35613 REQ-DASOBO-00076440(688-14)-AMD1_EVR2.0_ODOT_Approved.pdf

SP No. REQ-DASOBO-00076440 (688-14) AMD1-ODOT-EVR2.0 Page 1 of 7

REQUEST FOR SPECIAL PROCUREMENT No. REQ-DASOBO-00076440 (Formerly SP-688-14), Amendment No. 1

PART A. Requesting Agency must complete Items 1 through 13.

1. Requesting Agency Name: Oregon Department of Transportation (ODOT), on behalf of its Driver and Motor Vehicle Services Division (DMV)

2. Date of Request: July 29, 2024 3. Agency Number: 73000

4. Agency Contact Name: Stephanie Lemhouse 5. Phone: 503-779-9156

6. Type of Request: ___ Class Special Procurement X Contract-specific Special Procurement

7. Amendment Time Period Requested: From: August 1, 2024 To: May 31, 2039

8. Total Estimated Cost for Amendment Time Period: $0

9. Title: Supplies and/or Services to be acquired: DMV Electronic Vehicle Registration (EVR) Services – Expanded

10. Amendment Request, Background, Current Need, and Proposed Contracting Procedure:

a. Amendment Request:

ODOT, on behalf of DMV Division, requests approval of this Special Procurement No. REQ-DASOBO- 00076440 (previously SP-688-14), Amendment No. 1 (SP-AMD-1) to:

1. Conduct an alternate procurement process, as generally set out in Section 10.d. below, which will establish an application process for Contractors to be considered for program participation at periodic intervals (e.g. annually or semi-annually) through the end of the Special Procurement period, depending on program needs and availability of DMV resources.

2. Award and negotiate contracts with EVR Program applicants (Contractors) that meet the qualifications and requirements set forth in the solicitation documents. The number of Contractors selected during each award cycle will be determined by DMV’s business needs and technical resource capacity to onboard and manage additional Contractors.

3. Extend the term of the Special Procurement 15 additional years.

b. Background:

DMV’s current EVR program authorizes a third-party Contractor to provide specified vehicle title and registration services to Oregon certified dealers on behalf of the agency. This service allows DMV to shift a significant workload to a third party, which creates efficiencies and provides quality service to its customers. Eligible business customers pay the third-party Contractors directly and no payments are made from the agency to the third-party Contractor.

DMV struggles to improve production service levels with current staffing and service channels. Dealers and other high volume business customers overwhelm Field Offices and contribute to a vehicle

SP No. REQ-DASOBO-00076440 (688-14) AMD1-ODOT-EVR2.0 Page 2 of 7 processing backlog at DMV Headquarters, negatively impacting individual customer service and timely transaction turnaround times. The EVR program provides an efficient third-party service channel that caters specifically to these business customers, significantly reducing DMV’s workload. EVR is a voluntary program currently limited to Oregon certified dealers and provides services to approximately 370 of the more than 2,200 dealers (almost 17%). Expanding the capacity of the program will better leverage this service channel for improved customer service and a more efficient use of DMV resources.

Under the current program, EVR processes an average of 23,500 title transactions each month.

Although DMV cannot regulate fees for third-party providers per Oregon Revised Statutes (ORS) 802.600, dealers who use EVR services and charge document preparation fees must pay the EVR Contractor $35 per transaction (ORS 822.043). Using these figures, a conservative estimate of the current contract value is roughly $10 million a year.

In 2014, DMV received approval of Special Procurement No. 688-14 for its original EVR program. This Special Procurement prescribed a Request for Applications (RFA) process where third party Contractors could submit an RFA, which was scored with a pass/fail review. Those Contractors that met the minimum qualifications moved to a scored evaluation process. Evaluation scores were to be totaled and ranked, and up to five awards were to be issued.

In 2014, the DMV then issued Request for Proposal (RFP) No. 730-25995-14 on the Oregon Procurement Information Network (ORPIN). Through this process, there was only one Contractor successful that was issued an award. Contract No. B33487 was issued to VITU. The contract and program have been, and continue to be, successful.

For additional historical and background information see SP_Attachment-1, Original SP-688-14

c. Current Need:

In 2022, the EVR program processed approximately 25% of DMV’s title transactions and 10% of the registration transactions. DMV’s goal is to increase the volume of third-party EVR transactions by increasing the eligible customers using the service as well as the services available under the program.

As authorized under ORS 802.600, DMV outsources specified vehicle services to a third-party Contractor who uses their own software/system to interface with clients and process transactions. The Contractor’s system has a limited interface to DMV’s system, which finalizes and records the transactions. The Contractor charges high-volume business customers for their services.

ODOT is pursuing changes to the existing EVR program to:

1) expand the type of vehicle services a Contractor can provide through the EVR program.

2) expand access to EVR services to a broader customer base, which will include out-of-state dealers and financial institutions (vehicle security interest holders).

3) provide the opportunity to add Contractors to the EVR program that specialize in a subset of the services within the program.

The current EVR program requires the Contractor to provide all services authorized under the contract.

This limits the number of Contractors eligible to participate in the program. It also limits DMV’s

SP No. REQ-DASOBO-00076440 (688-14) AMD1-ODOT-EVR2.0 Page 3 of 7 opportunity to leverage niche services for high volume transactions (e.g. title only services). The current EVR program as a service channel is also limited to Oregon certified dealers. Expanding eligibility to additional high-volume businesses (out-of-state dealers and financial institutions) will create a new service channel for these customers that will ease DMV’s workload in field offices and reduce the volume of mailed-in transactions.

The EVR program expansion also enables a fully electronic title and registration application process, which was mandated in HB 3080 (2023) by January 1, 2027.

DMV now seeks to expand EVR services to out-of-state dealers, financial institutions (vehicle security interest holders), and high-volume business customers. With a new procurement, DMV will also expand the vehicle related services a third-party Contractor can provide and consider Contractors who offer only a select portion of the authorized services, thus allowing for more competition among Contractors that can provide all or some of the requested services.

DMV also seeks a procurement method that will allow program expansion to meet changing business needs and capacity to onboard additional Contractors through the life of the Special Procurement.

Expanding the EVR program to a larger customer base, increasing the services available through the program, and creating a procurement process that supports expansion and includes Contractors who may specialize in a subset of the authorized services will ensure more competitive options for DMV’s customers and reduce DMV’s risk of relying on a single Contractor for this significant volume of work.

The incumbent is eligible to propose under the new solicitation and, if selected for award, will negotiate a new contract with DMV in accordance with the new process approved in this Special Procurement. For business continuity purposes, DMV may continue using the incumbent services under its existing contract until alternative services are available under the new procurement.

Termination of the incumbent’s services will not be disruptive to DMV’s business processes or to the incumbent.

ODOT/ DMV will not pay Contractors for these services. The agency’s cost is limited to existing internal resources to onboard the contractors and manage the contract. Contractor services are paid to them by their customers. Under the current contract the EVR Contractor processes roughly 300,000 transactions a year. Although ODOT cannot control what they charge for their services, their per transaction fee is around $35, making the value of the current contract over $10,500,000 per year. The expanded program is expected to exceed this value while making it more competitive with multiple Contractor providing differing levels of service.

Aside from market-driven fees, other variables that will impact the value of the contracts awarded include the expansion of the eligible customer base to more high-volume businesses involved in the sale and titling of vehicles, as well as an increased number of services available through EVR. The additional advantage of a fully electronic title and registration application process that won’t be available through any other service channel is expected to also drive more high-volume businesses to the program.

d. Proposed Contracting Procedure:

SP No. REQ-DASOBO-00076440 (688-14) AMD1-ODOT-EVR2.0 Page 4 of 7

Step 1 - Special Procurement Amendment

1. As required by Oregon Administrative Rules (OAR) 125-247-0287, and under Delegation

Amendment No. REQ-DASOBO-00076429 (previously DEL-815-14), AMD-1, ODOT will issue a public notice (Notice) of the approved SP-AMD-1 on OregonBuys for a period of seven (7) calendar days.

2. The Notice will include provisions that any affected party may protest the approval of this SP-

AMD-1.

3. The Department of Administrative Services, Procurement Services (DAS PS), along with ODOT, will respond to and resolve all protest(s) of the SP-AMD-1, if any.

4. If no protests are received and sustained, ODOT will proceed with issuing a Request for Application (RFA) as described in Section 10.b.

5. ODOT will work with Enterprise Information Services (EIS) and obtain its endorsement prior to executing all contracts, as required.

6. Pursuant to OAR 137-045-0015, ODOT will work with the Department of Justice (DOJ) and obtain legal sufficiency approval prior to executing all contracts, as required.

Step 2 - Request for Application (RFA)

1. ODOT will issue a multiple award opportunity RFA, which will be posted on OregonBuys.

2. Proposers will submit their applications demonstrating how they meet certain “Minimum

Qualifications” set forth in the RFA.

3. ODOT will conduct a pass/fail review. Those Proposers who meet the Minimum Qualifications will move to a scored evaluation process.

4. Evaluation scores will be totaled, and Proposers will be ranked accordingly from highest to lowest.

5. ODOT will issue a Notice of Award establishing a list of all awardees in the ranking order of highest to lowest. ODOT estimates awarding up to five (5) contracts with the highest ranked applicants, or a lower number of contracts as a natural break in scoring may occur.

6. ODOT will execute a Contract with each Contractor that successfully completes negotiations beginning with the highest ranked applicant (Contractor 1) and proceeding with the next highest ranked applicant through the ranked order.

7. ODOT will issue a Notice to Proceed for Phase 1 – “Planning, Design, Coding, and Testing” (the “Work”) with the highest ranked Contractor (Contractor 1) under Contract.

8. Upon receipt of the Notice to Proceed, Contractor 1 will begin Phase 1 Work pursuant to the project schedule as negotiated with ODOT. If Contractor 1 does not substantially meet the project schedule, ODOT may suspend Phase 1 Work with Contractor 1 until a later date and initiate Phase 1 Work with Contractor 2.

9. If Phase 1 Work is successfully completed, ODOT will issue a Notice to Proceed to Contractor 1 for Phase 2 – “EVR Program Implementation”.

10. As ODOT has capacity to begin Phase 1 Work with the next highest ranked Contractor under contract, (Contractor 2) ODOT will issue a Notice to Proceed to Contractor 2. Upon receipt of the Notice to Proceed, Contractor 2 will begin Phase 1 Work pursuant to the project schedule as negotiated with ODOT. If Contractor 2 does not substantially meet the project schedule, ODOT DMV may suspend Phase 1 Work with Contractor 2 until a later date and initiate work with Contractor 3.

SP No. REQ-DASOBO-00076440 (688-14) AMD1-ODOT-EVR2.0 Page 5 of 7

11. If Phase 1 Work is successfully completed, ODOT will issue a Notice to Proceed to Contractor 2 for Phase 2 – “EVR Program Implementation.”

12. This process will continue through the list of applicants in the ranking order from highest to lowest with Contractors who are under Contract.

13. ODOT reserves the right to re-open RFA opportunities any number of times during the life of the SP-AMD-1, as the business needs deem necessary and DMV resources are available, and to award additional contracts to additional Contractors at ODOT’s sole discretion.

11. Justification for use of Special Procurement: Describe the circumstances that justify the use of a Special Procurement. Attach relevant documentation.

This RFA process is proposed as goods and services are not being procured for compensation and it will allow for maximum competition and multiple awards. It does not fit neatly into any of the typically prescribed solicitation methods. There is a value to the Contractors as they will be paid by their customers, and ODOT/ DMV wants to ensure a competitive process.

The same facts and findings detailed in SP_Attachment-1 still apply.

12. Findings to Satisfy the Required Standards: This proposed special procurement:

___X___ (a) will be unlikely to encourage favoritism in the awarding of public contracts or to substantially diminish competition for public contracts because:

• Multiple RFA opportunities with multiple awards over the life of the Special Procurement will support the participation of emerging businesses and technologies over the life of the program.

• The ability to apply to the program for a subset of the authorized services ensures Contractors who provide more specialized services are not excluded from the program participation.

• The RFA methodology will not diminish competition, rather it will be encouraged, by the proposed advertising methods and the ability to reopen the RFA multiple times, as needed.

and

______ (b)(i) will result in substantial cost savings to the contracting agency or to the public because:

or

_X__ (b)(ii) will otherwise substantially promote the public interest in a manner that could not practicably be realized by complying with the requirements of ORS 279B.055, 279B.060, 279B.065, or 279B.070, or any rules adopted thereunder because:

• The program funding model and the cyclical addition of Contractors supports competitive pricing for Contractor services to its customers.

• This is an enduring program and growing service business for the private sector. The ability to add Contractors to meet business needs by using this alternate method of procurement and reopening the RFA as needed will reduce the workload on the contracting agency.

SP No. REQ-DASOBO-00076440 (688-14) AMD1-ODOT-EVR2.0 Page 6 of 7

• While there is no cost to the state for this contracted work, there will be a cost savings to ODOT DMV recognized in the saving of FTE as customers will not need to come into a DMV field office to process titles and registrations or obtain inventory, thus freeing up DMV employees to work on higher priority and more technical work.

The RFA methodology will promote competition as ODOT advertises for new Contractors and awards contracts periodically.

ODOT/DMV has significant budget challenges and would require additional resources (FTE) to support the volume of work provided by these third-party Contractors. This no-cost solution for DMV offers an effective program to businesses willing to pay for these services while shifting the workload from overburdened state resources. This allows DMV to better serve and meet the needs of individual customers. The ability to add Contractors within a short timeline will maintain operational capability and provide incentive to Contractors in the program to maintain a high level of performance and service. Lengthy contracting delays to replace a failing Contractor would have a significant operational impact that would negatively impact DMV customers.

The SP-AMD-1 will enable a more competitive EVR marketplace with expanded and specialized services that can be expanded over time to meet business needs as DMV resources allow. This will provide more options for our eligible business customers and allow DMV to become more efficient over time and enable continuous customer service improvements. Smaller businesses that can only provide a subset of the EVR services will have an opportunity to compete within their niche service area.

The same facts and findings detailed in SP_Attachment-1 still apply.

13. Signature: The actual signature of the Agency Head or designee (e.g., Designated Procurement Officer) is not required on the Request submitted through OregonBuys. Agency may elect to attach a signed Request as a pdf file through OregonBuys or submit a signed hard copy Request.

Signature: e.g. Electronically in OregonBuys _________________ Name/Title: Date:

SP No. REQ-DASOBO-00076440 (688-14) AMD1-ODOT-EVR2.0 Page 7 of 7

PART B. The Department of Administrative Services completes Part B.

STATUTORY AND RULE AUTHORITY:

ORS 279B.085(2) states the Director of the Department of Administrative Services may approve a special procurement if the Director finds that a written request submitted under ORS 279B.085(4) demonstrates that the use of a special procurement as described in the request, or an alternative procedure prescribed by the Director will:

(a) Be unlikely to encourage favoritism in the awarding of public contracts or to substantially diminish competition for public contracts; and (b)(A) Result in substantial cost savings to the contracting agency or to the public; or

(B) Otherwise substantially promote the public interest in a manner that could not practicably be realized by complying with requirements that are applicable under ORS 279B.055, 279B.060, 279B.065 or 279B.070 or under any rules adopted thereunder.

OAR 125-246-0170 delegates the authority of the Director of the Department of Administrative Services to approve special procurements to the State Chief Procurement Officer. OAR 125-247-0285 through 125-247- 0288 implement ORS 279B.085.

OAR 125-247-0700(2) Protests and Judicial Review of Special Procurements designates the State Chief Procurement Officer as the Contract Review Authority.

FINDINGS: The findings are accepted, adopted, and incorporated by reference herein.

CONDITIONS OF APPROVAL:

1. Notice Period. The Authorized Agency shall post the Public Notice on OregonBuys. The Special Procurement may not be used until after the completion of the seven (7) day notice period required pursuant to OAR 125-247-0287(4), and either:

a. No Written protests are received by the Contract Review Authority, State Chief Procurement Officer, from an Affected Person in response to the notice, or

b. If any protest is received during the notice period, then not until:

i. the State Chief Procurement Officer or delegate issues a written disposition of the protest in accordance with ORS 279B.400 and OAR 125-247-0700 and OAR 137-047-0700, and

ii. confirms in writing the first possible date of use of the Special Procurement.

2. ORS 279A.165 Requirements. Authorized Agency shall comply with the requirements of ORS 279A.165 and OAR 125-247-0287(12) regarding a report about this Special Procurement. Agency shall use a form and follow the instructions provided by the State Chief Procurement Officer or delegate.

3. Authorized Agency shall comply with all Enterprise Information Services (EIS) conditions and requirements prior to contract execution, if any.

APPROVED:

Jay Jackson, Procurement Policy Officer Date:

Department of Administrative Services, State Procurement Services

9/12/2024