22-RFP-006-TH Technical Questions and Answers FINAL.pdf

Request for Proposal 22-RFP-006-TH Investment Management Services Technical Questions and Answers

The Department’s responses to timely submitted questions are provided below:

Respondent Question Number*

RFP Page Number, Section

Number, Subsection Reference*

Question* Answers

What is the DEO’s expectation for the period of time DEO expects the awarded capital to be fully deployed by the Contractor?

DEO expects the selected Contractor to employ all reasonable efforts to expeditiously deploy at least 80% of the allocated capital consistent with the requirements of the SSBCI Law and SSBCI Capital Program Policy Guidelines.

Does the DEO have preference towards the amount of capital deployed in initial investments vs reserving funds for follow on investments over the full term?

DEO does not currently have a preference.

Upon a successful exit, will the capital be re-deployed and managed as an evergreen fund or disbursed and if disbursed to whom?

Upon exit, the capital remaining after carried interest will be returned to the fund to be redeployed.

How will the DEO measure success of the Contractor?

DEO expects the Contractor to perform its duties consistent with the SSBCI Law, SSBCI Capital Program Policy Guidelines, and any resulting contract.

Success on individual investments will be measured consistent with the methodology set forth in Section B of the RFP.

Does the Contractor have discretion to make the investments within the guided parameters, or will the contractor be required to present its recommendations to a government agency/third party for approval prior to making an investment?

The Contractor will perform all underwriting and due diligence, and will present each potential investment opportunity to DEO and the Florida Opportunity Fund (FOF). The opportunity will be reviewed by FOF/DEO staff for SSBCI compliance and final approval will be made by DEO.

The Contractor will provide the evaluation of potential investments to assess the management, market risks, technology risks, financial risks, and compliance with SSBCI program guidelines.

Number*

RFP Page Number, Section

Number, Subsection Reference*

Question* Answers

In what frequency does the DEO expect the Contractor to report its investment activities back to the

DEO?

Not less than quarterly and annually, and as otherwise requested by DEO to ensure compliance with DEO’s reporting requirements to the U.S.

Treasury.

Page 39, Attachment

B

The Attachment B calculation for Management Fees provides an assumption to base it off of “each of the three years” however the table below on the same page requests a total over the 5 year initial term. Can you clarify the time period and calculation?

The term for the resulting contract will be for five years. References in the Attachment B to “three years” should be “five years.”

Please refer to Addendum 2 added to this Solicitation.

Page 39, Attachment

B

Similarly, The Attachment B calculation for Management Fees during the Renewal Term provides an assumption to base it off of “each of the three years” however the table below on the same page requests a total over the 5 year Renewal term.

Can you clarify the time period and calculation?

See response to Question 7.

Page 31, Section C, Scope of

Work, Funding

Limitations subsection

(2)

Under Section C, Funding Limitations (2), it references “early stage investments” as those terms are used in the SSBCI Capital Program Policy Guidelines. We have been unable to identify the definition in any guidelines.

Can you define this or provide a link to the definitions?

https://home.treasury.gov/system/files/256/SSBCI- Capital-Program-Policy-Guidelines-November- 2021.pdf Footnote 34, states: Early-stage equity investment, including convertible debt funding, is funding intended for companies in the development phase.

This stage of financing varies from small funds for companies cultivating ideas or concepts to larger sums for companies looking to grow their products and services.

Page 31, Section C, Scope of

Work, Funding

Limitations

Similarly are there other stages of investment with different parameters than the “early stage investments”?

See response to Question 9.

Early-stage investment rounds generally would not include any initial investment after Series A funding. Follow-on investments are allowed in later stages, so long as no SSBCI capital is committed in a single investment that will exceed $20 million.

https://home.treasury.gov/system/files/256/SSBCI-Capital-Program-Policy-Guidelines-November-2021.pdf

Number*

RFP Page Number, Section

Number, Subsection Reference*

Question* Answers subsection (2)

Please refer to Addendum 2 added to this Solicitation.

Page 31, Section C, Scope of

Work, Funding

Limitations subsection

(2)

Can you clarify as to the maximum amount that can be invested in a qualifying investment?

Under Section C Scope of Work (funding Limitations (2)) - the investment may include up to $125,000 in SSBCI capital with a maximum round of $375,000. That is unclear. Further, under C.(5)(v) - the ECP may be used to target loans or investments using ECP funds with what appears to be a maximum of $2,500,000.

https://home.treasury.gov/system/files/256/SSBCI- Capital-Program-Policy-Guidelines-November- 2021.pdf

Pg 34 of Guidance states:

In the “Early-Stage Investor Model,” for states that use direct investment programs to provide capital directly to early-stage businesses, the state may offer early-stage co-investors a call option to purchase SSBCI shares at a price equal to a predetermined multiple (greater than or equal to 1) of the SSBCI capital that is used for qualifying investments based on a negotiated trigger event.

For both models, “qualifying investment” means an investment with the following attributes:

1) The investment must be the first SSBCI investment in a company, raising early-stage capital, up to $125,000 per company (with a maximum round of $375,000);

2) The state conducts robust due diligence on the venture capital fund or early-stage investor, including (but not be limited to) ensuring that: (1) the investor has experience and a track record in early-stage investing and understands the early-stage investment process; and (2) the investor has a history of directly or indirectly providing incubator-like services.

(Footnotes Omitted) https://home.treasury.gov/system/files/256/SSBCI-Capital-Program-Policy-Guidelines-November-2021.pdf

Number*

RFP Page Number, Section

Number, Subsection Reference*

Question* Answers

Page 48, Attachment I, Evaluation

Criteria, Subsection

D(6)

Under Attachment I, Evaluation Criteria - D(6) - the question asks about track record of previous investments with a similar fund of funds investment structure. This seems to be the only place in the document that describes a fund of funds structure and seems inconsistent with the ECP venture capital strategy. Can you elaborate on this and whether fund of funds is part of the strategy?

This is not a fund of funds investment program.

This should read:

“Describe the track record of previous investments and the funding structure of those investments.”

Please refer to Addendum 2 added to this Solicitation.

Page 21, Tab 9-

Attachments Subsection

Does the Contractor have to be a Registered Investment Adviser at the time of the application or at the time of award?

At the time the Contractor submits its response to the RFP.

Can you clarify as to whom the decision makers will be for selecting the Contractor?

Please refer to Section B39.2 of the RFP.

In reference to B.34, Submittal Requirements, can all digital materials, including unredacted technical proposal, unredacted cost proposal, and redacted technical proposal, be supplied on the same USB drive, or should these materials be split up among multiple drives? If so, how should these materials be split up among multiple USB drives?

The redacted Technical Proposal can be placed on the same USB drive as the unredacted Technical Proposal and the redacted Cost Proposal can be placed on the same USB drive as the unredacted Cost Proposal. Any redactions must comply with B.16.

In section B.36.1, Tab 1, Item D., Part (6) on page 15, the RFP asks respondents to "Describe the track record of previous investments with a similar fund of funds investment structure." It doesn't seem like the proposed RFP scope includes a fund of funds structure. Rather, this language appears to mirror language from a recent Florida Opportunity

This language is included in error, and DEO will provide a technical clarification to the RFP.

Please refer to Addendum 2 added to this Solicitation.

Number*

RFP Page Number, Section

Number, Subsection Reference*

Question* Answers

Fund RFP which did include a fund of funds structure. Please confirm the intended inclusion of this question, and clarify what fund of funds structure is being referenced if inclusion is intended.

In section B.36.1, Tab 9, Item 8 on page 21, the RFP states, "Respondents to this RFP must include proof that they are registered with the E-Verify system as defined in

s. 448.095, F.S., to verify the work authorization status of all newly hired employees." The Florida E-Verify site (https://www.fdle.state.fl.us/EVERIFY) states, "Effective January 1, 2021, Florida law requires private employers to verify a person's eligibility for employment after the acceptance of an offer of employment. Employee eligibility verification must be completed using either (1) the E-Verify system administered by the Social Security Administration and the U.S.

Citizenship and Immigration Services (USCIS) or (2) by requiring the person to provide the same documentation required by the USCIS on its Employment Eligibility Verification form (Form I-9)." Florida Statute section 448.095, F.S., extends the “public employer” E- Verify requirements to contractors and subcontractors of the state. If a proposer for the RFP is not presently a contractor or subcontractor to the State, does the section B.36.1 “proof of E-Verify system” still apply, or can a private employer (not a state vendor yet) supply proof that it is completing employee eligibility verification by requiring persons to be

Respondents to this RFP must include proof that they are registered with the E-Verify system.

To register with or login to E-Verify, use this link:

https://www.e-verify.gov/employers. Provide a printout or other proof from E-Verify showing Respondent is registered with the E-Verify system.

https://www.fdle.state.fl.us/EVERIFY https://www.e-verify.gov/employers

Number*

RFP Page Number, Section

Number, Subsection Reference*

Question* Answers employed to provide the same documentation required by the USCIS on its Employment Eligibility Verification form (Form I-9)? Further, and/or in lieu of said certification, can a private employer certify that if selected as a state vendor, it will register with the E-Verify system?

In Attachment B on page 39, the text makes multiple references to running the requested example cost calculations over three year, but the included table on the same page indicates five years. Additionally, the proposed contract term is 5 years. Please confirm the requested term length in years for the cost proposal calculation.

See the response to Question 7.

Solicitation.

In section B.38, State Project Plan, the RFP refers to four objectives (Environmental Considerations, Certification of Drug Free Workplace Program, Products Available from the Blind of Other Handicapped, Prison Rehabilitative Industries and Diversified Enterprises). Does the Department have any clarification or context as to how these are intended to impact the investments, how they are to apply to proposals, how these objectives will apply or be weighed for venture capital? For example, how does the Department envision that venture capital would use prison labor?

The Respondent should submit a written plan addressing the State’s four (4) objectives listed, to the extent applicable, to the items/services covered by this solicitation.

Attachment

B – Cost Proposal

The bullet points reference 3-year terms, while the table and other RFP sections reference 5-year terms.

See the response to Question 7.

Number*

RFP Page Number, Section

Number, Subsection Reference*

Question* Answers

Please confirm 5-year terms. Please confirm that the values to be entered into the “Total Initial Term” and “Total Renewal Term” are the calculated total for this 5-year period vs. an annual or other amount.

Solicitation.