companies’ financial statements in a timely manner and examine each company at least every three (3) years and more frequently for problematic companies and is mandated by Michigan law to examine companies at least once every five (5) years and every three (3) years upon a company’s request. Other states require examination reports every three (3) years, and some domestic companies in Michigan write business in these states and therefore need an examination every three (3) years. DIFS must remain in a position to accommodate domestic multi-state licensees with at least a triennial examination. In addition to regularly performing the analysis on the financial statements, DIFS must be able to review and analyze new applications, re-qualification applications, and other requests such as requests for additional authority in a timely manner to not hinder competition in the insurance marketplace.

In addition, to maintain NAIC accreditation DIFS must meet required periods for monitoring and analyzing financial statements and to ensure compliance with Michigan regulations.

Level / Volume of Service:

DIFS is responsible for monitoring and analyzing the financial statements of approximately 1,400 Michigan based insurance companies, including approximately 130 domestic insurance companies or insurance related entities. Currently, approximately 30 of these insurance companies do business in the State of Michigan but maintain books and records outside Michigan. During the past five (5) years, DIFS has requested 5 out of state examinations to be completed. The exact number of examinations will vary each year.

Scope Contractor must perform insurance company examinations and analysis as required by individual DIFS second tier RFPs to determine solvency, compliance with Michigan insurance laws, regulations, bulletins and National Association of Insurance Commissioners (NAIC) requirements. Contractor must travel to company sites as necessary to complete examinations and analysis.

Requirements General Requirements The Contractor must provide Services and staff, and otherwise do all things necessary for or incidental to the performance of work, as set forth below:

Second Tier Project Assignment:

DIFS will prepare a written RFP that details the company involved and the work to be performed by the Contractor.

Some project assignments will include several members within an insurance holding company that must be examined at the same time. Each second tier RFP will be submitted to all pre-qualified Contractors by email. Each second-tier RFP from DIFS will include the following information:

Cover Sheet:

Contractor’s work statement due date.

Name of company or companies to be analyzed/examined.

Period of company operation time to be reviewed by this analysis/examination.

Expected end work product, i.e., agreed-upon procedures.

Criteria for determining acceptance of deliverables and final acceptance criteria.

Excerpts from Company’s Annual Statement or Quarterly Statement if Annual Statement is not available, appointments can be made to review the entire annual statement or quarterly statements or other documents that are available to the public by contacting DIFS.

Bidder Response

☐ I confirm the above requirement(s) and agree with no exception(s)

☐ I have reviewed the above requirement(s) and have noted any exceptions below.

Exceptions: List all exceptions here

Second-Tier Contractor Proposal: The Contractor will have approximately three (3) weeks from the date the second tier RFP is received to submit a proposal in response to an RFP. The Contractor must respond to the second tier RFP with a quotation and a project plan. (In detailing costs, the Contractor must not exceed the hourly rates included in Schedule B.)

Responses to Second-Tier RFPs must include the following:

Assignment Scope: Statement of the project assignment.

Dates by which analysis/examination of the company will begin and be completed.

Description of the services, including:

Contractor’s approach to completing the financial analysis or completing a statutory examination of the company identified in the second tier RFP (to include a history of the company, particular industry considerations, any significant issues raised by DIFS, etc.).

Technical project plan.

End product of the assignment (e.g. all examination work papers, including a finalized examination report, following NAIC guidelines, etc.).

Individual staff assigned to project.

Assigned staff information:

Name and title.

Background and credentials.

Total amount of experience relevant to completing financial examinations.

Specific experience relevant to the type of company being examined. (Not necessary to include individual resumes, if included in Contractor’s proposal under which this Agreement was awarded.).

Contractor staff who perform these examinations MUST NOT be affiliated or associated (either financially or contractually) with an entity being examined and that there be no financial or contractual relationship, either written or oral, with an entity being examined and this Contractor, during the life of this Agreement. Failure by the Contractor to comply with this provision will result in the cancellation of a Contract.

Detail of costs:

Staff assigned to project.

Estimated hours assigned for each of the project staff members.

The hourly rate per staff person. The hourly rate must include all costs.

Total projected cost for examination.

Bidder Response

☐ I confirm the above requirement(s) and agree with no exception(s)

☐ I have reviewed the above requirement(s) and have noted any exceptions below.

Exceptions: List all exceptions here

0.

0. Financial Examinations: Proposal to second tier RFPs for Financial Examinations must include the following:

The Contractor must develop a specific examination plan for the Company using the NAIC Examiners Handbook process, which must be jointly approved by the Contractor’s partner and manager, Examiner-in-Charge, and its Chief Examiner. The Contractor’s examination plan must include:

A description of the standard examination tests which the Contractor will use to determine the solvency of the company.

A description of tests which the Contractor will use to determine compliance with Michigan laws, regulations and bulletins and an elapsed time and worker-hours budget.

The specific examination dates, from start date to completion date, without any delays or gaps.

All the individual staff assigned to the examination, the areas each individual will be assigned to the examination, and the estimated number of hours each individual will participate in the examination. (Note that this description MUST reflect that the examination’s senior level auditor is scheduled on-site continuously throughout the entire examination and that the senior auditor must have previous experience in auditing insurance companies).Product Specifications Bidder Response

☐ I confirm the above requirement(s) and agree with no exception(s)

☐ I have reviewed the above requirement(s) and have noted any exceptions below.

Exceptions: List all exceptions here

0.

0. Service Requirements Financial Examinations: If awarded the financial examination (project) assignment, Contractor must carry out this project under the direction and control of DIFS, and must:

0.6.1.1. Perform specific examination tests identified in the initial examination plan and other examination tests as deemed necessary throughout the course of the examination to determine solvency and compliance with Michigan insurance laws, regulations and bulletins. The Contractor must review the tests performed and the results found with a DIFS examiner on request.

0.6.1.2. Meet the National Association of Insurance Commissioners (NAIC) accreditation standards and other standards of the NAIC for using outside firms to perform examinations. [NAIC requires the use of a CPA on an examination, where the insurer is licensed in more than one (1) state, and other additional requirements will vary by examination and according to each state’s circumstances. While there exists many different levels of service that a CPA may provide an insurance department, the use of a CPA in an examination is typically accomplished through an “agreed-upon procedures engagement.”] Therefore, in order to comply with NAIC standards many of the examinations conducted under this Contract will be completed using agreed-upon procedures. DIFS will make the final determination whether agreed-upon procedures are necessary and acceptable.

0.6.1.3. Work in conjunction with DIFS consulting actuary firms. The Contractor will be responsible for testing the underlying data used by the consulting actuary for accuracy and completeness.

0.6.1.4. Use, if available, the company’s independent certified public accountant (CPA) work-papers to the greatest extent possible without compromising the Contractor’s responsibility to perform the necessary tests as defined in the work statement and approved examination plan.

0.6.1.5. Document all work performed and examination findings in examination work-papers, ensuring all work-papers generated during the examination meet its firm’s work-paper quality standards, the NAIC Examiners Handbook standards, and DIFS work-paper standards (all work-papers will be reviewed and must be approved by the Examiner-in-Charge (EIC) and Chief Examiner). These work-papers shall become the property of DIFS after the examination.

0.6.1.6. Be responsible for bringing own supplies and equipment. The only items DIFS will request of the company being examined are access to a telephone, facsimile, and a photocopier (as the telephone may or may not have a dedicated line for use with computers).

0.6.1.7. Not contact the company prior to the on-site examination without written authorization from DIFS, even though it is DIFS’s practice to give companies at least 30 calendar days’ notice prior to beginning an on-site examination.

0.6.1.8. Assign staff who are certified public accountants familiar with Michigan insurance laws, regulations, bulletins and NAIC requirements supervising the examination. When performing an examination of Canadian insurers, the Contractor may assign chartered accountants as staff from its Canadian office(s).

0.6.1.9. Identify any items of noncompliance with State statutes and regulations, whether financial or non-financial, which become apparent during the examination. Also, the Contractor must identify any findings, again whether financial or non-financial, where the company could improve its operations, controls or reporting. DIFS will make the final determination about which items should then be discussed with the company and then whether that item should be included in the final report or management letter.

0.6.1.10. Work with, and under the direction of the EIC, to prepare a draft copy of the examination report and management letter on the company. The management letter must include all findings that are not material to the company’s financial solvency or code violations, but are areas where the company could improve its operations, controls or reporting.

0.6.1.11. Submit examination findings and work-papers to DIFS within 10 calendar days following the completion of the on-site examination of the company unless otherwise agreed to by DIFS. If the Contractor prepares a draft report and management letter, then the report and management letter must conform to reporting guidelines, as published by the NAIC, and DIFS policies and procedures.

0.6.1.12. Make changes to the report as agreed to, following discussions with DIFS.

0.6.1.13. Hold a meeting with DIFS and the company being examined to discuss any findings or comments arising from the examination. After the meeting, adjust the draft report and management letter based on the meeting and subsequent information received by DIFS and submit the final draft report and management letter to DIFS within 10 calendar days of approval of the draft by the EIC.

0.6.1.14. Attend final exit conference meetings at the DIFS office, if regulated entities accept DIFS’s offer for one (1) final exit conference. The cost of travel and hourly rate must be included in the overall cost proposed by the Contractor.

0.6.1.15. Remain available to answer any inquiries or clarify test-work and findings found during the examination until the next examination of the Company is completed. This is normally a three (3)-year period. Also, the Contractor must assist DIFS during any administrative or court proceedings involving the examination reports, the examinations or any matter related to the Contractor’s work under this Contract.

0.6.1.16. Upon notice by DIFS, appear or be available to appear for testimony in any administrative or court proceedings involving the examination reports, the examinations or any matter related to the Contractor’s work under this Contract. DIFS will pay for this type of service outside the cost proposed under the Contract. However, DIFS will only pay the individual hourly rates agreed to within this Contract. These services will only be provided at the request of the State Program Manager and a total agreed price will be determined before any services are rendered. No additional costs will be provided above the amount agreed to by the State Program Manager.

0.6.1.17. Remain available to participate in Chapter 81 processes. During the course of an examination, it may become necessary for DIFS to take a Chapter 81 action, such as seizure of the assets or rehabilitation. If these services are above the normal course of the examination, a separate arrangement will be negotiated with the Contractor. DIFS will make the final determination whether the services are above the normal course of the examination. Once a Chapter 81 action is taken, the Director of the Receivership Division, DIFS, may take responsibility for the examination.

0.6.1.18. Remain available to participate in review by the NAIC if necessary. DIFS will go through at least one (1) on-site review by the NAIC accreditation team during this Contract period. The Contractor’s anticipated participation would include answering questions about its work-papers and the oversight by DIFS during the examination. DIFS will pay for this type of service outside the cost proposed under the Contract. The rate charged by the Contractor for these services must be the hourly rates agreed to in the Contract. These services will only be provided at the request of the State Program Manager and a total agreed price will be determined before any services are rendered. No additional costs will be provided above the amount agreed to by the State Program Manager.

0.6.1.19. Remain available to answer any questions or provide any additional documentation requested by the auditor general’s office if DIFS is audited during this Contract period by the auditor general’s office. DIFS is also audited by the State of Michigan Legislature’s Office of the Auditor General. The Auditor General may review the Contractor’s work papers. DIFS will pay for this type of service outside the cost proposed under the Contract. The rate charged by the Contractor for these services must be the hourly rates agreed to in the Contract. These services will only be provided at the request of the State Program Manager and a total agreed price will be determined before any services are rendered.

0.6.1.19.1. NOTE: No additional costs will be provided above the amount agreed to by the State Program Manager.

0.6.1.19.2. From time to time, zone examiners may participate on these examinations. DIFS may receive little or no advance notice of their participation. These examiners will be assigned specific line items by DIFS to complete and may also want to participate in the planning process. In addition, these examiners will also sign the report so that they will also have the right to review any work-papers produced from the exam; if they (individually or from their zone) report any specific concerns, DIFS may be involved in investigating them.

0.6.1.20. Within ten (10) business days from the beginning of the examination, unless otherwise agreed upon, the Contractor will submit a project plan to the EIC and Chief Examiner for final approval. This final project plan or agreed upon procedures will be finalized after the examination planning has been completed jointly by the Contractor and DIFS. This final implementation plan must be in agreement with the Contractor’s accepted and approved quotation and must include the following:

0.6.1.20.1. The Contractor's project organizational structure.

0.6.1.20.2. The Contractor's staffing table with names and title of personnel assigned to the project. This must be in agreement with staffing of accepted proposal. Necessary substitutions due to change of employment status and other unforeseen circumstances may only be made with prior approval of the State.

0.6.1.20.3. The project breakdown showing sub projects, activities and tasks, and resources required and allocated to each.

0.6.1.20.4. The time phased plan in the form of a graphic display, showing each event, task, and decision point in the Contractor’s project plan.

Bidder Response

☐ I confirm the above requirement(s) and agree with no exception(s)

☐ I have reviewed the above requirement(s) and have noted any exceptions below.

Exceptions: List all exceptions here

Financial Analysis: If awarded the financial analysis (project) assignment, the Contractor must carry out this project under the direction and control of DIFS, and must:

0.6.1.21. Execute a cursory review on all assigned companies’ financial statements in accordance with NAIC Guidelines and DIFS policies and procedures within 10 business days of the assignment. Prepare a listing of all companies assigned and make recommendations commensurate with findings. This listing and recommendation will be submitted and reviewed by DIFS.

0.6.1.22. Execute an in-depth review and worksheet of all the assigned companies’ financial statements in accordance with DIFS policies and procedures.

0.6.1.23. Complete each separate worksheet within three (3) business days from the start date of the review, unless as otherwise agreed to by DIFS.

0.6.1.23.1. This worksheet will be reviewed and approved by DIFS.

0.6.1.23.2. DIFS may also have comments or concerns that will require additional review, follow up, and documentation by the Contractor.

0.6.1.24. Complete any other tasks required to execute a financial analysis within NAIC Guidelines for the assigned project, as determined by DIFS.

0.6.1.25. Submit concise written biweekly progress reports to DIFS indicating the work and reviews completed during the two (2) weeks, work in progress, problems real or anticipated, estimated date of completion for all.

0.6.1.26. Meet the NAIC accreditation standards and other standards of the NAIC for using outside firms to perform examinations. [NAIC requires the use of a CPA on an examination, where the insurer is licensed in more than one state, and other additional requirements will vary by examination and according to each state’s circumstances. While there exists many different levels of service that a CPA may provide an insurance department, the use of a CPA in an examination is typically accomplished through an “agreed-upon procedures engagement.” Therefore, in order to comply with NAIC standards many of the examinations conducted under this Contract will be completed using agreed-upon procedures. DIFS will make the final determination whether agreed-upon procedures are necessary and acceptable.

0.6.1.27. Meet at least monthly with DIFS, or whenever requested by DIFS, with the Contractor’s Project Manager for the purpose of reviewing progress and providing necessary guidance to the Contractor in solving problems which arise.

Bidder Response

☐ I confirm the above requirement(s) and agree with no exception(s)

☐ I have reviewed the above requirement(s) and have noted any exceptions below.

Exceptions: List all exceptions here

0.

0.

0. Second-Tier RFP Evaluation: Each second-tier RFP response will be evaluated utilizing the following criteria:

0.11.1. Description of Examination Services:

0.11.1.1. Examination Plan (per NAIC guidelines)

0.11.1.2. Service Description (per NAIC guidelines)

0.11.2. Resource Allocation:

0.11.2.1. Appropriate supervisory-staff time allocated (per NAIC guidelines)

0.11.2.2. Computer specialist allocated to evaluate IT (per NAIC guidelines)

0.11.2.3. Examination’s senior level auditor is scheduled on-site continuously throughout the entire examination

0.11.2.4. Senior auditor has previous experience in auditing insurance companies

0.11.2.5. Total project staff hours for completion of examination

0.11.3. Time:

0.11.3.1. Complete within 180 calendar days or less from date assigned

0.11.3.2. Estimated Date of Completion

0.11.4. Total Price

Bidder Response

☐ I confirm the above requirement(s) and agree with no exception(s)

☐ I have reviewed the above requirement(s) and have noted any exceptions below.

Exceptions: List all exceptions here

IT Policies, Standards and Procedures (PSP) Contractors are advised that the State has methods, policies, standards and procedures that have been developed over the years. Contractors are expected to provide proposals that conform to State IT policies and standards. All services and products provided as a result of this RFP must comply with all applicable State IT policies and standards. Contractor is required to review all applicable links provided below and state compliance for the publicly available PSPs in their response. Non-public PSPs are available to bidders under NDA.

Public IT Policies, Standards and Procedures (PSP):

DTMB - IT Policies, Standards & Procedures (michigan.gov) Bidder Response

☐ I confirm the above requirement(s) and agree with no exception(s)

☐ I have reviewed the above requirement(s) and have noted any exceptions below.

Exceptions: List all exceptions here

Acceptable Use Policy To the extent that Contractor has access to the State’s computer system, Contractor must comply with the State’s Acceptable Use Policy, see 1340.00.130.02 Acceptable Use of Information Technology (michigan.gov). All Contractor Personnel will be required, in writing, to agree to the State’s Acceptable Use Policy before accessing the State’s system. The State reserves the right to terminate Contractor’s access to the State’s system if a violation occurs.

Bidder Response

☐ I confirm the above requirement(s) and agree with no exception(s)

☐ I have reviewed the above requirement(s) and have noted any exceptions below.

Exceptions: List all exceptions here

ADA Compliance The State is required to comply with the Americans with Disabilities Act of 1990 (ADA) including its accessibility standard for websites, applications, content and documents. All Contract Activities created, provided, or made available by Contractor under this Contract in a digital format, including but not limited to, websites, applications, software, mobile applications, text, images, sounds, videos, controls, animations, links, and documents (including files in the following formats: PDF, word processing, presentation, and spreadsheet) must comply with the accessibility standards provided in the Digital Accessibility Standards, located at https://www.michigan.gov/standards.

Contractor must provide a description of conformance with the Digital Accessibility Standards by providing a completed Accessibility Conformance Report (ACR), such as an Information Technology Industry Council (ITIC) Voluntary Product Accessibility Template ( VPAT®), or equivalent for the Solution. If the Solution is comprised of multiple products, an ACR or VPAT must be provided for each product. In addition to the ACRs, Contractors may include a verification of conformance certified by an industry-recognized third-party. If the Contractor is including any third-party products in the Solution, Contractor must obtain and provide the third-party ACRs or VPATs as well.

Each ACR or VPAT must state how the product meets the specifications. All “Not Applicable” (N/A) responses must be fully explained. Contractor must address each standard individually and with specificity; and clarify whether conformance is achieved throughout the entire product (for example – user functionality, administrator functionality, and reporting), or only in limited areas. A description of the evaluation methods used to support conformance claims, including, if applicable, any third-party testing, must be provided. For each product that does not fully conform to the Digital Accessibility Standards, Contractor must provide detailed information regarding the plan to achieve conformance, including timelines.

Bidder Response

☐ I have reviewed the above requirement(s) and agree with no exceptions.

☐ I have reviewed the above requirement(s) and have noted any exceptions below.

Exceptions: List all exceptions here

Bidder must describe how they will ensure ADA compliance.

Insert response to the above requirement

Required Functionality Relating to Data Retention, Disposal, and Retrieval The State has legal obligations to retain, dispose, and retrieve State Data along with obligations to manage and secure State Data. To meet these obligations, the Solution must allow the State to:

retain all data for the entire length of the Contract.

delete its data or request the deletion of its data, even data that may be stored offline or in backups.

transfer its data back to the State or to a new vendor or new solution.

transfer its data to the Archives of Michigan as may be required by a retention and disposal schedule.

retrieve data, even data that may be stored offline or in backups.

Except as otherwise stated in the Contract, Contractor will not dispose of, delete, or destroy State Data without the prior written approval of the State.

Bidder Response

☐ I have reviewed the above requirement(s) and agree with no exceptions.

☐ I have reviewed the above requirement(s) and have noted any exceptions below.

Exceptions: List all exceptions here

Bidder must review and explain how the data retention, disposal, and retrieval requirements will be met by the solution and describe its data management capabilities (storage limitations, duration, etc.). If the Solution does not allow the State to perform these activities itself, the bidder must explain how it will support the State’s compliance with these requirements.

Describe how you will comply with the requirement(s)

Acceptance See Section 26. Transition Responsibilities of the Standard Contract Terms.

Bidder Response

☐ I confirm the above requirement(s) and agree with no exception(s)

☐ I have reviewed the above requirement(s) and have noted any exceptions below.

Exceptions: List all exceptions here

Final Acceptance Contractor must complete the examination, and it must be approved by the State Program Manager prior to final payment.

Bidder Response

☐ I confirm the above requirement(s) and agree with no exception(s)

☐ I have reviewed the above requirement(s) and have noted any exceptions below.

Exceptions: List all exceptions here

Staffing Contractor Representative The Contractor must appoint one (1) individual, specifically assigned to State of Michigan accounts, who will respond to State inquiries regarding the Contract Activities, answer questions related to ordering and delivery, etc. (the “Contractor Representative”).

The Contractor must notify the Contract Administrator at least ten (10) calendar days before removing or assigning a new Contractor Representative.

The Contractor must identify the Contractor Representative, indicate where they will be physically located, describe the functions they will perform, and provide a current chronological résumé.

Bidder Response

☐ I confirm the above requirement(s) and agree with no exception(s)

☐ I have reviewed the above requirement(s) and have noted any exceptions below.

Exceptions: List all exceptions here

Work Hours The Contractor must provide Contract Activities during the State’s normal working hours Monday – Friday, 7:00 a.m. to 6:00 p.m. EST, and possible night and weekend hours depending on the requirements of the project.

Bidder Response

☐ I confirm the above requirement(s) and agree with no exception(s)

☐ I have reviewed the above requirement(s) and have noted any exceptions below.

Exceptions: List all exceptions here

Key Personnel See Attachment 1- Key Personnel for requirements related to the key personnel.

Non-Key Personnel The Contractor must notify the Contract Administrator at least 10-calendar days before removing or assigning non-key personnel.

Organizational Chart Bidder Response

Provide an overall organizational chart that details staff members, by name and title, and subcontractors.

Add your org chart here or insert the label or filename if you are adding it as a separate attachment.

Customer Service Number Bidder Response

The Contractor must specify its customer service number for the State to contact the Contractor Program Manager who must be available for calls during the hours of specify hours and days of required availability, at a minimum. Identify customer service availability for this proposal by hours and days of the week.

Insert customer service number

Disclosure of Subcontractors If the Contractor intends to utilize subcontractors, the Contractor must disclose the following:

The legal business name; address; telephone number; a description of subcontractor’s organization and the services it will provide; and information concerning subcontractor’s ability to provide the Contract Activities.

The relationship of the subcontractor to the Contractor.

Of the total bid, the price of the subcontractor’s work.

Whether the Contractor has a previous working experience with the subcontractor. If yes, provide the details of that previous relationship.

A complete description of the Contract Activities that will be performed or provided by the subcontractor.

Geographically Disadvantaged Business Enterprise Sub-Contractors: If contractors plan to utilize subcontractors to perform more than 20% of the deliverables under this contract, at least 20% of that subcontracted work must be awarded to Michigan-based Geographically Disadvantaged Business Enterprises (GDBE). Contractor will submit a plan detailing all subcontractors to be used, including the percentage of the work to be done by each. Contractor must inform the State to the name and address of the GDBE, the percentage of the work they will complete, the total amount estimated to be paid to the GDBE, and provide evidence for their qualifications as a GDBE. If contractor cannot find GDBE subcontractors to meet this requirement they must provide reasoning and justification to receive an exemption from this requirement from the State. (Existing business relationships will not be an approved reason for this.)

GDBE definition: "Geographically Disadvantaged Business Enterprise" also known as GDBE, is a Michigan-based business that satisfies one or more of the following: (i) Is certified as a Michigan HUBZone Small Business Concern by the United States Small Business Administration. (ii) Has a principal place of business located within a Qualified Opportunity Zone within Michigan. (iii) More than half of its employees either work at a secondary location or have a principal residence located within a Qualified Opportunity Zone within Michigan, or both.

Additional information on GDBEs can be found here:

DTMB - Geographically Disadvantaged Business Enterprise Required Subcontractor information. Bidders must complete the table below for each anticipated subcontractor. Copy the table as many times as needed for each subcontractor. Complete the second table with the percentage of work that will be completed by all subcontractors involved.

The legal business name, address, telephone number of the subcontractor(s).

A description of subcontractor’s organization and the services it will provide and information concerning subcontractor’s ability to provide the Contract Activities.

The relationship of the subcontractor to the Bidder.

Is the subcontractor a GDBE?

Whether the Bidder has a previous working experience with the subcontractor.

A complete description of the Contract Activities that will be performed or provided by the subcontractor.

Of the total bid, the percentage of the subcontractor’s work.

Work performed by subcontractors

Total percentage of work that will be performed by subcontractors: Insert %

Total percentage of subcontracted work that will be performed by GDBE subcontractors: Insert %

Security The Contractor will be subject the following security procedures:

The Contractor must explain any additional security measures in place to ensure the security of State facilities. The State may require the Contractor’s personnel to wear State issued identification badges.

The Contractor’s staff may be required to make deliveries to or enter State facilities. The Contractor must: (a) explain how it intends to ensure the security of State facilities, (b) whether it uses uniforms and ID badges, etc., (c) identify the company that will perform background checks, and (d) the scope of the background checks.

Bidder Response

The Contractor must explain any security measures in place to ensure the security of State facilities.

Explain your security measures.

Project Plan The Contractor must provide a sample project plan with proposal including details in Schedule A – Statement of Work, Section 3.2 Second-Tier Contractor Proposal and Section 3.4. Service Requirements, Subsection 3.4.1.20. (e.g., services being proposed).

Bidder Response

Contractor to provide a sample project plan with proposal including details referenced from all of the above sections that include requirements of the resulting contract, as a guide to completing the response below.

Bidder Response:

Within five (5) business days of a Second-Tier proposal award, the Contractor must submit to the State Program Manager for final approval a detailed project plan. This final project plan must be in agreement with the Contractor’s proposal and accepted for Contract.

Bidder Response

☐ I confirm the above requirement(s) and agree with no exception(s)

☐ I have reviewed the above requirement(s) and have noted any exceptions below.

Exceptions: List all exceptions here

Reporting This information will be requested in individual Second Tier RFPs.

Bidder Response

Explain your reporting capabilities, any reporting that is included in your proposal, and any additional reporting capabilities.

Describe how you will comply with the requirement(s)

Meetings The Contractor must attend the following meetings:

Meet at least monthly with DIFS, or whenever requested by DIFS, with the Contractor’s Project Manager for the purpose of reviewing progress and providing necessary guidance to the Contractor in solving problems which arise.

Project status meeting Post examination meeting Final report conference meeting The State may request other meetings as it deems appropriate.

Bidder Response

☐ I confirm the above requirement(s) and agree with no exception(s)

☐ I have reviewed the above requirement(s) and have noted any exceptions below.

Exceptions: List all exceptions here

Price Term Pricing is firm for the entire length of the Contract.

Bidder Response

☐ I confirm the above requirement(s) and agree with no exception(s)

☐ I have reviewed the above requirement(s) and have noted any exceptions below.

Exceptions: List all exceptions here

Price Changes Adjustments will be based on changes in actual Contractor costs. Any request must be supported by written evidence documenting the change in costs. The State may consider sources, such as the Consumer Price Index; Producer Price Index; other pricing indices as needed; economic and industry data; manufacturer or supplier letters noting the increase in pricing; and any other data the State deems relevant.

Following the presentation of supporting documentation, both parties will have 30 days to review the information and prepare a written response. If the review reveals no need for modifications, pricing will remain unchanged unless mutually agreed to by the parties. If the review reveals that changes are needed, both parties will negotiate such changes, for no longer than 30 days, unless extended by mutual agreement.

The Contractor remains responsible for Contract Activities at the current price for all orders received before the mutual execution of a Change Notice indicating the start date of the new Pricing Period.

Bidder Response

☐ I confirm the above requirement(s) and agree with no exception(s)

☐ I have reviewed the above requirement(s) and have noted any exceptions below.

Exceptions: List all exceptions here

Authorizing Document The appropriate authorizing document for the Contract will be a Delivery Order (DO) or a Purchase Order (PO), and the results from the master agreement resulting from this RFP.

Bidder Response

☐ I confirm the above requirement(s) and agree with no exception(s)

☐ I have reviewed the above requirement(s) and have noted any exceptions below.

Exceptions: List all exceptions here

Invoice Requirements All invoices submitted to the State must include: (a) date; (b) delivery order; (c) quantity; (d) description of the Contract Activities; (e) unit price; (f) shipping cost (if any); (g) vendor-generated invoice number and (h) total price. Overtime, holiday pay, and travel expenses will not be paid.

Bidder Response

☐ I confirm the above requirement(s) and agree with no exception(s)

☐ I have reviewed the above requirement(s) and have noted any exceptions below.

Exceptions: List all exceptions here

Payment Methods The State will make payment for Contract Activities monthly by lump sum fixed price payment, based upon DIFS review of hours worked and sufficient progress.

The State has the right to hold back, as a retainage, an amount equal to twenty-five percent (25%) of all amounts invoiced by Contractor for Services/Deliverables. The amounts held back must be released to Contractor after the State has granted Final Acceptance.

The Contractor will be held to the price quoted in the second tier RFP response. No additional funds will be approved and paid to the Contractor for delays in the examination because of company delay of providing needed examination information unless the Contractor can provide sufficient documentation to demonstrate the delays. The delays must be a significant portion of the information such that the Contractor’s staff is not able to remain productive. Also, the Contractor must be able to demonstrate that its staff could not be temporarily reassigned during any such lulls in receiving documentation. DIFS does not anticipate any delays and would work with the Contractor and company to ensure delays will not occur.

DIFS will pay for all Financial Examination services by the Contractor that are provided according to the terms of this Contract. No charges shall be submitted to the regulated insurance company being examined, unless otherwise directed by DIFS.

Bidder Response

☐ I confirm the above requirement(s) and agree with no exception(s)

☐ I have reviewed the above requirement(s) and have noted any exceptions below.

Exceptions: List all exceptions here

Liquidated Damages Late or improper completion of the Contract Activities will cause loss and damage to the State and it would be impracticable and extremely difficult to fix the actual damage sustained by the State. Therefore, if there is late or improper completion of the Contract Activities the State is entitled to collect liquidated damages in the amount of $5,000.00 and an additional $100.00 per day for each day Contractor fails to remedy the late or improper completion of the Work.

Bidder Response

☐ I confirm the above requirement(s) and agree with no exception(s)

☐ I have reviewed the above requirement(s) and have noted any exceptions below.

Exceptions: List all exceptions here

Service Levels Per Schedule A – Statement of Work, Section 3.4.1.7., contacting the company prior to the on-site examination without written authorization from DIFS, will result in a 1% credit due to the State of the total value of the monthly invoice of the month when the contact took place.

Per Schedule A – Statement of Work, Section 3.4.1.11., examination findings and work-papers are to be submitted to DIFS within 10 calendar days following the completion of the on-site examination of the company unless otherwise agreed to by DIFS, failure to do this will result in a 1% credit of the total value of the monthly invoice of the month when failure to do this took place.

Per Schedule A – Statement of Work, Section 3.4.1.13., following a meeting with DIFS and the company being examined, draft reports and management letters are to be adjusted based on the meeting and the final draft report and management letter to DIFS is due within 10 calendar days of approval of the draft by the EIC. Failure to meet this requirement will result in a 1% credit of the total monthly invoice of the month when this failure occurred.

Per Schedule A – Statement of Work, Section 3.5.1.1., failure to execute a cursory review on all assigned companies’ financial statements in accordance with NAIC Guidelines and DIFS policies and procedures within 10 business days of the assignment will result in a 1% credit of the total monthly invoice of the month when the failure occurred.

Per Schedule A – Statement of Work, Section 3.5.1.3., failure to complete each separate worksheet within three (3) business days from the start date of the review, unless as otherwise agreed to by DIFS, will result in a 1% credit of the total monthly invoice of the month when the failure occurred.

Per Schedule A – Statement of Work, Section 3.5.3.1., second tier evaluations must be completed within 180 calendar days of date assigned, failure to do this will result in a 1% credit of total value of the monthly invoice of the month when the 180 calendar days ended is due to the State.

Per Schedule A – Attachment 1 – Key Personnel, item Sections 1.4.1. and 1.4.2., failure to advise on personnel changes will result in the credits outlined in those specific sections.

Bidder Response

☐ I confirm the above requirement(s) and agree with no exception(s)

☐ I have reviewed the above requirement(s) and have noted any exceptions below.

Exceptions: List all exceptions here

Enter your company name

RFP #260000002108 1

Schedule A – Attachment 1 – Key Personnel

1. Key Personnel The Contractor must appoint one (1) individual who will be directly responsible for the day-to-day operations of the Contract (“Key Personnel”). Key Personnel must be specifically assigned to the State account, be knowledgeable on the contractual requirements, and respond to State inquiries within 24 hours.

Contractor’s Key Personnel must be on-site or available during the following times: Monday – Friday, 7:00 a.m. to 6:00 p.m. EST.

The State has the right to recommend and approve in writing the initial assignment, as well as any proposed reassignment or replacement, of any Key Personnel. Before assigning an individual to any Key Personnel position, Contractor will notify the State of the proposed assignment, introduce the individual to the State’s Project Manager, and provide the State with a resume and any other information about the individual reasonably requested by the State. The State reserves the right to interview the individual before granting written approval. In the event the State finds a proposed individual unacceptable, the State will provide a written explanation including reasonable detail outlining the reasons for the rejection. The State may require a 30-calendar day training period for replacement personnel.

Contractor will not remove any Key Personnel from their assigned roles on this Contract without the prior written consent of the State. The Contractor’s removal of Key Personnel without the prior written consent of the State is an unauthorized removal (“Unauthorized Removal”). An Unauthorized Removal does not include replacing Key Personnel for reasons beyond the reasonable control of Contractor, including illness, disability, leave of absence, personal emergency circumstances, resignation, or for cause termination of the Key Personnel’s employment. Any Unauthorized Removal may be considered by the State to be a material breach of this Contract, in respect of which the State may elect to terminate this Contract for cause under the Termination for Cause section of the Standard Contract Terms. It is further acknowledged that an Unauthorized Removal will interfere with the timely and proper completion of this Contract, to the loss and damage of the State, and that it would be impracticable and extremely difficult to fix the actual damage sustained by the State as a result of any Unauthorized Removal. Therefore, Contractor and the State agree that in the case of any Unauthorized Removal in respect of which the State does not elect to exercise its rights under Termination for Cause, Contractor will issue to the State the corresponding credits set forth below (each, an “Unauthorized Removal Credit”):

For the Unauthorized Removal of any Key Personnel designated in the applicable Statement of Work, the credit amount will be $25,000.00 per individual if Contractor identifies a replacement approved by the State and assigns the replacement to shadow the Key Personnel who is leaving for a period of at least 30-calendar days before the Key Personnel’s removal.

If Contractor fails to assign a replacement to shadow the removed Key Personnel for at least 30-calendar days, in addition to the $25,000.00 credit specified above, Contractor will credit the State $833.33 per calendar day for each day of the 30-calendar day shadow period that the replacement Key Personnel does not shadow the removed Key Personnel, up to $25,000.00 maximum per individual. The total Unauthorized Removal Credits that may be assessed per Unauthorized Removal and failure to provide 30-calendar days of shadowing will not exceed $50,000.00 per individual.

Contractor acknowledges and agrees that each of the Unauthorized Removal Credits assessed above: (i) is a reasonable estimate of and compensation for the anticipated or actual harm to the State that may arise from the Unauthorized Removal, which would be impossible or very difficult to accurately estimate; and (ii) may, at the State’s option, be credited or set off against any fees or other charges payable to Contractor under this Contract.

The Contractor must identify the Key Personnel, indicate where they will be physically located, describe the functions they will perform, and provide current chronological résumés.

The Contractor must identify all Key Personnel that will be assigned to this contract and include the following (see Key Personnel Table on next page):

Name and title of staff that will be designated as Key Personnel.

Key Personnel years of experience in the current classification.

Identify which of the required key personnel positions they are fulfilling.

Key Personnel’s roles and responsibilities, as they relate to this RFP, if the Contractor is successful in being awarded…