S000000143 Global Custody Provider RFP Revised.pdf

STATE OF ARKANSAS

DEPARTMENT OF TRANSFORMATION AND SHARED SERVICES

OFFICE OF STATE PROCUREMENT

501 Woodlane St., Ste. 220

Little Rock, Arkansas 72201-1023

REQUEST FOR PROPOSAL (MAP)

REVISED (ALL REVISIONS ARE IN RED)

SOLICITATION DOCUMENT

SOLICITATION INFORMATION

Solicitation Number:

S000000143 Solicitation Issued:

July 7, 2022

Description: Global Custody Services

Department: Arkansas Treasurer of State’s Office

SUBMISSION DEADLINE AND DELIVERY OF RESPONSE DOCUMENTS

Proposal Opening Date: July 25,2022 Proposal Opening Time: 10:00AM, Central Time

Proposal submissions for this Request for Proposal must be submitted through ARBuy, the State’s eProcurement system. It can be accessed at https://arbuy.arkansas.gov. Proposals received after the submission deadline may be rejected as untimely. See Section 1.2 for information regarding Live Proposal Openings.

TSS OFFICE OF STATE PROCUREMENT CONTACT INFORMATION

TSS OSP Buyer: Shane Phillips Buyer’s Direct Phone Number: 501-324-9322

Email Address: Jordan.Phillips@arkansas.gov TSS OSP’s Main Number: 501-324-9316

TSS OSP

Website:

https://www.transform.ar.gov/procurement/ https://arbuy.arkansas.gov/ mailto:Jordan.Phillips@arkansas.gov https://www.transform.ar.gov/procurement/

SECTION 1 – GENERAL INFORMATION AND INSTRUCTIONS

• Do not provide responses to items in this section unless specifically and expressly required.

1.1 INTRODUCTION

This Request for Proposal (RFP) is issued by the TSS Office of State Procurement (TSS OSP) for the Arkansas Treasurer of State’s Office (“the Office”) to obtain pricing and a contract(s) for Global Custody Services.

Contract(s) awarded will be made to the Prospective Contractor determined to have submitted the proposal that is the most advantageous to the State. Direct all questions, comments, or concerns you may have regarding this solicitation to the TSS OSP, not the Department.

1.2 LIVE PROPOSAL OPENING

Use the information below to view the proposal opening online.

Zoom Meeting Link: https://arkansas-gov.zoom.us/j/85488085891?pwd=cURsOE84dGZNTGFuaVJoN0VTWnJYdz09 Meeting ID: 854 8808 5891 Meeting Password: 850044 Dial-In Information: 877 853 5257 US Toll-free 888 475 4499 US Toll-free

1.3 TYPE OF CONTRACT

A. As a result of this RFP, TSS OSP intends to award a contract to a single Contractor.

B. The anticipated starting date for any resulting contract is August 2022, except that the actual contract start date may be adjusted unilaterally by the State for up to three (3) calendar months. By submitting a signed proposal in response to the RFP, the Prospective Contractor represents and warrants that it will honor its proposal as being held open as irrevocable for this period.

C. The initial term of a resulting contract will be for up to four (4) years. Upon mutual agreement by the Contractor and Department, the contract may be renewed by TSS OSP for up to three (3) additional one-year terms or portions thereof, not to exceed a total aggregate contract term of seven (7) consecutive years.

1.4 SOLICITATION SCHEDULE

For informational purposes, TSS OSP is providing a Solicitation Schedule; however, dates listed and noted with an asterisk (*) are anticipated dates only and are subject to change at the discretion of the State. All times are listed in Central Time.

TABLE A: TENTATIVE SOLICITATION SCHEDULE DATES ARE PROVIDE FOR REFERENCE

ACTIVITY DATE

RFP Release to Prospective Contractors July 7, 2022

Bidders Conference July 11, 2022 1:00pm Central

Deadline for Prospective Contractor Questions July 13, 2022

Answers to Questions Posted to ARBuy* July 19, 2022

Proposal Due Date July 25, 2022 10:00am Central

Initial Proposal Evaluation* July 26th, 2022

Interviews* July 29th, 2022

Final Proposal Evaluation* July 29th, 2022

Discussions Kick Off Meeting* August 1st , 2022

Finalize Discussions* August 5th , 2022 https://arkansas-gov.zoom.us/j/85488085891?pwd=cURsOE84dGZNTGFuaVJoN0VTWnJYdz09 https://arkansas-gov.zoom.us/j/85488085891?pwd=cURsOE84dGZNTGFuaVJoN0VTWnJYdz09

Post Anticipation to Award* August 5th , 2022

Award Contract* August 22nd , 2022

1.5 BIDDERS CONFERENCE

A. TSS OSP will host a bidders conference to provide additional information and clarification regarding the RFP.

1. The conference will take place on the date and time listed in Section 1.4 Table A.

2. The conference is important for Prospective Contractors to understand the tasks a Prospective Contractor shall complete when submitting a proposal (“Submission Requirements”).

3. Prospective Contractors may attend the conference via Zoom.

Zoom Meeting Link: https://arkansas-gov.zoom.us/j/89811181229?pwd=ZDFoKzdFb09KRklxWU9RaUNLdmZzdz09 Meeting ID: 898 1118 1229 Meeting Password: 895585 Dial-In Information: 877 853 5257 US Toll-free 888 475 4499 US Toll-free

4. The bidders conference presentation will be posted to the Solicitation posting in ARBuy.

1.6 CLARIFICATION OF SOLICITATION

A. Submit any questions requesting clarification of information contained in this Solicitation via the

Solicitation posting in ARBuy by the date and time listed in Section 1.4 Table A.

1. For each question submitted, Prospective Contractor should reference the specific Solicitation item number to which the question refers.

2. Prospective Contractors’ written questions will be consolidated and responded to by the State as deemed appropriate. The State’s consolidated written response is anticipated to be posted to the Solicitation posting in ARBuy by the close of business on the date provided in Section 1.4, Table A. If Prospective Contractor questions are unclear or non-substantive in nature, the State may request clarification of a question(s) or decline to answer.

B. The Prospective Contractor should notify the TSS OSP buyer of any term, condition, etc., that precludes the Prospective Contractor from submitting a compliant, Responsive Proposal. Prospective Contractors should note that it is the responsibility of the Prospective Contractor to seek resolution of all such issues, including those relating to the terms and conditions of the contract, prior to the submission of a proposal.

C. Prospective Contractors may contact the TSS OSP buyer with non-substantive questions at any time prior to the proposal opening.

D. An oral statement by TSS OSP will not be part of any contract resulting from this Solicitation and may not reasonably be relied on by any Prospective Contractor as an aid to interpretation unless it is reduced to writing and expressly adopted by TSS OSP.

1.7 DEFINITION OF TERMS

A. Unless otherwise defined herein, all terms defined in Arkansas Procurement Law have the same meaning herein.

B. “Prospective Contractor” means a responsible offeror who submits a proposal in response to this solicitation.

C. The terms “Request for Proposal,” “RFP,” and “Solicitation” are used synonymously in this document.

D. “Requirement” means something required.

https://arkansas-gov.zoom.us/j/89811181229?pwd=ZDFoKzdFb09KRklxWU9RaUNLdmZzdz09 https://arkansas-gov.zoom.us/j/89811181229?pwd=ZDFoKzdFb09KRklxWU9RaUNLdmZzdz09

E. “Responsive Proposal” means a proposal submitted in response to this solicitation that conforms in all material respects to this RFP.

F. “Shall” and “Must” mean the imperative and are used to identify requirements.

G. “Specification” means any technical or purchase description or other description of the physical or functional characteristics, or of the nature, of a commodity or service. “Specification” may include a description of any requirement for inspecting, testing, or preparing a commodity or service for delivery.

H. “State” means the State of Arkansas. When the term “State” is used herein to reference any obligation of the State under a contract that results from this solicitation, that obligation is limited to the Department using such a contract.

1.8 RESPONSE DOCUMENTS

A. All proposal responses must be submitted through ARBuy, the State’s eProcurement system. The system can be accessed at https://arbuy.arkansas.gov.

B. Technical Proposal Packet

1. Responses within the Information for Evaluation and Exceptions sections must not contain the Prospective Contractor’s name or any other identifiers, including without limitation names of staff members, projects, products, and addresses.

2. Prospective Contractors shall utilize the Technical Proposal Packet to submit their responses.

3. The following items are proposal Submission Requirements and must be submitted as part of a Prospective Contractor’s proposal response.

a. Signed Proposal Signature Page. Signature may be ink or digital. (See Technical Proposal Packet.)

b. Technical Proposal response to the Information for Evaluation section included in the Technical Proposal Packet. Proposal response must be in the English language.

c. Completed Pricing Response. Official Solicitation Price Sheet attached to solicitation posting in ARBuy. Pricing must be proposed in U.S. dollars and cents.

d. Recommended Options Form. The Recommended Options form included in the Technical Proposal Packet allows Prospective Contractors to identify any recommended options or optional service ideas that may benefit the State that were not included in the Requirements and the proposed solution.

e. Proposed Subcontractors Form. The utilization of any proposed subcontractor is subject to approval by the Department.

f. Exceptions Form.

g. Copy of Prospective Contractor’s Equal Opportunity Policy.

4. The following items, which must be submitted prior to a contract award to the Prospective Contractor, may also be included with the Prospective Contractor’s proposal:

a. EO 98-04: Contract and Grant Disclosure Form.

b. Voluntary Product Accessibility Template (VPAT), if applicable.

5. DO NOT include any other documents or ancillary information, such as a cover letter or promotional/marketing information.

C. Redacted Copy of the Technical Proposal Packet and Completed Pricing Response

1. One (1) redacted (marked “REDACTED”) copy of the Prospective Contractor’s proposal response (see Section 6 of the Solicitation Terms and Conditions referenced in Section 1.10.)

https://arbuy.arkansas.gov/

1.9 ACCEPTANCE OF REQUIREMENTS

A. Unless a Prospective Contractor expressly and conspicuously identifies any exception or exceptions to any of the Requirements in the Requirements Section(s) of this RFP by listing them on the Exceptions Form (see Technical Proposal Packet), Prospective Contractor understands and agrees its submission of a proposal to represent that its proposal meets all such Requirements.

B. A Prospective Contractor’s proposal may be rejected if a Prospective Contractor takes exception to any Requirements in the Requirements Section(s) of this RFP.

1.10 ADDITIONAL TERMS AND CONDITIONS

A. This RFP incorporates all of the Solicitation Terms and Conditions located on the TSS OSP website found at transform.ar.gov.

1. Any special terms and conditions included in this solicitation shall override the Solicitation Terms and Conditions.

B. Unless a Prospective Contractor expressly and conspicuously identifies any exception or exceptions to any of the terms in the Services Contract (SRV-1) Fillable Form (found here) by listing them on the Exceptions Form (see Technical Proposal Packet), Prospective Contractor agrees and shall adhere to all terms if selected as the successful Contractor.

1. Items identified as non-negotiable may only be modified if the legal requirement is satisfied and approved by the State.

C. A Prospective Contractor’s proposal may be rejected if a Prospective Contractor takes exception to any terms or conditions in the documents listed in Sections 1.10.A and 1.10.B.

https://www.transform.ar.gov/wp-content/uploads/2021/12/MASTER-Solicitation-Terms-and-Conditions-11-29-21.pdf https://www.transform.ar.gov/wp-content/uploads/2021/08/Services-Contract-SRV-1-Fillable-Form-V.2.pdf

SECTION 2 – REQUIREMENTS

• Do not provide responses to items in this section unless specifically and expressly required.

2.1 BACKGROUND

The Arkansas Treasurer of State’s Office (the “Office”) is responsible for the deposits, investments, and disbursements of funds into or out of the State Treasury. The Office is managed by the Arkansas Treasurer of State (the “Treasurer”). The purpose of this procurement is to select a financial institution to provide custody and safely keep a portfolio of approximately $9.5 billion; maintain a daily market value in accordance with margin requirements for collateralized investments such as repurchase agreements;

and, when required, accept physical delivery, and collateral securing the State’s investments.

The Arkansas Treasurer of State, Dennis Milligan, is an elected State Official, charged statutorily with the safekeeping and investment of State funds. The Investment Division of the Office primarily invests cash balances that are temporarily idle between the time revenue is collected and the time budgeted amounts are disbursed. The Statutorily approved investments are primarily of a fixed income type and further restricted pursuant to the Treasury’s Investment Policy, set by the Arkansas State Board of

Finance.

Brief Description of the Portfolio

Additional data regarding the portfolio is posted on the Office’s Web Page at: https://www.artreasury.gov.

Follow “inside the vault” tab.

2.2 CURRENT ENVIRONMENT

A. The State currently utilizes Bank of America for safekeeping services. Bank of America is terminating that line of business for all its custodial clients. The State of Arkansas has approximately 120 days to replace them as our collateral custodian.

2.3 PROSPECTIVE CONTRACTOR MINIMUM QUALIFICATIONS

A. The Contractor shall be a member of, or have the ability to clear transactions or cash through, all major book entry or electronic securities depositories, such as the DTC/ID system and the Federal Reserve System.

B. The Contractor shall currently provide services of a similar size and scope as those described in this RFP for a minimum of three (3) public sector clients for a minimum of one (1) year. Upon request by the State, the Contractor shall provide names and contact information for the purpose of checking references during the Discussions Phase.

Size of investment portfolio $9.5 Billion (approx.)

Commercial Paper 24.6 %

Corporates 0.4%

Mortgage Back Securities 47.0%

Municipal Bonds 0.8%

Money Market Funds 12.9%

Non- US Sovereign 0.6%

Repurchase Agreements 0.0%

Treasuries/Agencies 13.7%

Average monthly incoming securities $11 Billion

Average monthly sold/maturing $6-7 Billion

MBS line items (paydowns) 190 items/$45 Million Monthly

Average number of securities held each month https://www.artreasury.gov/

C. The Contractor shall be required to provide five (5) years of financial statements during the

Discussions Phase.

2.4 LEGAL COMPLIANCE

A. The Contractor shall at all times observe and comply with federal and Arkansas state laws, local laws, ordinances, orders, and regulations existing at the time of or enacted subsequent to the execution of the Contract which in any manner affect the completion of the work. The Contractor shall indemnify and save harmless the Office and the State of Arkansas and all of their officers, representatives, agents, and employees against any claim or liability arising from or based upon the violation of any such law, ordinance, regulation order or decree by an employee, representative, or sub-contractor of the Contractor.

B. The Contractor understands and agrees that the State of Arkansas may not contract to:

1. Make any payment without a legislative appropriation.

2. Indemnify and defend the Office for liability and damages. However, with respect to loss, expense, damage, liability, claims or demands either at law or in equity for actual or alleged injuries to persons or property arising out of any negligent act or omission by the Office and its employees or agents in the performance of the Contract, the Office agrees with the successful party that: (a) it will cooperate with the successful party in the defense of any action or claim brought against the successful party seeking the foregoing damages or relief; (b) it will in good faith cooperate with the successful party should the successful party present any claims of the foregoing nature against the Office to the Claims Commission of the State of Arkansas; (c) it will not take any action to frustrate or delay the prompt hearing on claims of the foregoing nature by the said Claims Commission and will make reasonable efforts to expedite said hearing; provided, however, the State reserves its right to assert in good faith all claims and defenses available to it in any proceedings in said Claims Commission or other appropriate forum. The obligations of this paragraph shall survive the expiration or termination of this agreement.

3. Pay damages, legal expenses, or other costs and expenses of any party.

4. Conduct litigation in a place other than Pulaski County, Arkansas.

5. Agree to any choice-of-law provision other than the state of Arkansas.

6. Agree to any provision of a contract that violates the laws or constitution of the State of Arkansas.

2.5 GENERAL REQUIREMENTS

A. The Contractor shall be able to settle 10,000 security transactions annually, safe keep a total portfolio of at least $10 billion, and complete up to $1.5 billion in cash settlement trades/day.

B. The Contractor shall settle all State of Arkansas transactions on a delivery versus payment basis facilitated through the Federal Reserve or the Depository Trust Company.

C. The Contractor shall provide a system for all State securities that:

1. Collects interest and principal payments on securities and either credits the Office custody account or remits as directed by the Office on the payable date;

2. Accepts wirable securities at the Federal Reserve in the Contractor’s account;

3. Accept wired cash payments and credits properly to account for coupon payments on physical bonds and SPOs;

4. Collects interest and principal payments for collateral securities (mostly mortgage backed) and remits to brokers entitled to such payments under repurchase agreements, on the payable date;

5. Accepts repurchase agreement collateral information from the broker/bank after the Office notifies the custodian of the terms of the investment;

6. Returns repurchase agreement collateral on the closing date without additional Office instruction.

D. The Contractor shall maintain a daily market value of the collateral for repurchase agreements according to margin requirements established by the State.

E. The Contractor shall verify and maintain Repo collateral valued at an agreed amount, value the collateral daily, and make margin calls on behalf of the State when the collateral is under value.

F. The Contractor shall coordinate collateral substitutions and margin calls as requested by brokers/banks and ensure that the market value of the collateral is sufficient.

G. The Contractor shall provide daily online reports that compare the market value of the collateral to the related investment, aggregated on a broker by broker basis. In addition, the custodian shall provide a daily online report detailing all substitution and margin calls.

H. The Contractor shall provide a daily online securities pricing system.

I. The Contractor shall accept physical deliveries and hold in a vault (at the Office’s discretion).

Physical bonds must be accessible within a 24-hour period for overnight delivery.

J. The Contractor shall have an overnight investment vehicle for all funds remaining in or received by the Office account(s) after 3 p.m. central time each day. Also, any investment program utilizing repurchase agreements must provide that collateral is held at the Federal Reserve in the Offeror's account or, at the option of the Office, by a third party.

K. The Contractor shall provide secure internet access to a “real-time” online custodial trade settlement system that will provide comprehensive reporting including, but not limited to, all income and security transactions.

L. The Contractor shall invoice the Office for all fees and services on a monthly basis. The Contractor shall not debit the Office Account(s) for service fees.

M. The Contractor shall deliver to the Office’s disbursing bank all funds from investment activity by 1:00 p.m. central time each business day.

N. The Contractor shall provide services for up to ten (10) sub-accounts.

O. The Contractor shall provide a daily data feed of all transactions to an investment accounting platform, which is currently Clearwater Analytics.

2.6 SAFEKEEPING

A. The Contractor shall at minimum have the following depository memberships:

1. DTC

2. FRB

3. PTC

4. Cedel

5. Euroclear

B. The Contractor shall maintain insurance coverage for loss or disappearance of securities held in physical custody and for computer related crimes.

C. The Contractor shall ensure that the State’s securities or other assets in the Contractor’s possession are kept physically and virtually secure at all times.

2.7 TRADE INSTRUCTION & SETTLEMENT

A. The Contractor’s system must have built-in edit features to ensure accuracy in trade input (e.g., security description/security identifier cross check features, calculations of remaining par on factor-based securities, computation of accrued interest).

B. The Contractor’s system must allow “block” trading by providing the ability to allocate a single trade over multiple accounts or aggregating a position sold from multiple accounts.

C. The Contractor shall settle trades on a contractual basis.

D. The Contractor’s system must allow middle office access to affirm trades and view intraday money movements

2.8 INCOME COLLECTION/MATURITIES

A. The Contractor shall post income on a contractual basis.

B. The Contractor shall provide pre-notification of income reversals.

C. The Contractor shall provide income forecast reporting (e.g., cash balance projection reporting).

2.9 SECURITIES PRICING

A. The Contractor shall provide independent, end-of-day pricing for each individual security.

2.10 REPORTING

A. The Contractor shall provide monthly reports detailing the activity for the month, the balances in the custodial account, and the market value of each security held in the account.

B. The Contractor shall provide a report detailing all securities transactions for the month and an inventory of all securities held by maturity of the investment and by broker.

C. The Contractor shall make all required reports available online via a secure web portal 24/7.

D. The online reports must be presented in a manner allowing the Office to easily download and manipulate the data into a format suitable for its own analytical purposes (e.g. Excel, CSV).

2.11 AUDIT & CONTROL

A. The Contractor’s financial statements must be audited annually by an independent certified public accounting firm and receive an unqualified opinion of the auditor in connection with the audit.

B. The Contractor shall, at minimum, audit the following processes annually:

1. Safekeeping/operations (trade processing);

2. Income collection;

3. Vault (physical assets);

4. Asset reconciliation;

5. Security operations; and

6. Systems data processing controls (e.g., systems access, program change controls).

C. The Contractor shall provide a report on internal audit control prepared by internal audit staff or have a report on System and Organization Controls (SOC) attested to by an external auditor (SOC1 or 2 report).

2.12 TRANSITION OF SERVICES

A. The Prospective Contractor shall provide a proposed Transition Plan during the Discussions phase.

The Transition Plan must meet all requirements set forth in this section of the RFP and include, at minimum, a detailed plan for the transition from the current to the new Contractor, and a timeline for the transition. The plan and schedule must include the timing of each phase of the transition as well as the proposed involvement of the Contractor’s employees in the process, the anticipated level of involvement of State employees, and the proposed involvement of the current Contractor in the transition process.

B. The Contractor shall perform all procedures necessary to convert from the system of the current Contractor to the new Contractor’s system of record.

C. The Contractor shall reconcile custody positions to the prior Contractor’s records, research all reconciling items, and correct all position discrepancies.

D. All interfaces, including, but not limited to, those with outside investment managers, pricing services, and others must be ready and adequately tested prior to conversion or an acceptable alternative approved by the State (e.g. Clearwater Analytics).

2.13 DISASTER REOVERY & BUSINESS CONTINUITY

A. The Prospective Contractor shall be required to provide a proposed Disaster Recovery Plan during the Discussions phase. The Disaster Recovery and Business Continuity Plan must, at minimum, meet all requirements set forth in this section of the RFP.

B. The Prospective Contractor shall have a Disaster Recovery and Business Continuity Plan that, at a minimum, meets all requirements set forth during the Discussions Phase.

C. The Contractor shall include backup and recovery procedures which will allow recovery of the system and all data up to the moment of the disaster and successfully resume functioning within four (4) hours of any disaster.

D. The system must frequently and automatically back up data. All backup servers and backup data associated with the Arkansas instance of the Contractor-hosted solution must reside in the continental United States. The Contractor shall include data back-up provisions adhering to the following requirements and principles in their proposed Disaster Recovery and Business Continuity Plan:

1. The system must backup and completely restore key system data files. Backup media should be common media readable by readily available hardware.

2. If access to backed-up information depends on Contractor-owned hardware that is scheduled for discontinuation or prolonged downtimes, or if for any other reason the Contractor believes that its hardware or software may inhibit the State’s access to backed up information at any point in time, the Contractor shall immediately notify and present a remedy in writing to ADEE that the Contractor and ADEE must mutually agree upon.

3. The Contractor shall maintain a data backup schedule in accordance with the following requirements:

a. A weekly cycle providing a full backup of system information that reflects all project components, configurations, and data at the completion of that week’s cycle, run on Sundays.

b. A daily backup reflecting that day’s processed information, Monday through Sunday.

c. The Contractor shall furnish to the Contract Administrator or their designee an electronic daily report delineating the completion of that day’s backup, the status, and catalog of items backed up.

E. The Contractor shall ensure the proposed system meets NIST (National Institute of Standards and

Technology) standards for disaster recovery and contingency planning.

F. The Contractor shall be required to test the Disaster Recovery Plan by doing a complete fail over of all test/production systems during the final testing stage and after initial rollout.

2.14 PRICING STRUCTURE

A. The Contractor shall be required to provide their full pricing structure to the Arkansas Treasurer of State’s Office during the Discussions Phase. Should the Office deem the pricing structure to be unacceptable, the Office shall have the right to reject the proposal and start Discussions over with the next ranked Contractor. The acceptability of the proposed pricing structure shall be at the Office’s sole discretion.

2.15 DATA OWNERSHIP & END OF CONTRACT TRANSITION

A. The State shall retain sole ownership, right, title and interest to all data stored in the Contractor-hosted solution. At the end of the contract the Contractor shall transfer 100% of State-owned data back to the State or to another Contractor at the request of the State. At the end of the contract and after confirmed transfer of 100% of State-owned data back to the State or their designee, the Contractor shall destroy all copies of the State-owned data the Contractor possesses.

B. The Contractor shall ensure all data received as part of the Contract must be used solely for the purpose of this contract and not shared, reused, or disseminated to any other party or entity without the express written consent of the state Treasury Office.

C. Upon termination or expiration, should any subsequent contract for a Global Custody Provider be awarded to a provider other than the awardee of this RFP, the then current Contractor shall, to the greatest extent possible and reasonable, cooperate with the State in initiating a smooth and orderly transition to the next Contractor.

2.16 PERFORMANCE STANDARDS

A. State law requires that qualifying contracts for services include Performance Standards for measuring the overall quality of services that a Contractor shall provide.

B. The State may be open to negotiations of Performance Standards prior to contract award, prior to the commencement of services, or at times throughout the contract duration.

C. Performance Standards shall not be amended unless they are agreed to in writing and signed by the parties.

D. Failure to meet the minimum Performance Standards as specified will result in the assessment of damages.

E. In the event a Performance Standard is not met, the Contractor will have the opportunity to defend or respond to the insufficiency. The State has the right to waive damages if it determines there were extenuating factors beyond the control of the Contractor that hindered the performance of services. In these instances, the State has final determination of the performance acceptability.

F. Should any compensation be owed to the Department due to the assessment of damages, Contractor shall follow the direction of the Department regarding the required compensation process.

SECTION 3 – SELECTION

• Do not provide responses to items in this section.

3.1 SELECTION PROCESS

A. TSS OSP will review each Technical Proposal Packet to verify submission Requirements have been met. Technical Proposal Packets that do not meet submission Requirements will be rejected and will not be evaluated.

1. The State may conduct cost checks based on the cost submitted by each Prospective Contractor on the completed Pricing Response.

a. Prospective Contractors submitting Responsive Proposals with a proposed cost that falls twenty-five percent (25%) or more from the average submitted cost may be asked to justify their submitted cost.

b. Should TSS OSP request clarification and/or additional information regarding cost, Prospective Contractors shall provide clarification and/or additional information as specified by the request.

B. A Department-appointed Evaluation Committee will evaluate and score qualifying Technical Proposals. Evaluation will be based on Prospective Contractor’s response to the Information for Evaluation section included in the Technical Proposal Packet.

1. Members of the Evaluation Committee (Evaluators) will individually review and evaluate proposals and complete an Individual Score Worksheet for each proposal. Individual scoring for each Evaluation Criteria will be based on the following Scoring Description.

SCORE DESCRIPTION

The response provides metrics clearly establishing that the Prospective Contractor is reliable and capable of fully performing the required services.

The response provides metrics suggesting that the Prospective Contractor’s level of performance may be acceptable, but it does not clearly establish that the Prospective Contractor is reliable and capable of fully performing the required services.

The response provides metrics clearly establishing that the Prospective Contractor is unreliable and incapable of fully performing the required services.

2. After initial individual evaluations are complete, the Evaluators will meet to discuss their individual ratings. At the initial consensus meeting, each Evaluator will be afforded an opportunity to discuss his or her rating for each evaluation criteria.

3. After Evaluators have had an opportunity to discuss their individual scores with the committee, the individual Evaluators will be given the opportunity to change their initial individual scores, if they feel that is appropriate.

4. The final individual scores of the Evaluators will be recorded on the Pre-Interview Consensus Score Sheets and averaged to determine the group or consensus score and rank for each proposal.

5. Other agencies, consultants, and experts may also examine documents at the discretion of the Department.

C. Prospective Contractors submitting Responsive Proposals will be contacted by TSS OSP to schedule an interview.

1. Prospective Contractors shall attend the interview as scheduled by TSS OSP.

2. Evaluators will complete an Individual Score Worksheet for each interview. Evaluation will be based on Prospective Contractor’s responses to questions presented during the interview Individual scoring for each interview will be based on the Scoring Descriptions in 3.1.B.1.

3. During a final consensus meeting, after all interviews are complete, Evaluators will have the opportunity to discuss the interviews and change their individual interview scores on the Post- Interview Consensus Score Sheet, if they feel that is appropriate.

4. The final individual scores of the Evaluators will be recorded on the Post-Interview Consensus Score Sheets and averaged to determine the group or consensus score and rank for each proposal.

D. During the final consensus meeting, cost information will be provided to the Evaluators to allow them to determine if moving forward with the highest-ranking Prospective Contractor is the most advantageous to the State.

E. Should the State request clarification and/or additional information Prospective Contractors’ responses, Prospective Contractors shall provide clarification and/or additional information as specified by the State.

F. TSS OSP will submit responses and pricing received from the interviewed Perspective Contractors, along with the Evaluation Committee’s recommendation to the Department for review and approval to move into Discussions.

G. The State will move forward into Discussions with the highest-ranking Prospective Contractor based on the Grand Total Score for each proposal, unless the highest-ranking Prospective Contractor’s response is determined to not be the most advantageous proposal to the State.

3.2 EXPLANATION OF THE SUB-SECTIONS OF THE TECHNICAL PROPOSAL

A. Experience

1. The Experience sub-section included in the Technical Proposal Packet allows Prospective Contractors to differentiate themselves based on their experience, technical capability, and understanding of the State’s specific needs.

2. Prospective Contractors should identify expertise in the form of a claim and provide relevant experience to support each claim.

3. Prospective Contractors should use verifiable metrics (number of accounts, size of accounts, years of experience, customer satisfaction ratings) to support each claim.

B. Solution

1. The Solution sub-section included in the Technical Proposal Packet allows Prospective Contractors to differentiate themselves based on their proposed solution and/or approach to solve the State’s specific needs.

2. Prospective Contractors should provide a high-level overview of the Prospective Contractor’s proposed solution and/or approach to services using the Requirements outlined in the RFP.

3. Proposed solutions should be non-technical and include the Prospective Contractor’s recommendations for meeting the objectives and Requirements of the RFP.

4. Additional service options and recommendations above and beyond those included in proposed solution should be included in the Recommended Options Form.

C. Risk

1. The Risk sub-section included in the Technical Proposal Packet allows Prospective Contractors to identify and prioritize major risks that they reasonably foresee could potentially prevent or impair the Prospective Contractor’s delivery of the solution as offered in the proposal or to otherwise fail to meet the State’s desired outcome, specifications, and performance standards, and how they will mitigate, manage, and/or minimize each risk listed.

a. Prospective Contractors should include sources, causes, or actions that are both within and beyond the control of the Prospective Contractors that they reasonably foresee may cause cost increases, delays, amendments, or dissatisfaction to the State.

b. Risks should be described in simple, clear, and non-technical terms.

c. Prospective Contractor should explain how the Prospective Contractor will mitigate, manage, and/or minimize each risk listed.

i. The Documented Performance cell should include details such as how many times any identified risk was previously mitigated and the impact on the Prospective Contractor’s performance in terms of time, cost, and client satisfaction.

D. Interview

1. The Interview will allow Prospective Contractors to further demonstrate their experience in providing the services outlined in the RFP.

a. Each Prospective Contractor meeting the submission requirements will be contacted by TSS OSP to schedule an interview. Prospective Contractors shall attend the interview as scheduled by OSP.

b. Prospective Contractors shall identify one (1) Project Lead at the time of interview confirmation who shall attend the interview as part of the evaluation process.

c. The Evaluation Committee will interview the Prospective Contractor’s identified Project Lead using a pre-determined set of interview questions. Follow up questions may be asked based on responses given by the Project Lead.

3.3 TECHNICAL PROPOSAL SCORE

A. The Information for Evaluation section has been divided into sub-sections.

1. In each sub-section, items/questions have each been assigned a maximum point value of ten

(10) points. The total point value for each sub-section is reflected in the table below as the Maximum Raw Points Possible.

2. The Department has assigned Weighted Percentages to each sub-section according to its significance.

INFORMATION FOR EVALUATION

SUB-SECTIONS

MAXIMUM

RAW

POINTS

POSSIBLE

SUB-SECTION’S

WEIGHTED

PERCENTAGE

* MAXIMUM

WEIGHTED

SCORE

POSSIBLE

Experience 10 20% 140

Solution 10 20% 140

Risk 10 20% 140

Interview 10 40% 280

Total Technical Score 40 100% 700

*Sub-Section’s Percentage Weight x Total Technical Maximum Weighted Score = Maximum Weighted Score Possible for the sub-section.

B. The proposal’s weighted score for each sub-section will be determined using the following formula:

(A/B)*C =D

A = Actual Raw Points received for sub-section in evaluation

B = Maximum Raw Points possible for sub-section

C = Maximum Weighted Score possible for sub-section

D = Weighted Score received for sub-section

C. The proposal’s weighted scores for sub-sections will be added to determine the Total Technical Score for the proposal.

D. Proposals that do not receive a minimum Total Technical Score of 300 will not be subject to further consideration in the solicitation process. The pricing for proposals that do not receive a minimum Total Technical Score of 300 will not be scored.

3.4 COST SCORE

A. When pricing is opened for scoring, the maximum amount of cost points will be given to the proposal with the lowest seven (7) year grand total as shown in Table One (1) on the completed Pricing Response. (See Grand Total Score for maximum points possible for cost score.)

B. The amount of cost points given to the remaining proposals will be allocated by using the following formula:

(A/B)*C =D

A = Lowest Estimated Cost

B = Second (third, fourth, etc.) Lowest Estimated Cost

C = Maximum Points for Lowest Estimated Cost

D = Total price points received

3.5 GRAND TOTAL SCORE

The Technical Score and Cost Score will be added together to determine the Grand Total Score for the proposal. The State may move forward to discussions with the Prospective Contractor determined reasonably susceptible of being selected for award.

MAXIMUM

POINTS

POSSIBLE

Technical Proposal 700

Cost 300

Maximum Possible Grand Total Score 1,000

3.6 DISCUSSIONS

A. During the Discussions Kick Off Meeting, the Prospective Contractor shall provide the following documents to the State:

1. A detailed scope of work clearly identifying the Prospective Contractor’s understanding, implementation, and performance of services required in this RFP, including all activities required by the Contractor and all activities expected by the State/Participating Entities.

2. A Risk Management Plan intended to mitigate any risks, including but not necessarily limited to, the risks identified in the Risk Plan submitted in the Prospective Contractor’s Technical Proposal Packet.

3. A proposed financial summary, including:

a. The completed Pricing Response and Recommended Options Form submitted in the Prospective Contractor’s Technical Proposal Packet.

b. A proposed payment schedule.

4. Proposed project management and reporting templates.

B. During the Discussions Kick Off Meeting, the Prospective Contractor shall address questions and/or concerns the State may have to the satisfaction of the State.

C. During Discussions, the Prospective Contractor shall revise the discussions documents until agreement is made and the State has provided final approval.

1. The Prospective Contractor shall attend follow up Discussions meeting as determined necessary by the State. Reasonable effort will be made to accommodate scheduling conflicts.

D. During Discussions, the Prospective Contractor shall present a final draft of the Discussions documents to the State, including, at minimum:

1. A summary of all plans and scope of work developed during the discussions process and mutually agreed upon by the State and the Prospective Contractor.

2. A detailed scope of work clearly identifying the Prospective Contractor’s implementation and performance of services required in this RFP, including all provisions negotiated and agreed upon by the State and the Prospective Contractor since the Discussions Kick Off Meeting.

3. Description of deliverables in terms of simplified metrics.

4. The Risk Management Plan.

5. Project management and reporting templates.

6. Financial summary, including:

a. The completed Pricing Response submitted in the Prospective Contractor’s Technical Proposal Packet.

b. A list of agreed upon and accepted recommended options (with impact to price).

c. A payment schedule.

7. Contact information for the Prospective Contractor’s key personnel.

E. During Discussions, the Prospective Contractor shall present the final drafts of the items and shall summarize the coordination and planning completed during the discussion process.

F. Once approved by the State, final drafted documents will become part of the resulting contract.

G. The Prospective Contractor may determine which key personnel will attend the Discussions meetings.

3.7 PROSPECTIVE CONTRACTOR ACCEPTANCE OF EVALUATION TECHNIQUE

The submission of a Technical Proposal Packet signifies the Prospective Contractor’s understanding and agreement that some subjective value judgments will be made during the evaluation and scoring of the technical proposals.