HL_0002 Calyx PointCentral SS 2024 Bid S-27400-00010175.doc

SOLE-SOURCE DETERMINATION AND JUSTIFICATION

FOR SUPPLIES AND SERVICES

Open Market Bid S-27400-00010175

To : Designated Procurement Officer: Toni Payseno, DPO From:

Agency Manager: Cody Cox, Home Loans Manager Date: April 18, 2024 Re: Sole Source Determination pursuant to Oregon Revised Statute (ORS) 279B.075 and Oregon Administrative Rule (OAR) 125-247-0275

Part A

1. Authority to enter into a Sole-Source Contract: OAR 125-246-0170(2)(c)(H)

2. Estimated Total Value of Contract: $40,403

3. Subject of Contract: _ Calyx PointCentral Software Licensing, Maintenance, and Support Services (collectively "Software and Services”), a home loan origination system.

4. Background:

One of the primary divisions within ODVA is the Home Loan program. This program is mandated by the Oregon Constitution Article XI-A and was instituted in 1945. ODVA has offered Oregon veterans a continued opportunity to use ODVA funding for their acquisition of their primary resident. The program has funded over 350,000 veteran home loans at over $8 billion since its inception.

To facilitate operations, the Loan Origination section receives loan application submission from Oregon licensed Mortgage Brokers and Mortgage Bankers. To receive this loan submission, ODVA requires a compatible Loan Origination System (LOS) to receive, process, underwrite and fund the loan submissions.

In 2003, ODVA engaged with a national company, Calyx Software, to facilitate this function. Over this period, our systems have integrated internal functions with the current versions of Calyx Software, called PointCentral. This program is designed for 3rd-Party originators to receive files from these private sector originators.

Our Agency is preparing to further our relationship with Calyx Software and continue our operations. Our intent is to continue this relationship on or before May 18, 2024. This sole-source purchase is justified as Calyx Software offers the customization necessary to accurate process of receiving, processing, underwriting and funding an ODVA Veterans loan.

The current relationship is considered a subscription agreement. Previously, ODVA pays an annual subscription based on the number of “seats” ODVA has resident on our desktop computers. This subscription renews on an annual basis, is paid in advance annually, and is a fee of $396 dollars per “seat”. ODVA currently uses 15 seats of Calyx PointCentral.

In 2015, the Consumer Finance Protection Bureau (CFPB) made an extensive change to the manner of consumer disclosure for mortgage loans. During that time, ODVA made a decision to continue with Calyx Software as the customization necessary to continue our processes was already in place and offered the best opportunity for continues success.

We are seeking this Sole-Source procurement with the same intent as previous: Calyx Software’s PointCentral program is unique in the industry and offers the best option for ODVA to provide is Oregon Constitutional mandate moving forward.

The Oregon Department of Veterans’ Affairs (ODVA) is preparing to purchase six years of licensing services from Calyx PointCentral for home loan processing. It is the intent of ODVA to purchase them effective 5/18/2024. The estimated cost is $40,403 for those licenses and support.

This sole source justification applies to the purchase of these licenses and support.

The anticipated Contract will be through May 2030, with Software Licensing and Services being renewed further only if ODVA is unable to initiate a formal project to transition to a different system that would ensure continuity of the home loan program for Veterans.

In 2020, a solicitation was conducted in ORPIN (#DASPS-1599-20) that invited a number of companies offering these services. That solicitation was eventually canceled as the vendor was nonresponsive to required state contract terms and conditions. That failed solicitation resulted in licensing continuing for Calyx PointCentral.

Calyx Zip has been approved for agency use. Calyx PointCentral is the only software that can be used with that platform. Until another option is approved by the State of Oregon, the agency must continue use with Calyx PointCentral software.

5. Findings:

ODVA has utilized Calyx PointCentral for loan origination support and service since 2003 and Calyx PointCentral has been used as the system of record to process all loan origination documents since 2000 The estimated spend to date has been $51,616. The Calyx PointCentral system provides the sole source for fulfilling the Home Loan Program and meets the requirements of the Oregon Constitution Article XI-A.

ODVA subsequently contracted with Calyx PointCentral, pursuant to its procurement authority, for ongoing Software maintenance and technical support (Services). The current Software and Services term will expire May 18, 2024; however, ODVA will need to maintain both the Software and Services up to an additional 6-years (approx.) while new options are considered.

Calyx Zip is a consumer-facing web portal, designed to streamline mortgage origination by collecting data from borrowers in a comprehensive and user-friendly manner, and deliver such data to other loan origination products such as ODVA’s on-premises Calyx PointCentral which is a major component in ODVA’s loan origination process, is hosted at the State of Oregon Data Center, and has been in use since roughly 2015. Calyx Zip will be the only cloud-based component of ODVA’s loan origination process.

Calyx Zip and Calyx PointCentral will be utilized together to provide a near-paperless origination process that is more user friendly than the current fragmented process, will have increased accessibility to potential customers, and will provide modern features that customers have come to expect. Calyx Zip will collect customer data to include PII used in the origination and underwriting of home loans, which will be temporarily stored on an U.S. based Amazon S3 server before being downloaded by Calyx PointCentral. Record numbers will vary by file and borrower, with the overall quantity expected to begin below 1000 records but likely to grow to several thousand within the next 5 years.

Total licensing and usage costs are estimated to be $40,403 through 2030.

A. Market Research Overall Finding.

ODVA must have a compliant system loan program, which includes loan origination support to ensure continuity of operations and the ability to process veteran loans in a timely manner that complies with state and federal laws. The Calyx PointCentral software has been in place since 2003 and houses data and files that data back several decades and which are vital to the loan program division within the Agency.

The Calyx PointCentral software contains numerous records relevant to the daily operation of ODVA’s Loans program, Conservatorship program, Veteran Outreach Services, and directly impacts ODVA’s ability to process loans timely while meeting state and federal requirements. Since Calyx PointCentral is the only software that can be utilized on the Calyx Zip platform, ODVA must continue to utilize Calyx PointCentral until a different option is made available.

And

B. Findings of Fact pursuant to OAR 125-247-0275(2) must include, at a minimum, one of the following:

1. Pursuant to OAR 125-247-0275(2)(a): Compatibility. Provide findings supporting your determination that the efficient utilization of existing goods requires the acquisition of compatible goods or services from only one source.

2. Pursuant to ORS 279B.075 (2)(b): Exchange of Software or Data. Provide findings supporting your determination that the goods or services required for the exchange of software or data with other public or private agencies are available from only one source.

3. Pursuant to ORS 279B.075 (2)(c): Pilot or Experimental Project. Provide findings supporting your determination that the goods or services are for use in a pilot or an experimental project.

4. Pursuant to ORS 279B.075 (2)(d): Other findings that support the conclusion that Supplies and Services are available from only one source may include but are not limited to considerations of: unique design, availability, geographic location, exclusive authorized representative, cost of conversion, and warranty services.

For the last 20 years, ODVA has used Calyx Software to process loan origination documents for the Oregon Veterans. The system and the database it hosts are vital to ODVA meeting its state and federal requirements.

If the Agency were to discontinue its use of the Calyx PointCentral software, it would stop all production of the home loan program for Veterans until a replacement system could be fully implemented. The agency would be unable to fulfill the Oregon Constitutional mandate. Significant revisal of records-related processes and timelines would also become necessary as many electronic and automated processes would become manual and necessitate physical copies of each record. This would exponentially increase the time and materials necessary for ODVA to fulfill its State and Federal commitments.

If the Calyx PointCentral software is not utilized and licensing isn’t attained, platform and Software failures could occur, which may result in:

· Inability to fund program loans, thereby violating the Oregon Constitution.

· ODVA’s non-compliance with state and federal requirements.

· Interrupted (delayed) services to Oregon veterans served under the Home Loans Program and Veteran Outreach Programs including eligibility determinations for housing, education, and health care.

· ODVA will not succeed in fulfilling Governor Kotek’s vision statement to improve customer service for Oregonians.

· ODVA and the State exposure to litigation.

Since Calyx PointCentral is the only software that can currently be utilized on the Calyx Zip platform, ODVA must continue to utilize Calyx PointCentral until different options can be explored.

Sole-Source Determination_rev01-31-24