06CO-S3440-Scope-of-Work.docx

Scope of Work

RFQ 06CO-S3440

Debt Collection Services

Scope of Work

In general, the services to be performed are the collection of various type of receivables and include but are not limited to Tuition Fees, Administrative Fines, Assessments, Permits, Application Fees, Inspection Fees, Supervision Fees, Health Insurance Premiums, Business Licenses Fees, Payroll Overpayments, NSF Checks, and Taxes.

Vendors will use their best efforts to effectively collect accounts referred by the Controller’s Office. These referrals could include accounts referred as a second or third placement.

Vendors shall conduct their collection services in a professional manner. Under no circumstances shall vendor(s), use any threats, intimidation, or harassment of a debtor in the collection of accounts or violate any other applicable governmental guidelines. The vendor shall make contact(s) with delinquent account holders under the name of the collection agency.

Vendors must utilize current technologies to send, receive and store the Controller’s Office data in various electronic formats (Excel, XML, etc.) in a secure, encrypted environment.

A contract for the assignment of the collection of the debt may include the provisions in NRS 353C.135 regarding the payment of costs and fees for the collection of debts owed to the State.

For debts in excess of $300, the debtor must pay the costs and fees incurred to collect the debt. The costs and fees charged to the debtor must not exceed 35% of the debt principal or $50,000, whichever is less. Additionally, NRS 353C.135 authorizes the Controller’s Office to collect a fee of 2% of the principal amount of the debt. The 2% Controller’s Office fee is included in the 35% statutory maximum for fees.

For debts of $300 or less, the debtor is not responsible for the costs and fees incurred to collect the debt. Instead, costs are deducted from the debt principal.

In addition, the general authority of a state agency to utilize a private debt collector pursuant to NRS 353C.200 is limited by the source of revenue constituting the debt and the specific authority of the agency to collect the debt.

Neither a state agency nor a contracted debt collection company has authority to “write-off” bad debts. Requests for write-offs must be submitted to the State Controller’s Office and may be subject to approval by the State Board of Examiners (NRS 353C.220) or the Tax Commission (NRS 360.265).

Vendor may not negotiate a settlement of a debt without approval from the Controller’s Office

Vendors, subcontractors, agents and collection employees must comply with all federal and state general or special laws relating to the provision of debt collection services including, but not limited to, the following:

Chapter 353C of the Nevada Revised Statutes Chapter 649 of the Nevada Revised Statutes Fair Debt Collection Practice Act 15 US 1601 et seq.

Federal Bankruptcy Code State and Federal Wages Garnishment Law

Violation of any federal or state general or special law or regulation governing the fair collection of debts, whether related to accounts covered under the awarded contract or other accounts handled by awarded vendors, shall be grounds for termination of the contract.

Any awarded vendor shall be an independent contractor as defined by the Internal Revenue Service and NRS 333.700.

Vendor(s) shall do the following:

Make a minimum of two written or telephone contacts for each account within thirty (30) days of receipt of account, unless the account clears sooner. Vendor shall provide in the proposal detailed steps that will be taken once account is received from the Controller’s Office.

Enter state debt information into vendor’s database within three (3) business days of receiving the referral file.

Designate a Collection Account Manager who will be responsible for the accounts referred under the debt collection contract (s).

Conduct skip-tracing services for the Controller’s Office when a Debtor’s current address is unknown or not current.

Report, correct and/or delete credit bureau reporting. Vendor shall provide in the proposal a detailed policy on when delinquent accounts will be reported to the three major national credit bureaus.

Report, correct and/or delete credit bureau reporting. Vendor shall provide in the proposal a detailed policy on when delinquent accounts will be reported to the three major national credit bureaus.

Vendor shall identify possible attachable assets, locate those assets, and then prepare the necessary paperwork to execute on these assets. This includes repossession, garnishment, bank attachment, lines, and other remedies according to normal rules and time frames.

Designate a lead attorney licensed to practice law with five (5) or more years of litigation experience in Nevada courts.

Guarantee confidentially, security and safety of all files, documents and information provided to them by the Controller’s Office.

Consider and treat all case records as the property of the Controller’s Office or contracted client.

Vendors shall maintain complete and accurate records of collection service transactions in accordance with accepted industry standards and the requirements in this RFQ.

Vendors shall keep all such financial records and statements pertaining to the collection service operations for the Controller’s Office in a safe and secure manner.

Vendors will surrender these records to the Controller’s Office within seven (7) business days of receipt of a written request or upon contract termination.

All case records shall be available for inspection and audit without prior notice by the Controller’s Office or its appointed representative(s).

Vendors will not co-mingle State agency accounts. This means that a debt from one State agency cannot be combined with a debt from a different State agency for purposes of collection.

Vendors are to be responsible for professional quality, technical accuracy and timely completion and submission of all deliverables or services required to be provided under the contract.

Vendor shall, without additional compensation, correct or revise any errors, omissions, or other deficiencies in its deliverables and other services.

Suspend collection activity either temporarily or permanently on any account referred for collection upon notification of debtor bankruptcy.

Vendor must notify the Controller’s Office of any notice of bankruptcy received within five (5) business days.

Vendors shall return to the Controller’s Office any accounts which involve suspected fraud.

The vendor is allowed to receive a collection fee on the amount collected if Controller’s Office, or other state agency receive a payment from the debtor after the account was referred to the vendor for collections. However, no fees will be paid to the vendor if the Controller’s Office does not receive an invoice from the vendor after (90) days of receiving notification of the payment.

Forward to the Controller’s Office and/or state agency for verification of any disputed or contested accounts and/or where a vendor is not satisfied the debtor owes the liability, or if the debtor requested verification of the debt.

The Controller’s Office and/or agency will make every effort to respond within five (5) business days to verify the liability and notify the vendor of its findings. During the verification process, the vendor will suspend any active contact with the debtor.

Vendors shall take all appropriate actions on each case until the vendor determines whether the account is uncollectable, paid in full, or requested to be returned by the Controller’s Office and/or state agency.

When the vendor returns an account in the event it is unable to collect, a detailed explanation for that conclusion should be included, and if the vendor is not authorized to pursue litigation services, return any claim which warrants further action for discharge or settlement through litigation.

Vendors shall allow the Controller’s Office, or designee, upon three (3) business days’ notice, to enter the vendor’s premises during normal working hours to inspect, monitor or otherwise evaluate its work performance.

The Controller’s Office shall have the right to independently verify a vendor’s activities through direct contact with debtors or other means without notice to that vendor.

Vendors shall be responsible to the Controller’s Office for any embezzlement, vandalism, malicious mischief, or acts of fraud or dishonesty by the vendor and/or its employees during the term of the contract.

Vendors are expected to reimburse the Controller’s Office for any amount that becomes uncollectible which is lost due to any act or omission of the vendor or its officers, agents, or employees. Such acts or omissions may include, but are not limited to, Accepting a compromise settlement for less than the total amount due without authorization of the Controller’s Office and the state agency and acknowledging that a payment constitutes payment in full when in fact the debt or account is not paid in full.

Adjust the principal amount of the claim if the Controller’s Office later revises the amount of the claim. The contingent fee collection amount charged will be calculated on the revised amount of the claim.

Provide online portal access to allow the Controller’s Office staff access to monitor collection activities and histories.

Vendor must be aware of and accommodate the following provisions related to this contract:

The State retains the right to withdraw accounts from a vendor six (6) months after assignment and may reassign these accounts to another awarded vendor or to internal staff.

The State may recall the account at any point in time if there is no collection activity by a vendor for sixty (60) consecutive days following the referral.

The State operates a debt offset program for the collection of debt from State payables. The State also operates a Federal Treasury offset program and financial data matching program. If a debt or a portion of the debt becomes recoverable through any of these programs, the State reserves the right to withdraw the debt or recoverable portion from collection services. No collection fee shall be paid to any vendor on the amount collected through the debt offset programs or financial data matching program.

No fee shall be paid to vendors on accounts that are deferred, postponed, or canceled.

No fees shall be paid to any vendor on accounts that are referred for collection, but upon which the state agency receives payment prior to any collection efforts being performed by the vendor

Upon the termination of any resulting agreement or contract, vendors shall return all accounts to the Controller’s Office; and any payments received by the vendor after such termination date shall be sent in full to the Controller’s Office without retaining any fees.

All provisions of this RFQ and any subsequent contract with vendors will also apply to all vendors’ subcontractors. Vendors will monitor subcontractor activities to ensure compliance with these provisions.

Vendors shall be prepared to travel wherever necessary in order to maximize recovery of the government’s receivables.

Vendors shall be responsible for all operating expenses, including but not limited to phone services, computers, office equipment, and supplies.

Vendors and their subcontractors shall be responsible for all travel costs and related expenses associated with the Scope of Work (including transportation, hotels, parking, taxis, meals and incidental expenses, etc.) unless prior written authorization from the Controller’s Office is received.

Vendors and their subcontractors shall be responsible for all administrative costs related to filing judgments, bankruptcy claims, liens, garnishments, bank attachment filings, and attachable assets.

Vendors shall meet with the Controller’s Office within thirty (30) days of contract approval. The purpose of the meeting will be to establish an Implementation Plan and Performance Plan.

The Plans shall include, at a minimum, the following:

Proposed operations start-up process, including a time-line schedule with dates and major milestones to be accomplished with associated performance measures.

Description for start-up process of the debt collection services.

Description of a potential expansion of debt collection services to support higher collection volumes.

The Controller’s Office may use a Performance Plan to measure the effectiveness of a vendor’s collection efforts. The initial Performance Plan shall be developed jointly with the vendor within four (4) months of contract approval. Monitoring and adjustments to these performance measures will continue during the first six (6) months of the start-up and may continue later at the discretion of the Controller’s Office.

Vendor shall testify upon request by the State at court proceedings in conjunction with the recovery action, or on behalf of certain legislation related to receivable recoveries.

Each vendor shall provide the following reports to the Controller’s Office.

Account Acknowledgment Report. For each referring state agency, the vendor shall submit an Account Acknowledgement Report for all accounts referred the preceding week. This report is due within one (1) week of receiving accounts for placement into active collection. The details for each batch of accounts referred shall include:

Name of the referring state agency Name of each debtor Case number Total dollar amount per debtor Total number of accounts referred Total dollar referred.

Inbound Statement “CS1”. This report includes only payments received by the vendor. The report and funds must be received by the Controller’s Office the same day the ACH is transferred to our office. The ACH payment must match the statement. The report must include:

Name of the referring state agency Classification tier of the account (small, standard and large) Name of debtor Account number Payment date Amount Paid

Monthly Statement “CA1” (Remittance). This report includes all payments received by both the vendor and SCO/SA. The vendor shall submit this report on a monthly basis. This report is due on or before the fifteenth of the month following each month end. Each statement (remittance) should be broken down into two statements.

Statement displays vendor’s payments Statement displays SCO/SA payments

The report must include:

Name of the referring state agency, Classification tier of the account (small, standard and large), Name of debtor, Account number, Payment date, Amount paid, and Outstanding balance, Allocation of the payment to the vendors fee (amount and percentage)

Cancel Report. For each referring state agency, the vendor shall submit a monthly close report. This report is due on or before the fifteenth of the month following each month end. It must include the following:

Name of the referring agency, Debtors name Case number Amount paid Date the account is closed Reason for closing the account

Account Status Report. For each referring state agency, vendor shall submit the accounting status as needed reflecting the following:

Debtor’s name and file name Total payments made to date and the percentage of debt paid Balance outstanding Number of open collection accounts Number of and amount of installment agreements Number of returned accounts deemed uncollectible

Forensic Services

The State requires experienced forensic accountants and the application of informational databases in an effort to enhance the recoveries of individual delinquent receivables.

Vendors do not have to propose on the forensic portion of this scope of work; but should they choose to do so, they must also propose on the rest of the scope of work as well.

Vendors should make it clear in their SOQs as to whether or not they are proposing on the forensic services.

If proposing forensic services, the vendor agrees to perform an analytical study of why the receivable was not paid and a determination of the likelihood of the receivable being paid in the near future and the possible remedies of recovery, including other parties or other assets that may be attached.

If submitting qualifications for the forensic portion of this scope of work, vendors must submit references in accordance with section 4.2 for similar forensic projects performed for private, state and/or large local government clients.

Conducting a forensic investigation includes, but is not limited to, the following:

Searching online assets in calculating past and present economic worth.

Identifying related parties as responsible parties or recipients of monies.

Preparing flow of fund type worksheets through review of financial records as a means of tracing monies and ultimately determining why the debt was not paid.

Identifying assets acquired through co-mingling of funds.

Conducting interviews with people associated with the accounts.

Assembling the information in a case write-up format and obtaining necessary authorizations when appropriate from the State’s Attorney General’s Office.

Page | 2 RFQ 06CO-S3440