22 Cash Custody RFR.pdf

REQUEST FOR RESPONSE

COMMONWEALTH OF MASSACHUSETTS

OFFICE OF THE TREASURER AND RECEIVER GENERAL

TREASURY CASH CUSTODY SERVICES

(Description: TRE CASH CUSTODY RFR) (Bid Number: BD-22-1108-TREAN-ANF00-76979)

I. DESCRIPTION OF PROCURING ENTITIES, APPLICABLE LAW, and PROCUREMENT CALENDAR 3

A. Description of Procuring Entities

B. Applicable Law

C. Estimated Procurement Calendar

II. PURPOSE AND SCOPE OF PROCUREMENT

A. Purpose and Scope of Procurement

III. RFR INSTRUCTIONS, EVALUATION PROCESS, COMPONENTS

A. RFR Instructions

B. RFR Evaluation Process

C. Components of Procurement

IV. SPECIFICATIONS

A. Response Specifications

B. Contract Performance and Additional Business Specifications

Request for Response

Office of the State Treasurer and Receiver General

Address: One Ashburton Place, 12th Floor, Boston, MA 02108

Telephone Number: (617) 367-9333 x 207

Internet Address: www.masstreasury.org / www.commbuys.com

RFR Bid Description: TRE CASH CUSTODY RFR

RFR File Number: BD-22-1108-TREAN-ANF00-76979

RFR Contact Person: Elizabeth Morrocco, Procurement Manager

I. DESCRIPTION OF PROCURING ENTITIES, APPLICABLE LAW, and PROCUREMENT

CALENDAR

A. Description of Procuring Entities

The Commonwealth of Massachusetts Office of the State Treasurer and Receiver General (Treasury) is the state agency that manages and safeguards the state’s public deposits and investments through sound business practices for the exclusive benefits of Massachusetts citizens.

i. Cash Management Department (Cash Management).

Certain insurance companies operating within the Commonwealth of Massachusetts are required to make deposits with the Treasury pursuant to Massachusetts General Laws (M.G.L.) including, but not limited to: Chapter 152, Sections 61 and 62 and Chapter 175, Sections 151 and 185. The Treasurer holds these deposits as security for payment of the insurer’s obligations and for the benefit and security of the policyholders. The selected bidder(s) will provide safekeeping and custody on behalf of the Treasurer according to the instructions of the Cash Management Department of the Treasury.

Specific companies or individuals operating motor vehicles within the Commonwealth of Massachusetts may choose to make deposits with the Treasurer pursuant to M.G.L. Chapter 90, Section 34D. The Treasurer holds these deposits as security for payment of the company’s or individual’s self-insurance obligations. The selected bidder(s) will provide safekeeping and custody of these deposits on behalf of the Treasurer according to the instructions of the Cash Management Department of the Treasury.

ii. Massachusetts State Lottery Commission (Lottery) http://www.masstreasury.org/ http://www.commbuys.com/

In addition to insurance companies operating in the Commonwealth, the Lottery conducts several games for which the grand/jackpot prizes are paid out in annual installments over a period of ten or twenty years, and thirty years for Mega Millions and Powerball. The Lottery typically makes the first such payment when the prize is claimed, validated, and payment election (cash option or annuitized grand/jackpot prize) is made by the winner, with the balance being paid over 9 or 19 years, or 29 years for Mega Millions and Powerball with escalating payments each year (graduated annuity). The Lottery utilizes zero coupon U.S. Treasury STRIPS to fund these annual payments. As of April 30, 2022, the LOTTERY has approximately 1,290 separate accounts with an approximate market value of $552 million.

To purchase these STRIPS, the Lottery uses a competitive bidding process whereby qualified investment firms are notified of the amount and timing of a desired annual payment stream and are asked to make an offer. The winning firm is the one that offers to provide a portfolio of eligible securities that produces the desired cash flow at the lowest total cost. Upon completion of the trade, the Lottery processes a payment to the Lottery’s custodial bank for the cost of the securities. The Lottery’s custodial bank delivers cash to the winning firm’s bank, and the winning firm delivers book-entry securities to the Lottery’s custodial bank. Typically, there is one (1) purchase a month.

B. Applicable Law

i. Procurement Law.

To the maximum extent possible, the Treasury follows the rules and regulations set forth in 801 Code of Massachusetts Regulation (CMR) 21.00: Procurement of Commodities and Services in this RFR. This RFR is issued in accordance with the World Trade Organization Government Procurement Agreement.

ii. Fiduciary Status of the Respondent, Chapter 268A.

With respect to the performance of its duties and responsibilities hereunder, if awarded the contract pursuant to this RFR, the Respondent acknowledges that it is a fiduciary and will discharge its duties and responsibilities under any resulting Agreement in accordance with the fiduciary standard of conduct and other requirements as they apply to the Respondent.

The Respondent is advised of M.G.L., Chapter 268A (Conflict of Interest Statute) and is required to act and perform its duties in accordance with such provisions.

iii. Security Breach Law, M.G.L. Chapter 93H.

The Respondent hereby acknowledges and agrees to comply with the requirements and responsibilities, including those of providing notice and response, as set forth in M.G.L.

Chapter 93H. concerning Security Breaches and any regulations implemented to effectuate security of “personal information” as defined in Section 1.

iv. Public Records.

All responses and information submitted in response to this RFR are subject to the Massachusetts Public Records Law, M.G.L. Chapter 66, Section 10, and Chapter 4, Section 7, Subsection 26. Any statements in submitted responses that are inconsistent with these statutes will be disregarded. Respondents are advised that all proposals are deemed sealed and their contents will be treated as confidential and will not be made available to the public, including competing Respondents, until the evaluation process has been completed and selected Respondents have been pre-qualified to provide the services described in this

RFR.

C. Estimated Procurement Calendar

The information below represents a tentative timeline for this RFR. All dates are subject to change by the Treasury with notice on COMMBUYS.

• Issuance of RFR June 24, 2022

• Deadline for Submission of Questions through COMMBUYS July 12, 2022

• Official Answers for Bid Q&A Published July 19, 2022

• Deadline for Responses August 5, 2022

• Interviews / Oral Presentations

(at the option of the Procurement Management Team (PMT)) TBD

• Notification to Apparent Successful Respondent(s) November 2022

II. PURPOSE AND SCOPE OF PROCUREMENT

A. Purpose and Scope of Procurement.

The Treasury requests responses from qualified firms to provide custody and safekeeping services for deposits of cash and securities to the Treasury’s Cash Management Department and/or State Lottery Commission.

i. TREASURY CUSTODIAL SERVICES.

All insurance companies operating within the Commonwealth of Massachusetts, deposit a security that is equal to all or part of the present value of their outstanding claims under existing insurance contracts. The Commonwealth of Massachusetts Division of Insurance determines the nature and amount of these securities, while the Treasury must establish custody and safekeeping services. As of December 31, 2016, the Treasury established 1,486 insurance company sub-accounts with net assets of $499 million and averaged 25 insurance company security deposits/exchanges per month.

a. CASH DEPOSITS

Under the direction of the Cash Management Department, the financial institution selected must:

• Comply with MGL Chapter 152, sections 61 and 62 and Chapter 175, sections

151 and 185, and Chapter 176G, section 26 (see Attachment A).

• Follow the process set forth from the Treasury's Cash Management

Department.

• Hold in safekeeping and maintain cash, certificates of deposits, securities, and other property delivered into its custody.

• Upon instruction by the Treasury, the financial institution shall receive securities, exchange securities, present maturities for payment, and make delivery of securities that have been released as authorized by the Division of Insurance through the Treasury.

• The firm will collect income due and payable on securities. Upon collection, the firm will, per guidance supplied by the Treasury, distribute the income collected to the underlying insurance company for which the sub-account was established.

• The firm will collect principal due and payable on securities. Any principal collected will be distributed only upon instruction from the Treasury.

• In the event there are excess balances in the custody account, these balances will be “swept” into an overnight investment vehicle chosen by the Treasury.

• The bank shall return to the Treasury or distribute to any other party as directed by the Treasury, property held in account. This direction must be in writing.

• Provide pricing and account valuation services.

• Provide daily, monthly, and upon request asset statements and transaction statements.

• Provide daily, monthly, and upon request trade settlement and transaction processing services.

• Provide Internet access to all custody accounts.

The selected bidder must be able to maintain all deposits tendered to the Treasury under the relevant statutes and be capable of conducting all exchanges required in connection with these provisions. In addition, the selected bidder must be capable of opening multiple sub- accounts as directed by the insurers. As of December 31, 2021, the Treasury established1,468 insurance company sub-accounts with net assets of $499 million and averaged 25 insurance company security deposits/exchanges per month. These figures are included for reference only and are not intended as a binding representation of the volume of funds and transactions that will be required during the contract term.

Primary Business Partners:

• The Selected Custodial Institution (to be selected through this procurement)

• The Insurance Examiner (Division of Insurance)

• The Unit Manager of Cash Management Ops (Treasury)

• The Insurance Company Representative

Initial Receipt of Deposit:

Each insurance company representative is required to provide the insurance company’s tax identification number to the Treasury's Cash Management Department to establish the sub- account. The sub-account is opened under the name of the insurance company.

The Division of Insurance will determine the amount of securities to be held and determine if the securities presented are acceptable to the Commonwealth.

The following is a generalized model of the planned custody and safekeeping process as administered by the Cash Management Department of the Treasury. The outline below is intended to illustrate the process and related service requirements and does not incorporate all possible variations. It is not intended to limit the scope of services as otherwise described in this section.

When depositing securities, the insurance company representative must provide the following security information in writing to the Treasury's Cash Management Department:

• The CUSIP

• Par Value

• Interest Rate

• Maturity Date

The insurance company representative must indicate whether the security is being held for:

• Special Massachusetts Deposit

• Workers’ Compensation Deposit

• General Deposit

• HMO Deposit

The insurance company representative must also provide written wire instructions to provide for return of interest earned on the security. In order to complete/update the Treasury and bank files the insurance company representative must provide the following information to the Treasury:

• Contact Person

• E-Mail Address/Telephone/Fax

• Mailing Address

The Treasury's Cash Management Department will forward this information to the financial institution to authorize acceptance of the security. Then, the Treasury's Cash Management Department will notify the insurance company representative to deliver the security. The financial institution will provide delivery instructions to the insurance company.

Matured/Maturing Security Exchange or Other Exchanges:

The balance on deposit with the financial institution must not fall below the level prescribed by the Division of Insurance. If a security is maturing, the insurance company representative may initiate a security exchange.

The security to be offered in exchange must be approved by the Division of Insurance. Similarly, the proceeds from any matured security will remain in the custodial account until such time as it is replaced with another security as authorized by the Division of Insurance. Further, the insurance company may, at times, wish to exchange one security for another and may do so if the exchange is approved by the Division of Insurance.

In all such cases, the insurance company representative must detail the proposed replacement security transaction in writing to the Treasury's Cash Management Department. Once the Treasury's Cash Management Department determines that the replacement is acceptable and obtains Division of Insurance approval, the financial institution will be notified by the Treasury's Cash Management Department to accept the replacement security.

The financial institution notifies the Treasury's Cash Management Department of the receipt of the replacement security. The notice must occur within two business days. The Treasury's Cash Management Department then prepares a security confirmation of receipt and request for the matured security release package for the Division of Insurance review. The Division of Insurance ultimately approves the release of the matured security. Once the Division of Insurance has authorized the release of the maturing/matured security, the financial institution may deliver the security as directed by the Treasury. Any security release must be executed within two business days.

Release of Interest:

The Treasury's Cash Management Department will be responsible for providing the financial institution instructions on the release of interest. This release will be made based on data provided by the insurance company representative. The financial institution must prepare as well as execute the release of the interest earned on the insurance security deposits.

Corporate Action:

The financial institution must immediately notify the Treasury's Cash Management Department of any mandatory and voluntary corporate action executed by the issuer or agent of the security. The financial institution must also notify the insurance company representative of any mandatory and voluntary corporate action. The financial institution must be prepared to assist the Treasury's Cash Management Department and/or the insurance company representative with any corporate action request.

Reporting:

At month end, the financial institution must provide the Treasury's Cash Management Department with a detailed listing of each insurance sub-account name, the security deposit par and market values. Reports must be sorted by sub-account number. The custodial assets sub-account number will be provided to the financial institution by the Treasury. The financial institution must be prepared to discuss, review, and remediate any discrepancies in the report with the Treasury's Cash Management Department. All reports will include book and market values of the securities. In addition to periodic reports of market value, any significant change in the market value of a security must be immediately reported to the Treasury's Cash Management Department.

Further, the Agent must complete any audit confirmation requests received by the Agent regarding any of the sub-accounts promptly (within five business days).

Fees:

The Treasury will not be billed for the fees incurred by the insurance company sub- accounts. Insurance companies will be billed for these services directly by the financial institution. The financial institution must notify the insurance company representative of the schedule of fees at the time the account is established. The financial institution may deduct such charges from the income payments (not principal) to the underlying insurance companies providing that the company is given advance notice of this action.

Describe the methodology in fixing the monthly interest rate for the money market accounts. Also, forecast the interest rate from January 1, 2023 thru June 30, 2023.

The Treasury intends to seek a competitive rate for the Insurance Custodial deposits.

Relationship Support:

The financial institution will designate a primary manager for this account and must also provide the necessary support staff to ensure compliance with the required services.

a. SELF INSURANCE DEPOSITS

All individuals or corporations with a self-insured vehicle operating within the Commonwealth Of Massachusetts deposit a $10,000 cashier’s check with the

Treasury. The Treasury must establish custody and safekeeping services. As of April 30, 2022 the Treasury established 220 self-insurance sub-accounts with net assets over $6.3million. These figures are included for reference only and are not intended as a binding representation of the volume of funds and transactions that will be required during the contract term. Under the direction of the Cash Management Department, the financial institution selected must:

• Comply with MGL Chapter 90, section 34D (see Attachment A).

• Follow the process set forth from the Treasury's Cash Management

Department.

• Hold the deposit in safekeeping.

• Upon instruction by the Treasury, the financial institution shall accept the receipt of a self-insurers’ required deposit in accordance with Massachusetts General Law and make delivery of cash that has been released as authorized by the Treasury.

• The self-insurer will collect principal due and interest on all deposits. Any principal collected will be distributed only upon instruction from the Treasury.

• Provide monthly asset statements and transaction statements, for par value.

• Provide the Treasury with internet access to all custody accounts.

The selected bidder must be able to maintain all deposits tendered to the Treasury under the relevant statutes and be capable of conducting all exchanges required in connection with these provisions. In addition, the selected bidder must be capable of opening multiple sub-accounts as directed by the Treasury's Cash Management Department. As of April 30, 2022, the Treasury established 220 self-insurance sub-accounts with net assets over $6.3 million. These figures are included for reference only and are not intended as a binding representation of the volume of funds and transactions that will be required during the contract term.

Primary Business Partners:

• The Selected Custodial Institution (to be selected through this procurement)

• The Unit Manager of Cash Management Ops (Treasury)

• The Self Insurance Owner

Initial Receipt of Deposit:

Each self-insurance individual or corporation is required to provide the individual social security number or company’s tax identification number to Treasury’s Cash Management Department to establish the sub-account.

The sub-account is opened under the name of the individual owner or corporation.

When depositing the cashier’s check, the individual or corporation must provide the following information to the Treasury:

The following is a generalized model of the planned custody and safekeeping process as administered by the Cash Management Department of the Treasury. The outline below is intended to illustrate the process and related service requirements and does not incorporate all possible variations. It is not intended to limit the scope of services as otherwise described in this section.

• Contact Person

• Email/Telephone/Fax

• Mailing Address

The Treasury’s Cash Management Department will forward this information to the financial institution to authorize acceptance of the deposit.

Release of Interest:

The Treasury’s Cash Management Department will be responsible for providing the financial institution instructions on the release of interest. The financial institution must execute the release of the interest earned on the deposits. This release will be made based on approval by the Treasury’s Cash Management Department. All interest releases must be written by check to the individual or company identified by the Treasury.

Release of Deposit:

The Treasury’s Cash Management Department will be responsible for providing the financial institution instructions on the release of a deposit. The financial institution must execute the release of a deposit upon request by the Treasury’s Cash Management Department. All releases must be written by check to an individual, company, or party identified by a court judgement. In the event a Certificate of Deposit is called prior to maturity date, no fee or penalty will be assessed.

Reporting:

At month end, the financial institution must provide Treasury’s Cash Management Department with a detailed listing of each sub-account name, the deposit par values. Any interest accumulated in the account does not require Treasury oversight. Reports must be sorted by sub-account number. The custodial assets sub-account number will be provided to the financial institution by the Treasury. The financial institution must be prepared to discuss, review and remediate any discrepancies in the report with the Treasury’s Cash Management Department.

Further, the Agent must complete any audit confirmation requests received by the Agent regarding any of the sub-accounts promptly (within five business days).

Fees:

The Treasury will not be billed for the fees incurred by the self insurance sub-accounts. The current deposits total $6.5 million. The financial institution may deduct such charges from the income earned on the deposits.

Describe the methodology in fixing the interest rate for Certificate of Deposit accounts. Also, forecast the interest rate from July 1, 2017 thru December 31, 2017.

What will be the fee in basis points per Certificate of Deposit?

The Treasury intends to seek a competitive rate for the Insurance Custodial deposits.

Relationship Support:

The financial institution will designate a primary manager for this account and must also provide the necessary support staff to ensure compliance with the required services.

ii. LOTTERY CUSTODIAL SERVICES

The Lottery requirements of this contract are to provide custodial banking services for the receipt, custody, reporting, and redemption of U.S. Treasury STRIPS held in book-entry form. The STRIPS are expected to be held to maturity. The Lottery currently has approximately 1,290 separate custodial accounts, one for every draw game jackpot and instant ticket game grand prize claimed, with an approximate market value of $552 million. All of the reporting that will be generated by the Custodial Agents Portfolio Accounting will be predicated on the existing allocation of the securities in a master/feeder fund structure. Approximately eighty-six (86) strip securities will need to be allocated amongst approximately 1,290 feeders which each represent an individual Lottery winner.

Each feeder has on average 6 individual security positions. In total, the Custodial Agent Portfolio Accounting will have approximately 7,605 individual accounting entries for the portfolio. The Lottery will conduct 1 transaction per month.

The successful institution will need to provide the Lottery with the following custodial services:

• Portfolio Accounting, Custody, and Safekeeping services under a master/feeder account structure which include receipt, reporting and redemption of US Treasury Strips, deposits of cash and securities, account valuation for approximately 1,290 accounts, monthly asset statements, and internet access.

• The successful vendor must have a system that identifies each securities purchase within the Master Feeder Account by the following, but not limited to:

i. Manager (Individual Account Number)

ii. Game Name

iii. Claim / Win Date

iv. Security ID

v. Security Description

vi. Maturity Date

vii. Shares

viii. Market Price

ix. Base Cost

x. Market Value

xi. Unrealized Gain / Loss

• The contractor shall provide on-line access and have email capability.

• A monthly investment report, excel and pdf version, sorted by account number detailing, at a minimum, the information listed under #2 above and including a price date (date report run and securities valued at).

• A quarterly pre-maturity list. The list must be received fifteen days prior to the maturity of applicable securities (received on Feb. 1st, May 1st, August 1st, Nov. 1st), and include (at a minimum), CUSIP Number, Maturity Date, Maturity Value, Market Value, Security Description, and Account Number.

• A quarterly investment report. The list must be received fifteen days prior to the maturity of applicable securities (received on Feb. 1st, May 1st, August 1st, Nov. 1st) listing securities maturing for quarter detailing, at a minimum, the information listed under #2 above and including a price date (date report run and securities valued at).

• The contractor shall wire all maturing funds to a designated Lottery bank account and notify the Lottery that the funds were transferred via email.

• Additional services may be requested by the Lottery.

• The successful bank/firm shall bill the Lottery on a monthly basis in arrears, on a per master account basis and send the invoice via email.

Fees:

The Lottery is currently billed monthly by account. The Lottery currently has 1,290 individual accounts. Please indicate the monthly charge per account.

Taxes, Fees, Assessments, Etc. - Vendors must pay all taxes, fees and assessments associated with furnishing the products as part of the contract.

The Lottery intends to seek a competitive rate for Custodial Services

III. RFR INSTRUCTIONS, EVALUATION PROCESS, COMPONENTS

A. RFR Instructions

i. COMMBUYS.

COMMBUYS is the official source of information for this RFR and is publicly accessible at no charge at www.commbuys.com. Information contained in this document and in COMMBUYS, including file attachments and information contained in the related Response Questions and Answers (Q&A), are all components of this RFR as referenced in COMMBUYS, and are incorporated into the RFR and any resulting contracts.

Respondents are solely responsible for obtaining all information distributed for this RFR via COMMBUYS.

It is each Respondents’ responsibility to check COMMBUYS for any amendments, addenda, or modifications and any RFR Q&A records related to this RFR.

The Commonwealth accepts no responsibility and will provide no accommodation for Respondents who submit a response based on an out-of-date RFR or on information received from a source other than COMMBUYS.

Respondents may not alter (manually or electronically) the RFR language or any RFR component files. Modifications to the body of this RFR, its specifications, or terms and conditions which change the intent of this RFR are prohibited and may disqualify a response.

ii. COMMBUYS Subscription.

http://www.commbuys.com/

Respondents may elect to obtain a free COMMBUYS Seller Subscription which provides additional features including automated email notification associated with postings and modifications to COMMBUYS records.

All Respondents submitting a response to this RFR agree that, if awarded a contract for which COMMBUYS is the preferred method for contract purchases: (1) they will maintain an active Seller account on COMMBUYS, (2) they will, when directed to do so by the procuring entity, activate and maintain a COMMBUYS-enabled catalog using Commonwealth Commodity Codes which are based on the United Nations Standard Products and Services Code (UNSPSC), (3) they will comply with all requests by the procuring entity to utilize COMMBUYS for the purposes of conducting all aspects of purchasing and invoicing with the Commonwealth, as added functionality for the COMMBUYS system is activated, and (4) in the event the Commonwealth adopts an alternative market center system, successful Respondents will be required to utilize such system, as directed by the procuring entity.

iii. Response Submission.

Responses must be submitted on COMMBUYS by xxx.

iv. Response Format.

Failure to follow these formatting requirements may result in the disqualification of the response:

a. The written response to the Phase II Questionnaire shall be limited to replies totaling 25 pages front and back per Questionnaire. The mandatory attachments and other required supporting documentation are excluded from the allotted pages. The questionnaire responses must be single spaced, 12-point font, with at least three-quarter inch margins left and right and one-inch margins top and bottom. The narrative response should address all items included in each section of the Phase II Questionnaire. The Respondent is only required to include one set of Mandatory Attachments. In so doing, the Respondent agrees that the submitted Mandatory Attachments are applicable to each of its submitted proposals.

b. Bidders must use the Response Template which can be downloaded from COMMBUYS. The Response Template contains all required elements of a valid proposal response:

i. Cover Letter

ii. Executive Summary

iii. Statement of Minimum Qualifications

iv. Legal and Other Requirements

v. Representations and Warranties

vi. Disclosure Statement

vii. Phase II Questionnaire

viii. Mandatory Attachments

ix. Cost Response (in a separate document)

v. Cost Proposal Response.

THE COST PROPOSAL MAY BE INCLUDED IN THE SAME SUBMISSION AS

THE REST OF THE RESPONSE BUT MUST BE SUBMITTED IN A SEPARATE

DOCUMENT VIA COMMBUYS. NO COST INFORMATION SHALL BE

INCLUDED ANYWHERE IN THE RESPONSE, EXCEPT IN THE SEPARATE

COST PROPOSAL.

A COST REPONSE TEMPLATE IS PROVIDED IN THE RESPONSE TEMPLATE

If a bidder submits more than one strategy for the International Equity Mandate, separate Cost Responses must by submitted for each strategy.

vi. Written Questions via Bid Q&A on COMMBUYS.

The Bid Q&A provides the opportunity for Respondents to ask written questions and receive written answers from the PMT/Treasury regarding this RFR. All Respondents’ questions must be submitted through the Bid Q&A found on COMMBUYS. Questions may be asked only prior to the Deadline for Submission of Questions stated in the Estimated Procurement Calendar. The Treasury reserves the right not to respond to questions submitted after this date. All answers are final when posted. Any subsequent revisions to previously posted answers will be dated.

vii. Disqualification of Responses.

a. Late Proposals: Proposals received after the deadline date and time shall be automatically disqualified.

b. Incomplete / Non-Responsive Proposals: A response that fails to meet any material term, condition, requirement, or procedure of this RFR may be deemed unresponsive and disqualified. The Treasury reserves the right to waive or permit cure of non-material errors or omissions. Non-responsive proposals shall include, but not be limited to, those which fail to address or meet any mandatory item and those submitted in an incorrect format. The Treasury reserves the right to request additional information or clarification from Bidders responding to this request.

c. Collusion: Collusion by two or more Respondents agreeing to act in a manner intended to avoid or frustrate fair and open competition is prohibited and shall be grounds for rejection or disqualification of a proposal or termination of a resulting contract. Respondents will be required to complete a “Certificate of Non- Collusion” as one of the mandatory attachments.

d. Debarred Respondents or Subcontractors: A Respondent who is currently subject to any Commonwealth or Federal debarment order or determination shall not be considered for evaluation by the PMT. If a Respondent’s proposal is dependent upon the services of a named subcontractor, and the disqualification of the named subcontractor would materially alter the proposal, that proposal shall be deemed unresponsive if the named subcontractor is found to be debarred. Proposals indicating a subcontractor will be used but do not rely on any specifically named subcontractor shall not be deemed unresponsive if the disqualification of a proposed subcontractor will not materially alter the proposal.

e. Reservation of Rejection Rights: The Treasury further reserves the right to reject any and all responses to this RFR.

B. RFR Evaluation Process

i. Evaluation Process:

The RFR evaluation process will be conducted in phases by the PMT. The voting members of the PMT for this RFR will consist of staff from the Treasury. The PMT will recommend to the State Treasurer and Receiver General that certain Respondents be selected to provide the services described in this RFR. The Treasurer will make the final determination by accepting or rejecting the PMT’s recommendation.

a. PHASE I REVIEW. A review team will complete the Phase I review for all submissions. The purpose of Phase I review is to eliminate any submissions that are non-responsive to the requirements of the RFR. Respondents’ responses will be reviewed based on the listed criteria and completeness of response, including mandatory attachments and compliance with submission criteria. Responses that do not comply with these components will be rejected and will not proceed to Phase II Review. The Treasury reserves the right to waive or permit cure of non-material errors or omissions.

b. PHASE II REVIEW. Responses deemed to be qualified based on Phase I Review will be submitted to the PMT for Phase II Review. The PMT will score the submissions based on the Questionnaire Responses.

c. ORAL PRESENTATIONS. After the Phase II scoring is complete, the PMT will have the option to invite Respondents to make oral presentations. It is in the sole discretion of the PMT which, if any, Respondents are invited for presentations. It shall also be in the sole discretion of the PMT to determine the cutoff for Presentation invitations based on the Phase II scoring. If the PMT elects to hold a Presentation round, Respondents that do not receive an invitation to present will be eliminated from further consideration under this RFR. Respondents will not be informed of their rank or number of other firms participating at the time of the presentations. The PMT reserves the right to adjust any Phase II score based on the presentations. The PMT may request copies of the presentation materials for their review. The PMT may request that Respondents assign key personnel to conduct the presentation.

These presentations provide the PMT with an opportunity to evaluate the response in an interactive format. The time allotments and the format shall be the same for all oral presentations. The PMT will give Respondents at least five (5) business days’ notice regarding the date of the presentations.

A Respondent is limited to the presentation of material contained in its proposal with the limited exception that a Respondent may address specific questions posted by the PMT or provide clarification of information contained in its proposal. Any other correction or modification of the proposal or the presentation of supplemental information shall be considered prejudicial to the interests of other Respondents and fair competition and shall not be permitted. A Respondent’s attempt to submit such corrections, modifications, or supplemental information during a presentation may subject the Respondent’s response to disqualification. A Respondent’s failure to agree to a presentation may result in disqualification from further consideration. Presentations may be recorded by the Treasury as a matter of public record and Respondents will be advised in advance if a recording is to be made.

Respondents are cautioned against providing any cost information during their presentation or in the presentation materials. The inclusion of such information may result in disqualification from further consideration.

d. ON-SITE VISITS (OPTIONAL). The PMT reserves the right to conduct on-site inspections of any or all Bidder locations at any time prior to the awarding of this contract to verify the Bidder’s ability to perform the services required. The PMT shall schedule the time of these site visits and shall provide notice of such visit at least three (3) business days before a visit. Failure to agree to a site visit may result in disqualification of a Bidder’s proposal. Only those firms that were evaluated in Phase II and were invited for a presentation / interview will be the subject of an on-site inspection, in the event the PMT elects to conduct such an on-site inspection.

e. PHASE III REVIEW. Only once Phase II is complete (including Presentations and any score adjustments), will the PMT open and evaluate Cost Proposals. The Cost Proposals will be scored in relation to one another and as the PMT deems acceptable for the nature of the pricing. The Phase III score will be factored into the overall score as described in Section ii below.

f. BEST AND FINAL OFFER (BAFO). At the discretion of the PMT, Respondents may be asked to provide a BAFO. This will be an opportunity for Respondents to re-evaluate their pricing and submit a new Cost Proposal or opt to keep pricing the same. If the PMT moves forward with a BAFO, the costs will be re-evaluated based on new pricing and scoring will be adjusted accordingly.

ii. Scoring.

The PMT will score on the basis of the criteria listed below. Those scores will be weighted according to the percentages listed below. The total Phase II score will be worth 65% of the overall score, with Cost making up the remaining 35%.

a. 75% - Availability of Core Services: Assessment of services to be provided, time schedules, and reporting options. Scoring of these services will pay particular attention to the integration of the required services into an effective banking relationship for the Commonwealth.

b. 5% - Availability of Optional Services: The Treasury is open to new ways to conduct business. Following the PMT’s evaluation of a Bidder’s responses as to the availability of core services, which are required for the Commonwealth to conduct its business, it will conduct a review of any Optional Services which a Bidder chooses to include in its bid. “Optional Services” are not specifically delineated within this RFR, but are those which a Bidder considers would be cost-efficient, expedient or innovative services which would assist the Commonwealth to effectively conduct its business as outlined in this RFR.

c. 5% - Quality Control: Will include assessment of: 1. The financial institution’s disaster recovery plan and contingencies and past performances in either real or test environments; 2. Industry standards including but not limited to BAI Critical Quality Indicators; and 3. The current auditor’s report of internal control.

d. 5% - Financial Strength: Measured based on financial reports submitted and analyses to be completed by Treasury staff based on data provided in these reports as well as bank ratings.

e. 5% - Treasury Supplier Diversity Program (TDSP)

f. 5% - Invest in Massachusetts

C. Components of Procurement

i. Duration and Renewal Options.

The Treasury intends that any contracts resulting from this RFR will be for an initial term of three (3) years. The Treasury may, at its option, extend any such contracts for two (2) additional one (1) year terms for a maximum contract term not exceeding five (5) years, under the same or better terms and conditions as negotiated if deemed in the best interest of the Plan and Plan participants. Bidders who offer price guarantees for the life of the contract will be held to that offer or such better terms as are negotiated.

If, over the life of the contract, the Treasury determines that additional firms may be added, these may be drawn from qualified Respondents to this RFR who were not award contracts.

ii. Acquisition Method.

Outright Purchase License X Fee for Service Tax-Exempt Lease Purchase Term Lease Lease Purchase Rental (not to exceed six months) Other (specify)

iii. Single or Multiple Contracts.

The Treasury reserves the right to select multiple firms as deemed qualified by the PMT to be in the best interest of the Treasury and Lottery.

The selected firm(s) must agree to cooperate with such other firms and must not commit or permit any act that may interfere with the performance of work by any other selected firm.

iv. Contract Guidelines.

(Those that apply are checked)

X Option to allow other Departments/political subdivisions to contract under this RFR Only the Office of the State Treasurer and Receiver General may contract under this RFR.

Statewide Contract Multi-Treasury User Contract Pre-Qualification List

IV. SPECIFICATIONS

Respondents should take note of the following Specifications.

A. Response Specifications

i. Alternatives.

Unless otherwise specified, Bidders may submit responses proposing alternatives that provide equivalent, better, or more cost-effective performance than achievable under the stated RFR specifications. These alternatives may include related services that may be available to enhance performance during the period of the contract. The response should describe how any alternative achieves substantially equivalent or better performance than that of the stated RFR specifications. The Treasury will determine if proposed alternatives meet this standard.

ii. Best Value Selection.

The PMT may select the response(s) which demonstrate the Best Value overall, including proposed alternatives, that will achieve the goals of the Treasury.

iii. Request for Quotes, Best Value Selection and Negotiation.

When the Treasury determines that outside legal services are needed, a vendor(s), at the discretion of the Treasury, from the group of the selected Respondents who have been pre-qualified will be contacted by the Treasury and informed of any special considerations or instructions for the specific legal services to be provided. Those vendors will be asked to provide a project specific quote based on the rates and charges included in that vendor’s pre-qualification. In any such quote solicitation, the Treasury will select the response(s) that demonstrates the “Best Value” overall, including proposed alternatives that will achieve the specific goals of the Treasury.

iv. Respondent Communication.

Respondents are prohibited from communicating directly with any employee of the Treasury, including any of the Treasury’s departmentsi, divisions, affiliated commissions, boards, trusts, or members of this PMT regarding this RFR. Respondents may be disqualified for any such communication. No other individual, Commonwealth employee or representative is authorized to provide any information or respond to any question or inquiry concerning this RFR. Respondents may communicate with the contact person for this RFR in the event the RFR is incomplete or the Respondent is having difficulty obtaining any required attachments electronically through COMMBUYS:

Elizabeth Morrocco, Esq.

Procurement Manager / Associate General Counsel

Office of the State Treasurer and Receiver General

ATTN: 22-DC-457_PLAN-INTERNATIONAL EQUITY

One Ashburton Place, 12th Floor Boston, Massachusetts 02108

Email: procurements@tre.state.ma.us

In addition, Bidders that intend to submit a bid / proposal should not discuss this RFR with members of the Deferred Compensation Committee, any employee of the Plan’s third-party administrator / record keeper (Great-West Life & Annuity Insurance Company, d/b/a Empower Retirement), investment managers (as listed in Appendix A attached hereto), consultants (Aon Investments USA, Inc.), Plan legal counsel, or other Plan advisors.

v. Brand Name or Equal.

Unless otherwise specified in this RFR, any reference to a particular trademark, trade name, patent, design, type, specification, producer, or supplier is not intended to restrict this RFR mailto:procurements@tre.state.ma.us to any manufacturer or proprietor or to constitute an endorsement of any service. The Treasury will consider clearly identified offers of substantially equivalent services submitted in response to such reference.

vi. Electronic Communication / Duty of Respondent to Update Contact Information.

It is the responsibility of the Respondent to keep current the e-mail address of the Respondent’s contact person and prospective contract manager and to monitor that e-mail inbox for communications from the PMT and/or Treasury. The PMT and the Treasury assume no responsibility if a Respondent’s designated e-mail address is not current or if technical problems, including those with the Respondent’s computer, network, or Internet Service Provider, cause e-mail communications sent to or from the Respondent to the Treasury to be lost or rejected by any means, including spam filters.

vii. Minimum Response Duration.

Responses to this RFR must remain in effect for 1500 days from the date of submission and thereafter until the Respondent withdraws the response in writing, a contract is executed, or the procurement is canceled, whichever comes first.

viii. Reasonable Accommodation.

Bidders with disabilities or hardships that seek reasonable accommodation, which may include the receipt of RFR documents or the method of Presentations in an alternate format, must communicate such requests in writing to the RFR contact person. Requests for accommodation will be addressed on a case-by-case basis. The Treasury reserves the right to reject unreasonable requests.

ix. Restriction on the Use of the Commonwealth Flag, Coat of Arms, and Seal.

Respondents and contractors are not permitted to display the Commonwealth of Massachusetts Flag, Coat of Arms, and/or Seal in their response package or in any subsequent marketing materials if they are awarded a contract. Use of the Flag, Coat of Arms, and the Great Seal of the Commonwealth for advertising or commercial purposes is prohibited by lawii.

x. Submission of Proposal Materials and Oral Presentation.

All materials, representations, and submissions made within the responses and in any oral presentation are subject to becoming part of the contract binding the selected Respondent(s). All responses and their contents will become the sole property of the Commonwealth / Treasury upon receipt and will not be returned to the Bidder. The Treasury will not reimburse Bidder for any costs associated with the preparation or submittal of any response to this request or for any travel and/or per diem included in any presentation of such responses.

xi. Modification or Cancellation.

The Treasury and subject PMT reserve the right to modify or the specifications, terms, and elements identified in the RFR at any time prior to the closing date. The Treasury and subject PMT reserve the right to cancel this procurement at any time prior to the closing date. All updates regarding modification or cancellation will be posted on COMMBUYS.

xii. Change in Terms.

The Treasury reserves the right to negotiate with the selected Respondent(s) as to any element of cost or performance including, without limitation, elements identified in this RFR and/or the selected Respondents’ response to achieve the best value for the Commonwealth. In any RFR issued to firms/individuals that have been pre-qualified pursuant to this RFR, the Treasury reserves the right to request from any Respondent a “Best and Final Offer” as to the Respondent’s proposal or cost proposal. The Treasury reserves the right to procure some, all, or none of the services specified in this RFR.

xiii. Conflict of Interest.

Prior to the award of any contract, the Respondent shall certify to the Treasury, in writing, that no relationship exists between the Respondent and the Treasury that interferes with fair competition or is a conflict of interest, and no relationship exists between the Respondent and another person or organization that constitutes a conflict of interest with respect to a state contract. No official or employee of the Commonwealth who exercises any function or responsibility in the review or approval of the undertaking or carrying out of this project shall, prior to the completion of the project, voluntarily acquire any personal interest, either directly or indirectly, in this contract or proposed contract.

The Respondent shall provide assurance that it presently has no interest and shall not acquire any interest, either directly or indirectly, that will conflict in any manner or degree with the performance of its services hereunder. The Respondent shall also provide assurance that no person having any such known interests shall be employed during the performance of this contract. The Response Template contains a Disclosure Statement.

B. Contract Performance and Additional Business Specifications.

i. Changes to Personnel Performing Services.

The Treasury reserves the right to reject a firm or individual’s use of any particular personnel in the performance of the services sought under the RFR, within the Treasury’s sole discretion. Any changes to personnel performing services under a contract pursuant to this RFR require approval by the Treasury and the Treasury reserves the right to terminate a contract if changes are not approved. New personnel are required to submit a resume stating qualifications and experience to accomplish services. The Treasury reserves the right to verify each candidate’s experience and education.

ii. Termination or Suspension.

Once retained, a Respondent’s service may be terminated or suspended from the Treasury’s contract for poor performance, failure to perform, fraud, or other cause at any time without prior notice. Respondents may be terminated from the contract without cause with thirty (30) day prior to written notice.

iii. Permits and Compliance.

The Respondent shall procure and pay for all permits, licenses, and approvals necessary to perform the services solicited in this RFR. The Respondent shall comply with all applicable laws, ordinances, rules, orders, and regulations related to the performance of the services solicited. The Treasury may, at its option, request documentation evidence the Respondent’s compliance.

iv. Fees Subject to the Office of the State…