REQ-DASOBO-00136045_Financial Review Services_Approved.pdf

REQ-DASOBO-00136045_Financial Review Services_PPOSign_DCBS Page 1 of 6

REQUEST FOR SPECIAL PROCUREMENT

No. REQ-DASOBO-00136045

PART A. Requesting Agency must complete Items 1 through 13.

1. Requesting Agency Name: Department of Consumer and Business Services (DCBS)

2. Date of Request: June 06, 2025 3. Agency Number: 44000

4. Agency Contact Name: Franie Wilkins, Procurement and Contract Specialist

5. Phone: (971) 375-7759

6. Type of Request: Class Special Procurement __X__ Contract-specific Special Procurement

7. Time Period Requested: From: June 30, 2025 To: December 31, 2025

8. Total Estimated Cost: $500,000

Note: With approval of this Special Procurement (SP), the cumulative Total Estimated Cost approved under the SP will be $4,034,000.

9. Title: Supplies and/or Services to be Acquired: Financial examinations and financial analysis Services (Services)

10. Request, Background, Current Need, and Proposed Contracting Procedure:

a. Request:

The Department of Consumer and Business Services, Division of Financial Regulation (Agency) is requesting approval of this Special Procurement to extend Price Agreement (PA) No. DCBS-1835-20, with Risk & Regulatory Consulting, LLC (Contractor) for financial examinations and financial analysis services for an additional six (6) months beyond the maximum price agreement term of five

(5) years and to increase the Maximum Not-to-Exceed (NTE) Compensation by $500,000 for a new NTE of $4,034,000. The request is to allow Agency sufficient time to complete the current competitive process, which will replace the current PA with up to five (5) newly awarded PAs for future services.

b. Background:

DCBS is Oregon’s largest regulatory and consumer protection agency. DCBS administers state laws and rules, protects consumers and workers in the areas of workers’ compensation, occupational safety and health, financial services, insurance and building codes.

The Division of Financial Regulation (DFR) is a division of DCBS and oversees the financial and insurance industries in Oregon. It regulates insurance, depository institutions, trust companies, securities and consumer financial products and services (e.g., mortgage lending, small dollar loans, collection agencies). As the chartering authority for insurance companies, Agency’s primary

REQ-DASOBO-00136045_Financial Review Services_PPOSign_DCBS Page 2 of 6 objective is to protect Oregon consumers from market failures that would otherwise cause insurers to incur an excessive risk of insolvency or engage in market abuses that hurt consumers.

To accomplish this protection, Agency’s in-house financial analysis staff receives, monitors and evaluates regular filings made with Agency and with the National Association of Insurance Commissioners (NAIC). Concurrently, a team of Financial Examiners conducts regular examinations of each Oregon domiciled insurer every three (3) to five (5) years as well as targeted exams when necessary to address specific concerns.

Agency currently regulates thirty-nine (39) licensed domestic insurance companies, including one

(1) life and health insurer, seventeen (17) property and casualty insurers, eighteen (18) health care service contractors, two (2) combination health maintenance organizations/health care service contractors, and one (1) exempt insurer.

Domestic insurers involved in acquisition or merger activity are required to file a Pre-Acquisition Notification filing (Form E) if a change of ownership would result in 10% or more of a controlling interest by or with another party. Once Form E is approved, the proposing party must file an Acquisition of Control filing (Form A) with Agency that covers, among other items, the method of acquisition, consideration to be paid, and the impact on the insurance buying public.

Agency is required to review quarterly and yearly filings completed by all domestic insurers and occasionally, more frequent filings that the Agency requests. For any multi-state insurer, the filings must be completed to the standards and within the timing set by the NAIC. From time to time, due to fluctuations in Agency staff and the number of domestic insurers conducting business in Oregon in any given year, Agency needs assistance in completing the analysis of these filings.

All domestic insurers are examined every three (3) to five (5) years by Agency’s Financial Examiners, depending on scheduling considerations. These examinations are performed using the Risk Focused method as described in the NAIC Financial Condition Examiner’s Handbook. Of the forty

(40) domestic insurers, sixteen (16) are stand-alone companies or are in holding company structures where it is the only insurance company. The remaining twenty-four (24) are in insurance company holding systems with other insurance companies, and the examinations may be performed through coordination efforts with other State insurance regulators. Thirty (30) of these exams are required to be completed to standards and within timelines set by the NAIC. Due to increasing complexity of examinations, fluctuating examination staff and the need for subject matter expertise that may be different for each company examined, Agency has been contracting out for many of these examination services with the current Contractor.

Timeline:

Competitive Sealed Proposal:

• January 14, 2020 – Agency issued Request for Proposal (RFP) No. DCBS-1510-20 on the Oregon

Procurement Information Network (ORPIN), the state’s previous eProcurement system. Agency issued this solicitation pursuant to its authority under Oregon Revised Statutes (ORS) 731.216.

Agency used the Competitive Sealed Proposal method, pursuant to ORS 279B.060 and Oregon Administrative Rules (OAR) 137-047-0260.

• Agency awarded of one (1) Price Agreement, with a maximum cumulative term of five (5) years.

https://www.oregonlegislature.gov/bills_laws/ors/ors731.html

REQ-DASOBO-00136045_Financial Review Services_PPOSign_DCBS Page 3 of 6

Price Agreement:

• July 6, 2020 – DCBS-1835-20, Risk & Regulatory Consulting, LLC, a Foreign Limited Liability

Corporation.

o Executed with a two-year term (June 30, 2023).

o Executed a NTE of $1,250,000.

Amendment 1:

• August 3, 2021 - Agency executed PA Amendment 1 to revise the payment methodology.

Amendment 2:

• May 18, 2022 - Agency executed PA Amendment 2 to update the compensation language and add $500,000 compensation.

Amendment 3:

• November 16, 2022 - Agency executed PA Amendment 3 to update the Agency contract administrator and add $250,000 compensation.

Amendment 4:

• February 14, 2023 - Agency executed the following PA Amendment 4 to add $145,000 compensation.

Amendment 5:

• April 13, 2023 - Agency executed the following PA Amendment 5 to add $1,164,000 compensation and extend the term for two (2) years.

Amendment 6:

• June 3, 2025 - Agency executed PA Amendment 6 to add $225,000 compensation.

c. Current Need:

Agency is required to complete financial examinations on all domestic insurers every three (3) to five (5) years, Form A, and Form E reviews. Amending the existing PA for these Services maintains Agency compliance with these requirements and not creating a backlog of work.

Agency had every intention of completing a new solicitation and having new price agreement(s) in place before the June 30, 2025 expiration date. Agency conducted a competitive sealed proposal solicitation for these Services, but the evaluation process is taking longer than anticipated due to division staff workload and availability. Due to this delay for the evaluation of Proposals, and the anticipated time it will take to award the new price agreement(s), including the 7-day protest period, negotiation of awarded price agreement(s), and the legal sufficiency approval process, Agency recognizes there is not enough time to execute any of the new price agreement(s) prior to June 30th.

Agency also has immediate upcoming needs for additional Work Order Contract service requests that need to be executed as soon as possible.

The cumulative spend for these Services since 2020, is $3,534,000. With approval of this Special Procurement request, Agency will be adding an additional $500,000 and extending the term for six

(6) months while Agency negotiates the anticipated awarded five (5) price agreements.

REQ-DASOBO-00136045_Financial Review Services_PPOSign_DCBS Page 4 of 6

d. Proposed Contracting Procedure:

• Agency will issue a public notice (Notice) on OregonBuys, as required by OAR 125-247-

0287, regarding approval of this Special Procurement request for a period of seven (7) calendar days.

• The Notice will include provisions that any Affected Person(s) may protest the approval of the Special Procurement.

• At the completion of the seven (7) day notice period, if no protests are received and sustained, Agency will proceed with amending the PA and extending the term for six (6) months and adding compensation as described in section 10.a above.

• Pursuant to OAR 137-045-0015, Agency will obtain DOJ legal sufficiency review prior to executing the PA amendment(s), as required.

11. Justification for use of Special Procurement: Describe the circumstances that justify the use of a Special Procurement. Attach relevant documentation.

Oregon’s Public Contracting Code is established in ORS Chapters 279A, 279B, and 279C. Given the ‘Total Estimated Cost’ of $4,034,000 (as outlined in section 8 above), the only procurement method through which DCBS can request and obtain DAS’ approval to amend the PA with the Contractor is a Special Procurement found under ORS 279B.085.

The competitive sealed proposal solicitation for these contracted Services had a maximum contract term of five (5) years. Procurement rules do not allow Contracts or Price Agreements to be extended beyond that maximum term without the approval of a Special Procurement request. Due to unexpected evaluation delays listed above in section 10.c, Agency does not anticipate finishing the current solicitation to award new price agreements for these Services before the June 30, 2025 deadline.

12. Findings to Satisfy the Required Standards: This proposed special procurement:

__X__ (a) will be unlikely to encourage favoritism in the awarding of public contracts or to substantially diminish competition for public contracts because:

The approval of this Special Procurement request would not encourage favoritism, because Agency is currently conducting the evaluation process for a compensative sealed proposal solicitation process for future services, as outlined above. RFP No. S-44000-00013584 was posted on OregonBuys on April 14, 2025 with a Bid Opening date of May 15, 2025, providing ample time to attract maximum competition. The RFP was conducted in accordance with ORS 279B.060, Competitive Sealed Proposals, and related OAR 125-247-0260.

and

______ (b)(i) will result in substantial cost savings to the contracting agency or to the public because:

or

REQ-DASOBO-00136045_Financial Review Services_PPOSign_DCBS Page 5 of 6

__X__ (b)(ii) will otherwise substantially promote the public interest in a manner that could not practicably be realized by complying with the requirements of ORS 279B.055, 279B.060, 279B.065, or 279B.070, or any rules adopted thereunder because:

Due to unexpected delays, Agency does not anticipate finishing the competitive sealed proposal solicitation process before the June 30, 2025 expiration date of the current Price Agreement.

Approving this Special Procurement request will substantially promote the public interest, because of the requirement that Agency is required to complete financial examinations on all domestic insurers every three (3) to five (5) years, and reviews of form A and E. The delay in Services could provide a hardship on insurance companies and in turn, Oregon consumers.

13. Signature: The actual signature of the Agency Head or designee (e.g., Designated Procurement Officer) is not required on the Request if it is submitted through OregonBuys. Agency may elect to attach a signed Request.

Signature: Electronically in OregonBuys Date:_________________ Type Name: Miriha Aglietti, Designated Procurement Officer

REQ-DASOBO-00136045_Financial Review Services_PPOSign_DCBS Page 6 of 6

PART B. The Department of Administrative Services completes Part B.

STATUTORY AND RULE AUTHORITY:

ORS 279B.085(2) states the Director of the Department of Administrative Services may approve a special procurement if the Director finds that a written request submitted under ORS 279B.085(4) demonstrates that the use of a special procurement as described in the request, or an alternative procedure prescribed by the Director will:

(a) Be unlikely to encourage favoritism in the awarding of public contracts or to substantially diminish competition for public contracts; and (b)(A) Result in substantial cost savings to the contracting agency or to the public; or

(B) Otherwise substantially promote the public interest in a manner that could not practicably be realized by complying with requirements that are applicable under ORS 279B.055, 279B.060, 279B.065 or 279B.070 or under any rules adopted thereunder.

OAR 125-246-0170 delegates the authority of the Director of the Department of Administrative Services to approve special procurements to the State Chief Procurement Officer. OAR 125-247-0285 through 125-247-0288 implement ORS 279B.085.

OAR 125-247-0700(2) Protests and Judicial Review of Special Procurements designates the State Chief Procurement Officer as the Contract Review Authority.

FINDINGS: The findings are accepted, adopted, and incorporated by reference herein.

CONDITIONS OF APPROVAL:

1. Notice Period. The Authorized Agency shall post the Public Notice on OregonBuys. The Special Procurement may not be used until after the completion of the seven (7) day notice period required pursuant to OAR 125-247-0287(4), and either:

a. No Written protests are received by the Contract Review Authority, State Chief Procurement Officer, from an Affected Person in response to the notice, or

b. If any protest is received during the notice period, then not until:

i. the State Chief Procurement Officer or delegate issues a written disposition of the protest in accordance with ORS 279B.400 and OAR 125-247-0700 and OAR 137-047-0700, and

ii. confirms in writing the first possible date of use of the Special Procurement.

2. ORS 279A.165 Requirements. Authorized Agency shall comply with the requirements of ORS 279A.165 and OAR 125-247-0287(12) regarding a report about this Special Procurement. Agency shall use a form and follow the instructions provided by the State Chief Procurement Officer or delegate.

APPROVED

Jay Jackson, Procurement Policy Officer Date:

Department of Administrative Services, State Procurement Services

6/17/2025