B05 Attachment 1 PWS (IDIQ).pdf

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ATTACHMENT 1 – PERFORMANCE WORK STATEMENT (PWS)

1.0 Purpose

The purpose of this services contract is to provide the Small Business Administration (SBA) Office of Financial Analysis and Modeling (OFAM), on behalf of the SBA’s Office of Chief Financial Officer (OCFO), with credit modeling services which incorporates econometric data and performs additional functions in order to provide more accurate risk assessments. Additionally, credit reform modeling services are required for preparing SBA’s annual financial statements and budget. This includes, but is not limited to, ongoing technical assistance for the models and associated training for staff involved in support and implementation of the models.

2.0 Background

The OFAM provides modeling support and financial and statistical analysis of the SBA’s business and disaster loan programs, formulation estimates for the Office of Management and Budget (OMB) and Congressional budget submissions, performs annual re-estimates for over 150 loan cohorts in its business and disaster programs, and performs cost estimates and analysis as requested by the senior management within SBA, OMB, the House or Senate committees and the Congressional Budget Office.

The SBA currently has numerous active loan programs that require formulation estimates, re-estimates and analyses and several loan programs that are fully disbursed that require annual re-estimates. The SBA has a mixture of credit subsidy models written in SAS and Excel. During the formulation and re-estimate cycles the models for the major programs are distributed for an Independent Verification and Validation (IV&V) review prior to the models being provided to the OMB and the independent financial statement auditor under contract to the Office of Inspector General (OIG).

3.0 Objectives

Given the constant evolution of best practices in the credit modeling environment, the Contractor shall ensure that its services provide SBA with services and models that are current, relevant, and reflective of industry best practices, and are in compliance with the Federal Credit Reform Act (FCRA). The Contractor shall also be prepared to perform informational training sessions of Federal Credit Reform Modeling to SBA employees.

The OFAM continually enhances the capabilities of its modeling process to improve the accuracy and performance of the models. The Contractor, at the discretion of the OFAM, can be required to provide modeling and analysis support for any of the active/planned and discontinued programs listed below and for new programs that are initiated by the SBA or required by legislation.

Active or Planned Programs

• Direct Disaster Assistance Loans;

• Immediate Disaster Assistance Program;

• Expedited Disaster Assistance Program;

• Guaranteed Section 7(a) Small Business Loans (SBL);

• Guaranteed 504 Certified Development Company (CDC) Loans;

• Guaranteed 504 Commercial Real Estate (CRE) Refinance Loans;

• Guaranteed Secondary Market Guarantees (SMG);

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• Guaranteed Small Business Investment Companies (SBIC) Debentures;

• Direct Microloan Program;

• Surety Bond Guarantee (SBG) Program (Not subject to FCRA);

Not Active Programs

• Intermediary Lender Pilot Program (ILPP);

• Guaranteed SBIC Participating Securities (PS);

• Guaranteed Secondary Market 504 First Mortgage (Section 503) Program;

• Guaranteed America’s Recovery Capital (ARC) Loan (Section 506) Program;

• Guaranteed Dealer Floor Plan (DFP) Guarantees; and,

• Several small guaranteed and direct loan programs.

The models forecast the cash flows associated with SBA's direct loan and loan guarantee programs.

Forecasts of loan repayments, prepayments, defaults, fees, recoveries, expenses, and related cash flows are developed based on actual historical loan performance data. When new programs are proposed by the SBA’s senior management, the OMB, or via Congressional requests, the historical data of similar existing loan programs at the SBA or another Federal Agency are appropriately adjusted and used as proxy data for the proposed program. SBA's models are built using a variety of software programs including SAS and Excel.

The Contractor shall provide technical assistance to assist with meeting SBA's objectives. More specifically, the Contractor shall ensure it has sufficient technical support to meet the OCFO’s goals in the following areas:

• Maintaining an unqualified financial statement audit opinion.

• Providing timely and accurate formulation estimates for loan programs that should maintain zero percent subsidy rates in a constantly changing environment.

• Ensuring cash flow models meet all existing FCRA requirements, Office of Management and

Budget (OMB) directives, and Federal Accounting Standards Advisory Board (FASAB) standards, statements, technical releases and other requirements.

• Enhancing the SBA’s Business Models and Disaster Assistance Models credit models to improve operating efficiencies, produce subsidy estimates for significant sub-programs, and function as a tool to determine the effectiveness of the programs.

• Streamlining and automating credit reform modeling processes.

• Conduct training for staff involved in support and implementation of the models.

SBA has credit reform modeling expertise in-house, however OFAM requires a Contractor that can provide technical support assistance that is proficient in the use of SAS software and Excel, including Visual Basic.

Technical assistance shall include, at a minimum, the following areas:

• Maintaining existing modeling processes;

• Development of models to project program requirements;

• Data collection, and performance and/or benefit analyses;

• Automating the processing of current models;

• Maintaining and enhancing 10-year plans for loan programs and automating the updating of the plans;

• Processing data and updating tables for loan performance web sites;

• Design and development of subsidy estimate and re-estimate models as tasked;

• Sensitivity analysis and testing of the models;

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• Documentation of approaches and findings used in the modeling efforts;

• Designing the automation of projected versus actual performance analyses;

• Automating other inputs and outputs, including use of loan level data, used in the modeling process; and document and/or review of any of the above activities.

3.1 Credit Subsidy Models and Model Change Timeline

The SBA uses a mixture of SAS loan level models and Excel program level models. The SAS loan level models provide the SBA with the capability of accurately modeling many possible loan program scenarios. Loan level models project future performance for credit reform cohorts utilizing a competing risk hazards framework where a portion of every loan, for some programs that means in excess of 100,000 loans, will default, prepay or continue to be fully performing. Basically, the models then roll up, or sum, the various performance characteristics of the cohort to the program level.

The SBA will provide the Contractor with the most recent versions of the Credit Subsidy models being used for re-estimates and formulation estimates. The Contractor shall maintain, update, and enhance the models provided in the same software format provided. The SBA has four major guaranteed business loan programs and one direct disaster loan program that are SAS models.

Three of those models have multiple sub-programs contained within the models. The SBA also has multiple Excel modeled programs, some of which use SAS code to extract data from the database used by the office. The Contractor shall be responsible for ensuring that any models or analyses generated can use the data in the SBA-provided format. The Contractor will be responsible for addressing data inaccuracies, incomplete data fields or other data quality issues or considerations.

The SBA manages planned model changes, technical revisions, and the production of critical estimates through an annual lifecycle, each of which culminates in important deliverables to internal SBA groups, auditors, and OMB. The annual modeling services timeline for each model falls within four primary overlapping phases:

• Phase I, Model Preparation and Audit – January through July

• Phase II, Re-estimates for Financial Statements – August through October

• Phase III, Re-estimates for President’s Budget (PB) – October through Late November

• Phase IV, Formulation Estimates and Budget Support – November through January

3.1.1 Phase I

Phase I efforts are focused on model enhancements and core assumption changes in preparation for review by the auditors. In this phase, all primary methodological changes and primary edits to the code are conducted, key assumptions updated with historical information through March 31st, and all updates to documentation are completed. Preliminary model packages for most major models, and at times other selected models, are submitted to an Independent Validation and Verification (IV&V) team to perform an additional review. After addressing any issues discovered from the IV&V review, final Phase I model packages are created, reviewed, and submitted along with supporting analyses for review to the auditors.

All submissions to the IV&V team and auditors go through an extensive internal review prior to release. Although the specific dates for model submissions vary by year and assigned model, all submissions to the auditors are completed between June 1st and June 30th. At this point, model assumption methodologies are typically locked and only data updates through the rest of the year will result in additional model changes. Many formulation models utilize

73351020Q0071 Attachment 1 Page 4 of 30 the same assumptions created as part of the Phase I re-estimate model enhancements. A preliminary formulation estimate is produced in July by modifying the formulation models to include the updated assumptions submitted for audit review and any newly available data inputs.

3.1.2 Phase II

Phase II is the primary phase for preparing and completing the Financial Statement re-estimates and supporting analysis. In late August, team members will respond to any auditor questions about the Phase I deliverables. Each model is updated with newly available data through June 30th, and preliminary model packages for all models selected for IV&V, typically only the major models, are prepared for submission in early September. In September models are updated with the most recently available data to calculate Treasury Interest Income and Expense. Once final fiscal year loan data is available, typically in the first week of October, all models are updated and final re-estimate model packages are submitted for internal review. After internal review, all model packages and supporting reporting templates are aggregated and submitted to the auditors and other teams within OCFO for financial statement preparation. The Financial Statement re-estimates and supporting final model versions are typically submitted by second week of October .

Additional analyses, reports, and discussions of are subsequently completed in October in support of the Financial Statements and auditor review.

3.1.3 Phase III

Phase III includes modifications to the financial statement re-estimate models with any additional historical and forecasted macroeconomic data to create the final re-estimates for the President’s Budget. Final model packages are submitted through internal review and updated cash flows are submitted to OMB typically by mid to late November.

3.1.4 Phase IV

Phase IV refers to the preparation of the annual formulation estimates and budget support.

The preliminary formulation models are adjusted with input data coinciding with the Phase III re-estimate model changes. Recent trends in portfolio composition are reviewed, communicated with the Office of Capital Access (OCA), and final portfolio composition assumptions are finalized for final formulation model estimates. Final formulation model packages are submitted for internal review, and final are submitted to OMB typically by early-December. Follow on discussions and explanations of subsidy rate changes can continue into January. Additional analyses in December are created to support budget analysis, to support for the 10-year plan, and to respond to any questions about the revised formulation estimates.

The table below includes a cross walk of each SBA model, a listing of their used technology.

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Models Phase I

Phase

II

Phase

III

Phase

IV

Phase IV&V Technology

Major Models

7(a) X X X X X SAS, Econometric

504 CDC and CRE X X X X X SAS, Econometric

Disaster X X X X X

SAS,

Historical Averages

Secondary Market Guarantee X X X X X SAS, Econometric

SBIC Debentures X X X X SAS, Econometric

Intermediate Models

Microloan X X X X

SAS,

Historical Averages

Minor Models

SBIC Participating Securities X X X

SAS and Excel, Historical Averages

Minor Models Continued

ILP X X X

SAS,

Historical Averages

Dealer Floor Plan (DFP)

X X

SAS,

Historical

ARC

SAS,

Historical Averages

503 X X X

SAS,

Historical Averages

Small Programs (EOL, HAL, SBIC NMVC, SBIC Preferred Stock and Fee, 502 LDC)

Excel, Historical Averages

SBG X

Excel, Historical

The Contractor shall be responsible for continuing to maintain SAS code and other evaluation methods to determine the accuracy of the data and to exclude data anomalies from the data set used to generate coefficients and curves for the credit subsidy models or other analyses. The Contractor shall use Industry Standards and Best Practices in order to provide the services.

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4.0 Non-Personal Services Contract

(a) The Government and the Contractor understand and agree that the services to be delivered under this contract by the Contractor to the Government are non-personal services as defined in FAR 37, Service Contracting, and the parties recognize and agree that no employer-employee relationship exists or will exist under the contract between the Government and the Contractor’s personnel. It is, therefore, in the best interest of the Government to afford both parties an understanding of their respective obligations.

(b) Contractor personnel under this contract shall not:

(1) Be placed in a position where they are under relatively continuous supervision and control of a Government employee.

(2) Be placed in a position of command, supervision, administration, or control over

Government personnel or over personnel of other Contractors performing under other SBA contracts.

(c) The services to be performed under this contact do no require the Contractor or the Contractor’s personnel to exercise personal judgement and discretion on behalf of the Contractor.

(d) Rules, regulations, directives, and requirements that are issued by the SBA under its responsibility for good order, administration, and security are applicable to all personnel who enter the Government installation and facilities, who are provided access to Government systems, or who travel on Government transportation. This is not to be construed or interpreted to establish any degree of Government control that is inconsistent with a non-personal services contract.

(e) Both parties are responsible for monitoring contract activities for indication of improper employee-employer relationships during performance. In the event a situation or occurrence takes place inconsistent with this contract language, the following applies:

(1) The Contractor shall notify the Contracting Officer in writing within five (5) business days from the date of any situation or occurrence where the Contractor considers specific contract activity to be inconsistent with the intent of this contract language. The notice must include the date, nature and circumstance of the situation or occurrence, the name, function, and activity of each Government employee or Contractor employee involved or knowledgeable about the situation or occurrence, provide any documents or the substance of any oral communications related to the activity, and an estimated date by which the Government is recommended to respond to the notice in order to minimize cost, delay, or disruption of performance.

(2) The Contracting Officer will review the information provided by the Contractor, obtain additional information (if needed), and respond in writing as soon as practicable after receipt of the notification from the Contractor. The Contracting Officer’s response will provide a decision on whether the Contracting Officer determines the situation or occurrence to be inconsistent with the intent of this contract language and, if deemed necessary, will specify any corrective action(s) to be taken in order to resolve the issue.

5.0 Inherently – Non-inherently Government Functions

The Contractor shall not perform any inherently governmental functions as defined in FAR 7.503.

At no time shall the Contractor or its personnel represent themselves or conduct themselves as an “employee” of the Government. At no time shall the Contractor or its personnel:

(a) Direct and control federal employees;

(b) Determine Agency policy;

(c) Perform resource allocation or program management duties that must be performed by the

Government; or

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(d) Approve any contract documents or provide any contract administration for other SBA contracts

The Contractor and its personnel may perform functions that are closely associated with inherently governmental functions provided they do not impinge on Federal Official’s performance of inherently governmental functions. The performance of any closely associated functions must be carefully monitored so that they do not cross into inherently governmental functions over time. This oversight will be provided by the Contracting Officer’s Representative.

6.0 Description of Services

The work includes, but is not limited to, the services described below.

The Contractor will provide the number of analysts needed to maintain, enhance and analyze loan programs assigned. Effective credit reform modeling requires that the analyst responsible for a model/program understands the program and model. The SAS models utilized by the SBA are sophisticated models that employ the use of estimated coefficients or, in for the Direct Disaster program, estimated assumption curves. Tasks will relate to the following areas:

(a) Routine modeling and analysis support for existing models and programs as outlined in the

“Areas” (Section 3.0).

(b) Providing expert advice, analyses, and recommendations regarding options that should be considered for redesigning and/or developing enhancements to existing cash flow models for the SBA’s business and disaster loan programs.

(c) Supporting SBA staff in the design, development, testing, and documentation of models for new requirements or loan programs.

(d) Providing expert advice in performing analyses of performance and effectiveness indicators for the SBA’s business and disaster loan programs.

(e) Other activities or projects as assigned.

6.1 Task 1 - Modeling Services and Budget Preparation Technical Assistance - Transition and Training Period (Phase-in)

6.1.1 Transition and Training Period (Phase-in/Phase-out)

The Contractor shall work with the Contracting Officer's Representative (COR) and the existing incumbent to learn the modeling processes and loan programs at the SBA for programs that will be initially assigned. The Phase-in period will take place within three months from contract award. During this period, the Contractor will become familiar with internal processes, analysis tools, programs and models. It is expected the Contractor will verify the ability to replicate the most recent financial statement re-estimates, president’s budget re-estimates, and president’s budget formulation estimates. It is also expected that the Contractor will review existing methodologies and develop recommendations for model improvements for each of the assigned models. The Contractor shall also provide transition support and knowledge transfer either to a new Contractor, or back to SBA when the Contract ends or is terminated.

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6.1.2 Deliverables – Transition and Training Period (Phase-in/Phase-out)

The Contractor shall deliver:

6.1.2.1 Monthly Status Report

A monthly status report is due to the COR identifying Contractor’s monthly accomplishments, value-added, and next steps. The delivery of the status report will coincide with a monthly status meeting with the COR to be determined based upon the schedule of the COR. A copy shall also be provided to the CO.

6.1.2.2 Phase-in/Phase-out Plan and Report

The Contractor shall provide a Phase-in/Phase-out Plan which includes options to assist in ensuring a smooth transition, to begin the contract upon award, either to a new Contractor, or back to SBA when the Contract ends or is terminated. The Plan will include, at a minimum, meeting with SBA personnel to develop and implement a transition timeline, and transferring project data, documentation and Government-owned property. The Final Phase-in plan shall be provided for approval to the COR within 30 calendar days of the Contract Award. The Final Phase-out Plan shall be reviewed and updated by the Contractor and subject to government approval 60 calendar days prior to the Contract’s expiration. The Draft Phase-In/Phase- Out Plan is due as part of the proposal.

6.2 Task 2 – Modeling Services and Budget Preparation Technical Assistance and

Additional Program Analysis

6.2.1 Modeling Services and Budget Preparation Technical Assistance

The Contractor shall work with the Contracting Officer's Representative (COR) to determine the initial allocation of programs the Contractor will be responsible for supporting. This allocation will be detailed at the Task Order level. The Contractor shall provide sufficient number of personnel on a full-time or ad hoc basis to support the programs assigned. Under the direction of the COR, additional financial programs may be assigned to the selected Contractor if the SBA does not have Federal Government employees assigned to support the process.

For each assigned model, the Contractor shall maintain the models, perform re-estimates for the Agency’s financial statements and President’s Budget, prepare formulation estimates for the President’s Budget submission and perform cost estimates and special analyses, as assigned. The Contractor will fully implement the use of existing models and processes during the base period of performance. The Contractor is responsible for ensuring that any models or analyses generated can use the data in the SBA-provided format. The existing processes within the existing models must be maintained to address data quality issues.

The Contractor shall be responsible for complying with Privacy Act requirements governing any personal financial information provided by SBA on SBA loans and

73351020Q0071 Attachment 1 Page 9 of 30 borrowers. The Contractor shall use industry standards and best practices in order to provide the services. The Contractor will treat all estimates requested by any party as “confidential” and will not discuss the estimate with anyone but the requesting office.

All deliverables described in the parent IDIQ contract are required for each model.

6.2.2 Deliverables – Phase I

The Contractor shall deliver:

6.2.2.1 Monthly Status Report

A monthly status report is due to the COR identifying Contractor’s monthly accomplishments, next-steps, and value-added. The delivery of the status report will coincide with a monthly status meeting with the COR based upon the schedule of the COR. A copy shall be provided to the CO.

6.2.2.2 Planned Enhancements for Phase I

Each model contains an existing log of proposed model enhancements. For each model, the Contractor will review the list of potential model enhancements, determine which enhancements are planned, and provide support for why any other enhancements are not conducted. It is the responsibility of the Contractor to maintain this log to track suggested refinements to each model assigned. The list of enhancements for Phase I will be submitted to the COR for review by the beginning of March each year.

6.2.2.3 Reporting of March 31 Data for Accounting Review

For each model, loan financial transaction data and intra-governmental cash flows through the 31st of March each year are summarized and reported to SBA accountants for internal review. The deliverable is due to the COR and SBA accountants prior to the third week of April each year.

6.2.2.4 Preliminary Phase I IV&V Model Package

For models submitted to IV&V, a preliminary completed model package is created. The model should include all planned model enhancements for Phase I, including standard model updates of data through the 31st of March each year. The model package includes all data inputs, SAS code, Credit Subsidy Calculator (CSC2) cash flow input and output files, and additional analytical excel files necessary to independently run the model and produce final results. The package also includes documentation necessary to execute the model, as well as a full listing of model changes and decomposition of the subsidy impact of each change. Model packages will be submitted to the COR for internal review five business days prior to the submission date to IV&V.

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6.2.2.5 Responses to Questions from IV&V Review (as determined by the COR - detailed on each task order)

The IV&V team will spend one week reviewing each submitted model and will submit a formal list of questions. It is the responsibility of the Contractor to submit written responses to the questions for OFAM review five business days after receipt of the questions.

6.2.2.6 Final Phase I Re-estimate Model Package

Final Phase I model packages, including internal control worksheets, are delivered to financial statement auditors. If applicable, the Contractor is responsible for addressing any material weaknesses identified from the IV&V review, including any additional data inputs which become available after submission to IV&V. For the final submission, additional analyses are required which provide a comparison of model predicted performance to actual performance and tests of model sensitivities to changes to revised model assumptions. The Contractor shall submit the final model package to the COR for internal review one week prior to final delivery deadline to the auditor. The Contractor is responsible for obtaining all internal control signatures and submitting the internal controls worksheet before submission to the auditors. The deadlines for final submissions to the auditor may vary on an annual basis and will vary by program.

Submissions are similarly staggered as the IV&V review and deadlines for auditor submission range from June 1st to June 30th of each year.

6.2.2.7 Prepare Preliminary Formulation Estimates

For most of the active loan programs, the formulation model estimates use the same assumptions as created in the Phase I model deliverables.

Therefore, after finalizing Phase I model deliverables, formulation models are updated as much as possible with the latest available inputs and assumptions to provide a preliminary budget formulation estimate. The estimated subsidy rates and documentation supporting the decomposition of each model change shall be submitted to the COR in second week of July each year.

6.2.3 Deliverables – Phase II

6.2.3.1 Responses to Auditor Questions

After auditor review of Phase I model packages, the Contractor shall respond to any submitted questions by the auditors. If material issues are found, upon direction of the COR, the Contractor shall make corresponding adjustments to the re-estimate model during Phase II submission. Subject to annual change, auditor questions are typically received by the middle of August each year and responses are due two weeks after receipt. Draft responses are due to the COR two business days prior to submission to auditors.

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6.2.3.2 Reporting of June 30 Data for Accounting Review

For each model, loan financial transaction data and intra-governmental cash flows through June 30th each year are summarized and reported to SBA accountants for internal review. The deliverable is due to the COR and SBA accountants prior to August 20th each year.

6.2.3.3 Preliminary Phase II IV&V Model Package (if required) For models selected for IV&V review, preliminary Phase II models are updated to include available input data through June 30th each year, and if applicable the updated Mid-session Review Economic Assumptions provided by OMB. Unless there are identified issues from the auditor Phase I review or internal review, no methodological changes should be incorporated. The Contractor shall submit the Model Package to the COR for internal review five business days prior to submission to IV&V.

Models are submitted for IV&V review throughout the first week in September each year.

6.2.3.4 Responses to Questions from IV&V Review (if required)

The IV&V team will spend one week reviewing two submitted models and will submit a formal list of questions. The Contractor shall submit to the COR written responses to the questions for OFAM review five business days after receipt of the questions.

6.2.3.5 Financing Account Interest (FAI) Calculations

Upon the release of all final borrowings from and repayments to Treasury and the OMB provided CSC2 and Financing Account Interest Summary Compiler, the Contractor shall follow required protocols to calculate the Financing Account Interest for all cohorts within the assigned model.

These estimates are due to the COR three business days after the September release of the CSC2 each year.

6.2.3.6 Final Phase II Financial Statement re-estimate Model Package

For most models, the final Financial Statement Re-estimate and model packages are due to auditors the second week of October each year.

Models are updated to include the FAI calculations, loan financial data through September 30th each year and provided by October 3rd each year, and Single Effective Rate (SER) and Interest Rate Re-estimate (IRR) calculations performed for any applicable cohorts. The SMG, Microloan, and Small Program models are due to auditors third week of September and do not include updates of loan program history through the end of the fiscal year. The Contractor shall submit the model packages for COR internal review no later than two business days prior to final review.

6.2.3.7 Written Support for Re-estimates

The Contractor shall provide to the COR written support explaining the updated re-estimates for the assigned programs for inclusion in the

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Financial Statement footnotes. The discussion is due for internal review by second week of October.

6.2.4 Deliverables – Phase III

6.2.4.1 Final Phase III President’s Budget Re-estimate Model Package

The Phase III model packages include adjustments to the models reflecting any final adjustments to year-end cash balances, newly released historical economic data, and the inclusion of newly released President’s Budget Economic Assumptions (PEA’s) provided by OMB. The packages include updates to documentation outlining all model changes and a full decomposition of the subsidy rate impacts due to each model change. Final cash flows are submitted to OMB in November each year and are subject to the deadlines imposed by OMB’s Budget Data Requests (BDR’s). The Contractor shall deliver the model package to the COR for internal review one week prior to delivery to OMB and SBA’s accounting department.

6.2.5 Deliverables – Phase IV

6.2.5.1 Report to OCA, Investment Division, or ODA discussing preliminary

Budgetary Assumptions

For programs requiring budget formulation, the Contractor shall prepare preliminary estimates for all model assumptions used to produce the formulation subsidy estimates for new cohorts. These assumptions will be documented and presented to the appropriate program office to receive feedback and determination of final budgetary assumptions. The Contractor is responsible for preparing assumptions, creating presentation materials, and submitting materials to the COR for internal review at least two business days prior to the scheduled meeting with the program office.

The date of the meeting will be scheduled after award and is typically in late October each year.

6.2.5.2 Preliminary Phase IV Formulation Model Package for IV&V (if required)

For formulation models submitted to IV&V, the Contractor shall prepare preliminary formulation model packages. Formulation models are updated with the latest assumptions verified by the appropriate program office and data inputs available by the first week in November. The model package includes all data inputs, SAS code, CSC2 cash flow input and output files, and additional analytical excel files necessary to independently run the model and produce final results. Additional documentation supporting choice of assumptions should be included. The package also includes documentation necessary to execute the model, as well as a full listing of model changes and decomposition of the subsidy impact of each change.

The preliminary version, due to timing is submitted prior to the release of the November CSC2 and the President’s Economic Assumptions. The Contactor shall deliver the model package for internal review to the COR

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6.2.5.3 Responses to Question from IV&V Review (if required)

The IV&V team will spend one week reviewing submitted models and will submit a formal list of questions. The Contractor shall submit to the COR written responses to the questions from the IV&V team within five business days after receipt of the questions.

6.2.5.4 Final Phase IV Formulation Model Subsidy Estimates

The Contractor shall update the models to include OMB’s President’s Economic Assumptions, the November CSC2, and any remaining data inputs to provide the final subsidy estimates for submission to OMB. The Contractor shall submit Final Phase IV model packages to the COR for internal review one week prior to submission to OMB. The final submission deadline is subject to revisions by OMB’s BDR, but is expected to be in the first week in December each year.

In addition to the Model Phase Deliverables, OFAM has additional aggregate deliverables that include additional analysis or summary reporting of all model estimates. Although this will be supported by OFAM government staff, the Contractor may, as detailed at the task order level, provide technical assistance reviewing or executing the following deliverables that support the aggregated reporting across all loan programs. The Contractor may provide:

6.2.6 Summary Reporting Deliverables

6.2.6.1 Reporting of Liability for Loan Guarantee and Recoveries on Assets in

Inventory Projections for Financial Statements

OFAM has an application which aggregates cash flows reported by each model to provide aggregate estimates of SBA’s Liability for Loan Guarantee. The estimates are produced annually and are provided upon the creation of the Phase II Financial Statement re-estimates. The Contractor may either execute the summary application or assist in the review of the final portfolio estimates. The table is due to the COR upon the delivery of the last final Phase II model.

6.2.6.2 President’s Budget and Financial Statement Re-estimate Tables

Aggregate tables summarizing the re-estimates across all programs are provided for the Financial Statement re-estimates and the President’s Budget re-estimates. An existing application streamlines the summarization of Cash Flow files, and the Contractor may be asked to execute or review the aggregated estimates. These files are due to the COR upon the delivery of the last final Phase II and Phase III models.

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6.2.6.3 Financing Account Interest Tables

During Phase II, the Contractor will provide estimates for FAI for each model. Summary excel files are created aggregating the interest income and interest expense across all programs. The Contractor may be asked to execute or review the aggregated tables. The tables are due internally to the COR third week of September each year for submission to the Bureau of Public Debt.

6.2.7 Additional Deliverables

6.2.7.1 Analysis for 10-year Plan

The 10-year plan is a series of OMB MAX schedules containing projections related to loan balances and financing account cash flows.

OFAM has been tasked with preparing MAX schedules G, H, and Y for the current year (CY), budget year (BY), and the nine years beyond the budget year for all guaranteed and direct loan programs administered by the SBA.

This is due to the COR the middle of November each year.

6.2.7.2 Budget Briefing Book

The book documents all budgetary and re-estimates for all loan programs from the most recent two budget years and the most recent re-estimate.

Due to the COR prior to a mid-May submission to auditors each year.

6.2.7.3 Policies and Procedures Document

OFAM is responsible for maintaining and adjusting its policies and procedures documents to account for any adjustments to internal policies.

The Contractor will assist OFAM in review, modification, and maintenance of current policies and procedures. Any determinations about how to revise policies and procedures will be made by OFAM, but the Contractor may be asked to assist with recommendations for such changes and drafting the revised policies and procedures, which are due to the COR two weeks and auditor in the third week of May each year, with any adjustments communicated internally prior to submission.

6.2.7.4 Website Reports

OFAM currently produces quarterly reports of historical loan performance that are reported to the public. Existing SAS programs process existing data and generate excel file reports that must be augmented to be 508 compliant. The contractor shall assist in providing website reports that are due to the COR by the 17th or 18th after the end of each quarter.

6.2.7.5 Monthly Data Creation

OFAM currently processes monthly data extracts from SBA’s ELIPS financial transaction data and manages an accumulation of past financial history. The data is processed in SAS to be used by all models. Final SAS

73351020Q0071 Attachment 1 Page 15 of 30 datasets are provided to other SBA sources and is completed the 5th business day after receiving the data extracts, which are received normally the 2nd business day after the end of the month. When required the contractor shall assist OFAM with this task.

6.2.7.6 1502 Analysis

1502 reports are completed by lenders and provided to SBA to report loan balances and activity. OFAM is responsible for providing an audit assessment of the impact of errors in 1502 reporting and measuring the potential impact the reporting errors may have on the estimates of SBA’s liability for loan guarantees. The analysis is performed twice during the year. The Contractor shall provide an assessment of data as of March 31st to the COR in the third week of July each year. The Contractor shall also provide an assessment as of September 30th to the COR in the first week of November each year.

6.2.7.7 LIP Impact for 7(a) Loans

OFAM is responsible for providing an analysis measuring the impact of the Business Loan Increase Program (BLIP) accounting, which allocates cash flows associated with loan increases to the cohort year the loan increase occurred. The Contractor shall perform an analysis which demonstrates the impact on the historical cash flows had BLIP accounting not been implemented. The analysis is due to the COR by second week of October each year.

6.2.7.8 7(a), 504, ARC loan increases

SBA adopted the BLIP accounting processes on a specific date for 7(a) and 504 and applied the accounting for all newly approved loans. The Contractor shall assist OFAM with providing a second BLIP analysis which shows the impact of loan increases for loans associated with non- BLIP cohorts and the impact on subsidy transfers. The analysis is due to the COR in the second week of October each year.

6.2.7.9 Credit Risk Tool

The Credit Risk Tool (CRT) is designed to assist OFAM in evaluating model performance through data visualization, answering questions from auditors or other external stakeholders regarding re-estimate results, and facilitating a meeting with CFO and Deputy CFO to discuss model performance and planned model enhancements during Phase I. The Contractor will execute and maintain the CRT to support this process.

6.3 Additional Loan Program and Subsidy Cost Analysis

SBA frequently receives requests from Congress, OMB, the press, auditors, and internal SBA divisions for additional information concerning historical performance of the loan programs, reporting of model forecasts, or impacts of potential policy changes.

The Contractor will assist SBA in responding to such inquiries for the assigned

73351020Q0071 Attachment 1 Page 16 of 30 programs and models. The time and level of effort required depends upon the nature of the request. Most project requests can be completed in a matter of hours, while more complex requests may require more involved modifications to the models and potential submission of revised models to external parties. Upon receipt of the analytical requests, the COR will communicate the request and a proposed deadline to the Contractor.

6.4 Task 3 Special Projects or Analyses

Special projects and analyses are program related projects that are not part of the credit reform modeling process, but require a strong understanding of SBA’s information systems, SBA’s programs, and similar analytical and technical skills required to support SBA’s programs. Special projects and analyses are frequently performed for the various program offices (Office of Capital Access, Office of Disaster Assistance or the Investment Division) to support critical elements of the responsibilities assigned the program offices. The analyses and projects typically require the application of the unique analytical and technical skills set required for a highly qualified analyst that models Federal Credit Reform programs and supports SBA operations.

Past special projects and analyses include working with the Office of Credit Risk Management to build an analytical tool used for loan reviews, working with the Budget Office to create an updated budget reporting model to assist with tracking program expenditures and needs, creation of updated models projecting costs, and data and technical support for statistical analyses provide to the Investment division.

7.0 Business Relations

The Contractor shall successfully integrate and coordinate all activity needed to execute the requirement. The Contractor shall manage the timeliness, completeness, and quality of services.

The Contractor shall provide effective management of subcontractors. The Contractor shall seek to ensure customer satisfaction and professional and ethical behavior of all contractor personnel.

The Contractor shall notify the Contracting Officer and/or the COR immediately upon identification of problems that affect or potentially affect the contract. The Contractor shall follow-up verbal notifications in writing. The problem notification shall state the nature and source (description) of the problem, description of the impact of the problem on the task or deliverables, the recommendation solutions and of corrective actions needed to resolve the problem, and the proposed scheduled for resolving the problem. Submission of the report must be within 24 hours after the identification of the problem.

8.0 Contractor Personnel, Disciplines, and Responsibilities

The Contractor shall accomplish the assigned work by employing and utilizing qualified personnel with appropriate combinations of education, training, and experience. The Contractor shall match personnel skills to the work or task with a minimum of under/over employment of resources. The Contractor shall ensure the labor categories, rates, and man-hours utilized in the performance of each Task Order issued hereunder will be the minimum necessary to accomplish the task.

The Contractor shall provide the necessary resources and infrastructure to manage, perform, and administer the contract.

73351020Q0071 Attachment 1 Page 17 of 30

9.0 Licenses, Insurance, Certifications and Permits

The Contractor shall, without additional expense to the Government, obtain any necessary licenses, insurance, certifications and permits required in the performance of the contract and shall comply with any federal, city, state, county and municipal laws, codes and regulations applicable to the performance under this contract. The Contractor shall ensure that these additional responsibilities apply to all sub-contractors.

10.0 Ownership of Data

The term “Contractor” as used in this paragraph refers collectively to the prime and all subcontractors. The Government will retain ownership of all deliverables, models, analyses, databases, and any other products, software, or data generated while performing services under this contract. Any data provided by the SBA to the Contractor shall remain the property of the SBA.

Any data generated through the modeling or analysis processes (including, but not limited to, credit subsidy models, loan program analyses, lender analyses, trend or demand analyses) shall become the property of SBA. The Government, and not the Contractor or its employees, will retain sole right to use, distribute, and/or publish these data and items as it sees fit. Information shall not be submitted to third parties external to the agency without the prior written permission of the Contracting Officer’s Representative.

11.0 Disclosure of Information

11.1 Performance under this IDIQ contract may require the Contractor to access data and information proprietary to a Government agency, another Government Contractor, or of such nature that its dissemination or use other than as specified in this IDIQ contract would be adverse to the interests of the Government or others. Neither the Contractor, nor Contractor personnel, shall disclose data or information developed or obtained from the Government or third parties under performance of the IDIQ contract except to authorize Government personnel or upon written approval of the Contracting Officer. The Contractor shall not use, disclose, or reproduce proprietary data that bears a restrictive legend, other than as specified in the IDIQ contract.

11.2 To the extent the Contractor receives or is given access to proprietary data, data protected by the Privacy Act of 1974, or other classified or privileged technical, business or financial information under this PWS, the Contractor shall treat and protect Privacy Act information in accordance with any restrictions imposed on such data. Such information and materials will be protected. Access includes the functions of record management, data handling, storage, electronic transmission and physical distribution.

11.3 As required by the Contracting Officer or designee, the Contractor shall agree to enter into a written agreement with any firm whose proprietary data is used in conjunction with performance of this PWS. The Contractor shall furnish the Contracting Officer with executed copies of such agreements and shall not use any proprietary information for any purpose other than which it was provided.

11.4 Neither the Contractor nor the Contractor's employees shall disclose, or cause to be disseminated, any information concerning the operations.

11.5 All inquiries received by the Contractor for information concerning work performed under this IDIQ contract shall be referred to the Government for evaluation. The determination of whether records will be released will remain with the Government. The Contractor shall

73351020Q0071 Attachment 1 Page 18 of 30 assist the COR in compiling information or records for submission upon request by the Government.

11.6 The Contractor shall not release any information (including photographs, files, public announcements, statements, denials or confirmations) on any part of the subject matter of this contract or any phase of any program there under without the prior written approval of the COR. All documentation showing individual's names or other personal information shall be controlled and protected.

11.7 The Contractor shall use any data furnished by the Government only for performance under this PWS and shall return copies of such data to the Government upon completion of this effort.

11.8 Data pertaining to other contracts/services may reside on IT systems utilized or accessed by other Government organizations where Contractor personnel may be performing. Contractor personnel shall in no way divulge this information or use this information for its gain. The Contractor shall notify the Contracting Officer of any potential conflicts of interest.

11.9 All Contractor personnel shall sign non-disclosure agreements to protect all Government information to which he or she have access to both during and after contract performance is completed. The non-disclosure agreements will provide that the Contractor's employees will not disclose the information at any time.

12.0 Safety

The Contractor shall take proper health and safety precautions to protect workers, the public, and the property of others. The Contractor and its subcontractors shall comply with Public Law 91-596 (Occupational Safety and Health Act (OSHA)) and the Environmental, Safety, and Occupational Health (ESOH) (DODD 4715.1E). These requirements shall be incorporated into the contractor's safety and health program.

Mishap Notification and Investigation: The contractor and its subcontractors (if applicable) shall promptly report pertinent facts regarding mishaps involving Government property damage or injury to Government personnel and to cooperate in any resulting safety investigation.