2. The term of this Agreement is:

RFP 25-3021 Page 1 of 22 California Department of Social Services

EXHIBIT A

(Standard Agreement)

SCOPE OF WORK

A. Background

The primary source of federal funding for state subsidized child care programs is the Child Care and Development Fund (CCDF), which is authorized by the Child Care and Development Block Grant Act of 2014 and administered as grants to states and territories by the Administration for Children and Families (ACF). The California Department of Social Services (CDSS) is the State’s CCDF Lead Agency and administers child care and development programs through its Child Care and Development Division.

California leverages CCDF funds to support a mixed-delivery system comprised of a variety of provider/program types, including licensed centers, licensed home-based family child care and license-exempt family, friend, and neighbor care.

The federal government requires that states assess the adequacy of their subsidized child care reimbursement rates every three years, and that the State conduct a cost analysis to be considered as part of the rate setting process. There are two permissible approaches to doing a cost analysis:

1. Conduct a market rate survey that reflects prices charged by child care providers and paid by parents.

2. Conduct an alternative methodology developed by the State, which may be a cost study or a cost estimation model. A cost study involves gathering point-in-time data about providers’ costs to operate a program. A cost estimation model is a tool that is informed by provider and program data that can run scenarios to estimate how different variables, such as where the program is located or the ages of the children served, impact the cost of care.

The alternative methodology approach allows states to set rates that are informed by the actual cost to deliver services, rather than the price that parents can afford to pay as evidenced by market rates. California historically conducted market rate surveys to inform its CCDF State Plans. In recent years, the vision of moving to a single rate structure informed by a cost-based alternative methodology and encompassing the entirety of California’s mixed-delivery system has been broadly endorsed by the child care and development and early learning field, the State Legislature and multiple advisory bodies. In a reflection of that consensus, in 2023 CDSS sought and secured federal pre-approval to utilize an alternative methodology to update its cost analysis for the FFY 2025-2027 CCDF State Plan. The intent is to update the alternative methodology cost study performed in 2023-2024 in order to

RFP 25-3021 Page 2 of 22 inform California's FFY 2028-2030 CCDF State Plan which must be submitted by July 1, 2027.

B. Purpose

The CDSS and (Contractor) enter into this Agreement for the purpose of assessing the adequacy of the state’s subsidized child care reimbursement rates and conduct a cost analysis to be considered as part of the rate setting process. This includes, but is not limited to, gathering updated data and data elements used in the cost estimation model for the alternative methodology.

C. Definitions

The following are defined by Title 45, Code of Federal Regulations (CFR) CFR 98.2 Child Care and Development Fund:

1. The Act refers to the Child Care and Development Block Grant Act of 1990, section 5082 of the Omnibus Budget Reconciliation Act of 1990, Pub. L. 101-508, as amended and codified at 42 U.S.C. 9858 et seq.

2. ACF means the Administration for Children and Families.

3. Caregiver means an individual who provides child care services directly to an eligible child on a person-to-person basis.

4. Categories of care means center-based child care, family child care, and in home care.

5. Center-based child care provider means a provider licensed or otherwise authorized to provide child care services for fewer than 24 hours per day per child in a non-residential setting, unless care in excess of 24 hours is due to the nature of the parent(s)' work.

6. Child Care and Development Fund (CCDF) means the child care programs conducted under the provisions of the Child Care and Development Block Grant Act, as amended. The Fund consists of Discretionary Funds authorized under section 658B of the amended Act, and Mandatory and Matching Funds appropriated under section 418 of the Social Security Act.

7. Child care provider that receives assistance means a child care provider that receives Federal funds under the CCDF pursuant to grants, contracts, or loans, but does not include a child care provider to whom Federal funds under the CCDF are directed only through the operation of a certificate program.

8. Child care services, for the purposes of § 98.50, means the care given to an eligible child by an eligible child care provider.

RFP 25-3021 Page 3 of 22

9. Director means a person who has primary responsibility for the daily operations and management for a child care provider, which may include a family child care provider, and which may serve children from birth to kindergarten entry and children in school-age child care.

10. Discretionary funds means the funds authorized under section 658B of the Child Care and Development Block Grant Act. The Discretionary funds were formerly referred to as the Child Care and Development Block Grant.

11. Eligible child means an individual who meets the requirements of § 98.20.

12. Eligible child care provider means:

(a) A center-based child care provider, a family child care provider, an in-home child care provider, or other provider of child care services for compensation that:

(1) Is licensed, regulated, or registered under applicable State or local law as described in § 98.40;

and

(2) Satisfies State and local requirements, including those referred to in §

98.41 applicable to the child care services it provides; or

(b) A child care provider who is 18 years of age or older who provides child care services only to eligible children who are, by marriage, blood relationship, or court decree, the grandchild, great grandchild, siblings (if such provider lives in separate residence), niece, or nephew of such provider, and complies with any applicable requirements that govern child care provided by the relative involved.

13. Family child care provider means one or more individual(s) who provide child care services for fewer than 24 hours per day per child, in a private residence other than the child's residence, unless care in excess of 24 hours is due to the nature of the parent(s)' work.

14. In-home child care provider means an individual who provides child care services in the child's own home.

15. Lead Agency means the State, territorial or tribal entity, or joint interagency office, designated or established under §§ 98.10 and 98.16(a) to which a grant is awarded and that is accountable for the use of the funds provided. The Lead Agency is the entire legal entity even if only a particular component of the entity is designated in the grant award document.

RFP 25-3021 Page 4 of 22

16. Licensing or regulatory requirements means requirements necessary for a provider to legally provide child care services in a State or locality, including registration requirements established under State, local or tribal law.

17. Mandatory funds means the general entitlement child care funds described at section 418(a)(1) of the Social Security Act.

18. Matching funds means the remainder of the general entitlement child care funds that are described at section418(a)(2) of the Social Security Act.

19. Parent means a parent by blood, marriage or adoption and also means a legal guardian, or other person standing in loco parentis.

20. The Plan means the Plan for the implementation of programs under the CCDF.

21. Programs refers generically to all activities under the CCDF, including child care services and other activities pursuant to § 98.50 as well as quality activities pursuant to § 98.53.

22. Provider means the entity providing child care services.

23. Services for which assistance is provided means all child care services funded under the CCDF, either as assistance directly to child care providers through grants, contracts, or loans, or indirectly as assistance to parents through child care certificates.

24. Sliding fee scale means a system of cost-sharing by a family based on income and size of the family, in accordance with § 98.45(l).

25. State means any of the States and the District of Columbia, and includes Territories and Tribes unless otherwise specified.

26. Teacher means a lead teacher, teacher, teacher assistant, or teacher aide who is employed by a child care provider for compensation on a regular basis, or a family child care provider, and whose responsibilities and activities are to organize, guide, and implement activities in a group or individual basis, or to assist a teacher or lead teacher in such activities, to further the cognitive, social, emotional, and physical development of children from birth to kindergarten entry and children in school-age child care.

27. Tribal organization means the recognized governing body of any Indian Tribe, or any legally established organization of Indians, including a consortium, which is controlled, sanctioned, or chartered by such governing body or which is democratically elected by the adult members of the Indian community to be served by such organization and which includes the maximum participation of Indians in all phases of its activities: Provided, that in any case where a contract

RFP 25-3021 Page 5 of 22 is let or grant is made to an organization to perform services benefiting more than one Indian Tribe, the approval of each such Indian Tribe shall be a prerequisite to the letting or making of such contract or grant.

28. Types of providers means the different classes of providers under each category of care. For the purposes of the CCDF, types of providers include non-profit providers, for-profit providers, sectarian providers and relatives who provide care.

C. Contractor Responsibilities

The Contractor shall comply with all relevant laws and regulations in the performance of work in furtherance of the contract established pursuant to this procurement.

The Contractor shall:

1. Task 1 – Facilitate Meetings and Communication

a. Coordinate communications with the CDSS during the entire contract period.

Contractor shall provide timely and accurate communication and coordination with CDSS staff and other policy, administrative, and advisory groups; attend and provide minutes for required meetings; adhere to the CDSS’ approval schedule requirements for project deliverables; and generate and deliver the required data and reports.

b. Orientation Meeting – Within twenty (20) days following the execution of the

Agreement, all key prime contractor and subcontractor personnel, including the management team, task leaders, and significant subcontractors, shall meet either by telephone or web conference with the CDSS in Sacramento, California. The Contractor shall provide, at a minimum, a review of each task and the proposed method(s) for implementation as contained in the RFP response. This review shall include, but not be limited to, an in-depth orientation to the Contractor’s successful contract proposal in response to this solicitation, the work plan, the contractor’s data collection methodology, limitations of the methodology and proposals to overcome these limitations, Contractor’s staffing for the survey and report, and any issues raised by the CDSS regarding implementation of the Agreement. The Contractor must develop the meeting agenda in coordination with the CDSS and take minutes.

c. Biweekly Meetings – The Contractor shall conduct meetings at least every other week to be held between the Contractor’s Project Manager and the CDSS to review and discuss task implementation and status, including but not limited to, review of work plans and Gantt Charts. The contractor may be asked to join weekly internal meetings and biweekly meetings with the CDSS (as needed). The Contractor must ensure that all key prime contractor and

RFP 25-3021 Page 6 of 22 subcontractor personnel, including the management team, must be present as appropriate. The meetings shall be conducted via web conference. The Contractor must develop the meeting agenda in coordination with the CDSS five days prior to each meeting. The agenda shall include the status of all pending activities along with the deadline and person(s) assigned to each activity, any anticipated changes to the tasks or schedule, problems encountered and their resolution, and any interim findings, if applicable.

d. Transition Meeting – A transition meeting with the CDSS must be held in

Sacramento, California, or via web conference with the CDSS by November 30 of the final contract year to ensure that all final deliverables are complete or on track for final delivery before the end of the contract. The Contractor must ensure staff shall be available to work with the CDSS and any other contractor to ensure knowledge transfer and a smooth transition of Contractor’s responsibilities back to the CDSS. The Contractor and any proposed subcontractors must plan and budget for the cost of sending staff to the transition meetings.

e. The Contractor shall provide the minutes for each meeting to the CDSS by e-mail for review and approval within one (1) working day after each meeting in an electronic Microsoft Office format approved by the CDSS. The minutes must include a list of meeting participants, documentation of decisions and action steps.

f. Within one (1) working day after meetings, the Contractor shall submit the meeting minutes to the CDSS by e-mail for review and approval. The minutes must include a summary of the issues identified, action steps and agreements reached at the meeting.

g. At CDSS’ request, the Contractor shall make internal and external presentations and engage in consultations about the activities outlined in the Scope of Work at various meetings regarding the alternative methodology and cost analysis. This includes, but is not limited to, meetings with the public, the Legislature, the Governor’s Office, and state control agencies. These meetings, any minutes, notes, or other products shall be considered confidential unless specified otherwise by CDSS. Additionally, the Contractor shall notify CDSS of any meeting requests received from external entities regarding the activities outlined in the Scope of Work. The Contractor must adhere to rules and processes of the Bagley-Keen Open Meeting Act when applicable and appropriate.

h. At CDSS’ request, the Contractor shall make presentations and engage in consultation about the activities outlined in the Scope of Work regarding the alternative methodology and cost analysis at collective bargaining sessions with the family child care providers’ union. These meetings, any minutes, notes, or other products shall be considered confidential unless specified

RFP 25-3021 Page 7 of 22 otherwise by CDSS. Additionally, the Contractor shall notify CDSS of any meeting requests received from external entities regarding the activities outlined in the Scope of Work. The Contractor must adhere to rules and processes of the Bagley-Keen Open Meeting Act when applicable and appropriate. Additionally, the Contractor shall be available during bargaining sessions to provide technical assistance and subject matter expertise regarding the cost model.

i. Should the Contractor require specialized expertise to fulfill the tasks within this Agreement, subcontractors may be used by the Contractor but must be approved in advance by the CDSS.

j. The Contractor shall not disseminate any written information, materials, or deliverables, written or otherwise produced under this Agreement, to the field, public, or any other third party without the CDSS’ prior written approval.

2. Task 2 – Provide Regular Reports and Invoices

The Contractor shall be responsible for a variety of activities related to reports and invoices, shall adhere to the relative timelines, and attach work plans to reports and invoices. This includes, but is not limited to, the following:

a. Monthly Progress Reports – The Contractor shall prepare and provide CDSS with progress reports due on the last Friday of every calendar month detailing, at a minimum:

(1) Task number and title;

(2) Description of tasks;

(3) A report of activities completed and deliverables produced during the prior month;

(4) An update of current or ongoing activities and the progress noted for each;

(5) Unanticipated outcomes or problems (as applicable);

(6) Root cause analysis of the problems (as applicable);

(7) Tasks planned for completion the following month;

(8) A detailed list of activities; and

(9) Any interim findings, if applicable.

RFP 25-3021 Page 8 of 22

b. The monthly progress report shall be used as a basis for tracking progress and making improvements. The monthly progress reports must reflect all tasks specified in the corresponding monthly invoice and each monthly progress report must be used to determine approval for payment of the corresponding monthly invoice. Additionally, the original CDSS-approved monthly progress report must be signed by the Contractor’s Project Manager and submitted to the CDSS with the monthly invoice. The CDSS shall not approve invoices for payments on this contract without an approved monthly progress report.

c. If a problem occurs, the Contractor must notify the CDSS Program Contract Manager within one working day from the occurrence and submit a Root Cause Analysis Report as part of the monthly progress report within 30 calendar days after the incident occurred. At a minimum, the Root Cause Analysis Report must address the following:

(1) Identify the problem;

(2) Evaluate the significance and impact of the problem;

(3) Identify the root cause of the problem and the responsible party;

(4) Recommend actions to prevent recurrence of this or similar problems;

(5) Assign responsibility for developing and implementing corrective action;

(6) Implement new process or quality controls as necessary;

(7) Determine what to do with failed items; and

(8) Record permanent changes in process documentation.

3. Task 3 – Assist with Alternative Methodology Preapproval Process

The Contractor shall assist the CDSS with the ACF Alternative Methodology Preapproval Process which includes, but is not limited to, providing statements in the initial preapproval letter and responding to follow-up questions from the ACF regarding the alternative methodology.

4. Task 4 – Engage with Constituents, Interest Groups, and State Partners

a. Throughout the planning and updating of the Alternative Methodology, the

Contractor shall regularly consult with appropriate constituency, interest groups, and state partners to solicit feedback related to the principles of the alternative methodology. The Contractor must adhere to rules and processes of the Bagley-Keen Open Meeting Act. Engagement with constituency, RFP 25-3021 Page 9 of 22 interest groups, and state partners shall include, but not be limited to, hosting regular meetings, recording of minutes, and providing a summary to CDSS.

Constituency, interest groups, and state partners include, but are not limited to, the following:

(1) The State Advisory Council on Early Childhood Education and Care

(designated or established pursuant to section 642B(b)(1)(A)(i) of the Head Start Act (42 U.S.C. 9837b(b)(1)(A)(i)) or similar coordinating body.

(2) Local child care program administrators, local child care resource and referral agencies, and other relevant entities.

(3) Organizations representing child care caregivers, teachers, and directors to ensure comprehensive consideration of perspectives during the methodology development phase.

(4) Child care and development centers, family child care homes, and license-exempt family, friend, or neighbor care providers.

(5) Tribal CCDF grantees and tribal programs.

(6) California Department of Education.

(7) State contractors and California counties that administer subsidized child care and developer and preschool programs.

b. The Contractor shall track, summarize, and analyze the feedback, and provide a formal report of the feedback to the CDSS. Records of engagement and feedback shall be used to update the survey and used to gather data needed for the alternative methodology.

c. The Contractor shall seek permission and review from the CDSS one month prior to any presentations related to the alternative methodology, including, but not limited to, community engagement.

5. Task 5 – Lead the Alternative Methodology Advisory Work Group

The Contractor shall lead and support the CDSS Alternative Methodology Advisory Workgroup by completing the following tasks:

(1) Schedule at minimum quarterly virtual meetings with the public workgroup to detail workgroup goals and objectives. The Contractor may also assist in the scheduling of in-person meetings to accommodate the public workgroup as needed.

RFP 25-3021 Page 10 of 22

(2) Distribute a flat rate stipend to eligible participants serving as public workgroup members to assist with travel, child care, and other workgroup related expenses for participating in workgroup meetings. Eligible participants are subject to Child Care and Development Funding regulations and requirements in effect at the time of the workgroup meeting.

(3) Present the alternative methodology and cost modeling tool for public workgroup review and provide routine updates on next steps.

(4) Solicit recommendations from the public workgroup on the development and implementation of the alternative methodology and cost modeling tool.

6. Task 6 – Conduct Alternative Methodology Survey

The Contractor responsibilities associated with the alternative methodology survey reflect preliminary tasks and deliverables and is subject to change depending on the outcome of the alternative methodology process that is currently underway and the final rate structure. These preliminary tasks and deliverables include, but are not limited to, the following:

a. The Contractor shall conduct focus groups to gather further information on serving special populations of children, such as children with disabilities, multilingual learners, infants and toddlers, etc.

b. The Contractor shall describe the survey methods it plans to use to complete the services required under this Agreement, including, but not limited to, appropriate sample size, survey sampling plan, survey design, geographic parameters, and analysis of survey results.

c. The Contractor shall ensure the sample population for the survey shall include licensed child care centers licensed family child care homes (LFCH), licensed-exempt family, friend, and neighbor providers, child care programs on a public-school campus (including but not limited to state preschool programs), tribal child care and development centers, and tribal family child care homes within the sample population, and shall ensure that the sample includes Quality Counts California (QCC) participants.

d. The Contractor shall ensure that the source for the sample population shall include, but not be limited to, the Resource and Referral (R&R) agencies that contract with CDSS, the CDSS Community Care Licensing (CCL) database, Alternative Payment Programs, Child Care Provider United (CCPU), and QCC participants. The CCL listing may include providers that are no longer active. Therefore, the Contractor shall be responsible for cross-referencing these data sources in order to create the sample population.

RFP 25-3021 Page 11 of 22

e. The Contractor shall ensure that all of California’s 58 counties are represented in the survey.

f. The Contractor shall describe and demonstrate in detail how it shall determine the appropriate sample size for the survey, e.g., how many child care providers shall be surveyed in each county or geographic region, including a representative sample of QCC participants and the geographic regions or demographic areas to be used to collect the cost data. The Contractor shall provide a detailed description of the intended sample size, and steps that shall be taken to ensure a high response rate. For reference, the Contractor may consider the guidelines of a statistically valid and reliable survey, as described in the Federal Register, Volume 81, Section 98.45 Equal Access, Statistically Valid and Reliable Market Rate Survey or an Alternative Methodology.

g. The Contractor shall describe and demonstrate how it shall conduct the Alternative Methodology survey of child care providers through any combination of mail questionnaires, telephone interviews, personal interviews or by electronic surveys. All methods referenced shall be provided in multiple languages.

h. The survey shall have the ability to capture data on the following cost data elements, in addition to others as may be requested by CDSS:

(1) Cost Data Elements (The Cost Data Elements as established by the State of California.)

(a) Administration/Office: Costs such as advertising, insurance, legal and professional fees, office supplies, repairs, maintenance, and janitorial.

(b) Child Health: Costs associated with activities related to supporting child health, including costs associated with meeting licensing requirements, such as collecting and keeping records of child immunizations.

(c) Child Education and Development: Costs above and beyond the basic

Education Program costs, that support higher quality, including educational materials and curriculum, developmental screening and assessment tools, development specialists and special activities for children associated with meeting requirements.

(d) Discretionary Benefit - Employer Share: Cost of the employer-paid benefits such as health insurance expenses, retirement contributions, and other discretionary benefits.

RFP 25-3021 Page 12 of 22

(e) Discretionary Benefit - Paid Time Off: Cost of sick leave, vacation benefits and other paid time off.

(f) Multilingual Learner Supports: Costs associated with serving multi-language learners and their families effectively.

(g) Education Program: Cost of basic and necessary program supplies and expenses.

(h) Family Engagement: Cost to supports required and expected family engagement activities.

(i) Inclusion: Costs related to serving children with developmental delays, disabilities and other special needs.

(j) Mandatory Expenses Related to Staffing: Cost of employer-paid taxes including FICA payroll tax, Social Security, Medicare, unemployment insurance, and worker’s compensation.

(k) Occupancy: Facility-related costs such as rent/lease or mortgage, real estate taxes, maintenance, janitorial and repairs.

(l) Operating Reserve: Cost of contributions to an annual operating reserve fund.

(m)Planning Time: Cost of planning and release time for teachers, assistant teachers, child care providers and owners.

(n) Ratios and Group Size: Cost of maintaining ratios governing the maximum number of children for whom care may be provided at any one time.

(o) Salary/Wage/Income: Cost of provider compensation

(p) Staffing Pattern: Cost to maintain a setting-specific standard staffing pattern.

(q) Training: Cost of professional development for staff.

(r) Extended Evenings/Weekends: Costs associated with providing care during non-traditional hours.

(s) Child Transportation: Cost of year-round transportation services between schools and activities, children’s homes and providers’ facilities/homes when necessary to support families.

(t) Quality Variables (yet to be determined)

RFP 25-3021 Page 13 of 22

1) The survey shall have the ability to disaggregate cost data on each of the above cost data elements by:

a) Type of Care Setting:

i. Child care centers

ii. Family child care homes

iii. Family, friend, and neighbor care

b) Applicable Licensing Requirements:

i. Title 5 Licensed care

ii. Title 22 Licensed care

iii. License-exempt care

c) Age of Child:

i. Title 5:

(i) Infants under 1 year (0-18 months)

(ii) Toddlers 1 to 3 years (18-36 months)

(iii) Preschoolers 3 to 5 years

(iv) School Age 5 years and older

ii. Title 22:

(i) Infants under 2 years

(ii) Preschoolers (2-4 years)

(iii) School Age (5 years and older)

d) Geographical region (i.e., county or multi-county region)

2) The Contractor shall ensure the survey is administered in the predominant languages spoken by child care providers in the survey areas/geographic regions. Spanish and other non-English surveys shall be conducted in order to capture a large part of the

RFP 25-3021 Page 14 of 22 field, especially family child care homes and family, friend, and neighbor care.

3) If the survey is done by mail, the initial questionnaire must be in

English and translated into Spanish and other non-English languages.

4) If the survey is conducted by telephone, then all telephone interviews must be documented and completed in the native language of the interviewee.

5) The Contractor shall be responsible for providing technical assistance to child care providers about the survey questions in English and Spanish, and have the resources available to assist providers in other languages as needed.

6) The Contractor shall describe and demonstrate in detail the process for developing a survey instrument, subject to CDSS approval, for licensed child care centers, licensed family child care homes and license exempt family, friend, and neighbor care providers. The survey instrument must include, but not be limited to, the following types of questions: type of care, number of children served, age of the children, hours providing child care, staffing patterns and compensation, and occupancy expenses.

7) The Contractor shall submit survey questions at least 60 days prior to the implementation of the survey instrument. The CDSS reserves the right to add, delete, and modify survey questions.

8) The Contractor shall describe in detail how it shall ensure that the survey shall collect data to determine the percentage of subsidized families served by the provider and whether the child care provider is currently active (the CCL database contains providers who may be inactive and should, therefore, be excluded from the survey).

9) The Contractor shall identify, gather and analyze alternative data sources, including extant data, to supplement survey results or update data elements that cannot be captured in the alternative methodology survey.

7. Task 7 – Include Market Rate Survey Questions

The Contractor shall include questions to capture the market rates. This shall include, but not be limited to, what providers charge private pay (i.e., unsubsidized) families, by region, certain age brackets and type of care.

RFP 25-3021 Page 15 of 22

8. Task 8 – Conduct Cost Estimation Analysis

The Contractor shall analyze the 2026 cost study data and other data sources to arrive at an updated estimated cost of care for California informed by alternative methodology. The data analysis the Contractor shall be required to complete shall not be fully known until the final single rate structure is determined. The Contractor’s responsibilities associated with data analysis reflect preliminary tasks and deliverables and is subject to change depending on the final rate structure. These preliminary tasks and deliverables shall include, but not be limited to, the following:

a. Working with the CDSS to update the data elements, variables, and/or selection points used in the previous cost estimation model for the alternative methodology.

b. Gathering and analyzing any necessary and available data, including, but not limited to, the 2026 cost study survey, publicly available datasets, administrative and program data provided by CDSS and California Department of Education (CDE), other extant data sources, and qualitative data gathered from constituents, interest groups, and state partners.

c. Performing calculations to arrive at the cost of care across different settings, licensing categories, age groups and geographies.

d. Calculating statistics relevant to support the previous cost estimation model and cost analysis of the alternative methodology. This includes, but is not limited to, calculating proxy statistics.

e. The CDSS shall require the Contractor to calculate alternative rates under various sets of assumptions, which may include, but not be limited to, scenarios where rates are based on different age groupings, scenarios that involve the recalculation of cost input values and other data elements, scenarios incorporating new quality-informed rate elements, and performing additional analyses on any rates or any adjustments to the alternative methodology, if additional analyses on any rates are requested by the Department of Finance and/or the CDSS.

9. Task 9 – Prepare 2026 Alternative Methodology Draft and Final Report

The Contractor shall prepare the federally required detailed cost estimation report containing the results of the updated Alternative Methodology. This comprehensive report shall support rate setting and inform the California CCDF State Plan.

a. 2026 Alternative Methodology Final Report (Draft and Final) – The Contractor shall prepare and provide CDSS a fully editable Draft 2026 Alternative

RFP 25-3021 Page 16 of 22

Methodology Final Report due no later than February 1, 2027, that meets the federal reporting requirements and contains at a minimum a summary of the alternative methodology process, relevant background, a description of the cost estimation methodology, and the results of the alternative methodology cost study. The Draft 2026 Alternative Methodology Final Report must describe the procedures used, any limitations of the findings, and challenges related to conducting the task activities. Any surveys or other instruments developed to conduct the activities must be included in the report. The Contractor shall incorporate all of the comments in the 2026 Alternative Methodology Final Report provided by CDSS. The Contractor shall prepare and provide to CDSS the 2026 Alternative Methodology Final Report due no later than May 1, 2027. The Contractor shall deliver the Final Report in both Microsoft Word 2013 or later format and a portable document format (PDF) version suitable for Web posting either by a secure file transfer and/or as an encrypted file.

a. The Contractor must adhere to the CDSS writing guidelines, accessibility requirements contained in this Agreement, web standards, and data file requirements. All final documents must be provided in Microsoft Word 2013 or later format. With prior approval from CDSS, the Contractor may also use Adobe Acrobat or any other CDSS approved software. Whether documents are provided as Word or PDF, the documents must be fully accessible to persons with disabilities including at a minimum that they are text-based, have the correct reading order, and all non-text elements (e.g., pictures, charts, and graphs) have fully equivalent alternative text and alternative text tags. The Contractor shall ensure that all fully approved PowerPoint documents that are to be posted on the Internet must be delivered to the CDSS with a text only Word version, with fully equivalent alternative text for every non-text element (e.g., graphics, pictures, charts, graphs). Videos or Webinars shall be subject to CDSS’ review and approval before they are posted on any Web site, must be fully captioned, and must meet the CDSS Web standards.

b. The Contractor shall ensure that unless otherwise specified, all data files must be delivered in either a comma delimited (.csv) or tab delimited (.txt) file format that may be imported directly into Microsoft Excel. All data fields must contain ASCII character data according to the specifications provided by CDSS. The Federal Information Processing Standards (FIPS) Code is the code that identifies the state and county where the child receives services. The file must be encrypted using Federal Information Processing Standards (FIPS) 140-2 validation product that can be incorporated into Microsoft Access and Microsoft Structured Query Language (SQL) Server.

RFP 25-3021 Page 17 of 22

c. The Contractor is responsible for any costs associated with making modifications to materials and deliverables necessary to obtain sign-off by the CDSS.

d. The Contractor shall ensure that the CDSS and all authorized state control agencies must have access to all internal and external reports, documents, data and working papers used by the Contractor and potential subcontractors in the performance and administration of this Agreement.

The Contractor shall allow the CDSS to monitor all aspects of the Contractor's performance.

e. The contents of the 2026 Alternative Methodology Final Report must include:

(a) The results of the alternative methodology in a detailed report that shall include the methods, findings, and conclusions, along with an executive summary.

(b) The estimated cost of care necessary (including any relevant variation by geographic location, category of provider, or age of child) to support child care providers’ implementation of health, safety, quality, and staffing requirements, as defined by 45 CFR 98.41 through 98.44, and higher-quality care using the quality rating and improvement system at each quality level.

(c) The State’s response to stakeholder views and comments.

(d) How the following requirements were met:

1) Range of Providers: The report must address the availability of a wide range of child care providers, their participation in the CCDF subsidy system, and any barriers to participation, specifically focusing on payment rates and practices, using information obtained as per paragraph (d)(2) of 45 CFR 98.45.

2) Payment Rate Establishment: The report must ensure that payment rates are deemed sufficient and have been determined through the alternative methodology as outlined in paragraph (c) of 45 CFR 98.45.

3) Meeting Needs: The report must specify how the base payment rates enable child care providers to fulfill health, safety, quality, and staffing criteria as outlined in paragraphs (f)(1)(ii)(A) and (f)(2)(ii) of

45 CFR 98.45.

4) High-Quality Costs: The report must outline how the State considered the expense of higher quality care as per paragraph (f)(2)(iii) of 45 CFR 98.45; and must include how payment rates for

RFP 25-3021 Page 18 of 22 higher-quality care, as determined by the State through a quality rating and improvement system (or similar quality indicators), correspond to the anticipated cost of care at various quality levels.

5) Co-Payments Based on a Sliding Fee Scale: The report must address the affordability of co-payments determined by a sliding fee scale as specified in paragraph (l) of 45 CFR 98.45. Additionally, if applicable, the report must provide a rationale for the State's policy regarding whether childcare providers may levy extra charges on families beyond the obligatory family co-payment, demonstrating how this policy promotes affordability and accessibility. The report must include an analysis of how these additional charges interact with required family co-payments and assess the subsidy payment rates' ability to grant access to care without supplementary fees.

Furthermore, the report must present data on the extent to which CCDF providers impose such additional charges on families, based on information acquired in accordance with paragraph (d)(2) of 45

CFR 98.45.

6) Equal Access: The report must detail how the State's payment practices facilitate equitable access to a variety of providers by ensuring funding stability and incentivizing more child care providers to cater to children receiving CCDF subsidies, as specified in paragraph (l) of 45 CFR 98.45.

7) Factors for Differentiation: The report must identify the factors that differentiate payment rates among providers.

8) Additional Considerations: The report must highlight any additional facts or criteria that inform the determination of payment rates.

(e) Narrative and Data to support the State Plan shall include, but not be limited to, the following:

1) An explanation of how the data represents the child care market.

2) A description of how current and complete data were used.

3) A summary of the rigorous data collection procedures used.

4) Estimated costs of care and percent of cost for infant, toddler, preschool, and school-age subsidy rates.

5) Gaps between the cost of provide child care and subsidy rates.

6) Data on barriers to participating in the CCDF subsidy program reported by child care providers.

RFP 25-3021 Page 19 of 22

7) Data on the amounts that providers charge to families that exceeds the family co-payment.

8) Data on the frequency of when providers charge families more than the copayment.

b. At the direction of the CDSS, the Contractor shall make the report widely available in English and Spanish, and accessible per State rules, no later than 30 days after the completion of the report per paragraph (f)(1) of 45 CFR 98.45.

10. Task 10 – Narrow Cost Analysis

The Contractor shall analyze the estimated cost of care (including any relevant variation by geographic location, category of providers, or age of child), in the following two areas:

a. The cost of child care providers’ implementation of health, safety, quality, and staffing requirements (i.e., applicable licensing and regulatory requirements, health and safety standards, training and professional development standards, and appropriate child to staff ratio, group size limits, and caregiver qualification requirements as required in 45 CFR 98.45(b)(3), (f)(1)(ii)(A), and (f)(2)(ii)).

b. The cost of higher-quality care consistent with the quality rating and improvement system standards or other system of quality indicators in addition to health, safety, quality, and staffing costs as required in 45 CFR 98.45(b)(4), (f)(1)(ii)(B), and (f)(2)(iii)).

11. Task 11 – CDSS Review and Approval Process

a. The Contractor shall coordinate communications with the CDSS during the entire contract period. Contractor shall provide timely and accurate communication and coordination with CDSS staff and other policy, administrative, and advisory groups; attend and provide minutes for required meetings; adhere to the CDSS approval schedule requirements for project deliverables; and generate and deliver the required data and reports.

b. The Contractor shall provide the minutes for each meeting to the CDSS by e-mail for review and approval within one working day after each meeting in an electronic Microsoft Office format approved by the CDSS. The minutes must include a list of meeting participants, documentation of decisions and action steps.

RFP 25-3021 Page 20 of 22

c. The Contractor shall consult with the CDSS for guidance during all work performed under this Agreement, including adhering to CDSS’ review and approval process to document all final deliverables. This process consists of the review of the deliverable by CDSS staff and the approval of the deliverable by the CDSS Program Contract Manager. This process shall be further discussed by the CDSS at the orientation meeting.

d. The Contractor shall submit deliverables in a timely manner consistent with the CDSS’ review and approval requirements and due dates reflected in the project timeline and/or provided by CDSS, state or federal law, and/or state regulations.

e. The Contractor must have thoroughly vetted all deliverables to ensure they are of high quality prior to submitting them to the CDSS. The proposal must include a plan for complying with the CDSS’ review and approval process and requirements.

f. The Contractor must ensure that all materials and/or deliverables submitted to the CDSS have been reviewed and approved by the Contractor’s Project Manager, are free of any typographical or grammatical errors, and are presented in a professional format in adherence with the CDSS required style.

g. If the CDSS rejects a deliverable or product as unacceptable, the Contractor shall make required modifications within the time frame required by the CDSS. An approval/sign-off for any deliverable shall be provided only when the CDSS is satisfied with the deliverable. The Contractor is responsible for any costs associated with making modifications to deliverables necessary to obtain the CDSS’ approval.

h. In the event of failure of the Contractor to obtain prior CDSS approval of deliverables or products, the Contractor shall not be relieved of performing related responsibilities or providing related deliverables and products to the

CDSS.

i. The Contractor shall accept financial responsibility for failure to meet agreed-upon timelines and produce deliverables that are of high quality and satisfactory to the CDSS. The CDSS is not liable for payment for any work which begins without the Contractor consulting the CDSS for guidance.

Failure to conform to the CDSS’ approval and schedule requirements may result in the cancellation of the Agreement.

12. Task 12 – Ownership of Deliverables

All deliverables, including but not limited to reports, data, designs, models, documents, presentations, or other materials created, developed, or produced

RFP 25-3021 Page 21 of 22 under this Agreement, shall be the sole and exclusive property of the State of California. Upon completion of this Agreement, the Contractor shall transfer full ownership, rights, title, and interest in all deliverables to the CDSS, including any intellectual property rights. The Contractor or any other third party shall not use, share, publish, or distribute any part of the deliverables without the prior written consent of CDSS.

CDSS Responsibilities

1. The CDSS shall provide documentation as-needed to support the Contractor.

2. The CDSS will timely review and approve all materials and/or deliverables developed in conjunction with this Agreement.

3. The CDSS will timely review and determine whether to provide written approval for any requests by the Contractor to disseminate any written information, materials, or deliverables to the field, public, or any other third party.

4. All printing shall be sent to the California Department of General Services, Office of State Publishing (OSP). It is the responsibility of the CDSS Project Representative to obtain an exemption from OSP to competitively bid out any and all printing listed within this Agreement.

Resumes

The resumes of the principal personnel the Contractor will use to provide services under this Agreement are attached as Exhibit A – Attachment 1.

Subcontracting

Contractor may subcontract one or more portions of this Agreement if the subcontract is justified and is not for the purpose of circumventing state contracting requirements. Any subcontract(s) shall conform to State Contracting Manual (SCM) Volume 1, Section 3.06.

When the total of all of Contractor’s subcontracts exceeds $50,000 or 25% of the total value of the agreement, whichever is less, the following shall apply:

1. Contractor shall conduct a competitive bidding process that seeks at least three (3) bids from responsible bidders for all subcontracts, unless the contract is with an entity specifically exempted by SCM, Volume 1, Section 3.06A.

2. Contractor, by signing this Agreement, certifies that any subcontractor(s) utilized to fulfill the Scope of Work in this Agreement shall be selected by Contractor pursuant to a competitive bidding process that seeks at least three (3) bids from responsible bidders for all subcontracts, unless the subcontract is with an entity specifically exempted by SCM, Volume 1, Section 3.06A. Failure to comply with

RFP 25-3021 Page 22 of 22 this requirement may result in suspension of payments under this Agreement or be grounds for termination of this Agreement.

Project Representatives

The Project Representatives during the term of this Agreement shall be:

CDSS Contractor

TBD TBD

Phone: Phone:

Email: Email:

The Project Representative may be changed by providing written notice to the other party within five (5) business days of the change. Said change shall not require an amendment to this Agreement.

RFP 25-3021 Page 1 of 3

EXHIBIT B

(Standard Agreement)

Revised 3/21/25

BUDGET DETAIL AND PAYMENT PROVISIONS

A. Invoicing and Payment

1. The maximum amount payable under this Agreement shall not exceed $3,529,000.00.

2. For services satisfactorily rendered, and upon receipt and approval of the invoice(s), CDSS agrees to pay the Contractor for said services in accordance with the rates specified in Exhibit B – Attachment 1.

3. Funding for necessary travel expenses and per diem are included in this Agreement and will be reimbursed at rates established by the California Department of Human Resources (CalHR) for comparable classes. (See https://www.calhr.ca.gov/employees/Pages/travel-reimbursements.aspx).

Contractor will itemize travel expenses, including receipts, and submit to CDSS Program Contract Manager for approval. This approval, including itemization and receipts must be attached to the invoice submitted for payment. No travel outside of the State of California by Contractor shall be reimbursed unless there is prior written authorization from CDSS.

4. Progress Payment Withholds

a. If progress payments are allowed for services performed under this contract, not less than ten (10) percent of the contract amount shall be withheld pending final completion of the contract, and receipt and acceptance by the CDSS of any final reports required under the contract. However, for those contracts that consist entirely of separate and distinct tasks, any funds withheld with regard to a particular task may be paid upon completion of that particular task.

b. Ten percent (10%) payment withholds shall not be applied to reimbursements or periodic payment requests for direct costs associated with equipment purchases, media buys, operating expense items, and other procurements not directly associated with the Contractor’s personal performance.

https://www.calhr.ca.gov/employees/Pages/travel-reimbursements.aspx

RFP 25-3021 Page 2 of 3

EXHIBIT B

(Standard Agreement)

Revised 3/21/25

5. Invoices shall include the Agreement Number RFP 25-3021 and Reporting Structure 51809990 and shall be submitted not more frequently than monthly in arrears to:

California Department of…