AG-31ME-S-12-0016 Questions Answered 9-7-12.pdf

1. How are the end-to-end services outlined in the RFP provided today? Who is the existing contractor?

SunTrust Bank is the current contractor providing all the services outlined in the RFP under the current outstanding contract.

2. Please clarify who will be required to obtain security clearances. (Section H14)

Since there could be exposure to Privacy Act data through the ACH detail records and the check clearing records, the individual security clearances for contractor employees would be a requirement for, but not limited to, these services as appropriate. In addition, basic security clearance requirements as outlined in Section H14 are necessary to protect the security of government funds.

3. Please specify what elements of data are subject to the Privacy Act. (Section H14)

Since there could be exposure to Privacy Act data through the ACH detail records and the check clearing records, the individual security clearances for contractor employees would be a requirement for, but not limited to, these services as appropriate. In addition, basic security clearance requirements as outlined in Section H14 are necessary to protect the security of government funds.

4. In section C6 (pg 17), the accounts must be established and operational by October 10th or no more than two weeks after contract award (whichever is later), but in Performance Requirements Summary (pg 67), the accounts must be established by October 2nd or no more than two weeks after contract award (whichever is later) - please clarify which date is correct.

USDA – RD projects a Contract award in October 2012. The contractor would be required to have all bank accounts established and operational within two weeks after Contract award date.

5. What are your collateral requirements for balances in your accounts? December 31st, unlimited FDIC insurance expires on Non Interest Bearing accounts. What are your requirements prior to 12/31/12 and after that date?

The USDA – RD – CSC Escrow Concentration, USDA – RD – CSC Borrowers Escrow Funds and the USDA – RD – CSC Net Income Custody Accounts should be the only bank accounts with overnight balances where funds should be invested in either a Money Market Mutual Fund invested in 100% Treasury Securities, individual Treasury Bills or a pre-approved contractor NOW Account that is collateralized at 102% of the amount invested.

6. There are a number of accounts that could sweep into Treasury money market accounts. These have cutoff times. Do you have feedback as to the expected timing of the flows into these accounts?

Inflows and outflows into USDA – RD bank accounts could occur anytime during the business day.

7. What is the expected uninvested average daily balance remaining in each of the required accounts?

The USDA – RD – CSC EFT Account has an average daily balance un-invested of $200,000.00. The remaining USDA – RD bank accounts should be fully invested and/or there is only a nominal (under $1,000.00) un-invested balance.

8. Will taxes and insurance disbursements vary by jurisdiction?

Yes.

9. We have deep experience with investing in Money Market Accounts for our clients. Additionally are experienced with purchasing Treasuries on behalf of our clients. We do not, however, act in an investment advisory role. Rather, we act as an agent for our clients and act based on their direction.

We do try to act in a consultative role in that we can share our deep experience with our clients, but we do not provide explicit investment advice. As USDA's investment strategy is focused on 100% Treasury assets, we believe this approach may meet your needs. Please advise if USDA is comfortable receiving a proposal from a potential contractor that will not include an investment advisory role.

All services detailed in the solicitation are to be performed by the prospective contractor. This is inclusive of Section C5, C6.12, C6.13, C6.14 and any other investment management services detailed in the RFP.

10. What is the term of investment in each account? Is daily liquidity important?

The USDA – RD – CSC Escrow Concentration Account balance is invested overnight in a Money Market Mutual Fund invested in 100% Treasury Securities or a pre-approved contractor Now Account. Liquidity is important since nightly sweeps from other USDA – RD bank accounts occur daily. The USDA – RD – CSC Borrowers Escrow Funds and the USDA – RD – CSC Net Income Custody Accounts may be invested in either a Money Market Mutual Fund invested in 100% Treasury Securities or individual Treasury Bills with maturities less than one year.

11. We have the ability to buy US Treasuries and Money Market accounts but would you be open to limiting purchases to Money Market accounts?

Investment decisions made by USDA – RD are based upon USDA – RD – CSC Investment Policy Board guidelines, U.S. economic market conditions, current and projected Treasury yields, cash flow requirements, etc. USDA – RD is not opposed to a 100% allocation in Money Market Mutual Fund considering the circumstances.

12. In regards to archiving requirements, how long is historical data envisioned to be stored in the banking system?

Contractor shall supply USDA – RD hard copy bank statement activity (C6.15) and images (front and back) of checks that have cleared at month-end on compact disk (C6.3).

Therefore, a rolling forty five day history of bank account activity on-line is sufficient.

13. Please confirm entitlements for USDA - RD in regards to the banking system - view, reporting, and/or transactional processing?

Contractor shall provide all banking services detailed in Sections B, C and F4 as stated in the RFP in regards to on-line and/or hard copy viewing, reporting, transactional reporting and full ARP reconciliation.

14. Please confirm that it is the COR that will provide final direction to the Contractor on Investments?

The COR or designee shall have the authority to approve final investment decisions which follow USDA – RD – CSC Investment Policy Board guidelines (C6.14).

15. Notwithstanding the comments in the solicitation: “[account] must be must be established and operational by October 10, 2012, 8:00AM (CST) or no more than two weeks after contract award (whichever is later),” would the Department consider extending the date by which the accounts must be operational?

No, the contractor would be required to have all bank accounts established and operational within two weeks after Contract award date.

16. Is it possible to receive a sample of file layouts (ex. ACH processing file)?

See attached NACHA File Specifications supplied by current contractor (SunTrust Bank).

17. Will USDA or the Contractor follow up on outstanding checks and what is the escheatment?

USDA – RD checks are stale-dated after 180 days. USDA – RD routinely researches checks that are over 180 days and processes voids or stop payments on the checks.

18. Can Contractor bid on component parts of this RFP?

No, all services detailed in the solicitation are to be performed by prospective contractors.

19. Please define the five accounts listed in CLIN 001.

USDA – RD – CSC Escrow Concentration Account, USDA – RD – CSC Escrow Disbursement Account, USDA – RD – CSC Escrow Voucher Account, USDA – RD – CSC Emergency Disbursement Account and USDA – RD – CSC EFT Account. The other two accounts (i.e., USDA – RD – CSC Borrowers Escrow Funds Custody Account and USDA – RD – CSC Net Income Custody Account) are “custody” accounts.

20. Could an example of the ARP be provided along with additional detail of reconciliation requirements?

The Full Account Reconciliation Plan (ARP) must include:

• Monthly Account Statement activity transactional reporting for each day during the month for each bank account.

• Monthly check activity reporting for each Disbursement Account broken out into three reports:

Paid Only, Unpaid Only and Consolidated and to reflect each checks: check number, check dollar amount, date issued and if applicable the date paid, sequence number, explanation codes (i.e., void, stop payment, etc.).

• Outstanding Settlement Report that reflects totals for the month for Previous Outstanding Balance, New Issues, Stop Payments, Cancellations, Paid Checks and New Outstanding Balance.

21. Will there be a backstop for contractor fees in the event there are not enough monies in the requisite account?

The USDA – RD – CSC Net Income Account currently holds over $19 Million of U.S government funds. Typically, monthly income earned from investments have more than offset monthly contractor fees.

22. Will there be any tax implications related to duties performed by Contractor?

No.

23. Please further define the Investment Advisory Role.

The contractor will provide professional investment advice to ensure maximum return on investments while preserving principal (C5, C6.12, C6.14) within the framework outlined in the USDA – RD – CSC Investment Policy Board Investment Policy Guidelines. The contractor investment advisors will meet with USDA – RD every 3 to 4 month to discuss U.S. economic market conditions, Federal Reserve Board decisions and future projected Treasury yields and recommend investment Treasury Security maturity action plans (C6.13). USDA – RD will contact the contractor investment representative the day of a Treasury Security maturity and discuss new Treasury Security yields by maturity and a security will be purchased for the portfolio.

24. How many approved closing agents there are and what are the average monthly volumes per closing agent? Are the 800 ACH transactions per month spread out over hundreds of closing agents or consolidated into just a few?

USDA – RD has hundreds of approved closing agents through-out the U.S. to support future new loan originations that are processed in all 50 states, U.S. Territories (i.e., Puerto Rico, U.S. Virgin Islands, Guam and Western Pacific Rim islands).

25. Who is the incumbent contractor for this work?

SunTrust Bank

26. When will answers to these questions be released?

Answers will be released the week of September 10, 2012.

27. Why is the new contractor’s implementation period restricted to two weeks? Is expansion of this period possible?

No, the contractor would be required to have all bank accounts established and operational within two weeks after Contract award date. The meeting of USDA – RD mission goals require that there be no lapse in servicing of banking and investment/asset management services.

28. Will you accept pointers for web access of our Annual Report and other financial report requirements?

Complete Annual Report and financial report requirements are necessary for USDA – RD review.

29. Do you intend to use FTP for file delivery, or dedicated line?

No, outbound ACH transmission process is a main frame process not software based.

30. Would you be able to provide sample file layout for check issue detail and ACH transaction detail?

See attached NACHA File Specifications supplied by current contractor (SunTrust Bank).

31. Are you under any mandate to convert check disbursements to ACH transactions that will diminish the number of checks issued? Are other processes underway that might decrease the number of checks?

USDA – RD has been tasked by the U.S. Treasury with reducing the number of checks disbursed in lieu of EFT’s (preferably ACH transmissions). USDA – RD utilizes EDI processing (i.e., ACH of premium payments and automated data file premium policy payment information transmissions) to pre-approved insurance vendors (i.e., Allstate, American Family, Farmers, Nationwide, State Farm and Travelers Indemnity).

32. What file format is used to originate ACH transaction – NACHA, EDI or proprietary?

See attached NACHA File Specifications supplied by current contractor (SunTrust Bank).

33. What is the largest total of ACH files released on any two consecutive days over the past year?

151 ACH transmission processed on July 24 (56) and July 25, 2012 (95).

34. Do your ACH payment transactions contain remittance information beyond addenda records?

No, addenda records only.

35. Item 0025 – ACH On Line Software Originated – are these debits or credits?

Credits.

36. How many USDA staff will be accessing our electronic banking platform each day for balance reporting, check details and other utility actions?

USDA – RD will require access to contractors on-line systems for up to six employees. But, no more than three USDA – RD employees should access the system in a given day.

37. Are you willing to access the month-end account statement online to meet 12 day deadline?

Hardcopy delivery accompanies the recon, which could be temporarily held up by out of balance conditions.

USDA – RD has required internal accounting deadlines monthly. In order to meet these deadlines the month end reporting source documents must be received by contractor by the 12th. In addition, since the reconciliation includes the manual review of checks and ACH transmissions processed from the prior month a hard copy report is mandatory.

38. Section C, 6.7 (page 18). Please offer more definition regarding the ‘guarantee’ for funds disbursed to closing agents on all new loans.

Contractor shall provide a guarantee, in excess of FDIC insurance coverage, for funds disbursed to closing agents on all new loans originated by USDA – RD. The conditional guarantee pertains to loss of U.S. Government funds if such loss is due to failure of the financial institution with which the closing agent has deposited the loan funds. The contractor shall list payment premiums (of the additional coverage indicated above) with the other monthly banking fees (if applicable).

39. Can you confirm that the escrows under this contract will relate solely to owner-occupied, single family residences (no multi-family units)?

The loans originated by USDA – RD and escrow funds received by borrowers, covered under this contract, are owner-occupied, single family loans.

40. Can you confirm that the client is the USDA, and that such escrow accounts are to be held in the name of the USDA?

This is an USDA – RD contract and below are the names of the bank accounts to be administered in the contract. USDA – RD – CSC Escrow Concentration Account, USDA – RD – CSC Escrow Disbursement Account, USDA – RD – CSC Escrow Voucher Account, USDA – RD – CSC Emergency Disbursement Account and USDA – RD – CSC EFT Account. USDA – RD – CSC Borrowers Escrow Funds Custody Account and USDA – RD – CSC Net Income Custody Account.

41. The Solicitation cites the Federal Government Complex in Saint Louis, MO as the “Place of Performance”. Is it anticipated that the Contractor will need to have personnel on-site at this location to perform the daily work required under the SOW?

The contractor chosen for this contract will not be expected to have personnel on-site at the government complex to administer this contract.

42. Please explain the Description ARP Auto D/T To Bank/Transaction (CLIN 0012 – page 4)

This is the daily charge from the contractor for receiving ACH file information from USDA – RD via a transmission platform not requiring manual intervention by contractor.

43. Please explain the Description ARP Auto D/T To Bank/Recorded (CLIN 0013 – page 4)

This is the per item charge from the contractor for receiving ACH file information from USDA – RD via a transmission platform not requiring manual intervention by contractor.

44. Is the USDA utilizing online software to upload ACH files in addition to a direct transmission to an FTP (File Transfer Protocol) or FTM (File Transfer Manager) service?

No, outbound ACH transmission process is a main frame process not software based.

45. What levels of fraud services or products are in place for the 5 accounts?

This is the monthly maintenance fee per account for the 5 accounts with ACH Fraud Control (i.e., full ACH blocks or authorization filters).

46. Is there a notification of incoming wires? If so, how is the USDA informed?

The USDA – RD bank accounts are reviewed and reconciled daily by the COR. Therefore, wire transfer receipts are viewed at that time. No additional notification from contractor is required.

47. Can we submit our own pricing estimate based on how we charge for items or must we utilize the spreadsheet that was provided with volumes?

The Supplies or Services and Price/Costs schedule included in Section B is the approved pricing structure for this contract.

48. Can you provide the average daily incoming ACH total files amount for the Escrow Voucher Account?

There were 282 ACH transactions totaling $3,207,999.91 received into the USDA – RD – CSC Escrow Voucher Account in the month of August 2012.

49. Can you provide the average daily outgoing ACH total files amount for the EFT Account?

The average daily outgoing ACH total file amount for the month of August 2012 for the USDA – RD – CSC EFT Account was $3,202,589.85 ($73,659,566.54/23).

50. We note that all responsible sources may submit a proposal, yet many of the questions seemed geared toward the Company making the proposal, actually being a bank? Our Company is going to proceed with the proposal, as if there was not a need to actually be a bank, and being a Title Company, utilizing a Bank which will handle escrow disbursements for Our Company as a Title Company will suffice. As is also typical for Title Companies, this same 3rd party bank, such as either US Bank or BOA will be the party to suggest Overnight investment strategies for account balances?

USDA – RD is not limiting proposals from the banking industry exclusively. But, USDA – RD does require that all services detailed in the RFP be supplied.

51. We see no requirements to determine calculations on disbursement amounts, this we assume means our proposed duties as disbursement agents do not include any research based work which affect amounts disbursed, such as calculations related to adjustments to property taxes?

USDA – RD will disburse checks “in-house” to payees (i.e., taxing authorities, insurance vendors, borrowers, etc.) it is not the contractors duty to disburse checks in this contract.