APS_Request for Information.docx

Section C: SOW Passport APS

Application Processing System (APS) United States Department of State Bureau of Consular Affairs Passport Services

Request For Information (RFI) This RFI is for information and planning purposes only, in accordance with FAR 15.201(e). It does not constitute a Request for Proposal (RFP), a solicitation, or a commitment by the Government to issue a solicitation or award a contract. The Government will not pay for any information or costs incurred in responding to this RFI. Responses will not be returned. Not responding to this RFI does not prevent participation in any future solicitation.

Contents

30 Questions…………………………………………………………………………………………………………………………………..

Version control for Confirmation of Requirements

1 EXECUTIVE SUMMARY

The U.S. Department of State (the Department) issues U.S. passports to citizens and nationals for international travel and secure proof of U.S. citizenship. To support this mission, the Bureau of Consular Affairs (CA) requires secure fee collection and initial passport application intake and processing services.

Under this contract, the Application Processing System (APS) contractor shall operate lockbox-style front-end services to support the processing of millions of paper-based passport applications annually. The contractor shall, within 24 hours of receipt at an APS facility or signature for direct deliveries:

· Receive and sort mailed applications and related correspondence;

· Open and prepare mail, extract and organize contents;

· Scan applications and associated documents;

· Capture, validate, and correct data;

· Process fees (see Section 17 for Fee Processing Requirements);

· Batch applications and associated materials;

· Transmit electronic data, images, and physical files to the Department; and

· Dispatch physical application packages and supporting documents, and securely store/destroy or return documents as authorized.

The contractor shall be prepared to process application volumes as provided by the Department of State. The contractor shall price services based on application volumes as specified in Section 8 and shall operate seven days a week (potentially excluding federal holidays) with the flexibility to scale rapidly across the full volume range.

APS services must remain flexible and scalable; the contractor shall rapidly adapt to changes in technology, application processes, and workload demands. The contractor shall comply with applicable laws, regulations, Department policies, and program requirements.

Background Passport Services (PPT), a directorate within CA, manages this contract and oversees APS program operations, including performance, quality, and policy adherence.

The Resource Management Unit (EX/RMU) and the Department’s Office of the Comptroller and Global Financial Services (CGFS) manage consular fee collection policy, revenue accounting, and reconciliation. The APS contractor performs operational fee collection, deposit, and reporting functions in accordance with EX/RMU and CGFS policy. APS operations and systems must accommodate evolving data exchanges and anticipated reductions in paper volume over time.

APS Processing Services (Summary) The contractor verifies fees and batches applications by origin and service level, processes and deposits fees into designated Treasury accounts, and captures and transmits application images and data to Passport Services. These services must include structured quality assurance; management of intercepts, unprocessable cases, damaged or misdirected mail, and other special handling; routine physical transmission of forms Monday–Friday with Saturday deliveries as required; and security measures for all transport and handling.

APS front-end services include:

· 24/7 operations to receive, sort, and classify mail by service level (Routine/Expedite) and assigned (destination) agency/center;

· Processing and dispatching applications within 24 hours of receipt;

· Verifying, reconciling, and reporting USPS delivery manifests;

· Verifying fees and batching applications by origin and service level;

· Processing and depositing fees into designated Treasury accounts;

· Capturing and transmitting images and data to Passport Services;

· Structured quality assurance;

· Managing intercepts, unprocessables, damaged/misdirected mail, and other special handling (see section 11 for definitions);

· Delivering physical forms Monday–Friday (with Saturday deliveries as required); and

· Implementing enhanced security measures for all transportation and handling of applications, supporting documents, and personally identifiable information (PII).

Anticipated Contract Type This requirement will be awarded as a Firm-Fixed-Price (FFP) contract.

Under the FFP structure, the contractor performs all required APS services at a fixed price and assumes responsibility for all costs associated with receipt, sorting, scanning, data entry, batching, fee collection and deposit, dispatch, and reporting. The Government benefits from price certainty and simplified contract administration.

If the contractor encounters circumstances requiring equipment, resources, or services not reasonably contemplated at award, the contractor may submit a Request for Equitable Adjustment (REA) in accordance with contract terms. The Government, at its sole discretion, may approve or deny any REA and authorize additional compensation only via formal contract modification when justified by evidence of a constructive change or out-of-scope requirement. The Government will not approve additional payments for work clearly within the agreed scope.

Both parties will operate in accordance with clearly defined requirements and scope, consistent with the objectives of FFP contracting and successful passport application processing.

Scope of Work and Performance Expectations The contractor shall provide all personnel, management, equipment, facilities, systems, materials, transportation, and other resources to deliver APS services in support of the Department’s passport operations.

At a minimum, the contractor shall:

1. Receive passport applications and associated documents at designated facilities, including mail from USPS and authorized private couriers;

2. Sort and organize applications and materials in accordance with Government-specified procedures, including by form type and precedence;

3. Accurately capture and validate application data in Government-approved systems, including data from 2D barcodes and handwritten entries;

4. Collect, reconcile, and deposit consular fees in accordance with Department of the Treasury and Department of State policies;

5. Batch and dispatch application packages and supporting documents to designated passport agencies and centers;

6. Transmit all required electronic data and images to the Department by the required daily deadline; and

7. Securely store, and when authorized, destroy sensitive documents and media.

Unless otherwise specified, the contractor completes all processing steps (from receipt at the APS facility or signature for direct delivery to dispatch/transmission) within 24 hours.

Non-inherently Governmental Functions The contractor performs non-inherently governmental functions that include, but are not limited to:

· Courier services (between USPS, APS, and passport agencies/centers);

· Mail receipt and reconciliation;

· Application opening, preparation, scanning, and batching;

· Fee collection, deposit, and reconciliation;

· Data entry and verification;

· Application and file transmission; and

· Secure destruction of envelopes and specific documents in accordance with Department standards.

Essential Functional Categories APS scope includes five essential functional categories:

1. APS Processing / Professional Services

· Receive passport applications and supporting documents via USPS, private carriers, and/or other means;

· Retrieve and reconcile work from dedicated P.O. boxes assigned to this program;

· Open, classify, organize, batch, and prepare applications for scanning and dispatch;

· Capture and validate data and images, including resolving barcode/handwriting discrepancies;

· Deliver applications and supporting documents to passport agencies and centers; and

· Manage issue escalation, special handling, and workload transfers.

2. Fee Processing (See Section 17 for consolidated fee-processing and cash-handling requirements.)

The contractor shall operate an end-to-end fee-processing solution that:

· Collects fees in U.S. dollars via checks, money orders, and authorized electronic payments;

· Deposits funds the same day into designated U.S. Treasury accounts;

· Maintains a one-to-one audit trail tying each fee to an application (including fee splits);

· Supports detailed reconciliation and reporting at the individual application level.

3. Quality Control The contractor shall implement robust quality control capabilities, including:

· Validation and accuracy checks;

· Data masking to protect sensitive information;

· Data analytics to identify trends and potential vulnerabilities;

· Error and intercept management; and

· Reporting on quality metrics to monitor performance and drive continuous improvement.

4. Technology The contractor shall use modern technology to support secure, scalable, and efficient operations, including:

· Systems and secure portals with robust cybersecurity and privacy controls;

· Digital storage meeting Department standards;

· Barcode scanning capabilities; and

· Secure, redundant transmission of data to Department systems to maintain continuity, integrity, and protection of information.

5. Physical Security The contractor shall ensure robust physical security across all operations, including:

· Secure facilities with appropriate access controls and surveillance;

· Effective management of personnel and visitors; and

· Stringent protection of paper records, digital files and records, payment instruments, and other sensitive materials from loss, theft, or unauthorized access.

High-Level APS Objectives The Department considers the following objectives essential for successful performance:

1. Discreet Operations The system must support discreet operations at all times, including maintaining APS facilities that are unmarked as to their purpose, using unmarked courier transportation, and tightly controlling information about facility locations and APS functions such that such details are shared only on a strict need-to-know basis and are never publicly disclosed.

· No Marketing or Publicity

· The contractor shall not market, advertise, or publicize any work related to this contract.

2. Government Ownership of Services and Information All services, data, documentation, and work products generated under this contract are the property of the U.S. Government and shall not be treated as proprietary to the contractor. The contractor’s systems and processes must align with Government practices and fully support established passport processing workflows, ensuring that operations, information, and outcomes remain under clear Government ownership and control.

· First Point of Contact for Applications The contractor serves as the primary operational intake point for travel document (passport) applications and associated fees received by mail or authorized courier. This first point of contact function applies to applications submitted directly by applicants as well as those transmitted through Department-approved Acceptance Facilities.

· Electronic Data Capture and Fee Deposit The contractor shall operate and maintain a system that electronically captures application data and payment information, and deposits fees in accordance with the service requested. The contractor must accurately process all consular fees and related funds and ensure same-day deposit into U.S. Treasury systems and designated accounts for all payments received.

Fee-to-Service Matching The contractor ensures that each passport application is correctly matched to its corresponding fee payment (one-to-one fee-to-service association, including fee splits where a single payment covers multiple applications).

3. Reporting The contractor shall maintain a reliable reporting database and provide regular reports—daily, weekly, monthly, quarterly, and annually—on fees, processing and dispatch activity, intercepts, and other key metrics to designated Department offices. When discrepancies arise, the contractor works promptly with appropriate Department offices to identify and resolve the issues.

· Timely Electronic Transmission and Physical Delivery The contractor shall ensure timely and secure delivery of both electronic and physical materials to the Department. All electronic data must be transmitted on an agreed schedule and no later than 11:59 p.m. Eastern Time on the day applications are processed (or earlier, where specified), while physical application packages must be delivered to passport agencies and centers within one business day of processing, in accordance with CA workload instructions, and arrive as early as possible.

· Courier Accountability The contractor is fully responsible for the performance and reliability of all couriers and any subcontracted carriers and is accountable for any late or missing shipments. The Department will monitor courier performance by collecting feedback from passport sites regarding shipment timeliness and any delivery issues.

Note: The Department has determined that physical application processing for the San Juan Passport Agency and Honolulu Passport Agency is not operationally or cost-effective due to:

· High transportation costs relative to application volumes;

· Extended package travel times that do not justify the expense; and

· The availability of more efficient alternatives (direct mail from acceptance facilities and increased online passport applications).

Therefore:

· The contractor shall not be required to provide physical application delivery services to San Juan or Honolulu;

· These agencies will continue to receive direct mail from their acceptance facilities; and

· The contractor shall focus physical delivery operations on agencies and centers where APS processing provides clear operational and cost advantages.

2 PERIOD AND PLACE OF PERFORMANCE

Period of Performance The anticipated period of performance is a one-year Base Period with nine (9) one-year Option Periods, for a total potential period of ten (10) years.

Exercise of each Option Period is at Government discretion.

Place of Performance APS services shall be performed at contractor established and maintained facilities located within the continental United States. Facilities must:

· Meet all security and operational requirements in this SOW;

· Support 24/7 operations as required; and

· The Department, and this contract, considers redundant sites as one combined entity, one Firm Fixed Price contract cost.

3 FLEXIBLE AND RAPIDLY SCALABLE

Scalability for New Workstreams In addition to scaling for seasonal passport application demand, the contractor shall maintain the flexibility and capacity to rapidly scale operations for new and expanded workstreams (see Section 12 for workstream details), including:

Revocation Program:

· Anticipated growth: potentially up to 50,000 passport products annually and expand further if the program expands;

· The contractor shall demonstrate the ability to scale from baseline to 3x-5x volume within 60 days of Department notification.

Authentications:

· Baseline volume: approximately 70,000 applications annually;

· The contractor shall accommodate up to 20 percent volume fluctuations and maintain the 24-hour processing standard Vital Records

· Baseline volume is approximately 30,000 DS-5542 applications per year

· The contractor shall accommodate up to 20 percent volume fluctuations and maintain the 24-hour processing standard.

Expanded Special Issuance:

· Current volume: Approximately 90,000 Department of War (DoW) Official and No Fee Regular applications only;

· Expanded volume: estimated 195,000 across all federal government special issuance applications (five passport types);

· The contractor shall demonstrate the ability to scale processing capacity.

Electronic Payment Solicitation:

· Volume dependent on fee issue identification rates;

· The contractor shall maintain adequate customer service staffing to contact applicants and process payments without impacting agreed to processing timelines.

Future Digital Application Support:

· Implementation timeline: gradual rollout anticipated; the department will notify contractor as implementation timelines are confirmed;

· See section 28 for further details. The contractor shall provide capacity planning documentation, scalability testing results, and contingency plans for rapid volume increases as part of the transition and ongoing contract management.

4 DEMAND PROJECTIONS AND PRICING SCENARIOS

4.1 Projected Demand Volumes

The Department of State provides the following projected passport application demand volumes from the base year 2028 through Option Year 9 (2037):

4.2 Dual Scenario Pricing Requirement

Offerors provide firm fixed pricing for each option year under each Scenario (1 and 2) based on Government intake expectations through FY 2037. Beginning in FY 2030 and continuing through FY 2037, the Department will notify the contractor to proceed according to Scenario 1 (expected high applications) or Scenario 2 (expected low applications) based on demand trends as each fiscal year approaches, provided that the Department exercises the option.

4.3 Scenario Selection and Implementation

The Department will notify the contractor of the selected scenario (1 or 2) 30 days in advance of each fiscal year to allow adequate time for staffing adjustments and operational planning. The Department follows the federal budgetary fiscal year which runs from October 1 to September 30. Upon notification, the contractor's pricing for the selected scenario shall become effective for that fiscal year.

4.4 Pricing Methodology and Risk Allocation

This pricing structure follows a Firm Fixed Price methodology. Once the Government notifies the contractor of a Scenario to follow in the coming Fiscal Year, the contractor assumes all risk related to variations in application volumes within the framework of projected volumes (“high” or “low” for an upcoming year). The contractor is not entitled to price adjustments based on actual volumes falling below or exceeding forecasted amounts, except as specifically provided in Section 9 - Surge Pricing.

4.5 Monthly Billing Structure

The Department will provide the contractor with monthly forecasted volumes for Fiscal Year 2028 and 2029. The Department will provide the contractor with monthly forecasted volumes based on the selected scenario for Fiscal Year 2030 – 2037. The contractor invoices the Department every month at a firm fixed price for the selected demand scenario. Surge pricing adjustments, when applicable, are calculated and billed according to Section 9.

5 DETAILED REQUIREMENTS

APS Front-End Processing – Overview The Department requires the contractor to provide comprehensive front-end processing support, including intake, fee processing, data capture and validation, secure electronic transmission of data and images, and secure physical transfer of materials and supporting documents to passport sites nationwide. The contractor must maintain capacity to receive and process applications from domestic regions, overseas posts, Department-identified domestic and overseas Passport Application Acceptance Facilities, and facilities sending special-issuance passport applications to CA/PPT/SIA and CA/PPT/CPC. After each application is received, verified, and scanned, the contractor distributes associated electronic and physical materials as directed by Passport Services.

The contractor shall provide comprehensive front-end processing support, including:

· Application or other materials intake from designated P.O. boxes, USPS, private couriers, and other channels approved by the Department;

· Fee processing and deposit;

· Data capture and validation;

· Secure electronic transmission of data and images; and

· Secure physical transfer of materials and supporting documents to passport sites nationwide.

Once an application or other materials are received, verified, and scanned, the contractor shall distribute electronic and physical materials as directed by Passport Services.

Current High-Level APS Application Process Flow The APS process includes frontend handling of passport applications within 24 hours from secure mail intake through final delivery to passport agencies and centers. The contractor retrieves and reconciles incoming mail from USPS and other carriers, opens and prepares application packages, classifies and batches applications by form type and precedence, and isolates exceptions for prompt return when deficiencies prevent processing. The contractor shall capture, review, and validate application data (including resolving discrepancies between barcodes and handwritten entries), collect and same day deposit fees, scan applications and payments into designated consular systems, and verify applications against Acceptance Facility transmittals, reporting any discrepancies. The contractor then transmits complete electronic application packages and required reports to the Department on the established schedule and ensure overnight delivery of physical application materials in line with Passport Services’ workload instructions.

The APS process generally includes the following steps, all within a 24-hour time period:

1. Intake – Secure Mail

· Retrieve packages and mail from USPS and other carriers.

· Reconcile manifests.

· Open mail and prepare applications.

· USPS makes mail available; the contractor retrieves mail four times daily based on mutually agreed pickup times.

2. Open and Remove Contents

· Open envelopes using methods that preserve document integrity.

· Remove all contents and prepare them for classification and scanning.

3. Classify Applications

· Sort by form type (e.g., DS-11, DS-82, DS-5504), precedence (Routine or Expedited), and special workstreams (e.g., special-issuance, military fee, naturalization ceremony, courier-delivered).

4. Organize, Assign, and Batch

· Organize application sets for scanning and dispatch to the appropriate agencies/centers.

· Group applications into batches according to classification, destination, and Department instructions.

5. Isolate Nonstandard Categories

· Remove intercepts, unprocessables, damaged or misdirected parcels, and fee-issue cases from standard workflows and manage them in accordance with Section 11 and Definitions.

6. Review and Validate

· Capture data from applications using 2D barcode and/or manual entry.

· Validate and correct data as needed.

· When handwritten entries differ from 2D barcode data, the contractor shall ensure the system reflects the handwritten information.

6a. Future Role: Identify and Resolve Fee Issues Future state process to be negotiated at future date, but may include:

· When fee discrepancies are identified, determine whether immediate electronic payment solicitation is appropriate;

· Contact applicants via phone, SMS/RCS text message, or email using Department-approved templates;

· Provide secure electronic payment options and instructions;

· Process electronic payments in real-time and update application records;

· Securely store unresolved applications on-site for a Department specified timeframe;

· For unresolved fee issues, annotate applications and route through "Fee Issue" workstream per existing procedures; and

· Document all contact attempts, payment solicitations, and outcomes.

7. Collect and Deposit Fees

· Collect passport application and expedite fees.

· Verify that payment matches the requested services or is within the Department defined acceptable margin.

· Deposit fees to designated Treasury account(s) on the day of processing, consistent with Section 17.

8. Scan Applications and Payments

· Scan application forms, signatures, photos, and payment instruments into designated consular systems in accordance with Department requirements.

9. Balance and Verify

· Verify applications against Acceptance Facility transmittals.

· Note discrepancies (“missing application,” “application not on transmittal,” “wrong fee,” etc.) and report to Passport Services and destination agencies/centers.

10. Transmit Electronic Files

· Electronically transmit daily digital application packages (data, images, fees, and other required information) to the Department, identifying the receiving agency/center, by the daily deadline of 11:59 PM.

11. Prepare and Transmit Reporting

· Prepare and transmit daily, weekly, monthly, quarterly, and annual reports on application volumes, workload distribution, errors, fee deposits, intercepts, and other metrics, as specified in Section 20.

12. Deliver Physical Applications

· Dispatch physical application materials in accordance with workload instructions.

· Ensure delivery no later than the next business day, with arrival as early as possible.

13. Future Role: Process Specialized Workstreams

· Revocations: Complete data entry for revoked passports, transmit electronic records to Passport Services, and physically transfer passports to Passport Services for cancellation;

· Authentications: Complete data entry and fee processing, transmit electronic files to Passport Services, and dispatch physical materials as directed;

· Vital Records: Complete data entry and fee processing, transmit electronic files to Passport Services, and dispatch physical materials as directed;

· Expanded Special Issuance: Process all federal government special issuance applications (Official, Diplomatic, No Fee Regular, Military Dependent, Service), complete data entry, and transmit as directed; and

· Digital Support: Receive hybrid digital-physical DS-11/DS-82/DS-5504 packets, digital payment processing, scan citizenship evidence, link to digital application data, transmit complete packages, securely store materials in accordance with Department directions, and return physical documents.

6 APPLICATION TYPES AND PRECEDENCE

Application Forms The contractor shall support secure fee-collection and application processing across the following application types (and others as identified), in compliance with applicable privacy regulations:

Additional forms may be added or revised over the life of the contract; the contractor shall adapt processing accordingly.

Processing Priority (Precedence) Passport Services publishes service commitments for the public. Applicants may select:

· Routine Processing, or

· Expedited Processing for an additional fee.

The contractor shall:

· Treat “precedence type” (Routine vs. Expedite) as a key routing attribute;

· Process expedited applications first, along with Department-identified special workstreams; and

· Process routine applications after expedited work.

Key Handling Requirements For all application types, the contractor shall:

1. Capture correct data from the application and any 2D barcode.

2. Ensure character recognition is consistent, and systems can scan and interpret barcodes.

3. When handwritten information conflicts with 2D barcode data, ensure the electronic record reflects the handwritten information.

4. Make a good faith effort to data enter the applicant’s correct Place of Birth, when the provided information is ambiguous or unclear.

5. Review both the first and second page of the application, and where an apartment number is listed on page 2 but not in the mailing address on page 1, the contractor shall data enter the apartment number into the electronic file.

6. Apply Government-provided barcodes to each application for tracking and workload distribution.

7. Review applications for processing suitability within Department directed parameters (completeness, legibility, required signatures, etc.).

8. Review and record fee payments, including receipt information from online external payment instruments if applicable.

Special requirements include:

· Special-Issuance Applications: Process official/diplomatic/no-fee applications per Passport Services instructions, including DOTS and reimbursement code notation, without fee collection.

· U.S. Territories: For applications from Guam, U.S. Virgin Islands, CNMI, or other designated territories, record receipt numbers and total fees paid.

· Acceptance Facility Transmittals: Perform transmittal reconciliation, document discrepancies, and generate monthly transmittal error reports by Acceptance Facility.

7 PROFESSIONAL SERVICES AND PERSONNEL

Contractor Responsibilities

· The contractor is responsible for ensuring adequate staffing and resources to meet demand.

· The contractor must process all applications and unique workstreams within 24 hours regardless of volume.

· The contractor shall plan and price operations based on the volume of applications demand scenario the government chooses prior to the upcoming contract year, whether it is the higher or lower option.

· The contractor is responsible for determining how they will process all applications and meet the 24-hour processing requirement. The Department will not direct or provide guidance on how the contractor should process applications to meet mandatory processing time requirement.

· The contractor shall ensure there is zero tolerance for PII breaches or unauthorized disclosure.

Personnel Requirements

· All contractor personnel supporting APS must be U.S. citizens or U.S. nationals.

· All personnel must successfully complete required background investigations and maintain appropriate clearances before entering APS facilities or accessing systems.

· See Sections 24 and 25 for PII and Security Use of Government-Supplied Data

· Passport Services will provide the contractor with historical data and projected passport application demand information to assist with operational planning and resource allocation (See Section 4)

· If changes in law or administrative policy materially alter the scope or volume of required processing, the Government will provide a revised forecast as soon as practicable. The contractor shall continue 24-hour processing in accordance with contract terms. If the revised forecast reflects a material change in scope, the contractor may submit a Request for Equitable Adjustment in accordance with the Changes clause (FAR 52.243-1).

Future Role: Applicant Contact and Communication Capabilities For workstreams requiring direct applicant contact (e.g., electronic payment solicitation for fee issues), the contractor shall:

Competency Requirements:

· Employ customer service representatives trained in professional communication, PII protection, and Department policies;

· Ensure representatives can clearly explain fee issues, payment options, and next steps;

· Provide multilingual support capabilities for non-English speaking applicants as directed by the Department; and

· Maintain adequate staffing levels to respond to applicants within Department specified timeframes.

Communication Protocols:

· Use only Department-approved communication templates and scripts;

· Document all communications in auditable systems;

· Protect PII in all communications (secure email, encrypted portals, etc.);

· Provide applicants with clear reference numbers and contact information for follow-up; and

· Escalate complex cases or complaints to designated Department representatives.

Performance Standards:

· 95% of applicants contacted within Department specified timeframes; and

· 98% accuracy in matching fee or other issues with communication.

Sample of Monthly Expected Volumes Table 7.1: Historical Monthly Passport Application Volumes – The Department has provided data on monthly passport application volumes for the past three fiscal years. These figures are for informational purposes only. For future demand and scenario pricing, see section 4.

Note: Historical monthly application volumes are strictly for planning purposes only. Future application demands may differ.

8 VOLUME FORECAST AND RISK ALLOCATION

8.1 Monthly Billing Methodology

The Government will pay the contractor on a monthly basis at the agreed fixed firm price structure corresponding to the selected fiscal year demand scenario (higher or lower demand). Surge payments are authorized once the criteria are met, as explained below.

· Within-Range Payment: When actual monthly applications received falls within range, which includes the monthly forecast plus the 20% capacity buffer, the contractor shall invoice the fixed monthly price.

· Surge Payment: When the actual monthly applications received exceeds the monthly forecast plus the 20% capacity buffer, the contractor shall invoice:

· The Within-Range fixed monthly price ($__________), PLUS

· The per-application unit price multiplied by the number of applications exceeding the 20% capacity buffer (see section 9.3 for example).

8.2 Contractor Risk and Capacity Requirements

The contractor assumes full performance risk for application volume fluctuations. The contractor shall:

· Maintain sufficient staffing, equipment, and facility capacity to process any volume of incoming applications.

· Scale operations flexibly to meet expected demand

· Meet the 24-hour processing requirement regardless of volume.

· Maintain 100% redundant processing capacity across at least two facilities to handle expected seasonality.

8.3 Government-Provided Volume Forecasts

The Government shall provide the contractor with:

· Annual Forecast: Monthly volume projections each fiscal year (See Section 4)

These forecasts are for planning purposes only and do not:

· Guarantee any specific volume;

· Create entitlement to payment beyond actual volumes processed; or

· Relieve the contractor of the obligation to meet service levels at any application volume.

8.4 No Daily or Partial-Month Proration

Invoices shall reflect the total monthly price based on the total applications processed during the entire calendar month. The contractor shall not:

· Prorate costs on a daily basis;

· Submit partial monthly invoices;

· Invoice based on forecasted volumes rather than actual processed volumes; or

· Charge separately by site.

8.5 Volume Verification and Reconciliation

The Government reserves the right to audit and verify monthly application volumes through:

· Electronic transmission records;

· Physical dispatch manifests;

· Batch tracking logs; and/or

· Agency/center reports.

Any discrepancies between invoiced volumes and verified volumes shall be resolved through the standard contract disputes process.

9 SURGE PAYMENT CALCULATION

The Government provides the contractor with a monthly forecast in advance of each fiscal year. The forecast establishes anticipated APS application volumes. A twenty percent (20%) capacity buffer above the monthly forecast is incorporated to account for demand fluctuations.

Surge payments are explicitly authorized only when the actual volume of applications received per month exceed the 20% capacity buffer. See section 9.3 for example surge payment calculations.

9.1 Contractor Risk Assumption

The contractor assumes all risk for timely processing received application volumes, whether volumes fall below or exceed the Government monthly forecast. No price adjustments are made for volumes below the forecast. The contractor must process all applications up to and including the 20% capacity buffer threshold without additional compensation beyond the monthly fixed price.

9.2 Surge Payment Eligibility

Surge payments are only paid when the actual monthly applications received exceeds the sum of: (1) the Department of State monthly forecast, plus (2) the 20% capacity buffer.

The Surge payment formula is:

· Surge Payment Threshold = Monthly Forecast × 1.20

· Surge-Eligible Volume = Actual Applications Received Monthly Volume − Surge Payment Threshold (when positive)

9.3 Surge Payment Example

Table 9.1: Surge Payment Calculation Example, based on 18,426,000 (actual volumes may differ)

Note: Actual volumes will differ from this example.

9.4 Invoicing Restrictions

The contractor shall not invoice for Surge premium:

1. In any month in which actual applications received volume falls below the monthly forecast; or

2. Under any basis other than actual applications received in excess of the 20% buffer threshold.

9.5 Surge Payment Rate

The Surge payment rate per application processed above the threshold is specified in Section 9.2 and the contractor's accepted price proposal.

10 APPLICATIONS RECEIVED VIA USPS AND INBOUND COURIER OPERATIONS

10.1 USPS Mail Handling

The contractor manages USPS mail handling and inbound transport to APS facilities, including retrieving all envelopes from USPS within four hours of availability and procuring and managing dedicated P.O. Boxes for the CA program in accordance with Department governance for P.O. Box assignments. The contractor defines and coordinates USPS pickup schedules and ensures that the 24-hour processing clock starts when APS or private couriers deliver envelopes to APS facilities (or when APS signs for direct deliveries). The contractor establishes secure mail tracking and transport protocols, specifies courier accountability and vehicle requirements (such as GPS tracking and dual drivers where required), and maintains effective coordination procedures among APS headquarters, field sites, USPS, and couriers.

10.2 Inbound USPS to APS Courier Transport

The contractor shall establish:

· Secure mail tracking and transport protocols;

· Courier accountability and vehicle specifications (including GPS tracking and dual drivers, where required); and

· Coordination procedures among APS headquarters, field sites, USPS, and couriers.

10.3 Start of the 24-Hour Processing Clock (Authoritative Rule) For purposes of the 24-hour processing requirement:

· The 24-hour processing clock starts when envelopes and parcels are physically delivered to APS facilities.

· Time between USPS “availability” and APS retrieval (within the required four hours) does not count toward the 24hour processing window. This definition applies consistently across all processing steps and performance metrics, unless otherwise defined by the Department.

11 SPECIAL HANDLING AND TRACKING

11.1 The contractor implements structured special handling and tracking for all nonstandard application categories, including intercepts, unprocessables, damaged or misdirected parcels, fee issues, and direct courier deliveries. Definitions are authoritative in Section 29. Intercepts – see section 29 for definition For deficient DS-82 routine renewals, the contractor removes them from the standard workflow, returns them to applicants via traceable mail with standardized error letters, and maintains accessible intercept logs.

The contractor shall:

· Remove such applications from the standard workflow;

· Return them to the applicant via traceable mail, with a standardized error letter;

· Log each intercept (what was received and returned) for audit purposes; and

· Make intercept logs accessible to Passport Services.

Note: In the future state we would want the contractor to hold the application rather than returning and pursue actions with the applicant to fix the issue. The Department and the contractor would establish a process for the contractor to accept correct application payment, and forward those funds electronically, along with the paper application. The transition to holding applications will occur when the contractor develops online payment collection. See section 20 for details.

11.2 Unprocessable – see section 29 for definition

For unprocessable applications, the contractor makes reasonable efforts to repair and prepare them for processing, flag unscannable items, and report volumes and characteristics.

The contractor shall:

· Make reasonable efforts to recover and prepare such applications for processing in accordance with Department instructions;

· Flag unscannable items for the receiving passport agencies and centers; and

· Report unprocessable volumes and characteristics as requested.

11.3 Damaged and Misdirected Parcels

The contractor documents and handles damaged and misdirected parcels in line with Passport Services guidance, manages any PII exposure, and maintains appropriate logs.

· Damaged Parcels: Mail items compromised in transit (e.g., water damage, torn envelopes). The contractor shall document damage, attempt to process contents, and manage PII exposure as required.

· Misdirected Parcels: Items incorrectly sent to APS or unintended destinations. The contractor shall return or reroute such items per Passport Services guidance and maintain appropriate logs.

11.4 Fee Discrepancies

Fee discrepancies are identified, annotated, and routed through dedicated “Fee Issue” workstreams in accordance with Passport Services’ direction.

The contractor shall package applications (DS-82, DS-11, and DS-5504) with fee issues that are forwarded to agencies or centers for resolution separately from all other applications. The contractor shall not combine fee-issue applications with standard application shipments.

The contractor shall use one of the following methods to ensure fee-issue applications are clearly identified and prioritized: (1) place fee-issue applications in a separate box and label the box for quick identification, or (2) wrap fee-issue applications in special packaging and place them on top of a standard shipment box. The contractor shall either clearly label boxes containing fee-issue applications or notify the receiving agency prior to shipment arrival which boxes contain fee-issue applications. This packaging and notification process enables agencies to immediately identify and prioritize fee-issue applications to expedite applicant contact.

Fee-issued applications must be processed and distributed to passport agencies within 24-hours, the same standard as normal application processing.

· Identify and annotate fee discrepancies;

· Create and manage appropriate special workstreams (“Fee Issues”);

· DS-11, DS-82 and DS-5504 “Fee Issue” applications must be batched separately and easily identifiable for Customer Service teams at passport agencies so they can be pulled and worked on immediately.

· Follow Passport Services direction regarding return, reprocessing, or forwarding to adjudicating agencies.

11.5 Third Party Courier Applications

The contractor operates a separate workstream for designated passport courier applications, processes 2D barcoded items as standard (manual for non2D with monthly reporting), tracks all privately delivered envelopes and parcels from APS receipt and starts the 24-hour processing clock upon APS signature.

11.6 Direct Courier Mail Processing and Deliveries

This is a program for third party courier companies to deliver passport applications directly to the APS.

The contractor shall:

· Support a separate workstream for designated passport courier applications and process 2D barcoded applications as standard;

· Process non-2D courier applications as manual applications and report such occurrences monthly;

· Track all privately delivered (non-USPS) envelopes and parcels from the time of APS signature; and

· Start the 24-hour processing clock at the time of APS receipt for these items.

11.7 Future Role: Electronic Payment Solicitation for Fee Issues When fee discrepancies are identified (missing payment, underpayment, incorrect payment), the contractor shall:

· Contact applicants directly via phone, SMS/RCS text message, and/or email to notify them of the fee issue;

· Solicit electronic payment through a secure, Government-approved online payment portal;

· Accept electronic payments via ACH debit, credit/debit cards, and other approved methods in compliance with Treasury and Department policies;

· Link payments to the specific application using unique identifiers;

· Process and deposit electronic payments the same day in accordance with Section 18;

· Transmit updated application files to the appropriate passport agency or center once payment is received and verified; and

· Maintain audit trails documenting all customer communications, payment solicitations, and resolutions.

The contractor shall develop and implement:

· Secure customer contact protocols that protect PII;

· Standardized communication templates for fee issue notifications;

· A user-friendly electronic payment interface meeting Section 508 accessibility requirements;

· Real-time payment verification and application matching capabilities; and

· Exception handling procedures for unresolved fee issues.

12 UNIQUE PROGRAMS AND SPECIALIZED WORKSTREAMS

The contractor shall provide a fixed firm price in their proposal covering all four unique programs outlined below. The contractor will process payments, assemble packages, and ship assembled work to destinations the Department of State provides. The table below shows anticipated demand forecast for all four workstreams combined for each contract year. The contractor shall use this data to provide a single price for each high and low tier in each contract year. Before the Department exercises each Option Year, it will select a demand scenario and notify the contractor in advance.

The contractor assumes all risk associated with actual incoming demand. No surge pricing applies to special workstreams, as no defined busy season causes volumes to spike significantly.

The contractor shall complete processing within 24 hours for all unique and special workstreams.

The contractor shall support the following special programs and workstreams, in accordance with Department instructions:

12.1 Existing Programs:

· Special-issuance passports (diplomatic, official, service, no-fee);

· Courier-delivered applications (Passport Services-authorized third-party couriers);

· Military fee passports; and

· Naturalization ceremony applications.

12.2 Expanded Special Issuance Processing

The contractor shall receive and complete data entry for all Special Issuance passport applications for the entire federal government. This is approximately 195,000 applications annually but can fluctuate. The types of applications include:

· Official passports;

· Diplomatic passports;

· No Fee Regular passports;

· Military Dependent passports; and

· Service passports.

The contractor shall:

· Receive applications from federal agencies;

· Complete front-end data entry and validation as per the Department’s instructions;

· Scan applications and supporting documentation;

· Transmit electronic files to the Department for adjudication; and

· Dispatch physical materials in accordance with workload instructions.

12.3 Future Role: Vital Records

The contractor shall perform front-end processing services for the Office of Vital Records, handling approximately 30,000 DS-5542 applications a year, though volumes can fluctuate.

· P.O Box Creation

· Mail Pick Up

· Mail Open

· Payment Verification and Deposit

· Review Forms and attachments for…