Amendment 0001.doc

U.S. Department of Education Office of Federal Student Aid Phase I – Solicitation #ED-FSA-12-R-0011 Amendment 0001 Perkins Loan Servicing

1.0 GENERAL DESCRIPTION OF SCOPE/PURPOSE

The U.S. Department of Education (Department), Office of Federal Student Aid (FSA), is conducting Phase I of a two-phase solicitation in accordance with the procedures in the Department of Education Acquisition Regulation (EDAR) Subpart 3415.302-70. This procurement will be set aside for small businesses under FAR Part 19 and acquired using procedures provided under FAR Part 12.

1.1 Type of Contract

A single, firm, fixed price, Indefinite Delivery/Indefinite Quantity (IDIQ) award under NAICS code 522110 is anticipated. The award will have a Base Ordering Period of five (5) years and one (1), five (5)-year Optional Ordering Period.

1.2 Federal Student Aid Background/Overview

FSA plays a central and essential role in America's postsecondary education community.

FSA's core mission is to ensure that all eligible individuals benefit from federal financial assistance—grants, loans and work-study programs—for education beyond high school. The FSA administered Programs comprise the nation's primary source of student aid. As of September 30, 2011, FSA provided approximately $157 billion in new aid to nearly 15 million postsecondary students and their families, and is managing a portfolio of $848 billion as of September 30, 2011. FSA’s staff of 1,100 is based in 10 cities, in addition to its Washington, D.C. headquarters.

FSA’s non-defaulted Perkins Loan portfolio is currently being serviced by ACS Education Solutions under the Common Services for Borrowers contract vehicle. The new Perkins Servicer shall work with the incumbent Servicer to transfer the portfolio and associated images to the new Perkins Servicer system for servicing.

1.2 Current Need

The Federal Perkins Loan Program is a Campus Based Program, one of three Title IV programs. It is administered by participating institutions that manage individual awards and disbursements of loans from funds. Funds are allocated to the institutions (campuses) by the Department and other sources.

The overall Federal Perkins Loan Portfolio is comprised of both school-serviced borrowers (School Held - representing approximately 6,300 schools) and federally-serviced borrowers (Federally Held). Schools, or their contracted servicers, service approximately 2.4 million non-defaulted borrowers representing approximately 3.8 million loans (as of March 2011). The Federally Held portfolio contains approximately 10,000 borrowers in non-default status, including approximately 13,200 loans valued at approximately $19.3 million, and approximately 48,000 defaulted borrowers, including approximately 63,300 loans valued at approximately $67.5 million.

FSA is currently in the process of acquiring a servicer for the Federally Held portion of the Federal Perkins Loan Portfolio. The vendor selected for this procurement will have the technical capabilities of providing loan servicing for the Perkins Loan Portfolio in its current state, have the scalability to meet FSA’s needs in a dynamic environment (e.g., servicing an additional 2.4 million borrowers from the School Held loans), and possess the capabilities of implementing a variety of default aversion tools.

1.3 Objective

FSA is looking for a servicer to service the Federal Perkins Loan Portfolio.

1.4 Constraints

1.4.1 Specific compliance activities for servicing Federally held assets may include, but are not limited to: 1) Security; 2) Loan Conversion, 3) Financial Reconciliation; 4) Servicing (including appropriate full customer service and default aversion activities); 5) Reporting; 6) Record Retention; and 7) Audit Response Support. Please see Appendix B – High-Level Federal Servicer Requirements

1.4.2 In order to manage the costs associated with such a potentially large portfolio, the service must provide innovative measures to ensure portfolio growth is not the key driver of total cost. Contractor compensation will be based on performing assets, rather than transaction or activity-based delinquency incentives. Costs may also be managed through redistribution of customers to self-service options. Performance measures will help ensure that the complete service operates as efficiently and effectively as possible and that it is achieving the desired business outcomes. These measurements will be flexible to allow for regular reviews and revisions as necessary.

1.4.3 The contractor(s) will be responsible for maintaining a full understanding of all federal and state laws and regulations and FSA requirements and ensuring that all aspects of the service continue to remain in compliance as changes occur.

1.4.4 The contractor(s) will provide a service flexible enough to handle new requirements generated by Congress and respond to legislative mandates and policy changes. Please see Appendix A – Standards and Relevant Documents for historical and current representative information.

1.4.5 The contractor(s) will provide timely (as defined by FSA and contractor) responses to Office of Inspector General (OIG), General Accounting Office (GAO), budget, data, and management requests.

1.4.6 It is understood and mutually agreed that the Department has exclusive ownership of all information stored in, retrieved, modified, and/or archived in as part of this service. The contractor shall have no rights in such information and no rights to such information shall vest on the contractor by virtue of its performance of this contract. No other party has the right to copy, delete, archive, or transfer such information without the prior express written consent of the Department. The contractor shall not use such information for any marketing or solicitation purpose including, but not limited to: commercial advertising, credit offers, or similar campaigns.

2.0 BASIS ON WHICH POTENTIAL SOURCES ARE TO BE SELECTED TO SUBMIT OFFERS IN THE PHASE II The following constitutes the evaluation factors on which offerors will be selected for consideration for Phase II of this solicitation process. Failure to meet the Go-No Go Factors will result in removal from further consideration for selection for Phase II.

2.1 Go/No-Go Factor

(1) Experience in servicing a minimum volume of 30,000 borrowers annually.

(2) Must meet the small business standards under NAICS code 522110.

2.2 Additional Factors

(1) Ability to accommodate additional volumes up to an approximate capacity of 2.5 million borrowers at any given period in time. (Note: Actual volume may vary and is not guaranteed under this agreement.)

(2) Ability to become system compliant in accordance with NIST standards, relevant laws (including FISMA compliance), regulations and policies.

(3) Estimated Cost to the Government. Demonstrate a cost effective plan to service a portfolio of under $250,000,000 and a portfolio of over $250,000,000 by completing pricing tables included below. (Estimated costs will be evaluated for realism. Final pricing will be established in Phase 2.)

3.0 CONTENT OF OFFERS

The Government will evaluate Offerors proposal submission based on the following:

(1) Experience in servicing a minimum of 30,000 borrowers. Offerors should provide at least one reference, or only as many as needed to demonstrate the minimum threshold stated herein. The references provided should include the following information:

Lender Name

Project Name

Description of Effort

Number of Borrowers Serviced and Total Outstanding Balance

Point of Contact (Name, Title, Organization, Mailing Address, Telephone, and Email)

Dates of Performance

(2) Provide your organization’s Representations and Certifications (Either reference your organization’s Online Representations and Certifications Application (ORCA at https://orca.bpn.gov/) or complete and submit FAR 52.212-3, Offeror Representations and Certifications—Commercial Items (April 2012) at https://www.acquisition.gov/far/current/html/52_212_213.html#wp1179194) and last 3 years of audited financial statements. (Representations and Certifications, as well as the financial statements will not be counted against the page limitation identified below.)

(3) Explain your organization’s capabilities and approach to scaling up from 30,000 borrowers to 2.5 million borrowers within a 12-month period. (Note: Actual timeframe for scaling up may vary, if this occurs.)

(4) Explain how your organization will become system compliant in accordance with NIST standards, relevant laws (including FISMA compliance), regulations and policies within 1 year after the date of award.

(5) Complete Tables 1 and 2 below for estimated Tier unit pricing.

Table 1: Portfolio Value Less than or equal to $250,000,000 (Tier 1)

500,001 and up

300,001 and up

Table 2: Portfolio Value in Excess of $250,000,000 (Tier 2)

500,001 and up

300,001 and up

Estimated Cost for System Compliance

Assumptions:

a. 1.32 loans per borrower;

b. Estimates should be based on a threshold of under 129,534 borrowers for Tier 1 and a threshold of over 129,534 borrowers for Tier 2;

c. This is a performance-based acquisition, aimed at maintaining borrowers in grace or current repayment status; thus, the above pricing will represent the highest per unit price the Government expects to pay;

d. There will be additional loan servicing life-cycle pricing requested in Phase II (e.g. Borrowers in In-School Status, Borrowers in Deferment or Forbearance, etc.).

e. Reporting is required for the number of borrowers and/or loans and dollar amount of each program, in addition to any other reporting requirements provided in the contract.

f. Borrowers in multiple statuses shall be billed once, in the lowest performing deliverable status. The lowest performing deliverable status is defined as the lowest unit priced deliverable.

g. Borrowers pending discharge, which include, but are not limited to: conditional disability, death, or bankruptcy, shall be, for billing purposes, counted in the deliverable status at the time of the discharge request.

h. The “last day of the billing period" is defined as the last day of the Department of Education’s monthly billing period.

i. Base Ordering Period consists of a 5-year period. Optional Ordering Period consists of a 5-year period.

4.0 ADDITIONAL INFORMATION

4.1 Two-Phase Solicitation Process

Only offerors selected in Phase I of this two-phase solicitation process will be provided a copy of the solicitation amendment for Phase II, and only those offerors selected in Phase I will be permitted to submit an offer in Phase II. Selection in Phase I of this solicitation does not constitute, nor guarantee, a contract award.

4.2 Offer Submission Methods

Offers shall be submitted using the following method only:

Electronic mail (E-mail). E-mail offers should be sent to Bradley Bumgarner, Contracting Officer, at bradley.bumgarner@ed.gov, Julia Jones, Contract Specialist, julia.jones@ed.gov, and Teka Thomas, Contract Specialist, at teka.thomas@ed.gov with a subject line that reads, “Phase I Submission – Perkins Loan Servicing”. All offers shall be included as attachments formatted using Adobe PDF format with a duplicate copy compatible with Microsoft Word or Microsoft Excel.

4.3 Page Limitations

An offeror’s submission for Phase I of this solicitation process may not exceed ten (10) pages total.

Offerors may include a table of contents, and a single title page, which will not count against the page limitations. Any page size up to 8 ½” x 11” (or metric equivalent) will be considered a single page. Printing on two sides of a single page will be considered as two pages. Offerors may include pages larger than 8 ½” x 11”, however such pages will count as two or more pages, rounding up to the next increment of 8 ½” x 11”. Font sizes for text portions of the technical proposal should not be less than Times New Roman, 12 point or approximate equivalent. The font size restriction does not apply to small text in charts or similar presentations. Margins should be kept at 1” on all four sides of the page. In the event that the page limitation stated herein is exceeded, the Government reserves the right to evaluate only the first number of pages up to the page limit, or what the Governments deems to be the equivalent of the first number of pages up to the page limit.

4.4 Submission Deadline

Offers should be received no later than 12:00PM (Noon) EDT on June 22, 2012. The time of receipt is considered to be the time in which the e-mail is received at the initial point of entry to the Department’s infrastructure.

Appendix A

Historical and Current representative sample of Standards and Relevant Documents United States Department of Education Information and Resources

• Title IV Student Aid Programs Regulations (34 CFR Parts 600-694) - http://www.access.gpo.gov/nara/cfr/waisidx_03/34cfrv3_03.html#600

• Review of Student Aid Regulations Under Title IV of the Higher Education Act of 1965 - http://www.ed.gov/offices/ODS/regreview/index.html

• Amendments to the Higher Education Act of 1965 - http://edlabor.house.gov/education/higher-education/

• Department of Education Priorities - http://www.ed.gov/about/priorities.jsp

• Information for Financial Aid Processionals (IFAP) Library - http://www.ifap.ed.gov/

• U.S. Department of Education Records Disposition Schedules - www.ed.gov/policy/gen/guid/fra/intro-02sch.pdf

• Security Requirements for Contractors Doing Business with the Department of Education - www.ed.gov/fund/contract/about/bsp.html Applicable Federal Public Laws and Regulations

• Title IV Student Aid Programs Regulations (34 CFR Parts 600-694) - http://www.access.gpo.gov/nara/cfr/waisidx_03/34cfrv3_03.html#600

• Review of Student Aid Regulations Under Title IV of the Higher Education Act of 1965 - http://www.ed.gov/offices/ODS/regreview/index.html

• Amendments to the Higher Education Act of 1965 - http://edlabor.house.gov/education/higher-education/

• Federal Acquisition Regulation (FAR) - http://www.arnet.gov/far/

• Fair Debt Collection Practices Act - http://www.ftc.gov/os/statutes/fdcpajump.htm

• Privacy Act of 1974 - http://www.ed.gov/policy/gen/leg/privacyact.html

• Freedom of Information Act of 1974 - http://www.usdoj.gov/04foia/

• Federal Managers’ Financial Integrity Act of 1982 - http://www.whitehouse.gov/omb/financial/fmfia1982.html

• Computer Fraud and Abuse Act of 1987 - http://www.cio.energy.gov/documents/ComputerFraud-AbuseAct.pdf

• Computer Matching and Privacy Protection Act of 1988, as amended - http://thomas.loc.gov/cgi-bin/bdquery/z?d100:SN00496:

• Paperwork Reduction Act, as amended - http://www.ed.gov/policy/gen/leg/pra.html

• Government Paperwork Elimination Act (GPEA) - http://www.ed.gov/policy/gen/leg/gpea/index.html

• Clinger-Cohen Act - http://www.ed.gov/policy/gen/leg/cca.html

• Federal Records Act - http://www.ed.gov/policy/gen/leg/fra.html

• Federal Information Security Management Act (FISMA) of 2002 (Title III of E-Gov) - http://csrc.ncsl.nist.gov/policies/

• Section 508 of the Rehabilitation Act of 1973 - http://www.section508.gov/

• Electronic Signatures in Global and National Commerce Act of 2000 (E-Sign) - http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=106_cong_bills&docid=f:s761enr.txt.pdf

• Gramm-Leach-Bliley Act - http://www.senate.gov/~banking/conf/ Standards Resources

• International Organization for Standardization - http://www.iso.ch/iso/home.htm

• National Institute of Standards and Technology - http://www.nist.gov/

• Software Engineering Institute (SEI) and the Capability Maturity Model (CMM) - http://www.sei.cmu.edu/cmmi/

• FIPS PUB 113 – “Computer Data Authentication” - http://www.itl.nist.gov/fipspubs/fip113.htm Executive Orders and Executive Office Guidance

• Executive Order 13231 - "Critical Infrastructure Protection in the Information Age" - http://www.whitehouse.gov/news/releases/2001/10/20011016-12.html

• Executive Order 13228 - "Establishing the Office of Homeland Security and the Homeland Security Council" - http://www.whitehouse.gov/news/releases/2001/10/20011008-2.html

• Executive Order 13011 - "Federal Information Technology" - http://www.cio.gov/Documents/federal%5Fit%5FJul%5F1996%2Ehtml Office of Management and Budget (OMB) Circulars, Memoranda, and Other Guidance on Information Technology

• OMB Circular A-123 – “Internet Control Systems” - http://www.whitehouse.gov/omb/circulars/a123/a123.html

• OMB Circular A-127 – “Financial Management Systems” - http://www.whitehouse.gov/omb/circulars/a127/a127.html

• OMB Circular A-130 – “Management of Federal Information Resources”, Appendix III – “Security of Federal Information Resources” - http://www.whitehouse.gov/omb/circulars/a130/a130.html

• NIST Special Publication 800-18 – “Guide for Developing Security Plans for Information Technology Systems” - http://csrc.nist.gov/publications/nistpubs/800-18-Rev1/sp800-18-Rev1-final.pdf

• OMB Memorandum 97-02 – “Funding Information Systems Investments” - http://www.whitehouse.gov/omb/memoranda/m97-02.html

• OMB Memorandum 97-16 – “Information Technology Architectures” - http://www.whitehouse.gov/omb/memoranda/m97-16.html

• OMB Memorandum 00-15 – “OMB Guidance on Implementing the Electronic Signatures in Global and National Commerce Act” - http://www.whitehouse.gov/omb/memoranda/m00-15.html

• OMB Memorandum 03-19 – “Reporting Instructions for the Federal Information Security Management Act and Updated Guidance on Quarterly IT Security Reporting” - http://www.whitehouse.gov/sites/default/files/omb/memoranda/m03-19.pdf

• OMB Memorandum 03-18 – “Implementation Guidance for the E-Government Act of 2002” - http://www.whitehouse.gov/sites/default/files/omb/memoranda/m03-18.pdf

• US General Accounting Office Accounting and Information Management Division (GAO/AIMD) Report 94-115 – “Executive Guide: Improving Mission Performance Through Strategic Information Management and Technology” - http://www.gao.gov/special.pubs/ai94115.pdf

• 1098E – Student Loan Interest Information Reporting - http://www.unclefed.com/Tax-Bulls/1998/not98-07.pdf Other

• IRS Publication 1075 – “Tax Information Security Guidelines for Federal, State, and Local Agencies” - http://www.irs.gov/pub/irs-pdf/p1075.pdf (End of Appendix A) Appendix B High-Level Requirements

Transactions

Transactions

Transactions

Transactions

Transactions

Transactions

Transactions

08/09 Loan Purchase Program, Puts from 08/09 Participation Program, 09/10 Loan Purchase program, Conduit, Direct Loan, etc.)

Financial Activity and Transactions

Reporting

Reporting

Disability System (TPD).

Total & Permanent Disability

Collection System.

Debt Collection

Consolidation System (DLCS).

Consolidation (Payoff interface)

(such as citations to pertinent laws, codes and regulations such as 44 U.S.C chapters 21, 29, 31 and 33; Freedom of Information Act (5 U.S.C. 552); Privacy Act (5 U.S.C. 552a); 36 CFR Part 1222 and Part 1228).

Record Retention

designees.

Compliance & Monitoring Reviews

FSA

Compliance & Monitoring Reviews

Reviews

challenges.

Other

a) All personnel are required to complete a federal background clearance based on their position risk level. Background clearances are submitted on line via Office of Personnel Management (OPM)'s Electronic Questionnaire for Investigations Process (e-Qip). Contractor employees who have undergone appropriate personnel security screening for another federal agency may submit proof of personal security screening for validation. (Attached Security Attachment A -Department of Education's Directive for Contractor Employee Personnel Security Screenings.)

b) Preliminary clearances must be completed for high-risk positions prior to working on Federal Student Aid systems or data (This process can take 2-6 weeks). Moderate and low risk positions must submit background clearance paperwork prior to working on Federal Student Aid computer resources.

c) Non-U.S. Citizen may be assigned to a High Risk IT (6C) level position, provided: he/she is a Lawful Permanent Resident of the United States and has resided continuously in the United States for a minimum of three (3) years. Non-U.S. Citizens living outside of the United States cannot have the capability to access Federal Student Aid systems or data.

Security

800-53 controls, identify security deficiencies/gaps, and create a remediation plan for the identified deficiencies.

Security

(End of Appendix B)