B05 - 73351021Q0075 Att 1 SOW.pdf

ATTACHMENT 1 – 73351021Q0075

STATEMENT OF WORK

Consolidated Credit Scoring and Reporting

FOR THE U.S. SMALL BUSINESS ADMINISTRATION

August 2021

1.0 BACKGROUND

The mission of the U. S. Small Business Administration (SBA) is to help maintain and strengthen the nation’s economy by enabling the establishment and viability of new and existing small businesses and by assisting in the economic recovery of communities during disasters. This contract will support three main SBA loan programs: 7(a) loans, 504/Certified Development Company (CDC) loans, and the Disaster Loan Program. This contract will also support SBA’s Disaster Credit Risk Management efforts.

The 7(a) Loan Program is the SBA’s primary lending program to help start-up and existing small businesses obtain financing when they might not be eligible for business loans through normal lending channels. The name comes from section 7(a) of the Small Business Act, which authorizes the SBA to provide business loans to American small businesses. The SBA itself does not make loans through this program, but rather guarantees a portion of loans made and administered by commercial lending institutions.

The 504/CDC loan program is a long-term financing tool, designed to encourage economic development within a community. The 504 Program accomplishes this by providing small businesses with long-term, fixed-rate financing to acquire major fixed assets for expansion or modernization.

The Disaster Loan Program provides affordable, timely and accessible financial assistance to homeowners, renters, and businesses. These SBA, low-interest, long-term loans are the primary form of federal assistance for the repair and rebuilding of non-farm, private sector disaster losses.

SBA is seeking to issue a Blanket Purchase Agreement (BPA) to a supplier of services that will provide consumer and commercial loan credit reporting and scoring services, business information products and reports, and disaster credit risk analysis as described in Tasks 1 through 3.

2.0 SPECIFIC REQUIREMENTS AND DELIVERABLES

2.1 TASK I: Scores for Loan Underwriting: FICO Small Business Scoring Service (SBSS) and FICO Consumer Scores:

The SBSS score is used to assist SBA and its lenders in determining if a small business applicant is creditworthy. In addition, SBA/Disaster is a direct lender and will use the SBSS score as part of its credit determination for business applicants. Also, Fair Isaac Consumer scores are used for every disaster loan origination.

2.1.1 The vendor shall:

1. Provide a SBSS using data from the Fair, Isaac and Company Inc. (FICO) Liquid Credit Decision Engine which gathers and uses consumer and business bureau information to help determine a score. The SBSS and FICO consumer scores are then made available to SBA through SBA’s ETran system or Disaster Credit Management System (DCMS) depending on the type of SBA loan.

2. Serve as a centralized commercial loan credit-scoring program.

3. Ensure the commercial loan credit scoring capabilities are compatible with the SBA’s Office of Credit Risk

Management’s (OCRM) credit scoring methodology and scores, both in an underlying algorithmic basis and in demonstrable quantifiable reporting constructs. This enables a direct correlation between OCRM’s Small Business Risk Portfolio Score (SBRPS also known as SBPS) and SBSS scoring to be easily derived.

(The SBRPS predicts the likelihood of severe delinquency over the next 12 months including bankruptcies and charge offs. It uses statistical probabilities to classify companies into a score range. FICO data is also used to derive the SBRPS.)

4. Execute and deliver to the SBA individual commercial loan credit scores on each specific loan transmission, as well as corresponding delineated consumer and/or business credit reports in a compatible image format (PDF or TIF).

5. Have the capability to receive credit scoring requests 24/7 to facilitate an approximate 50,000 said transmissions annually (with potential surge in volume due to disaster activity) from SBA’s loan centers and provide the credit score, individual and business credit reports and analytic (creditworthiness) information pertinent to the individual commercial loan transmission.

6. Vendor shall include all costs associated with front end underwriting credit scoring. This includes licensing the data from a national consumer credit bureau(s) and data from a national business credit bureau(s) needed in order to run the credit scores. This also includes licensing the actual SBSS FICO credit scores, and the FICO Liquid Credit underwriting software that runs FICO’s Liquid Credit decision engine. These can be purchased separately, however, all are needed in order to complete the credit scoring process, and can be purchased combined. This may provide SBA with economies of scale in purchase; and at a minimum will reduce the logistical burden.

7. Vendor shall provide credit-scoring services as needed.

8. Customer service must be available for any technical and service-related issues needed.

2.2 TASK II: Experian Consumer Credit Bureau Reports:

2.2.1 Consumer Information:

SBA will need to retrieve Experian’s consumer specific credit information, as it is a feeder file to the SBSS score.

The contractor’s database must contain consumer data from all major credit grantors across the United States and is continuously validated by the receipt and processing of monthly updates from each of those sources. Because most credit accounts represent active relationships with consumers, the quality of the information from those sources has a higher degree of accuracy and reliability than most other source of consumer data. Collectively, the information from these different sources gives a unique base for high quality information from which to identify most adult consumers (18+ years) within the USA.

2.2.3 Consumer Credit Report:

The Consumer Credit Report is a composite history of a consumer’s credit and identification information. This report will be used as a comprehensive credit decision making tool, providing timely and in-depth credit information that allows for faster, accurate, and cost effective decisions. The contractor’s Consumer Credit Report must provide:

a. Personal Data, including:

a. Current and previous addresses b.

Social security number

c. Employment history

b. Summary of the consumer’s credit history, including:

a. Number of accounts (open & closed) held by consumer

b. Type of accounts

c. Number of credit inquiries over the last 12 months

d. Number of accounts past due

e. Number of accounts in good standing c.

Detailed account information, including:

a. Name, account type, account number, date opened, balance, and status of each account listed on the consumer’s credit report

b. Payment history, date of last activity and contact information for credit issuer for each account listed on the consumer’s credit report

c. Details specific to past-due accounts and accounts with negative credit history

d. Consumer Credit history inquiries

e. Summary of any of the consumer’s accounts which have been turned over to a credit agency

f. Summary of liens, wage garnishments or other judgments that appear against the consumer in federal, state or county court records.

g. Consumer Risk Assessment Credit Score developed based on the information in the consumer’s credit report.

a. Predicts the likeness of accounts experiencing seriously derogatory payment performance in the next 12 months.

b. Produce scores ranging from 300-850, where high scores equal low risk.

2.2.4 Ad-Hoc Reports

The SBA is interested in available Ad-Hoc reports that may help to support loan portfolio management.

These reports should be identified and available. The request for these Ad-Hoc reports, which may be funded separately, must be verified and approved by the COR and/or Contracting Officer.

2.2.5 Availability of Reports

• The contractor will electronically deliver one copy of the data to the SBA upon completion. The data will consist of services and/or information required but the SBA.

• As updates are made available, contractor will provide latest business and consumer information and data, including risk assessment credit scores.

• All reports must be available in print image format and also in an automated, electronic report format that is compatible for transfer with SBA systems and the FICO Liquid Credit product as it supports SBA’s custom interfaces for loan origination and underwriting.

• All reports purchased by the SBA must be stored online and available for at least 6 months after purchase.

• All user names and locations will be available for at least 6 months after purchase.

2.3 TASK III: Dun & Bradstreet Commercial Credit Bureau Reports:

2.3.1 Business Information:

The contractor will provide electronic access to the Dun & Bradstreet database so the SBA can identify all related records associated with the latest business credit information and data, including risk assessments, repayment ability, and ratings. SBA will need to access the information and associated data in order to identify all related members of any corporate family. The contractor will provide the prospecting record profile, plus electronic access to any data fields needed.

• All reports shall be stored online and available for 6 months.

• The contractor will electronically deliver one copy of the data to the SBA upon request. The data will consist of services and/or information required by the SBA.

2.3.2 Supplemental Business Information Reports. In addition to the business credit data, the verification service must contain the following elements in a reporting format so SBA may conduct a moderate risk assessment:

a. The rating showing company net worth and risk indicator

b. Breakdown of credit behavior by industry

c. Detailed information about liens, judgments, bankruptcies, and critical events

d. Basic company profile and public records filings

e. Numerical score that measures and evaluates whether a business makes prompt payments to its suppliers and creditors within the agreed upon terms of payment

f. Credit limit recommendations

g. Payment and industry trends

h. Predictive scores to evaluate the likely future payment behavior

e. Compare companies to others in the same industry, locally or across the U.S.

f. The government will have ten (10) business days to review each deliverable. Upon receipt of the Government comments, the Contractor shall have ten (10) business days to incorporate the government's comments and/or change requests and to resubmit the deliverable in its final form. If the Government has not informed the Contractor of any issues before COB tenth business day of receipt, no reply will confirm Government acceptance of the deliverables.

3.0 User Access

• Approval for usage shall be specified by the COR and/or the Contracting Officer.

End-users must obtain pre-authorization by the COR before accessing any of the reports.

4.0 Training and Customer Service

• Training guide or similar document to be made available for user reference.

• The contractor must identify a point of contact for any customer service or system questions.

5.0 Monthly Invoices

Contractor shall invoice no more often than once a month. Each invoice shall be submitted only to jaamscp@sba.gov for processing. At a minimum, each invoice shall include the type of unit, number of units billed, and individual unit cost then associate these elements with user name and location. Additionally, a summary should be provided that indicates the total cost by location for that month and a summary of the entire contract’s current burn rate. Each invoice shall include the Contract number and associated Requisition number for payment. The contractor shall bill SBA for products and services on a monthly basis plus a usage report and graph running monthly expenses with burn rate and a list of user names for control purposes.

6.0 PERIOD OF PERFORMANCE

It is SBA’s intent to award a base period from date of award through 12 months with four 12 month option years.

PERIOD OF PERFORMANCE

BASE 09/13/2021 – 09/12/2022

OPTION YEAR 1 09/13/2022 – 09/12/2023

OPTION YEAR 2 09/13/2023 – 09/12/2024

OPTION YEAR 3 09/13/2024 – 09/12/2025

OPTION YEAR 4 09/13/2025 – 09/12/2026

Optional Services (52.217-8) 09/13/2026 – 03/12/2027

7.0 LOCATIONS IDENTIFIED FOR USER ACCESS

• Headquarters (Washington, DC)

• Citrus Heights 7(a) Commercial Loan Processing Center (Citrus Heights, CA)

• Sacramento 504/PLP Commercial Loan Processing Center (Citrus Heights, CA)

• Herndon National Guaranty Loan Purchase Center (Herndon, VA)

• Fresno Commercial Loan Servicing Center (Fresno, CA)

• Little Rock Commercial Loan Servicing Center (Little Rock, AR)

• El Paso Disaster Loan Servicing Center (El Paso, TX)

• Birmingham Disaster Loan Servicing Center (Birmingham, AL)

• Santa Ana National Disaster Loan Resolution Center (Santa Ana, CA)

• District Offices (as approved) mailto:jaamscp@sba.gov

8.0 TRANSITION PLAN

The parties recognize that there is a period of transition at the beginning of this contract and at the end. “Transition” refers to the transfer of the work performed pursuant to this SOW at the beginning of the contract. “Transition” also refers to the transfer of this work at the end of this contract back to the Government or to another Contractor.

Contractor agrees to cooperate and assist in all transitions required by this contract at no additional cost to the Government.

The Contractor recognizes that the services under this contract are vital to the Government and must be continued without interruption, and that, upon contract expiration, a successor may continue the contractual effort. The Contractor agrees to furnish phase-in-training, and to exercise its best efforts and cooperation to affect an orderly and efficient transition to a successor.

Upon written notification from the COR, the Contractor shall furnish phase-in, phase-out services for up to 180 days after this contract expires. The Contractor shall negotiate in good faith a plan with a successor to determine the nature and extent of phase-in and phase-out services required. The plan shall cover all facets of the Contractor’s requirements under the expired contract, including the identification and utilization of all System software, procedures, policies, and protocols developed – which workflow tools shall all be in a written format.

The Contractor shall transfer responsibilities for the existing contract, as well as the related servicing function, only upon written authorization by the COR. Until such transfer is authorized by the COR, the Contractor will continue to receive compensation pursuant to the contractor’s agreed pricing schedule. The Contractor shall be required to provide sufficient experienced personnel during the phase-in, phase-out period to ensure that the services called for by this contract are maintained at the required level of acceptance as detailed in this contract.

Phase-In: Identification of critical steps and technical specifications in assuming full functionality of service as defined in the SOW, as to not cause any break in loan origination at SBA.

Continuity of Operations Plan: Contract will identify critical steps to ensure continuity of operations in the event of delays in assuming full functionality of services.

Phase-Out: Identification of critical steps to ensure a successful transition out period as identified in this SOW and to ensure full functionality of service.

9.0 SMALL BUSINESS SUBCONTRACTING REQUIREMENT

The contractor shall develop a subcontracting plan such that at least 5% of the BPA value per year for the first the two years and at least 10% of the BPA value for the remaining years of the BPA shall be subcontracted to a small business. The latter is based on a BPA with a base year and four to option years. The subcontracting plan should identify the subcontractor(s) that the Contractor proposes for the BPA, discuss the subcontractor’s qualifications and include a certification from the subcontractor that it is a small business as defined by SBA’s Small Business Size Regulations. The Contractor shall submit the subcontracting plan to the Contracting Officer for approval.