Risk_Oversight_Pre_Bid_conference_Presentation.pptx

Pre-Solicitation Conference

March 5, 2014

Regulated Institution Risk Oversight and Risk Oversight Support Services

OFFICE OF THE CHIEF FINANCIAL OFFICER

ACQUISITION DIVISION

AGENDA

Opening Remarks/Introductions Toni Hoskinson – Contracting Officer, Acquisition Division

Rules of Engagement Toni Hoskinson – Contracting Officer, Acquisition Division

Welcome Remarks Ann Marie Mehlum - Associate Administrator, Office of Capital Access

SBA/OCRM Overview/RFP Objective Brent Ciurlino – Director, Office of Credit Risk Management

RFP Overview Toni Hoskinson – Contracting Officer, Acquisition Division

Rules of Joint Ventures and Partnering Agreements Meagan Guerzon – Attorney Advisor, Office of General Counsel

VI. Closing Remarks/Questions Toni Hoskinson – Contracting Officer, Acquisition Division

Rules of Engagement Nothing said during this conference is absolute.

Only the written solicitation will contain all the facts and final requirement and submission requirements.

All questions during and after this conference should be emailed today to the Contracting Officer: Toni.Hoskinson@sba.gov

Answers to questions that pertain directly to the solicitation will be addressed if applicable within the solicitation.

Only the Contracting Officer can and will provide answers to the questions concerning this and other requirements.

All slides, sign in sheets, and questions asked during the conference will be published as an attachment to the solicitation.

The solicitation should be issued within 30 days of the conference.

Governing regulations that pertain to this conference and the exchanges are included in FAR 52.1202.

Conference is Conducted IAW FAR 52.1202 SBA is providing the information to improve the understanding of the Government’s requirement.

Understand the Industry’s Current Capabilities.

Increase Efficiency in the preparation of the final solicitation, and easy vendor’s proposal preparations.

General information.

All information will be provided with the solicitation.

Exchanges with industry before receipt of proposals.

Exchanges of information among all interested parties, from the earliest identification of a requirement through receipt of proposals, are encouraged. Any exchange of information must be consistent with procurement integrity requirements.

The purpose of exchanging information is to improve the understanding of Government requirements and industry capabilities, thereby allowing potential offerors to judge whether or how they can satisfy the Government’s requirements, and enhancing the Government’s ability to obtain quality supplies and services, including construction, at reasonable prices, and increase efficiency in proposal preparation, proposal evaluation, negotiation, and contract award.

Agencies are encouraged to promote early exchanges of information about future acquisitions.

General information about agency mission needs and future requirements may be disclosed at any time. After release of the solicitation, the contracting officer must be the focal point of any exchange with potential offerors.

FAR 52.1202

The purpose of this conference is to allow prospective bidders the opportunity to gain a better understanding of the objective of the solicitation. In addition, it offers SBA an opportunity to stress the importance of the significant elements of the Request for Proposal.

Purpose

SBA OCRM Overview RFP Objective

SBA Overview The SBA is an independent agency of the United States, established on July 30, 1953, pursuant to the Small business Act, as amended (the “Small Business Act”). The SBA derives its authority principally from the Small Business Act and the Small Business Investment Act of 1958, as amended (the “Small Business Investment Act”).

The Office of Credit Risk Management (“OCRM”) is charged with risk management of the SBA’s lending programs. OCRM’s objective for lender oversight is to identify and analyze the risk profile of SBA’s lending partners and assign a specific level of concern to each lender.

The 7(a) Guaranteed Loan Program is the primary federal lending program devoted to small business in the United States. Established under Section 7(a) of the Small Business Act of 1953, as amended, the program extends a full faith and credit guarantee of the U.S. Government to lenders that make small business loans pursuant to SBA rules and regulations.

OCRM’s Mission Mission:

To maximize efficiency of the U.S. Small Business Administration’s lending programs, by:

effectively managing program credit risk;

monitoring lender performance, and;

enforcing lender program requirements.

7(a) Portfolio Overview 7(a) Balance Sheet

Current Balance $55,663,081

Approximately $9 billion with high risk SBPS

7(a) Regional Portfolios

* SBA is primary federal regulator for 157 of these lenders

* Total is as of February 28, 2013.

7(a) Active Lenders Lender reported data through 5/31/13

7(a) Inactive Lenders Lender reported data through 5/31/13

7(a) Portfolio Overview

PARRiS 1.0 Benchmarks and Flags

PARRiS Benchmarks (15)

PARRiS Flags (6)

Performance

Industry Concentration Rate

Acquired Loans Rate

Loan Agent Rate (Over the last 5 years)

Franchise Rate

Sold on Secondary Market Rate

Loans > $2 million (Over Last 12 Months)

Asset Management

Regulatory Compliance

Risk Management

Special Items

Preferred = Best 20 percentile

Less Than Acceptable = Worst 20 percentile PARRiS 1.0 Lender Scoring Example

PARRiS 1.0 Review Categories

PARRiS Assessment Review

(PAR)

Lender Profile Tool Metrics and Benchmarks

PAR data analysis

Additional Targeted analysis

PARRiS Targeted Review (Assessment of high risk PARRiS Components)

Additional information or loan samples required

PARRiS Target Report

PARRiS Full Review (Assessment of all PARRiS Components)

Additional information required

Outcome:

Outcomes:

PARRiS Score

Complete PAR Report

Outcome:

PARRiS Flags

Virtual or Onsite

PARRiS Full Report

Onsite

Information request possible

Review Outcomes & Oversight Lenders will be subject to:

In reference to SOP 50 53

No Action

Corrective Actions

Increased Monitoring

Supervisory Activity and Actions

Enforcement Actions

OCRM 7(a) Organizational Chart Director Office of Credit Risk Management Contractor Support Federally Regulated 7(a) Lenders Supervisory Financial Analyst Northern Region Supervisory Financial Analyst Southern Region Supervisory Financial Analyst Western Region Team of Financial Analysts Team of Financial Analysts Team of Financial Analysts 832 Active Lenders

$16,061,313,88 Active Gross Balance 832 Active Lenders

$16,061,313,88 Active Gross Balance 716 Active Lenders

$19,165,475,190 Active Gross Balance Deputy Director Office of Credit Risk Management

MT

WY

ID

WA

OR

NV

UT

CA

AZ

ND

SD

NE

CO

NM

TX

OK

KS

AR

LA

MO

IA

MN

WI

IL

IN

KY

TN

MS

AL

GA

FL

SC

NC

VA

WV

OH

MI

NY

PA

MD

CT

RI

MA

ME

VT

NH

AK

HI

OFFICE OF CREDIT RISK MANAGEMENT

Geographic Assignment North/South/West

PR

North

Regions I, II, V

South

Regions III, IV, VI

West

Regions VII, VIII, IX, X

RFP Objectives To provide innovative approaches to our oversight and monitoring processes that will ensure:

(1) that SBA policies and procedures are being followed by 7(a) Lenders (2) the assessments of individual 7(a) Lenders are provided at the best value possible to the SBA as well as to the 7(a) Lenders.

To conduct Risk Based Reviews that will assess the current financial institution practices against internal policies and procedures, and accepted industry practices. Provide a report after each review addressing each risk assessment framework area for PARRiS (Portfolio, Asset Management, Regulatory, Risk Management and Special Items) Protocol.

To obtain a management /tracking system to support the coordination of the lender review/monitoring, and corrective action process.

To obtain technical assistance in the assessment of SBA 7(a) Lender’s for the overall management of its SBA loan program.

RFP Overview

Sample Tasks Conduct Risk Based Reviews that will assess the current financial institution practices against internal policies and procedures, and accepted industry practices utilizing SBA PARRiS protocol.

Prepare a report addressing each risk assessment framework area for PARRiS (Portfolio, Asset Management, Regulatory, Risk Management and Special Items) Protocol.

Provide an IT based platform/system to support the coordination of the lender review/monitoring, and corrective action process.

Provide technical assistance in the assessment of SBA 7(a) Lender’s overall management of its SBA loan program from file review information collected as well as from other data available to the SBA and maintained in the data room warehouse.

Assist in the monitoring and tracking of supervision and enforcement activities and provide a formal report and analysis of the Lender reviewed.

Perform partial compliance and/or credit review of loans and provide a written report and analysis.

Provide technical assistance in the review, assessment, and processing of all Delegated Lender Authority Nominations and Renewals processing.

Sample Tasks cont.

Perform a Delegated Lender Authority portfolio review and analysis all SBA lenders.

Provide an in depth analysis of the Delegated Lender process identifying, strengths, weaknesses, and provide recommendations on ways to streamline the process and implement efficiencies.

Provide an in depth analysis of the assessment of SBA 7(a) Lender’s overall management of its SBA loan program identifying strengths, weaknesses, and provide recommendations on ways to make the oversight program efficient.

Develop review sampling standards and create a loan sampling plan.

Conduct Entrance Meetings/Pre-Exit Meetings/Exit Meetings establish and maintain official monitoring files for each Regulated Institution’s review with which it is engaged on the SBA’s behalf.

document their methodology for determining findings, observations and recommendations in their work papers, in accordance with SBA policies and procedures.

provide a quarterly report due the 1st of Oct, Jan, Apr, and July. The report should include but not be limited to information relative to the commercial industry, such as industry trends, emerging commercial credit risk, federal regulatory issues applicable to SBA and concerns in various GAO findings.

Incumbent Contractor for Similar Services Fuentes and Fernandez and Company

SBAHQ-09-D-0017/GS23F-0355P

Important Milestones Question submission deadline:

Wednesday, March 5, 2014 at 5:00 PM

Anticipated Solicitation Release Date:

On or about April 1, 2014

Anticipated Award Date:

On or about June 1, 2014

Evaluation Factors Factor 1: Technical/Management Approach

Factor 2: Past Performance

Factor 3: Price

Evaluation Process Awards will be made to the responsible Bidders submitting an overall quote that is determined most advantageous to the Government, price and non-price factors considered.

Award will be made to the firms whose quotes meet the Government's requirements and whose technical evaluation and price represents the best value to the Government.

The technical evaluation criteria, listed in order of descending importance, consist of (1) Technical/Management Approach, and (2) Past Performance. When combined, the technical evaluation factors of (1) Technical/Management Approach and (2) Past Performance are more important than factor (3), Price.

Rules of Joint Ventures and Partnering Agreements

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