California Department of Motor Vehicles RFQ #ISD25-4404, Section III

Exhibit A, Page 1 of 20

STATEMENT OF WORK

A. BACKGROUND

The California Department of Motor Vehicles’ (DMV) primary business functions revolve around the licensing and administration of the driving privilege and the registration of vehicles. In addition, the licensing and regulation of vehicle salespersons and dealers, automobile dismantlers, and other licensees and permittees, plays an important role in the business of the DMV. The collection of, accounting for, and distribution of fees associated with these transactions is also an integral business function.

Annually, the DMV collects over $12 billion dollars approximately in fees, penalties, and fines, of which the DMV uses less than 10% to support the operation of the Department and its 10,000 employees. The State distributes the remainder of the monies to other state and local governmental agencies. The monies are committed to the State’s general fund and various special programs.

Currently, the DMV maintains records on over 35 million vehicles and 33 million plus (active and inactive) drivers. In support of this complex business model are a multitude of computer information systems and a complete information system’s support infrastructure.

B. CONTRACT DESCRIPTION AND SCOPE

1. The Contractor will provide file-based National Change of Address (NCOA) services, including all the task required to update the Vehicle Registration (VR) Renewal Notice Print Records received with address changes from the United States Postal Service (USPS) NCOA database, address standardization, zip + 4 codes, and delivery point barcodes, via electronic (DMV’s SFTP/VPN) delivery.

2. The Contractor will provide Data Personator API software for Address Standardization and Validation for real-time with up to 24,000,000 records per year.

3. The Contractor will provide Data US Express Entry (Autocomplete000) Bulk API software with National Change of Address (NCOA) services with address changes from the United States Postal Service (USPS) NCOA database, address standardization, zip + 4 codes, and delivery point barcodes, with up to 24,000,000 records per year.

C. CONTRACT TERM

The base term of this contract is three (3) years. It is understood that no funds sufficient for the purpose of this order have been appropriated until such time as the budget for each fiscal year covered by the agreement has been adopted by the Legislature and signed by the Governor.

Exhibit A, Page 2 of 20

D. CONTRACTOR RESPONSIBILITIES

1. The Contractor shall assume responsibility for completion of work identified in Exhibit A, Statement of Work, and in accordance with Exhibit F, Information Security and Privacy Provisions Dated 04/2022.

2. Contractor will ensure that Contractor’s staff maintain telecommunication and internet connectivity to perform all duties required in this Contract.

3. The Contractor shall prepare all deliverables, where applicable, in accordance with the State’s, and DMV’s, applicable business and information technology documentation standards and requirements, including format and content.

4. The Contractor’s staff listed in this contract shall undergo and clear a background check prior to that individual commencing any work under this contract if they are working on the DMV’s physical site or have access to sensitive or personal data (including Personally Identifiable Information (PII)). The background check shall be processed by an authorized Department of Justice (DOJ) Live Scan site. Failure of the proposed staff to pass the background check will ban that individual from commencing any work under this contract and the Contractor shall propose a replacement staff person within five (5) business days. The DMV will provide authorized DOJ Live Scan services at DMV Headquarters in Sacramento, CA, at no additional cost to the Contractor’s staff listed in this contract until the DMV discontinues the service to all Contractors. At that point, the Contractor is responsible for any costs incurred to complete the required background check. In any case, if the Contractor staff listed in this contract use the DOJ Live Scan at other locations, the Contractor is responsible for any costs incurred to complete the required background check. NOTE: The DOJ background check is only available for staff located in the United States; therefore, staff located outside of the United States shall not have access to sensitive or personal data.

5. If requested, the Contractor will attend project meetings and periodic briefings for DMV’s management as indicated by the DMV Contract Manager (refer to Section E, #7 for identification of DMV Contract Manager).

6. The Contractor Official responsible for overseeing completion of services, approval of Deliverable Acceptance Documents (DAD), approval of Personnel Change Orders (PCO), and to whom all communications relative to those services be addressed is:

Name: TO BE DETERMINED

Telephone Number:

Email Address:

Exhibit A, Page 3 of 20

7. It is DMV policy that “User authentication and access authorization decisions will be performed within a security layer that is separate from the application business logic”. Before application business logic is initiated, the security layer will verify the user’s authorization to perform the requested process. For any proposed applications that will be used by DMV employees or Government and Industry Partner employees, the Contractor must integrate the web-based application with the Secure Access Infrastructure (SAI) (ISAM and ISIM) deployment, including security header contents and proposed access groups or the non-web-based application will utilize Microsoft Active Directory (AD) or some other repository that utilizes Lightweight Directory Access Protocol (LDAP).

8. Contractor shall provide, with each deliverable, detailed Network and/or System Architecture Diagrams for any network/system created or altered.

9. The Contractor will ensure employee compliance with all sexual harassment training requirements under California law (Government Code section 12950.1). In the event that the Contractor has less than five (5) employees in California, the Contractor will ensure that its employees have sexual harassment training commensurate with the requirements under California law.

10. All tasks associated with this Contract may be performed remotely and/or on site at 2415 First Avenue, Sacramento, CA 95818, as determined by the DMV Contract Manager. The approval to work remotely is required in writing from the DMV’s Contract Manager and Chief Information Security Officer (CISO), to ensure the work has a secure remote connection and storage on DMV drives/servers. . If remote work is approved, it must be performed within the continental United States. Contractor personnel shall perform their duties on the premises of the DMV or remotely, if approved, during DMV’s regular business days and normal work hours of 7:00 am to 5:00 pm Pacific Time, except State holidays, except as specifically agreed to otherwise in writing by the DMV Contract Manager. There will be no increase in hourly rates for extended hours or days.

11. The Contractor shall comply with all applicable health and safety laws and regulations at the Contractor’s own expense. Upon notice by the DMV, the Contractor shall also comply with the DMV’s specific health and safety requirements and policies. The Contractor also agrees to include in any subcontract related to the performance of this Agreement, a requirement that the subcontractor comply with all applicable health and safety laws and regulations, and upon notice by the DMV, the DMV’s specific health and safety requirements and policies.

12. Contractor will comply with the Department of Transportation Federal Motor Carrier Safety Administration Non-Discrimination Assurances located at:

https://www.dmv.ca.gov/portal/file/fmcsa-appendix-a-and-e-pdf/

13. Prior to expiration of the Contract, the Contractor shall return all State property, including security badges, to the DMV Contract Manager.

Exhibit A, Page 4 of 20

14. Small Business Participation and DVBE Participation Reporting Requirements:

A. If for this Contract the Contractor made a commitment to achieve small business participation, then the Department requires the Contractor upon completion of this Contract (or within such other time period as may be specified elsewhere in this Contract) to report the actual percentage of small business participation that was achieved. (Govt. Code § 14841)

B. If for this Contract the Contractor made a commitment to achieve the disabled veteran business enterprise (DVBE) participation goal, then, pursuant to Mil. & Vets. Code § 999.5(d), upon completion of this Contract, the Department requires the Contractor to certify using the Prime Contractor’s Certification – DVBE Subcontracting Report (STD 817), all of the following:

1. the total amount the prime Contractor received under the Contract;

2. the name, address, Contract number and certification ID number of the DVBE(s) that participated in the performance of this Contract;

3. the amount and percentage of work the prime Contractor committed to provide to one or more DVBE(s) under the requirements of the Contract and the total payment each DVBE received from the prime Contractor;

4. that all payments under the Contract have been made to the DVBE(s); and

5. the actual percentage of DVBE participation that was achieved. Upon request, the prime Contractor shall provide proof of payment for the work.

C. If for this Contract the Contractor made a commitment to achieve the DVBE participation goal, the Department will withhold $10,000 from the final payment, or the full final payment if less than $10,000, until the Contractor complies with the certification requirements above. The Contractor must e-mail the Std. 817 to dmvasdsbdvbeadvocate@dmv.ca.gov .

D. A Contractor that fails to comply with the certification requirement shall, after written notice, be allowed to cure the defect. Notwithstanding any other law, if, after at least 15 calendar days but not more than 30 calendar days from the date of written notice, the prime Contractor refuses to comply with the certification requirements, the Department shall permanently deduct $10,000 from the final payment, or the full payment if less than $10,000. (Mil. & Vets.

Code § 999.7).

E. A person or entity that knowingly provides false information shall be subject to a civil penalty for each violation. (Mil. & Vets. Code § 999.5(d); Govt. Code § 14841).

F. Contractor agrees to comply with the rules, regulations, ordinances, and statutes that apply to the DVBE program as defined in Section 999 of the Mil. & Vets. Code, including, but not limited to, the requirements of Section 999.5(d).

(PCC Code § 10230).

Exhibit A, Page 5 of 20

15. Contractor must comply with Executive Order N-6-22, Economic Sanctions Against Russia Sanctions. The Executive Order is available at the following website:

https://www.gov.ca.gov/wp-content/uploads/2022/03/3.4.22-Russia-Ukraine- Executive-Order.pdf

On March 4, 2022, Governor Gavin Newsom issued Executive Order N-6-22 (the EO) regarding Economic Sanctions against Russia and Russian entities and individuals. “Economic Sanctions” refers to sanctions imposed by the U.S.

government in response to Russia’s actions in Ukraine, as well as any sanctions imposed under state law. By submitting a bid or proposal, Contractor represents that it is not a target of Economic Sanctions. Should the State determine Contractor is a target of Economic Sanctions or is conducting prohibited transactions with sanctioned individuals or entities, that shall be grounds for rejection of the Contractor’s bid/proposal any time prior to contract execution, or, if determined after contract execution, shall be grounds for termination by the State.

16. The State of California seeks to realize the potential benefits of GenAI, through the development and development of GenAI, while balancing the risks of these technologies.

Bidder/Offeror must notify the State in writing if it: (1) intends to provide GenAI as a deliverable to the State; or (2), intends to utilize GenAI, including GenAI from third parties, to complete all or a portion of any deliverable that materially impacts: (i) functionality of a State system, (ii) risk to the State, or (iii) Contract performance. For avoidance of doubt, the term “materially impacts” shall have the meaning set forth in State Administrative Manual (SAM) .

Failure to report GenAI to the State may result in disqualification. The State reserves its right to seek any and all relief it may be entitled to as a result of such non-disclosure.

Upon notification by a Bidder/Offeror of GenAI as required, the state reserves the right to incorporate GenAI Special Provisions into the final contract or reject bids/offers that present an unacceptable level of risk to the state.

Government Code defines “Generative Artificial Intelligence (GenAI)” as an artificial intelligence system that can generate derived synthetic content, including text, images, video, and audio that emulates the structure and characteristics of the system’s training data.

17. The Contractor shall provide to the DMV Contract Manager a copy of the insurances listed below within 10 calendar days after Contract award. The State requires that the Certificate Holder on the Certificate of Insurance include the DMV’s address as: Department of Motor Vehicles, 2415 1st Avenue, Sacramento, CA 95818, and this DMV Contract Number.

Exhibit A, Page 6 of 20

A. General Provisions Applying to All Insurance Policies

1. Coverage Term:

Coverage needs to be in force for the entire term of this Contract. If insurance expires during the term of this contract, a new certificate of Insurance must be received by the DMV at least ten (10) DMV business days prior to the expiration of the insurance. Any new insurance must comply with the original terms of this Contract.

2. Policy Cancellation of Termination and Notice of Non-Renewal:

The Contractor shall provide to the DMV, within five (5) DMV business days following receipt by the Contractor, a copy of any cancellation or non-renewal of insurance required under this Contract. In the event the Contractor fails to keep the required insurance coverage in effect at all times, the DMV may, in addition to any other remedies it may have, terminate this contract upon the occurrence of such event.

3. Deductible

The Contractor is responsible for any deductible or self-insured retention contained within their insurance program.

4. Primary Clause

Any required insurance specified under this Contract shall be primary, and not excess or contributory to any other insurance carried by the DMV.

5. Insurance Carrier Required Rating

All insurance companies must carry a rating acceptable to the Department of General Services (DGS), Office of Risk and Insurance Management (ORIM). Per DGS ORIM, an acceptable rating is “A” or better, and financial size category of “VII” or better to the latest edition of the A.M. Best Key Rating Guide. If the Contractor is self-insured for a portion or all of its insurance, a review of the Contractor’s financial information, including a letter of credit, may be required.

6. Endorsements

Any required endorsement must be physically attached to all requested certificates of insurance and not substituted by referring to such coverage on the certificate of insurance.

7. Inadequate Insurance

Inadequate insurance or lack of insurance does not negate the Contractor’s obligations under this Contract.

B. Commercial General Liability

1. Throughout the term of this Contract, the Contractor shall provide the DMV with a valid certificate of insurance stating that there is commercial general liability insurance presently in effect for the Contractor with limits of not less

Exhibit A, Page 7 of 20 than $1,000,000.00 per occurrence for bodily injury and property damage liability combined. The policy shall include coverage for liabilities arising out of premises operations, independent contractors, products/completed operations, personal and advertising injury, and liability assumed under an insured Contract. This insurance shall apply separately to each insured against whom claim is made or suit is brought subject to the Contractor’s limit of liability.

2. The insurance policy shall include the following additional insured endorsement that shall be supplied under form acceptable to DGS, ORIM:

The State of California, its officers, agents and employees are included as additional insured, but only with respect to work performed for the State of California.

C. Automobile Liability

By signing this Contract, the Contractor certifies that the Contractor and any of their employees or subcontractors using a vehicle in the performance of work under this Contract possesses valid automobile liability coverage in accordance with California Vehicle Code Sections 16450 to 16457, inclusive.

The DMV reserves the right to request proof at any time.

D. Workers Compensation

1. Throughout the term of this Contract, the Contractor shall provide the DMV with a valid certificate of insurance stating that there is workers compensation insurance presently in effect for the Contractor, if the Contractor employs any person, in any manner, that is subject to the Workers Compensation Laws of California. The Contractor shall maintain statutory worker’s compensation and employer’s liability coverage for all its employees who will be engaged in the performance of this Contract.

Employer’s liability limits of not less than $1,000,000.00 are required. If the Contractor does not employ any person, in any manner, so as to not become subject to the Workers Compensation Laws of California, the Contractor shall complete and submit to the DMV Contract Administrator, a Workers Compensation Exemption Certification form.

2. In the event the Contractor becomes subject to the Workers Compensation Laws of California during the term of this Contract as a result of hiring employees to perform required services under this Contract, the Contractor shall provide the DMV within ten (10) calendar days of hiring employee, with a valid certificate of insurance stating that there is workers compensation insurance presently in effect for the Contractor. The Contractor shall maintain statutory worker’s compensation and employer’s liability coverage for all its employees who will be engaged in the performance of this Contract. Employer’s liability limits of not less than $1,000,000.00 are required.

Exhibit A, Page 8 of 20

3. The Contractor’s workers compensation insurance policy shall be endorsed with a waiver of subrogation in favor of the State of California in the event the Contractor employs any person, in any manner, that is subject to the Workers Compensation Laws of California.

E. Professional Liability Insurance

1. Throughout the term of this Agreement, the Contractor shall provide the DMV with a valid certificate of insurance stating that there is professional liability insurance presently in effect for the Contractor with limits of not less than $1,000,000.00 per occurrence and $3,000,000.00 in the aggregate, covering any damages caused by a negligent error, act, or omission.

2. By signing this Contract, the Contractor certifies that the carrier of any professional liability insurance required in the performance of this Contract has knowledge of the Contractor’s extension of services to the DMV.

E. DMV’S RESPONSIBILITIES

1. Provide current VR Renewal Notice Print Records available by electronic file transmission to the Contractor for the tasks listed below in Section F, Contractor Task and Deliverables.

2. Provide access to business and technical documentation as necessary for the Contractor to complete the tasks identified under this Contract.

3. Provide access to the DMV staff, management, offices, and operation areas as required to complete the tasks defined under this Contract.

4. The DMV shall be available to provide general guidance, information, and facilitation activities, including access to DMV Subject Matter Experts such as DMV business analyst(s), DMV system analyst(s), and DMV programming staff, as necessary for the Contractor to complete the tasks defined under this Contract.

DMV shall not provide any resources to complete the Contractor responsibilities.

5. Provide Contractor staff with normal office working facilities and equipment if work occurs at DMV Headquarters.

6. If needed, invite the Contractor to appropriate project meetings.

7. The DMV Contract Manager responsible for overseeing the Contractor's performance, the Contractor’s completion of requested services, approval of the DADs, PCOs, and invoices, and to whom all communications relative to those services be addressed is:

Name: TO BE DETERMINED

Telephone Number:

Email Address:

Exhibit A, Page 9 of 20

8. The DMV Contract Manager is responsible for forwarding approved invoice(s), the associated DAD, the deliverable(s), status reports, and timesheets to the DMV’s IT Acquisitions Unit for auditing purposes.

F. CONTRACTOR TASKS AND DELIVERABLES

The following identifies the tasks and deliverables that, at a minimum, will be required of the Contractor for this SOW. Some of the tasks may be addressed concurrently and incrementally throughout the engagement.

1. TASKS

Contractor tasks include performing the following:

Update the VR Renewal Notice Print Records received with address changes from the USPS NCOA database using file-based approach. The number of records sent to the Contractor will not exceed 3.5 million per week. Updates will include:

1. Standardized and corrected addresses, verified and corrected 5-Digit ZIP codes, and the correct ZIP + 4 codes,

2. 11-Digit delivery point barcodes,

3. A second updated record in the prescribed record format, suitable for updating the VR record database when any change has occurred.

4. A computer-generated USPS Form 3553 Facsimile Report for each pre-barcoded mailing – one copy to be provided weekly, by email, for every batch.

The address changes applied against these print records are to be made in accordance with the licensee performance requirements as set forth in the NCOA License Agreement entered between the Contractor and the USPS. The address standardization/correction changes, 5-digit ZIP code additions and/or corrections, and the appending of ZIP + 4 codes to these print records are to be made in accordance with the rules and regulations as set forth by the USPS in the Domestic Mail Manual.

Provide the records received with address changes from the USPS database using the real-time Personator Application Programming Interface (API) for standardization and validation. The number of records sent to the Contractor will not exceed 1 million per year.

Provide the DPP bulk-Application Programming Interface (API) records received with address changes from the USPS database using the real-time Smartmover API with address changes from the USPSNCOA database. The number of records sent to the Contractor will not exceed 0.5 million per year. Updates will include:

1. Standardized and corrected addresses, verified and corrected 5-Digit ZIP codes, and the correct ZIP + 4 codes,

2. 11-Digit delivery point barcodes, Exhibit A, Page 10 of 20

3. A computer-generated USPS Form 3553 Facsimile Report for each pre-barcoded mailing – for every batch.

The address changes applied against these print records are to be made in accordance with the licensee performance requirements as set forth in the NCOA License Agreement entered between the Contractor and the USPS. The address standardization/correction changes, 5-digit ZIP code additions and/or corrections, and the appending of ZIP + 4 codes to these print records are to be made in accordance with the rules and regulations as set forth by the USPS in the Domestic Mail Manual.

2. DELIVERABLES

DMV will provide the Contractor with VR Renewal Notice Print available by electronic file transfer. It will be the Contractor’s responsibility to provide DMV with the following:

1) Unchanged Records

The Contractor’s software must return DMV’s VR Renewal Notice Print Records to the DMV in the exact same state and form that they were provided. Data errors are charged against the Contractor’s work when the fields in the VR Renewal Notice Print Records that are not supposed to be changed by the Contractor’s software are somehow inadvertently changed or deleted. When 200 data errors are detected, DMV’s Validation Program (RP0826) stops processing the Contractor’s files and the backup files are processed. When this happens, the Contractor shall not invoice for that particular batch of work. DMV’s VR Renewal Notice Print Records must also be returned unchanged if the address information is not standardized/corrected, including the 5-Digit ZIP Codes, or when an Address Change is not used to update the R/O Address Information.

2) Address Changes

a. The Contractor’s software must update DMV’s VR Renewal Notice Print Records with address change information and return them to the DMV by Secure File Transfer. These address changes are to be transferred in the prescribed print record formats provided in Exhibit B, Vehicle (Print Record) and in the prescribed VR database update record format provided in Exhibit C, Format. When an address change is provided, it will also be necessary for the Contractor to provide updated California County Code information as well as the updated street address, city name, 5-Digit ZIP Code, ZIP+4 Code and 11- Digit Delivery Point Barcode in every updated print record. The Contractor must update the county code when standardizing/correcting addresses if the provided registered owner county code does not reflect the correct county code associated with the registered owner address. Excluding the 11-Digit Delivery Point Barcode, this same information will also be required in every VR database update record. If the address change information exceeds any of the field lengths in these record formats (e.g., 27 bytes maximum for street address data) then the Contractor’s software must bypass applying the

Exhibit A, Page 11 of 20 address change information to the print record and will not create a VR database update record. Data lengths on the NCOA database that exceed the maximum length allowable in the print records are considered to be a no match condition as far as DMV’s NCOA record processing is concerned. The Contractor’s software matches on name and old address information in order to make a positive match on the NCOA database. In the case of individual names, this is a simple and straightforward matching process. However, in the case where there are multiple names in the print records, this matching process can become much more involved. As a general rule, when the “Family Box” is checked on the NCOA database records, the Contractor’s software must attempt a match on last name only (bypassing or blocking out the first name information) and if a match is found, identifying the input record as a positive match is found, identifying the input record as a positive match on the NCOA database. Since the name information contained in the print records can signify other than true family names, the Contractor’s software may have to be modified in order to follow the rules established by DMV for identifying positive multiple name matches in its print records. These rules are illustrated in the following examples:

SMITH JOHN LESLIE/

MARIA ESTELLE

EDWARDS MARY OR JONES JEAN

Rule #1 – If a multiple name in the print record is separated by a slash mark (/) or by the word “OR”, and if the “Family Box” is checked in the matching NCOA database record, then the NCOA software may follow its current practice of bypassing first name information in order to provide a positive match on the print records.

RIVER CITY OLDS LSR

SCHIFFNER LEE H LSE

SMITH BILL

DBA BILLS MARINE

HARRINGTON GEORGE

AKA SMYTHE HARRY

Rule #2 – If the multiple names in the print record are separated by the words “LSR” or “LSE”, then the Contractor’s software is to bypass applying the address change to DMV’s record. If the multiple names in the print record are separated by “DBA”, or “AKA”, then the Contractor’s software can provide a positive match on name if either of the last names match the name in the NCOA database record regardless of whether or not the “Family Box” is checked.

b. The Contractor’s software must modify the City field for Out-of-State addresses.

The Contractor’s software must use the first thirteen-bytes of city field to populate city and state information. First ten bytes must be used for the city, one byte space, and last two bytes for the state. This modification must only be applied to records with Out-of-State addresses.

Exhibit A, Page 12 of 20

(Now) CO 93456 123456789+123 (13 byte city field)

Change to this format;

RENO NV

123456789+123

(when city > 10 bytes)

COLORADO SPRINGS CO

123456789+123

(use the USPS abbrev.)

CLRDO SPGS CO

123456789+123

-the above meets DMV 13 bytes maximum length criteria for Out-of-State City and State

3) Standardized/Corrected Addresses

The standardized and corrected addresses must be transferred in the prescribed print record formats provided in Exhibit B, Vehicle (Print Record) and in the prescribed VR master file update record format provided in Exhibit C, Format. If the standardized/corrected address information exceeds any of the field lengths in these record formats (e.g., 27 bytes maximum for street address data) then the Contractor’s software must bypass applying the standardized/corrected address information to the print record and must not create a VR database update record.

Data lengths on the ZIP+4 database that exceed the maximum length allowable in the print records are considered to be a no match condition as far as DMV’s NCOA record processing is concerned. Since all of the print records being sent to the Contractor consists of First-Class Mail items, the Contractor must provide DMV with standardized/corrected address information as follows:

a. Multiple street address lines in the print records that enter the NCOA process must be returned as multiple street address lines and cannot be standardized or corrected into single address lines. DMV has dual address in some of its VR database records and it does not want these dual addresses standardized or corrected into single address lines. This remains true even if the Contractor has to modify its software to bypass these records without doing ZIP+4 processing or applying the NCOA address changes to them.

b. Address standardization and corrections cannot be based on variations of the street address that rely on a degraded search pattern such as a Soundex or phonetic variation of the street address name.

c. Addresses that are standardized and corrected in order to find a match on the ZIP+4 database must be returned in their original formats in the print records and VR database update records by the Contractor. For example, “POST OFFICE BOX 234,” which would be standardized and corrected to “234 PO

Exhibit A, Page 13 of 20

BOX” by the Contractor in order to find a match on the ZIP+4 database must be returned in the print record and in the VR database update record as “PO BOX 234” (mailable address line format) by the Contractor. Addresses that are simply standardized in order to find a match on the ZIP+4 database without being corrected will not require any changes to the print record or the creation of a VR database update record by the Contractor.

d. The Contractor must correct the spelling in city names and to standardize them according to USPS abbreviation requirements (see subsection #2 Address changes, B, above). However, the city names in California must be returned exactly the way that they were given to the NCOA Contractor without being changed as a result of the ZIP+4 processing. For example, HOLLYWOOD must not be changed to the USPS Last Lines Name of LOS ANGELES.

4) Corrected 5-Digit ZIP Codes

The 5-digit ZIP Code corrections must be transferred in the prescribed print record formats provided in Exhibit B, Vehicle (Print Record) and in the prescribed VR database update record format provided in Exhibit C, Format. Corrected 5-Digit ZIP Code Records must be intermixed with the Address Change Records mentioned in B, 1, and the Standardized/Corrected Records mentioned in B, 2.

For the purposes of NCOA processing 5-Digit ZIP Code additions, deletions, and corrections are all considered to be 5-Digit ZIP Code corrections. Since the 5-Digit ZIP Codes are a part of the VR database, 5-Digit ZIP Code corrections must be processed the same as a standardized and corrected address. The Contractor must provide the following when supplying DMV with corrected 5-Digit ZIP Codes:

a. The long standing practice of providing the USPS with the first three positions of ZIP Code (SCF) followed by two zeros, e.g., 95800, when a positive match cannot be found on the USPS 5-Digit ZIP Code database is no longer valid and results in a distortion of the Residual Item Counts in the 3-Digit Reports that must accompany each group of 11-Digit Delivery Point pre-barcoded mail items to the Post Office. Therefore, the Contractor must replace each California 5-Digit ZIP Code that ends in two zeros with either the correct 5-Digit ZIP Code, or with 5 spaces in the 5-Digit ZIP Code field in the print records and with 5 zeros in the 5-Digit ZIP Code field in the corresponding VR database update records.

b. The corrected 5-Digit ZIP Codes for California addresses must be inserted into the fields marked as Registered Owner (R/O) ZIP Code in the print records provided in Exhibit B, Vehicle (Print Record) and in the VR master file update records provided in Exhibit C, Format. The corrected 5-Digit ZIP Codes for out

– of – state addresses (County Code = 60) must appear in the City fields in both of these records, following the two-character USPS State Abbreviation Code or the Country Name for a foreign country. The R/O ZIP Code field in the print records will contain 5 spaces with 5 zeros in the R/O ZIP Code field in the corresponding VR database update records. When the City field contains the

Exhibit A, Page 14 of 20

USPS State Abbreviation Code and the 5-Digit ZIP Code, or the Country Name for out-of-state addresses, then the City Name must be in the next available Name/Address field with an “A” inserted into the indicator field.

5) 4ZIP + 4 Codes

The ZIP + 4 codes must be transferred in the prescribed print record formats provided in Exhibit B, Vehicle (Print Record) and in the prescribed VR database update record format provided in Exhibit C, Format. If an accurate ZIP+4 Code cannot be provided for individual print records, then the Contractor’s software must insert 4 spaces into the R/O ZIP+4 Code Field in the print records and 4 zeros into the R/O ZIP+4 Code field in the corresponding VR database update record.

NOTE: If the only change that is made to the print record consists of the addition of the ZIP+4 Code, then the Contractor’s software will supply the ZIP+4 Code in the print record but it will not create a corresponding VR master file update record.

6) 11-Digit Delivery Point Barcodes

The 11-Digit Delivery Point Barcodes must be transferred along with their Framing Bars and Check Digit, for a total of 14 bytes, in the prescribed print record formats provided in Exhibit B, Vehicle (Print Record). The appropriate Framing Bars for DMV’s print records consists of a # (number sign) in the starting position and an * (asterisk) in the ending position. If an accurate 11-Digit Delivery Point Barcode cannot be provided for individual print records, then the Contractor’s software must insert 14 spaces into the R/O Delivery Point Barcode field in the print records.

The 11-Digit Delivery Point Barcodes are not to be inserted into the VR database update records.

7) Record Sequence

The output records from the Contractor’s software are to be written to two separate files. The first file will contain changes and corrected print records. The second file will contain all of the VR database update records.

8) ZIP + 4 and Action Code Reports

Weekly, the Contractor must email DMV a copy of its 3553 Report. The audit trail copy of this report is to be retained by the Contractor for one year per USPS rules and regulations from the date of the file sent to them. Weekly, the Contractor must email DMV a copy of its “Action Code Report” in the following format:

Exhibit A, Page 15 of 20

ACTION CODE REPORT

CALIFORNIA DEPARTMENT OF MOTOR VEHICLES

PREPARED BY XXX CORPORATION

CONFIDENTIAL

BATCH 16

APRIL 23, 2004

ACTION CODE FREQUENCY PERCENT

NO CHANGE 438,389 86.86%

NCOA HIT W/FWD 20,288 4.02%

STANDARDIZED 46,006 9.12%

504,683 100.00%

THE TOTALS ABOVE INCLUDE 1,267 BYPASSED RECORDS

3,298 EXCEPTION RECORDS

9) Turnaround Time

The Contractor must process and return DMV’s work using Secure File Transfer (via Virtual Private Network processing) within 48 hours of receipt, excluding Saturdays, Sundays, and Holidays observed by Contractor. The 48 hour, return cycle starts on the day that the VR Renewal Notice Print Records are received by the Contractor.

10) Product Verification

The Contractor must have an on-line process in place to handle inquiries concerning individual customer complaints made to DMV involving either address standardization/correction and/or NCOA address changes. These inquiries will be made by DMV’s staff and will be identified by Batch number and License number.

The inquiries may include the following requests/questions: what the particular record looked like when it was sent to the Contractor for processing, what action was taken by the Contractor’s software, and what the record looked like when it was returned by the Contractor. The Contractor must be able to answer routine inquiries within two (2) hours and most difficult inquiries should be answered within 8 hours. Errors identified as a result of the inquiry process will be corrected by the Contractor, as quickly as possible, at no additional cost to the DMV. Depending on the circumstances, the DMV may withhold sending any more files to the Contractor until such time as the error condition(s)have been corrected. Since the Contractor is paid for the number of records processed, there will be no payment made for the shipments withheld by the DMV.

11) Software Maintenance and Testing

The Contractor will be responsible for maintaining its own software in order to remain in compliance with USPS regulations. DMV will be the recipient of these changes without incurring any additional costs. When it becomes necessary for the Contractor to release an updated version of its ZIP+4 software, it must be

Exhibit A, Page 16 of 20 approved by DMV before the Contractor will be allowed to use the updated version on DMV’s records. This approval cycle will be in the form of the Contractor running “Before and After” tests on its old ZIP+4 software versus its updated/new ZIP+4 software. Any differences in address standardization and/or correction must be submitted in printed report form and these differences must be explained and resolved by the Contractor before DMV will allow the updated version of the ZIP+4 software to be used on its production records. This testing will be done without DMV incurring any additional costs.

12) Software Modifications

The Contractor will be responsible for modifying its software to meet the processing needs of DMV within thirty (30) calendar days of receiving written instructions to do so from DMV’s technical staff.

13) Shipment Costs, Disposition, and Security

The Contractor will be responsible for transmitting the updated VR Renewal Notice Print Records, VR Database Update Records, USPS 3553 Facsimile Reports, and the Action Code Reports to DMV. All reports produced as a result of the NCOA process will remain the property of DMV and will not be returned to the Contractor.

G. DELIVERABLE ACCEPTANCE OR REJECTION

All work shall be submitted to the DMV Contract Manager for review and approval or rejection with the following process:

1. The Contractor will submit each deliverable with the level of detail and quality consistent with the deliverable description in Section F, Contractor Tasks and Deliverables to the DMV Contract Manager for review and approval or rejection via an Exhibit D, Deliverable Acceptance Document.

2. A signed Exhibit D, Deliverable Acceptance Document is required from the DMV Contract Manager before processing an invoice for payment. The DAD must accompany any invoice submitted by the Contractor. Should deficiencies be identified in a deliverable, the DMV and the Contractor will meet to determine what work products are acceptable and the strategy and level of effort for correction of any deficiencies. The DMV may issue a DAD for a portion of the Deliverable. The DMV and the Contractor will document the strategy and level of effort for the Contractor’s correction of deficiencies.

3. All Deliverables shall be provided in a format compatible with the DMV Project Office standard applications (currently, Microsoft Office 2019 or above). In all cases, the Contractor must verify application compatibility with the DMV Contract Manager prior to creation or delivery of any electronic documentation. Any deviations from these standards must be approved in writing by the DMV Information Systems Division (ISD) and Information Security Office (ISO).

4. Hardcopy deliverables must be on standard paper as appropriate. All deliverables are the sole property of the DMV.

Exhibit A, Page 17 of 20

5. Payment for tasks performed under this Contract shall be by deliverable. It shall be the DMV’s sole determination as to whether a deliverable has been successfully completed and is acceptable to the DMV.

H. PAYMENT TERMS AND INVOICING REQUIREMENTS

1. Payment for tasks performed under this Contract shall as described in Exhibit E, Cost Data Sheet.

2. It shall be the DMV’s sole determination as to whether a deliverable has been successfully completed and is acceptable to the DMV. Signed acceptance is required from the DMV’s Contract Manager before processing an invoice for payment. Refer to Section E, DMV’s Responsibilities, #7, for identification of the DMV Contract Manager required to sign for acceptance of deliverables under this contract.

3. The Contractor may submit an invoice to the DMV but payment will not be issued until the DMV Contract Manager has approved the invoice as stipulated in this Contract.

4. Invoices submitted must reference this Contract Number.

5. In no event shall the DMV pay more for a deliverable than the agreed maximum cost for the deliverable as provided in Exhibit E, Cost Data Sheet.

6. The DMV may dispute an invoice that does not comply with the SOWs requirements, including requirements for invoices, timesheets and status reports, and a dispute notice given on that basis shall satisfy the requirements of the California Prompt Payment Act.

7. Project costs related to items such as travel, per diem, and travel time to the designated base of operation for the engagement are costs to be included within the Contractor rates. DMV shall not pay for such costs as a separate item.

8. DMV Accounts Payable will pay only those invoices approved by the DMV Contract Manager and verified by the IT Acquisitions Unit.

9. Invoices must be mailed to:

Department of Motor Vehicles P.O. Box 932382

Sacramento, CA 94232-3820 Attn: Accounts Payable M/S E-109 or emailed to:

ACCT_INV@dmv.ca.gov

I. PROBLEM OR ISSUE ESCALATION

The parties acknowledge and agree that certain technical and project-related problems or issues may arise, and that such matters shall be brought to the DMV’s or Contractor’s attention from the moment a service problem is discovered to resolution.

Exhibit A, Page 18 of 20

Problems or issues shall also be reported in status reports. However, there may be instances where the severity of the problem or issue justifies escalated reporting. To this extent, the DMV or the Contractor will notify the appropriate party as follows:

1. 1st Level of Escalation:

a. Problem or issue (deviation) is identified by the DMV or the Contractor as follows:

1. Project output, samples, or deliverables are not consistent with the requested status or quality, or

2. Exceeded deadlines, or

3. Services by DMV or Contractor are not efficient or were not implemented.

b. Action(s):

1. On-site meeting at DMV headquarters in Sacramento, CA with Contractor and DMV Contract Manager about the deviation and approach for resolution.

c. Consequence(s):

1. Define necessary actions for deviation troubleshooting, resolution and completion time.

2. Monitoring of status reports concerning deviation.

If actions are processed and successful at 1st Level of Escalation, no further process shall follow. If actions are deemed not successful by the DMV or the Contractor, proceed to 2nd level of escalation.

2. 2nd Level of Escalation:

a. Problem or issue (deviation) is identified by the DMV or the Contractor as follows:

1. Declaration by DMV or Contractor that 1st Level of Escalation was not effective.

b. Action(s):

1. Meeting with Contractor’s Senior Management and DMV Contract Manager about the deviation and approach for resolution.

c. Consequence(s):

1. Define necessary actions for deviation troubleshooting, resolution and completion time.

2. Monitoring of status reports concerning deviation.

If actions are processed and successful at 2nd Level of Escalation, no further process shall follow. If not successful, proceed to 3rd Level of Escalation.

Exhibit A, Page 19 of 20

3. 3rd Level of Escalation:

a. Problem or issue (deviation) is identified by the DMV or the Contractor as follows:

1. Declarations by the DMV or the Contractor that 2nd Level of Escalation was not effective.

b. Action(s):

1. Meeting with the Contractor Executive(s) who holds the authority to bind the Contract and DMV Executive(s) about the deviation and approach for resolution. DMV Executive(s) will include the following: Project Director, Enterprise Applications Branch Chief, Chief Information Officer, Information Systems Division Deputy Director, or Director.

c. Consequence(s):

1. Analysis by the Contractor or DMV for immediate resolution, subject to the other party’s approval.

2. If a deviation is in result of the Contractor’s performance, the Contractor shall submit an action plan documenting results of the 3rd Level Escalation meeting for DMV approval.

If actions are processed and successful at 3rd Level of Escalation, no further process shall follow. If not successful, and the deviation is in result of the Contractor’s performance, the DMV may issue a Cure Notice, in accordance with Section J, Cure Notices, of this Contract.

J. CURE NOTICES

DMV may issue a cure notice to inform the Contractor in the event the Contractor fails to meet a Contract requirement or performance. The cure notice allows for ten

(10) days for the Contractor to remedy the condition. If the condition is not corrected within this period, the cure notice confirms that the Contractor may face the termination of its Contract for default. Cure notices may be triggered by any of the following conditions, or other conditions that arise in performance of the Contract:

1. The Contractor continues to miss agreed-upon deadlines;

2. Quantifiable evidence is lacking to show that work is being accomplished;

3. Quality of deliverables does not meet DMV’s standards;

4. The Contractor is non-responsive to DMV requests; or

5. The Contractor does not replace its Staff in a timely manner.

K. STAFF ADDITION OR REPLACEMENT

1. The replacement or addition of the DMV Contract Manager or Contractor Official may be completed with Exhibit G, Personnel Change Order. The additional or replacement staff will not begin work on a contract deliverable until the Contractor Official, DMV Contract Manager, DMV IT Acquisitions Analyst, and

Exhibit A, Page 20 of 20

DMV IT Acquisitions Manager have approved the PCO. An amendment to the contract is not required for replacement of the DMV Contract Manager or Contractor Official.

L. AMENDMENTS

1. Should, during the course of this Contract, it become necessary to modify the terms of this Statement of Work (Exhibit A), those modifications may be made by mutual agreement by the contracting parties through a written amendment to the Contract.

2. A Contract amendment shall not be effective unless in writing and until fully executed by both parties. No oral understanding or agreement not incorporated through the proper contractual process shall be binding on either the Contractor or the DMV. All amendments will follow the rules and regulations set forth by the State Contracting Manual Volume 2.

3. Contractor resources will not be expended, at a cost to the DMV, in excess of the authorized Contract cost without written authorization from the DMV, in the form of a written Contract amendment. Additionally, a Contract amendment is required in the event that additional work is required that both parties agree was unanticipated, is necessary to successfully complete the project, and is within the project scope. All Contract amendments will be processed utilizing the guidelines of the current rules from the State Contracting Manual Volume 2 and a contractor cannot begin work until they have received a fully executed copy of the written amendment from the DMV Information Technology Acquisitions Unit. Any amendment to the Contract not in the scope of the Contract that increases the dollar amount of the Contract, and/or adds additional tasks, and/or time, will be required to follow the Non-Competitive Bid (NCB) process as described in the State Contracting Manual – Volume 2.

Exhibit B, Page 1 of 3

VEHICLE (PRINT RECORD)

Registration Renewals General Information

See the following Vehicle Registration Renewals Record Layout for specific information concerning both the format and the contents of the vehicle registration renewal records.

In general, the fields that the Contractor will be interested in pertaining to registered owner (R/O) name and address information as listed below:

Item Number 1 =…