RFP 200000000634 - Schedule A.docx

Bidder must enter company name here

STATE OF MICHIGAN

Request For Proposal No. 200000000634 Unclaimed Property Custodial Services

SCHEDULE A

STATEMENT OF WORK

CONTRACT ACTIVITIES

This schedule identifies the anticipated requirements of any Contract resulting from this RFP. The term “Contractor” in this document refers to a bidder responding to this RFP.

The Contractor must respond to each requirement or question and explain how it will fulfill each requirement. Attach any supplemental information and appropriately reference within your response.

BACKGROUND

This is a Request for Proposal (RFP) for Unclaimed Property Custodial Services. Bidders must submit written proposals according to the instructions contained within this RFP, discussing how they will meet the specific requirements. This will be a five-year contract with five, one-year options available.

The objective of this project is to obtain the services of a qualified Contractor to serve as custodian for securities received from holders that report unclaimed property. The property consists of securities and the dividends or interest associated with these securities. The Contractor will also be involved in the liquidation or transfer of securities as instructed by the Program Manager or designee.

SCOPE

To account for securities, related dividends and interest remitted by holders of unclaimed property to the Michigan Department of Treasury, Unclaimed Property (UP). This includes, but is not limited to, the following:

A. To accept and deposit securities and related dividends/interest remitted to UP B. To account for securities and related dividends/interest remitted to UP C. To liquidate or transfer securities to unclaimed property owners at the direction of the Program Manager or designee D. To account for all corporate actions, including mergers, stock splits, cash and stock dividends, spinoffs, etc.

1. Requirements

1.1. General Requirements

1. The Contractor must establish a custodian account for the Michigan Department of Treasury, Unclaimed Property (UP). Contractor will not deduct charges and fees from the custodian account, except in those instances where the charges stem from redemption or sale transactions. These charges and fees shall be billed separately.

Bidder shall check only 1 box below, and identify exception(s)

2. The Contractor must use the same account for the duration of Contract.

Bidder shall check only 1 box below, and identify exception(s)

3. The Contractor must provide online inquiry access for UP staff into the proposed custodian account for purposes of accessing reports.

Bidder shall check only 1 box below, and identify exception(s)

Bidder shall describe how they comply with the above requirement

Bidder Response:

4. The Contractor must be able to accept securities through the Depository Trust Company (DTC) from holders and reporting entities.

Bidder shall check only 1 box below, and identify exception(s)

5. The Contractor must provide accounting for the following types of securities: stocks, mutual funds, bonds, debentures and warrants (see section 5.3 for report requirements).

Bidder shall check only 1 box below, and identify exception(s)

6. The Contractor must record each security by CUSIP number, name of issue, number of shares, and type of security (i.e. common stock, preferred stock, bonds, debentures and warrants).

Bidder shall check only 1 box below, and identify exception(s)

Bidder shall describe how they comply with the above requirement and provide a sample record format

Bidder Response:

7. The Contractor must accept, and deposit securities registered in either custodian’s name, State of Michigan’s name, its nominee name, or unclaimed property owner’s name.

Bidder shall check only 1 box below, and identify exception(s)

8. The Custodial Service must account for all corporate actions, such as mergers, stock splits, cash and stock dividends, etc.

Bidder shall check only 1 box below, and identify exception(s)

9. The Contractor must collect and record dividends, interest, and other cash receipts.

Bidder shall check only 1 box below, and identify exception(s)

10. The Contractor must deposit dividends, interest, securities liquidation proceeds, and other cash receipts in an interest-bearing money market account.

Bidder shall check only 1 box below, and identify exception(s)

11. The Contractor must be able to secure physical stock and bond certificates in a vault.

Bidder shall check only 1 box below, and identify exception(s)

12. The Contractor must conduct research as requested by the Program Manager or designee, on corporate actions such as mergers, name changes, discontinued corporations, etc., (see section 5.3 for report requirements).

Bidder shall check only 1 box below, and identify exception(s)

13. The Contractor must liquidate securities at the direction of the Program Manager or designee.

Bidder shall check only 1 box below, and identify exception(s)

14. The Contractor must re-register shares from State of Michigan’s name to unclaimed property owners at the direction of the Program Manager or designee.

Bidder shall check only 1 box below, and identify exception(s)

Bidder shall explain their process to comply with the above requirement

Bidder Response:

15. The Contractor must provide for medallion signature guarantee.

Bidder shall check only 1 box below, and identify exception(s)

16. Security lending is not allowed in this contract.

Bidder shall check only 1 box below, and identify exception(s)

1.2 Transition

Refer to Section 25, Transition Responsibilities of the Standard Contract Terms for transition language

1.3 Implementation

1. PHASE 1 – Specifications Compliance Review

The first phase shall be comprised of a compliance review of the specifications for the service listed in the Contract. This review will ensure all items follow the required specifications for the Contract. In the event Treasury determines that any component or feature of the service does not comply with the specifications of the Contract, Treasury reserves the right to cancel the contract.

Bidder shall check only 1 box below, and identify exception(s)

2. PHASE 2 – Acceptance Test

The Program Manager will evaluate the service performance based on the specifications provided in the Contract. The Program Manager will determine that the service is fully operational when all requirements listed in the Contract are met. It will be the Program Manager’s responsibility to determine that the service is fully operational.

Bidder shall check only 1 box below, and identify exception(s)

3. PHASE 3 – Post Implementation

The performance period for Phase 3 is a period of 45 consecutive calendar days. The performance period shall commence when the service is fully operational.

During the performance period for Phase 3 there shall be no more than three interruptions. During the performance period for Phase 3 there shall be no individual interruption that lasts longer than four hours.

An interruption is defined as failure in the Contractor-supplied service, which results in work stoppage.

Bidder shall check only 1 box below, and identify exception(s)

4. PHASE 4 - Final Testing Will be completed 45 days after completion of Phase 3 noted in Section 1.2.3. During Final Testing, there shall be no more than three interruptions. During Final Testing there shall be no individual interruption that lasts longer than four hours (see Section 1.2.3 for definition of interruption). Upon completion of the Final Testing phase, the Program Manager will provide written acceptance of the service and contract activities will officially begin.

Bidder shall check only 1 box below, and identify exception(s)

1.4. Training

The Contractor must provide any and all onsite, offsite, or internet-based training documentation and materials and be available to conduct training sessions, in any of the forms noted above, as requested by the Program Manager.

Bidder shall check only 1 box below, and identify exception(s)

2. Service Levels

2.1. Time Frames

1. The Contractor must inventory securities at the current market value no later than 48 hours after receipt.

Bidder shall check only 1 box below, and identify exception(s)

2. The Contractor must inventory securities at par value for those that do not have a market value upon receipt.

Bidder shall check only 1 box below, and identify exception(s)

3. The Contractor must return to the holder or reporting entities, any worthless or non-transferable securities with an explanation within 30 calendar days after the Contractor becomes aware of the issue.

Bidder shall check only 1 box below, and identify exception(s)

Bidder shall describe how they comply with the above requirement

Bidder Response:

4. The Contractor must hold securities for 45 days before they are eligible for sale.

Bidder shall check only 1 box below, and identify exception(s)

5. The Contractor must provide to the Program Manager a list of securities eligible for sale no later than the 20th of each month in Excel format.

Bidder shall check only 1 box below, and identify exception(s)

6. The Contractor must liquidate securities within three working days after request.

Bidder shall check only 1 box below, and identify exception(s)

7. The Contractor must transmit, via wire transfer, by the 3rd business day of each calendar month to the Michigan Department of Treasury all liquidation proceeds, dividends, interest and other cash receipts plus interest earned on such funds.

Bidder shall check only 1 box below, and identify exception(s)

8. The Contractor must conduct research of old securities for potential value within 30 days of request.

Bidder shall check only 1 box below, and identify exception(s)

9. The Contractor must assist Program Manager or designee in determining market value of securities not maintained by the Contractor, within 30 days of request.

Bidder shall check only 1 box below, and identify exception(s)

10. The Contractor must conduct research as requested by the Program Manager or designee, on corporate actions such as mergers, name changes, discontinued corporations, etc., within 30 days of request.

Bidder shall check only 1 box below, and identify exception(s)

11. At the direction of the Program Manager or designee, the Contractor must re-register shares from State of Michigan’s name to unclaimed property owners. Such registration change shall be requested from transfer agent within 3 days of request from Program Manager.

Bidder shall check only 1 box below, and identify exception(s)

3. Acceptance

3.1. Acceptance, Inspection and Testing

The following criteria will be used by the State to determine Acceptance of the Services and/or Deliverables provided under this SOW and will be approved by the Program Manager or designee.

1. Verification that the unit price charged for each service matches the fees listed in Schedule B and a confirmation that the calculations are correct.

2. A confirmation that the quantity for each transaction charged (i.e. receipt of securities, liquidation of securities, receipt of mutual funds/DRP transactions, etc.) is accurate and matches the share position and valuation reporting provided by the Contractor for the month.

4. Staffing

4.1. Contractor Representative

The Contractor must appoint one individual, specifically assigned to State of Michigan accounts, that will respond to State inquiries regarding the Contract Activities, answering questions related to ordering and delivery, etc., (the “Contractor Representative”).

The Contractor must notify the Contract Administrator at least 30 calendar days before removing or assigning a new Contractor Representative.

Bidder shall check only 1 box below, and identify exception(s)

List the Contractor Representative with title, address, and contact information

4.2. Customer Service Toll-Free Number

The Contractor must specify its toll-free number for the State to make contact with the Contractor Representative. The Contractor Representative must be available for calls during the hours of 8 am to 5 pm EST.

Bidder shall check only 1 box below, and identify exception(s)

4.3. Work Hours

The Contractor must provide Contract Activities during the State’s normal working hours Monday – Friday, 7:00 a.m. to 6:00 p.m. EST, and possible night and weekend hours depending on the requirements of the project.

Bidder shall check only 1 box below, and identify exception(s)

4.4. Key Personnel

The Contractor must appoint one individual who will be directly responsible for the day-to-day operations of the Contract (“Key Personnel”). Key Personnel must be specifically assigned to the State account, be knowledgeable on the contractual requirements, and respond to State inquires within 24 hours

The State has the right to recommend and approve in writing the initial assignment, as well as any proposed reassignment or replacement, of any Key Personnel. Before assigning an individual to any Key Personnel position, Contractor will notify the State of the proposed assignment, introduce the individual to the State’s Program Manager, and provide the State with a resume and any other information about the individual reasonably requested by the State. The State reserves the right to interview the individual before granting written approval. In the event the State finds a proposed individual unacceptable, the State will provide a written explanation including reasonable detail outlining the reasons for the rejection. The State may require a 30-calendar day training period for replacement personnel.

Contractor will not remove any Key Personnel from their assigned roles on this Contract without the prior written consent of the State. The Contractor’s removal of Key Personnel without the prior written consent of the State is an unauthorized removal (“Unauthorized Removal”). An Unauthorized Removal does not include replacing Key Personnel for reasons beyond the reasonable control of Contractor, including illness, disability, leave of absence, personal emergency circumstances, resignation, or for cause termination of the Key Personnel’s employment. Any Unauthorized Removal may be considered by the State to be a material breach of this Contract, in respect of which the State may elect to terminate this Contract for cause under Termination for Cause in the Standard Terms. It is further acknowledged that an Unauthorized Removal will interfere with the timely and proper completion of this Contract, to the loss and damage of the State, and that it would be impracticable and extremely difficult to fix the actual damage sustained by the State as a result of any Unauthorized Removal. Therefore, Contractor and the State agree that in the case of any Unauthorized Removal in respect of which the State does not elect to exercise its rights under Termination for Cause, Contractor will issue to the State the corresponding credits set forth below (each, an “Unauthorized Removal Credit”):

(i) For the Unauthorized Removal of any Key Personnel designated in the applicable Statement of Work, the credit amount will be $25,000.00 per individual if Contractor identifies a replacement approved by the State and assigns the replacement to shadow the Key Personnel who is leaving for a period of at least 30 calendar days before the Key Personnel’s removal.

(ii) If Contractor fails to assign a replacement to shadow the removed Key Personnel for at least 30 calendar days, in addition to the $25,000.00 credit specified above, Contractor will credit the State $833.33 per calendar day for each day of the 30 calendar-day shadow period that the replacement Key Personnel does not shadow the removed Key Personnel, up to $25,000.00 maximum per individual. The total Unauthorized Removal Credits that may be assessed per Unauthorized Removal and failure to provide 30 calendar days of shadowing will not exceed $50,000.00 per individual.

Contractor acknowledges and agrees that each of the Unauthorized Removal Credits assessed above: (i) is a reasonable estimate of and compensation for the anticipated or actual harm to the State that may arise from the Unauthorized Removal, which would be impossible or very difficult to accurately estimate; and (ii) may, at the State’s option, be credited or set off against any fees or other charges payable to Contractor under this Contract.

The Contractor must identify the Key Personnel, indicate where they will be physically located, describe the functions they will perform, and provide current chronological résumés.

Bidder shall check only 1 box below, and identify exception(s)

List the Key Personnel with title, address, and contact information. Attach chronological résumés as a separate document in PDF or Word format.

4.5. Organizational Chart

The Contractor must provide an overall organizational chart that details staff members, by name and title, and subcontractors.

Bidder shall check only 1 box below, and identify exception(s)

Bidder shall attach the organizational chart as a separate document in PDF, Visio or Word format.

4.6. Disclosure of Subcontractors

If the Contractor intends to utilize subcontractors, the Contractor must disclose the following:

The legal business name; address; telephone number; a description of subcontractor’s organization and the services it will provide; and information concerning subcontractor’s ability to provide the Contract Activities.

The relationship of the subcontractor to the Contractor.

Whether the Contractor has a previous working experience with the subcontractor. If yes, provide the details of that previous relationship.

A complete description of the Contract Activities that will be performed or provided by the subcontractor.

Bidder must complete this table for all subcontractors.

Legal business name and full address.

State in which business was incorporated.

Phone number.

Description of subcontractor’s organization and the services it will provide.

Description of the Contract Activities that will be performed or provided by the subcontractor.

Information concerning subcontractor’s ability to provide the identified Contract Activities for their business.

Website address.

The relationship of the subcontractor to the Contractor.

If the Contractor has a previous working experience with the subcontractor, provide the details of that previous relationship.

Of the total bid, the price of the subcontractor’s work.

4.7. Security

The Contractor will be subject the following security procedures:

See Attachment A – Security Requirements Version 6.1

Bidder shall check only 1 box below, and identify exception(s)

Deemed accepted by bidder unless redlines to the document are submitted but the proposal deadline.

Bidder Response:

5. Project Management

5.1. Project Plan

The Contractor will carry out this project under the direction and control of the Program Manager. Within 30 calendar days of the Contract Effective Date, the Contractor must submit a project plan to the Program Manager for final approval. The plan must include: (a) the Contractor's organizational chart with names and title of personnel assigned to the project, which must align with the staffing stated in accepted proposals; and (b) the project breakdown showing implementation timelines, sub-projects, tasks, and resources required.

Bidder shall check only 1 box below, and identify exception(s)

5.2. Meetings

The Contractor must attend the following meetings:

There are no mandatory meetings required with this RFP. The Program Manager may request meetings as needed.

Bidder shall check only 1 box below, and identify exception(s)

5.3. Reporting

The Contractor must submit, to the Program Manager, the following reports:

1. Monthly reports required by the State must be electronically accessible by designated UP staff. Designated UP staff will also require access to generate custodial holdings and financial reports throughout the month, on an as-needed basis.

Bidder shall check only 1 box below, and identify exception(s)

Bidder shall describe how they comply with the above requirement and provide a sample report

Bidder Response:

2. Monthly Transaction Report

a. The Monthly Transaction Report must list all transactions/corporate actions during the month.

b. The listing must be in an Excel format, allowing the data to be manipulated.

c. The Monthly Transaction Report must indicate the total cash receipts for the month.

Bidder shall check only 1 box below, and identify exception(s)

Bidder shall describe how they comply with the above requirement and provide a sample report

Bidder Response:

3. Monthly Securities Inventory

The Monthly Securities Inventory report must include the month-end inventory and be in an Excel format, allowing the data to be manipulated. The Monthly Securities Inventory report must list all securities held as of the last day of the month and must include the following:

Bidder shall check only 1 box below, and identify exception(s)

Bidder shall describe how they comply with the above requirement and provide a sample report

Bidder Response:

6. Pricing

6.1. Price Term

Pricing is firm for the entire length of the Contract.

Bidder shall check only 1 box below, and identify exception(s)

7. Ordering

7.1. Authorizing Document

The appropriate authorizing document for the Contract will be a Purchase Order (PO) or Delivery Order (DO) issued through the State of Michigan SIGMA system.

Bidder shall check only 1 box below, and identify exception(s)

8. Invoice and Payment

8.1. Invoice Requirements

All invoices submitted to the State must include: (a) date; (b) purchase order; (c) quantity; (d) description of the Contract Activities; (e) unit price; (f) shipping cost (if any); and (g) total price. Overtime, holiday pay, and travel expenses will not be paid.

Bidder shall check only 1 box below, and identify exception(s)

8.2. Payment Methods

The State will make payment for Contract Activities via EFT.

Bidder shall check only 1 box below, and identify exception(s)

9. Liquidated Damages Late or improper completion of the Contract Activities will cause loss and damage to the State and it would be impracticable and extremely difficult to fix the actual damage sustained by the State. Therefore, if there is late or improper completion of the Contract Activities the State is entitled to collect liquidated damages in the amount of $10,000 and an additional $200 per day for each day Contractor fails to remedy the late or improper completion of the Work.

Bidder shall check only 1 box below, and identify exception(s)