CFO_Credit_Modeling_Solicitation_final_.docx

Credit Modeling Technical Assistance

IDIQ

Office of Financial Services

PART I – SUPPLIES OR SERVICES AND PRICES/COSTS

SERVICES

The Contractor shall provide credit modeling services necessary to support the Small Business Administration (SBA), Office of Financial Analysis and Modeling (OFAM) on behalf of the SBA’s Office of Chief Financial Officer (OCFO), perform annual budget cost estimates for SBA’s on-going loan programs and annual re-estimates for SBA’s existing loan portfolio in accordance with the Federal Credit Reform Act. The contract will provide support for executing SBA’s existing models and processes, and will provide technical assistance in enhancing the models in order to provide more accurate risk assessments. The contract will also provide ongoing technical assistance for the models and associated training for staff involved in support and implementation of the models.

1. CONTRACT DEFINITION – INDEFINITE DELIVERY – INDEFINITE QUANTITY

This is an Indefinite Delivery - Indefinite Quantity Contract as defined at Subpart 16.504 of the Federal Acquisition Regulation (FAR), FAR Clause 52.216-22, Indefinite-Quantity. Services provided by the Contractor under this Contract shall be secured by the issuance of Task Orders placed in accordance with the following clauses: FAR 52.216-18, Ordering, and FAR 52.216-19, Ordering Limitations.

2. MINIMUM AND MAXIMUM QUANTITIES AND AMOUNTS FOR ORDER

The minimum quantity and/or amount to be ordered under this contract shall not be less than the minimum quantity and/or amount shown in the following table. The maximum quantity and/or amount to be ordered under this contract shall not exceed the maximum quantity and/or amount shown in the table. THE MINIMUM AND MAXIMUM AMOUNT IS FOR THE LIFE OF THE CONTRACT which covers the base year and all options exercised.

2.1. TYPE OF CONTRACT - HYBRID CONTRACT TYPE

The contract type is a hybrid. Task orders issued may contain Firm Fixed Price (FFP) or Labor Hour type pricing with a cost-reimbursement line item for travel, or a combination of these types. There are four total tasks that SBA may order. Two of these tasks are fixed price tasks that require per month pricing. The third task is a fixed price task based on negotiated labor rates and a fixed level of effort. The fourth task is a labor-hour task.

Task orders will be issued on a fixed price basis, fixed unit price, or cost reimbursement basis. Orders may combine the three types if warranted, e.g. travel costs may be reimbursable under a fixed price order. Upon receipt of a request for proposals, the Contractor shall provide a proposal of costs to be incurred, including direct labor and other direct costs. In doing so, the Contractor agrees that, unless otherwise specified in the request for quote, reimbursable travel will be paid based upon Federal travel regulations in place at the time the travel takes place and will not have any fee added to it.

PERIOD OF PERFORMANCE BASE CONTRACT

The period of performance for this contract is one, one-year base period and four, one-year option periods.

Base period will begin on the date of award and completed twelve months after the date of award.

Option period 1 (1 year) NOTE: DATES WILL BE FILLED IN AT TIME OF AWARD Option period 2 (1 year) Option period 3 (1 year) Option period 4 (1 year)

PART II. IDIQ PRICING SCHEDULE -

3. PRICE SCHEDULE -*NOTE: FOR PROPOSAL PURPOSES FILL IN THE UNIT RATE FOR THE CONTRACT LINE ITEMS (CLINS) LISTED ON THE SF 1449 (sign), Complete Attachment 1 the below chart. Price Proposal for the Task Order shall be completed on the Task Order Pricing Schedule Chart on Attachment 2.

4. NOTE: ALL CLINS THAT REQUIRE PRICING ARE LISTED ON THE SF 1449.

FOR CLINS 0003, 1003, 2003, 3003, 4003, 0004, 1004, 2004, 3004 and 4004 ITEMS THAT ARE BASED ON LEVEL OF EFFORT AND LABOR CATEGORIES LISTED IN PARAGRAPH 5. BELOW. FOR TASK ORDER 0001 UTILIZED THE CLIN PRICING BELOW FOR THE FIXED PRICE PROPOSAL ON TASK ORDER 0001.

SEE SF 1449

As total compensation for all services performed in accordance with the terms, conditions, and specifications stated herein, the contractor will be paid according to the prices listed above per CLIN Structure or per negotiated level of effort per the Labor Rates listed below under paragraph 5.1 as negotiated as a fixed price on all Task Orders issued.

5. LABOR RATES

5.1. The Contractor shall perform negotiated task orders under this contract using the labor categories and rates listed below. Each Labor category must list a corresponding Task from the PWS that it is associated with and the percentage of the price increase per option year, if applicable. Labor Categories and rates should reflect the Labor Hour CLINS. Will negotiated at a level of effort fixed price Task Order.

NOTE: All labor rates submitted with the IDIQ task will be incorporated into this section upon award and shall be valid for the base period of the contract. Additional labor rates not included at the time of initial award but that are used in a task order shall be valid for the rest of that performance period and will be added to the contract prior to, or at the same time as, exercising the next option period. If more lines are need please add to this chart.

PART III – PERFORMANCE WORK STATEMENT

1.0 Purpose

The Small Business Administration (SBA), Office of Financial Analysis and Modeling (OFAM) on behalf of the SBA’s Office of Chief Financial Officer (OCFO) issues this Request for Proposal (RFP) to to establish an Indefinite-Delivery, Indefinite Quantity (IDIQ) agreement to provide Credit Modeling Services and assist with preparing SBA’s annual financial statements and budget. The Government intends to establish an IDIQ with one vendor to facilitate the ordering of Subsidy Reform Modeling services in Task Orders. The subsidy reform modeling services will be conducted in accordance with the Performance Work Statement (PWS) included herein. The contractor shall provide all qualified personnel, equipment, logistical support, and other materials and/or services necessary to perform the efforts as set forth in the SOW.

2.0 Background Overview of Subsidy Reform Modeling

The U.S. Small Business Administration (SBA), Office of the Chief Financial Officer (OCFO), Office of Financial Analysis and Modeling (OFAM) provides modeling support, and financial and statistical analysis of the SBA’s business and disaster loan programs. The OFAM provides formulation estimates for the Office of Management and Budget (OMB) and Congressional budget submissions, performs annual re-estimates for over 150 loan cohorts in its business and disaster programs and performs cost estimates and analysis as requested by the senior management within SBA, OMB, the House or Senate committees and the Congressional Budget Office. Given the constant evolution of best practices in the credit modeling environment, the Contractor shall ensure that its services provide SBA with services and models that are current, relevant, and reflective of industry best practices, and are in compliance with the Federal Credit Reform Act. The contractor shall also be prepared to perform informational training sessions of Federal Credit Reform modeling to SBA employees.

3.0 Objectives

The purpose of this services contract is to provide OFAM with credit modeling services which incorporates econometric data and performs additional functions in order to provide more accurate risk assessments. The contract will also provide ongoing technical assistance for the models and associated training for staff involved in support and implementation of the models.

The SBA currently has numerous active loan programs that require formulation estimates, re-estimates and analyses and several loan programs that are fully disbursed that require annual re-estimates. The SBA has a mixture of credit subsidy models written in SAS and Excel. During the formulation and re-estimate cycles the models for the major programs are distributed for an Independent Verification and Validation (IV&V) review prior to the models being provided to the OMB and the independent financial statement auditor under contract to the Office of Inspector General (OIG).

The OFAM continually enhances the capabilities of its modeling process to improve the accuracy and performance of the models. The Contractor, at the discretion of the OFAM, can be required to provide modeling and analysis support for any of the active/planned and discontinued programs listed below and for new programs that are initiated by the SBA or required by legislation.

Active or Planned Programs

Surety Bond Guarantee(SBG) Program (Not subject to FCRA);

Discontinued Programs

The models forecast the cash flows associated with SBA's direct loan and loan guarantee programs. Forecasts of loan repayments, prepayments, defaults, fees, recoveries, expenses, and related cash flows are developed based on actual historical loan performance data. When new programs are proposed by the SBA’s senior management, the OMB or via Congressional requests, the historical data of similar existing loan programs at the SBA or another Federal Agency are appropriately adjusted and used as proxy data for the proposed program. SBA's models are built using a variety of software programs including SAS and Excel.

The contractor shall provide technical assistance sufficient in order to assist SBA's objectives to ensure it has sufficient technical support to meet the Office of the Chief Financial Officer's goals in the following areas:

SBA has credit reform modeling expertise in-house, however OFAM requires a contractor that can provide technical support assistance that is proficient in the use of SAS software and Excel, including Visual Basic. Technical assistance shall include providing additional assistance to the OFAM by ensuring that we (SBA) meet the objectives identified above.

Technical Assistance shall include at the minimum the following areas:

3.1 SBA Credit Subsidy Models and Model Change Timeline

The SBA uses a mixture of SAS loan level models and Excel program level models. The SAS loan level models provide the SBA with the capability of accurately modeling many possible loan program scenarios. Loan level models project future performance for credit reform cohorts utilizing a competing risk hazards framework where a portion of every loan, for some programs that means in excess of 100,000 loans, will default, prepay or continue to be fully performing. Basically, the models then role up, or sum, the various performance characteristics of the cohort to the program level.

SBA will provide the Contractor with the most recent versions of the Credit Subsidy models being used for re-estimates and formulation estimates. The Contractor shall maintain, update, and enhance the models provided in the same software format provided. The SBA has three major guaranteed business loan programs and one direct disaster loan program that are SAS models. Three of those models have multiple sub-programs contained within the models. The SBA also has multiple Excel modeled programs, some of which use SAS code to extract data from the database used by the office. The Contractor shall be responsible for ensuring that any models or analyses generated can use the data in the SBA-provided format. SBA will not be responsible for addressing data inaccuracies, incomplete data fields or other data quality issues or considerations.

SBA manages planned model changes, technical revisions, and the production of critical estimates through an annual lifecycle, each of which culminates in important deliverables to internal SBA groups, auditors, and OMB. The annual modeling services timeline for each model falls within four primary overlapping phases:

3.1.1 Phase I efforts are focused on model enhancements and core assumption changes in preparation for review by the auditors. In this phase, all primary methodological changes and primary edits to the code are conducted, key assumptions updated with historical information through March 31st, and all updates to documentation are completed. Preliminary model packages for all major models, and at times other selected models, are submitted to and Independent Validation and Verification (IV&V) team to perform an additional review. After addressing any issues discovered from the IV&V review, final Phase I model packages are created, reviewed, and submitted along with supporting analyses for review to the auditors. All submissions to the IV&V team and auditors go through an extensive internal review prior to release. Although the specific dates for model submissions vary by year and assigned model, all submissions to the auditors are completed between June 1st and June 30th. At this point, model assumption methodologies are typically locked and only data updates through the rest of the year will result in additional model changes. Many formulation models utilize the same assumptions created as part of the Phase I reestimate model enhancements. A preliminary formulation estimate is produced in July by modifying the formulation models to include the updated assumptions submitted for audit review and any newly available data inputs.

3.1.2 Phase II is the primary phase for preparing and completing the Financial Statement reestimates and supporting analysis. In late August, team members will respond to any auditor questions about the Phase I deliverables. Each model is updated with newly available data through June 30th, and preliminary model packages for all models selected for IV&V, typically only the major models, are prepared for submission in early September. In September models are updated with the most recently available data to calculate Treasury Interest Income and Expense. Once final fiscal year loan data is available, typically by October 2, all models are updated and final reestimate model packages are submitted for internal review. After internal review, all model packages and supporting reporting templates are aggregated and submitted to the auditors and other teams within OCFO for financial statement preparation. The Financial Statement reestimates and supporting final model versions are typically submitted by October 8. Additional analyses, reports, and discussions of are subsequently completed in October in support of the Financial Statements and auditor review.

3.1.3 Phase III includes modifications to the financial statement reestimate models with any additional historical and forecasted macroeconomic data to create the final reestimates for the President’s Budget. Final model packages are submitted through internal review and updated cash flows are submitted to OMB typically by mid to late November.

3.1.4 Phase IV refers to the preparation of the annual formulation estimates and budget support. The preliminary formulation models are adjusted with input data coinciding with the Phase III reestimate model changes. Recent trends in portfolio composition are reviewed, communicated with the Office of Capital Access (OCA), and final portfolio composition assumptions are finalized for final formulation model estimates. Final formulation model packages are submitted for internal review, and final are submitted to OMB typically by early-December. Follow on discussions and explanations of subsidy rate changes can continue into January. Additional analyses in December are created to support budget analysis, to support for the 10-year plan, and to respond to any questions about the revised formulation estimates.

The table below includes a cross walk of each SBA model, a listing of their used technology.

Major Models

Intermediate Models

SAS, Historical Averages

SAS and Excel, Historical Averages

Minor Models

SAS and Excel, Historical Averages

SAS, Historical Averages

SAS, Historical Averages

SAS, Historical Averages

SAS, Historical Averages

Expedited Disaster

X

Excel, Historical Averages

Immediate Disaster

X

Excel, Historical Averages

Excel, Historical Averages

RBIC

X

X

SAS and Excel, Historical Averages

SBG

X

Excel, Historical Averages

The Contractor shall be responsible for continuing to maintain SAS code and other evaluation methods to determine the accuracy of the data and to exclude data anomalies from the data set used to generate coefficients and curves for the credit subsidy models or other analyses. The Contractor shall use Industry Standards and Best Practices in order to provide the services.

4.0 Abbreviations and Definitions

4.1 Abbreviations

4.1.1 AUP – Agreed Upon Procedures

4.1.2 CO – Contracting Officer

4.1.3 COR – Contract Technical Monitor

4.1.4 CLIN – Contract Line Item Number

4.1.5 CPARS – Contractor Performance Review System

4.1.6 FAI - Financing Account Interest

4.1.7 FAR – Federal Acquisition Regulation

4.1.8 FCRA – Federal Credit Reform Act

4.1.9 FFP – Firm Fixed Price

4.1.10 FTR - Federal Travel Regulation

4.1.11 IRR – Interest Rate Reestimate

4.1.12 IV&V – Independent Validation and Verification

4.1.13 MWP – Management Work Plan

4.1.14 OCA – Office of Capital Access

4.1.15 OCFO – Office of the Chief Financial Officer and Performance Management

4.1.16 OCRM – Office of Credit Risk Management

4.1.17 OFAM – Office of Financial Analysis and Modeling

4.1.18 OMB – Office of Management and Budget

4.1.19 QAP – Quality Assurance Plan

4.1.20 PWS - Performance Work Statement

4.1.21 SAS – Statistical Analysis Software

4.1.22 SBA – U.S. Small Business Administration

4.1.23 SER – Single Effective Rate

4.1.24 VBA – Visual Basic for Applications

4.2 Definitions

4.2.1 Business Day: Any day other than a Saturday, Sunday, a Federal holiday or other day on which the Federal Government, by law, or executive order is closed.

4.2.2 Contracting Officer: The SBA Official authorized to execute and administer the contract on behalf of SBA and includes any duly appointed successor or authorized representative.

4.2.3 Contractor: The individual, partnership, corporation, or other entity, which is the party subject to the terms and condition of this contract.

4.2.4 Day: Calendar day unless otherwise stated.

4.2.5 Deliverables: If a deliverable date falls on a weekend or federally recognized holiday, the due date shall be the next business day.

4.2.6 Key Personnel: Personnel specifically considered to be essential to the work being performed under this contract are defined below.

4.2.7 Performance Work Statement: Describes the requirement in terms of measurable outcomes rather than by means of prescriptive methods.

4.2.8 Quality Assurance: A planned systematic pattern of all government actions to provide confidence that adequate technical requirements are established, products and services conform to established technical requirements, and satisfactory performance is achieved.

4.2.9 Quarter – A quarter will be defined as the first of January through the end of March, first of April through the end of June, first of July through the end of September, and first of October through the end of December

4.2.10 Model Package – Model estimates are submitted along with all underlying programs and analytical files necessary to run the models and produce the Phase I, Phase II, Phase III, or Phase IV estimates. A final model package, as outlined in the policies and procedures, shall include at a minimum all input data, programs, and additional files required to replicate the estimates produced by the model. A final model packages also includes, as outlined in the policies and procedures, all required documentation to detail any changes to the models, a decompositional analysis documenting the step by step subsidy rate impact of any model updates, a model execution guide detailing the procedures for maintaining the existing model, and revised overviews of the associated loan program and modeling approach.

5.0 Contractor Furnished Items

The Contractor shall furnish the necessary personnel, materials, travel, facilities, and services and shall otherwise do all things necessary for, or incidental to, the performance of the tasks set forth in this contract. Any additional specific requirements and any government furnished items or services will be identified in each task order.

The contractor shall appoint a Main Point of Contact and an Alternate Point of Contact. The Alternate Point of Contact shall be capable of assuming the role of the Main Point of Contact without delays due to any lack of knowledge/information, which could reduce the level of efficiency necessary to ensure task order performance. NOTE: The Main Point of Contact and the Alternate Point of Contact SHALL be employees of the contractor and cannot be employees of a subcontractor or consultant.

6.0 Government Furnished Property and Services

SBA will provide the contractor with access to its office facilities in Washington D.C including office space, furniture, office equipment and Agency-approved software and hardware in order to perform some of the services detailed in this Performance-Based Statement of Work. Only contractors working at SBA facilities will have access to SBA systems. The Contractor will be provided adequate desk space, computer peripherals, and related systems access for up to 5 employees. The Contractor will also be provided copies of related policies and procedures, accounting systems documentation, local or other relevant operating procedures and instructions, and any other necessary documentation related process. In addition, the Contractor will be provided access to government staff experts, as necessary, to complete the tasks

7.0 Performance Work Statement

The Contractor shall provide all necessary personnel services, materials, and supplies to credit modeling services; develop, document and enhance SBA’s credit risk models ; and provide technical assistance in accordance with the general scope outlined herein.

The work includes, but is not limited to, the services described below.

The Contractor will provide the number of analysts needed to maintain, enhance and analyze loan programs assigned. Effective credit reform modeling requires that the analyst responsible for a model/program understands the program and model. The SAS models utilized by the SBA are sophisticated models that employ the use of estimated coefficients or, in for the Direct Disaster program, estimated assumption curves. Tasks will relate to the following areas:

7.1 Task 1 - Modeling Services and Budget Preparation Technical Assistance - Transition and Training Period (Phase-in / Phase - Out) - Monthly Fixed Rate

7.1.1 Transition and Training Period (Phase-in / Phase-Out ) - per month

The Contractor shall work with the Contracting Officer's Representative (COR) and the existing incumbent to learn the modeling processes and loan programs at the SBA for programs that will be initially assigned. The Phase-In period will take place from contract award through January 19th, 2015, or later, but not to exceed 3 months. During this period the Contractor will become familiar with internal processes, analysis tools, programs and models. It is expected the Contractor will verify the ability to replicate the most recent financial statement re-estimates, president’s budget re-estimates, and president’s budget formulation estimates. During this process, it is also expected that the Contractor will review existing methodologies and develop recommendations for model improvements for each of the assigned models. The Contractor shall also provide transition support and knowledge transfer either to a new contractor, or back to SBA when the Contract ends or is terminated. A Phase-In/Phase-Out Plan will include, at a minimum, meeting with SBA personnel to develop and implement a transition timeline, and transferring project data, documentation and Government-owned property.

7.1.1.1 Deliverables - Transition and Training Period (Phase-in)

The Contractor shall:

7.1.1.1.1 Deliver a weekly status report to the COR identifying Contractor’s weekly accomplishments, value-added, and next-steps. The delivery of the status report will coincide with a weekly status meeting with the COR to be determined on a weekly basis based upon the schedule of the COR. A copy shall be provided to the CO.

7.1.1.1.2 Phase-In/Phase-Out Plan and Report. The Contractor shall provide a Phase-In/Phase-Out Plan which includes options to assist in ensuring a smooth transition, to begin the contract upon award, either to a new contractor, or back to SBA when the Contract ends or is terminated. The Plan will include, at a minimum, meeting with SBA personnel to develop and implement a transition timeline, and transferring project data, documentation and Government-owned property. The Final Phase-In plan shall be provided for approval to the COR within 30 calendar days of the Contract Award. The Final Phase-Out Plan shall be reviewed and updated by the Contractor and subject to government approval 60 calendar days prior to the Contract’s expiration. The Draft Phase-In/Phase-Out Plan is due as part of the proposal. .

7.2 Task 2 – Modeling Services and Budget Preparation Technical Assistance and Additional Program Analysis (Each Year) - CLIN 0002, 1002, 2002, 3002, and 4002 - Monthly Fixed Rate

7.2.1 Modeling Services and Budget Preparation Technical Assistance

The Contractor shall work with the Contracting Officer's Representative (COR) to determine the initial allocation of programs the Contractor will be responsible for supporting. This allocation will be detailed at the task order level. The Contractor shall provide sufficient analysts on a full time basis to support the programs assigned. Under the direction of the COR, additional programs may be assigned to the selected Contractor if the SBA does not have Federal Government employees assigned to support the process.

For each assigned model, the Contractor shall maintain the models, perform re-estimates for the Agency’s financial statements and President’s Budget, prepare formulation estimates for the President’s Budget submission and perform cost estimates and special analyses, as assigned. The Contractor will fully implement the use of existing models and processes during the base period of performance. The Contractor is responsible for ensuring that any models or analyses generated can use the data in the SBA-provided format.. The existing processes within the existing models must be maintained to address data quality issues.

The Contractor shall be responsible for complying with Privacy Act requirements governing any personal financial information provided by SBA on SBA loans and borrowers. The Contractor shall use Industry Standards and Best Practices in order to provide the services. The Contractor will treat all estimates requested by any party as “Confidential” and will not discuss the estimate with anyone but the requesting office. The Contractor shall provide adequate staff to accomplish Task 2 as described. SBA will provide on-site space for up to 3 contractor employees. NOTE: Additional details may be provided at the Task Order level.

7.2.1.1 Deliverables - Modeling Services and Budget Preparation Technical Assistance

The Contractor shall provide the following deliverables as determined by the COR from the list of potential deliverables listed below. Delivery dates may change as dates for budget submission, providing re-estimates for the SBA’s financial statements, or analyses deliverable dates are changed. The COR will provide an agreed least five days’ notice of a change in a deliverable except for additional analytical requests which are typically required within two to four hours of the request. The COR will review deliverables, including updates, usually within one business day of receipt. Contractor must obtain acknowledgement from appropriate SBA personnel (usually the COR) for a deliverable to be accepted. For purposes of the delivery schedule, the terms “day” and “days” shall mean calendar days, unless otherwise noted. In addition, SBA Policy and Procedures as referenced below will be provided to the Contractor at contract award.

All dates are subject to further review after the task order is issued, but are intended to provide a guideline for planning and reflect the existing policies and timelines. Many deliverables are subject to OMB provided deadlines. OFAM also meets with the auditor at the beginning of the audit to review all delivery dates, identify new analyses to support their audit, and determine whether or not old analyses are no longer needed. Any audit deliverables discussed below are subject to future revisions.

The Contractor shall provide:

7.2.1.1.1 Deliver a weekly status report to the COR identifying Contractor’s weekly accomplishments, next-steps, and value-added. The delivery of the status report will coincide with a weekly status meeting with the COR to be determined on a weekly basis based upon the schedule of the COR. A copy shall be provided to the CO.

For each model assigned, the Contractor shall provide the following Model Phase Deliverables:

Phase I

7.2.1.1.2 Planned Enhancements for Phase I. Each model contains an existing log of proposed model enhancements. For each model, the contractor will review the list of potential model enhancements, determine which enhancements are planned, and provide support for why any other enhancements are not conducted. It is the responsibility of the model owner to maintain this log to track suggested refinements to each model. The list of enhancements for Phase I will be submitted to the COR for review by the beginning of February.

7.2.1.1.3 Reporting of March 31 Data for Accounting Review. For each model, loan financial transaction data and intra-governmental cash flows through March 31 are summarized and reported to SBA accountants for internal review. The deliverable is due to the COR and SBA accountants prior to April 25th.

7.2.1.1.4 Preliminary Phase I IV&V Model Package (as determined by the COR - detailed on each task order). For models submitted to IV&V, a preliminary completed model package is created. The model should include all planned model enhancements for Phase I, including standard model updates of data through March 31. The model package includes all data inputs, SAS code, CSC2 cash flow input and output files, and additional analytical excel files necessary to independently run the model and produce final results. The package also includes documentation necessary to execute the model, as well as a full listing of model changes and decomposition of the subsidy impact of each change. Model packages will be submitted to the COR for internal review five business days prior to the submission date to IV&V. In 2014, IV&V model submission deadlines were spread between May 8th and June 3rd.

7.2.1.1.5 Responses to Questions from IV&V Review (as determined by the COR - detailed on each task order). The IV&V team will spend one week reviewing each submitted model and will submit a formal list of questions. It is the responsibility of the Contractor to submit written responses to the questions for OFAM review five business days after receipt of the questions.

7.2.1.1.6 Final Phase I Re-estimate Model Package. Final Phase I model packages, including internal control worksheets, are delivered to financial statement auditors. If applicable, the Contractor is responsible for addressing any material weaknesses identified from the IV&V review, including any additional data inputs which become available after submission to IV&V. For the final submission, additional analyses are required which provide a comparison of model predicted performance to actual performance and tests of model sensitivities to changes to revised model assumptions. The Contractor shall submit the final model package to the CORfor internal review one week prior to final delivery deadline to the auditor. The Contractor is responsible for obtaining all internal control signatures and submitting the internal controls worksheet before submission to the auditors. The deadlines for final submissions to the auditor may vary on an annual basis and will vary by program. Submissions are similarly staggered as the IV&V review and deadlines for auditor submission range from June 1st to June 30th.

7.2.1.1.7 Prepare Preliminary Formulation Estimates. For most of the active loan programs, the formulation model estimates use the same assumptions as created in the Phase I model deliverables. Therefore, after finalizing Phase I model deliverables, formulation models are updated as much as possible with the latest available inputs and assumptions to provide a preliminary budget formulation estimate. The estimated subsidy rates and documentation supporting the decomposition of each model change shall be submitted to the COR by July 10th.

Phase II

7.2.1.1.8 Responses to Auditor Questions. After auditor review of Phase I model packages, the Contractor shall respond to any submitted questions by the auditors. If material issues are found, upon direction of the COR, the Contractor shall make corresponding adjustments to the re-estimate model during Phase II submission. Subject to annual change, auditor questions are typically received by the middle of August and responses are due two weeks after receipt. Draft responses are due to the COR two business days prior to submission to auditors.

7.2.1.1.9 Reporting of June 30 Data for Accounting Review. For each model, loan financial transaction data and intra-governmental cash flows through June 30th are summarized and reported to SBA accountants for internal review. The deliverable is due to the COR and SBA accountants prior to August 20th.

7.2.1.1.10 Preliminary Phase II IV&V Model Package (if required). For models selected for IV&V review, preliminary Phase II models are updated to include available input data through June 30th, and if applicable the updated Mid-session Review Economic Assumptions provided by OMB. Unless there are identified issues from the auditor Phase I review or internal review, no methodological changes should be incorporated. The Contractor shall submit the Model Package to the COR for internal review 5 business days prior to submission to IV&V. Models are submitted for IV&V review throughout the first week in September. Submit to the COR.

7.2.1.1.11 Responses to Questions from IV&V Review (if required). The IV&V team will spend one week reviewing two submitted models and will submit a formal list of questions. The Contractor shall submit to the COR written responses to the questions for OFAM review five business days after receipt of the questions.

7.2.1.1.12 Financing Account Interest (FAI) Calculations. Upon the release of all final borrowings from and repayments to Treasury and the OMB provided CSC2 and Financing Account Interest Summary Compiler, the Contractor shall follow required protocols to calculate the Financing Account Interest for all cohorts within the assigned model. These estimates are due to the COR three business days after the September release of the CSC2.

7.2.1.1.13 Final Phase II Financial Statement Re-estimate Model Package. For most models, the final Financial Statement Re-estimate and model packages are due to auditors October 8th. Models are updated to include the FAI calculations, loan financial data through September 30th provided by October 3rd, and Single Effective Rate (SER) and Interest Rate Re-estimate calculations performed for any applicable cohorts. The SMG, Microloan, and Small Program models are due to auditors September 23th and do not include updates of loan program history through the end of the fiscal year. The Contractor shall submit the model packages for COR internal review no later than two business days prior to final review.

7.2.1.1.14 Written Support for Re-estimates. The Contractor shall provide to the COR written support explaining the updated re-estimates for the assigned programs for inclusion in the Financial Statement footnotes. The discussion is due for internal review by October 10th.

Phase III

7.2.1.1.15 Final Phase III President’s Budget Re-estimate Model Package. The Phase III model packages include adjustments to the models reflecting any final adjustments to year-end cash balances, newly released historical economic data, and the inclusion of newly released President’s Budget Economic Assumptions (PEA’s) provided by OMB. The packages include updates to documentation outlining all model changes and a full decomposition of the subsidy rate impacts due to each model change. Final cash flows are submitted to OMB in November and are subject to the deadlines imposed by OMB’s Budget Data Requests (BDR’s). The Contractor shall deliver the model package to the COR for internal review one week prior to delivery to OMB and SBA’s accounting department.

Phase IV

7.2.1.1.16 Report to OCA, Investment Division, or ODA discussing preliminary Budgetary Assumptions. For programs requiring budget formulation, the Contractor shall prepare preliminary estimates for all model assumptions used to produce the formulation subsidy estimates for new cohorts. These assumptions will be documented and presented to the appropriate program office to receive feedback and determination of final budgetary assumptions. The Contractor is responsible for preparing assumptions, creating presentation materials, and submitting materials to the COR for internal review at least two business days prior to the scheduled meeting with the program office. The date of the meeting will be scheduled after award and is typically in late October.

7.2.1.1.17 Preliminary Phase IV Formulation Model Package for IV&V (if required) For formulation models submitted to IV&V, the Contractor shall prepare preliminary formulation model packages. Formulation models are updated with the latest assumptions verified by the appropriate program office and data inputs available by the first week in November. The model package includes all data inputs, SAS code, CSC2 cash flow input and output files, and additional analytical excel files necessary to independently run the model and produce final results. Additional documentation supporting choice of assumptions should be included. The package also includes documentation necessary to execute the model, as well as a full listing of model changes and decomposition of the subsidy impact of each change. The preliminary version, due to timing is submitted prior to the release of the November CSC2 and the President’s Economic Assumptions. The Contactor shall deliver the model package for internal review to the COR one week prior to submission to IV&V, which typically is scheduled for the second week of November.

7.2.1.1.18 Responses to Question from IV&V Review (if required). The IV&V team will spend one week reviewing two submitted models and will submit a formal list of questions. The Contractor shall submit to the COR written responses to the questions from the IV&V team within five business days after receipt of the questions.

7.2.1.1.19 Final Phase IV Formulation Model Subsidy Estimates. The Contractor shall update the models to include OMB’s President’s Economic Assumptions, the November CSC2, and any remaining data inputs to provide the final subsidy estimates for submission to OMB. The Contractor shall submit Final Phase IV model packages to the COR for internal review one week prior to submission to OMB. The final submission deadline is subject to revisions by OMB’s BDR, but is expected to be the first week in December.

In addition to the Model Phase Deliverables, OFAM has additional aggregate deliverables that include additional analysis or summary reporting of all model estimates. Although this will be supported by OFAM government staff, the contractor may, as detailed at the task order level, provide technical assistance reviewing or executing the following deliverables that support the aggregated reporting across all loan programs. The Contractor may provide:

Summary Reporting Deliverables

7.2.1.1.20 Reporting of Liability for Loan Guarantee and Recoveries on Assets in Inventory Projections for Financial Statements. OFAM has an application which aggregates cash flows reported by each model to provide aggregate estimates of SBA’s Liability for Loan Guarantee. The estimates are produced annually and are provided upon the creation of the Phase II Financial Statement re-estimates. The Contractor may either execute the summary application or assist in the review of the final portfolio estimates. The table is due to the COR upon the delivery of the last final Phase II model.

7.2.1.1.21 President’s Budget and Financial Statement Re-estimate Tables. Aggregate tables summarizing the reestimates across all programs are provided for the Financial Statement reestimates and the President’s Budget reestimates. An existing application streamlines the summarization of Cash Flow files, and the Contractor may be asked to execute or review the aggregated estimates. These files are due to the COR upon the delivery of the last final Phase II and Phase III models.

7.2.1.1.22 Financing Account Interest Tables. During Phase II, the Contractor will provide estimates for FAI for each model. Summary excel files are created aggregating the interest income and interest expense across all programs. The Contractor may be asked to execute or review the aggregated tables. The tables are due internally to the COR Sept 24th for submission to the Bureau of Public Debt.

Deliverables for Task 2

7.2.1.1.23 Analysis for 10-year Plan. The 10-year plan is a series of OMB MAX schedules containing projections related to loan balances and financing account cash flows. OFAM has been tasked with preparing MAX schedules G, H, and Y for the current year (CY), budget year (BY), and the nine years beyond the budget year for all guaranteed and direct loan programs administered by the SBA. This is due to the COR the middle of November.

7.2.1.1.24 Budget Briefing Book. The book documents all budgetary and re-estimates for all loan programs from the most recent two budget years and the most recent re-estimate. Due to the COR prior to a May 15th submission to auditor.

7.2.1.1.25 Policies and Procedures Document. OFAM is responsible for maintaining and adjusting its policies and procedures document to account for any adjustments to internal policies. The Contractor will assist OFAM in review, modification, and maintenance of current policies and procedures. Any revised policies and procedures are due to the COR two weeks and auditor on May 23rd, with any adjustments communicated internally prior to submission.

7.2.1.1.26 Website Reports. OFAM currently produces quarterly reports of historical loan performance that are reported to the public. Existing SAS programs process existing data and generate excel file reports that must be augmented to be 508 compliant. Website reports are due to the COR by the 17th or 18th after the end of each quarter.