SBA_Supervised_Lender_Solicitation_2016.05.27_final_Draft_Amendment_1.docx

SBA Supervised Lender Safety & Soundness Examination, Risk Based Review And Oversight Support Services

Office of Capital Access/Office of Credit Risk Management

SBAHQ-16-R-0006

Amendment 00001

Contents

PART I – SUPPLIES OR SERVICES AND PRICES/COSTS

SERVICES

The Contractor shall provide services necessary to create a framework for and perform services related to the oversight of SBA Supervised Lenders that receive loan guarantees from the U.S. Small Business Administration (SBA) through the 7(a) loan program. These services shall include assisting with the performance of lender safety & soundness examinations and reviews, providing technical assistance with the administration of lender safety & soundness examinations and reviews, and tracking and managing data related to lender safety & soundness examinations and reviews.

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. The North American Industry Classification System (NAICS) code for this acquisition is 541219. NOTE: The successful offeror shall be registered in Sam.gov under this NAICS prior to award. The small business size standard is $20.5m. This procurement is a Small Business Set-Aside as defined by the NAICS code. No materials produced under this contract can be used for advertising or promotional purposes of the vendor.

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 includes the base year and all options periods exercised.

0. TYPE OF CONTRACT - HYBRID CONTRACT TYPE

The contract type is a hybrid. Task orders issued may contain Firm Fixed Price (FFP) per Contract Line Items (CLIN) or Negotiated Level of Effort utilizing Fixed Labor Rates as detailed in paragraph 5 below, with a cost-reimbursement line item for travel, or a combination of these types.

Task orders will be issued on a fixed price basis or fixed unit price basis. Orders may combine the two types if warranted, e.g. travel costs may be reimbursable only up to a fixed, not to exceed amount that is established with the task order award. Upon receipt of a request for a proposal, 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 proposal, 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

IDIQ PRICING SCHEDULE AND QUANTITY ESTIMATES

The IDIQ Pricing Sheet with Quantity Estimates for each Contract Line Item (CLIN) is included as ATTACHMENT 1. PLEASE NOTE THAT THE QUANTITIES ARE ESTIMATES ONLY. The guaranteed amount is listed in Paragraph 2.0 above.

The first task order (Task Order 0001) is included as ATTACHMENT 2.

LABOR RATES

All task orders issued against this contract will be firm-fixed price. Tasks will be either based on a per-unit price agreed upon with the award of the IDIQ contract or will be based on proposed labor categories and hourly rates agreed upon with the award of the IDIQ contract.

The following tasks are based on per unit pricing:

· Task 1 (monthly price)

· Task 2 (price per review)

· Task 3 (price per review)

· Task 4 (price per review)

· Task 9 (price per unit of 5 loan files)

· Task 10 (price per unit of 1 loan file)

· Task 13 (monthly price ordered once per year)

The per unit pricing for these tasks must be listed in the SF 1449 and ATTACHMENT 3, as described in Paragraph 6 below. Tasks 14, 15, 16, and 17 must be completed as a part of all of the above tasks; the cost of these tasks are to be included in the fixed price proposal for each task based on per unit pricing.

For certain tasks associated with the contract, offerors must provide their proposed labor categories and hourly pricing. If a task order RFP is issued for one of those tasks, the offeror must propose the number of hours and individuals necessary to complete the tasks, based on the agreed upon labor categories and hourly pricing. The resulting task order award is a firm-fixed price award.

The following tasks are priced based on labor categories and firm-fixed hourly rates agreed upon in the IDIQ contract:

· Task 5

· Task 6

· Task 7

· Task 8

· Task 9

· Task 11

· Task 12

The proposed labor categories, hourly rates, and any increase in price for option year performance of such tasks must be listed in the SF 1449 and ATTACHMENT 3, as described in Paragraph 6 below. The proposed labor categories, hourly rates, and any increase in price for option year performance of such tasks will be incorporated into the award of the IDIQ contract and the number of hours and individuals will be negotiated and agreed upon prior to the award of any task order for these tasks. Tasks 14, 15, 16, and 17 must be completed as a part of all of the above tasks; the cost of these tasks are to be included in the hours and labor categories proposed for each task priced based upon labor categories and hourly pricing.

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 and fixed level of effort (based on fixed labor rates and fixed number of hours) established on all Task Orders issued.

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 and option periods of the contract.

Additional lines should be incorporated or a separate chart may be included as part of the offeror’s proposal and will be incorporated at time of award at this section.

CONSOLIDATED PRICE PROPOSAL

The Offeror should include one Excel Workbook with a consolidated price proposal for Task Order 0001 and all Tasks for the BASE/PARENT IDIQ in the formats laid out in ATTACHMENT 3, to include the following elements:

a) The first worksheet should contain a detailed estimate for Task Order 0001, in the format specified in the first worksheet of Attachment 3.

b) The second worksheet should contain a summary proposal for the Base Year, assuming that the following orders occur:

a. TASK 1 – 12 months

b. TASK 4a - 2 examinations

c. TASK 4b - 2 examinations

d. TASK 4c - 1 examination

e. TASK 4d – 1 examination

f. TASK 13 – 12 months

c) For each task based on per unit pricing, provide a detailed estimate with labor categories and hours included in a table in the “Template – per unit format” specified in the third worksheet in ATTACHMENT 3.

d) For each task to be priced based on labor categories and hourly rates, provide only the labor categories and rates for the base and option years, in the “Template – labor category” format specified in the fourth worksheet in ATTACHMENT 3.

PART III – PERFORMANCE WORK STATEMENT

1. PURPOSE

The purpose of this contract is to ensure that SBA’s oversight of the SBA Supervised Lenders participating in the 7(a) Guaranteed Loan Program is thorough, effective and efficient. The Contractor shall assist with performance of on-site safety & soundness lender examinations and on-site and off-site lender reviews, provide technical assistance with the administration of lender examinations and reviews, and track and manage data related to lender examinations and reviews. The purpose of this contract is also to ensure that SBA’s oversight of SBA Microloan Program Intermediaries satisfactorily addresses program integrity and reputation risk, as well as financial risk to SBA.

BACKGROUND

The SBA is an independent agency of the United States, established on July 30, 1953, pursuant to the Small Business Act. The SBA derives its authority principally from the Small Business Act and the Small Business Investment Act.

The 7(a) Guaranteed Loan Program

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, as amended, the program extends a full faith and credit guarantee of the U.S. Government to SBA Lenders that make small business loans pursuant to SBA Loan Program Requirements.

SBA’s Office of Credit Risk Management (“OCRM”) is charged with credit risk management of SBA’s lending programs, including providing supervision for SBA Supervised Lenders. An SBA Supervised Lender is a 7(a) Lender that is either a Small Business Lending Company (“SBLC”) or a Non-Federally Regulated Lender (“NFRL”). SBLCs are non-depository lending institutions that are SBA licensed and authorized by SBA to only make loans pursuant to section 7(a) of the Small Business Act and loans to Intermediaries in SBA’s Microloan program. NFRLs are business concerns that are authorized by the SBA to make loans under section 7(a) and are subject to regulation by a state but whose lending activities are not regulated by a Federal Financial Institution Regulator. OCRM is also charged with risk management of SBA’s Community Advantage (“CA”) Pilot Program, a program which allows mission oriented lenders, primarily non-profit financial intermediaries that are focused on economic development in underserved markets, access to 7(a) loan guaranties for loans of $250,000 or less. Each CA Lender will be identified as either an SBLC or an NFRL, depending on whether the lender is subject to regulation by a state.

Under 15 U.S.C. §634(b)(7) and (14), 15 U.S.C. §650, 15 U.S.C. §636(a)(31), 13 C.F.R. §120.1000 13 C.F.R. §120.1025 and 120.1050, and SBA SOP 51 00 “On-Site Lender Reviews/Examinations,” as amended, SBA supervises, examines, regulates and enforces laws against SBLCs and NFRLs. In order to discharge this responsibility, SBA, as the primary federal regulator for SBLCS, conducts safety & soundness examinations of SBLCs. Additionally, under the authority of 13 C.F.R. §120.490, every SBLC is subject to periodic audits by the SBA’s Office of Inspector General. Because the level of supervision of NFRLs provided by state authorities varies widely from state to state, SBA has the authority to supplement state supervision with its own oversight by conducting safety & soundness examinations of NFRLs. As per SBA’s Community Advantage Participant Guide (“CA Participant Guide”) published on December 28, 2015, SBA has the authority to monitor CA Lenders for performance, risk characteristics, and compliance, which includes conducting on-site and off-site reviews and safety & soundness examinations for CA Lenders when required according to the CA Participant Guide or as needed as determined by OCRM. SBA also has authority to conduct reviews of SBA Supervised Lenders as appropriate as determined by SBA in its discretion.

The Microloan Program

The Microloan Program was initially authorized on October 28, 1991 via Public Law 102-1140, which added subsection (m) to section 7 of the Small Business Act in order to set forth the legal authority and framework for the Program. The purpose of the Microloan Program is to assist women, low income, veteran, and minority entrepreneurs, and other small businesses in need of small amounts of financial assistance. Under the program, SBA makes direct loans to Intermediaries that, in turn, use the proceeds to make small loans to eligible micro-borrowers.

SBA’s OCRM is also charged with oversight of Microloan Intermediaries that are participants in SBA’s Microloan Program. Under SOP 50 53 (A) “Lender Supervision and Enforcement”, SBA provides supervision of and enforcement actions for Microloan Intermediaries as it relates to their SBA lending operations. Given the unique contribution of this program to SBA’s mission, OCRM conducts its monitoring practices in a manner that addresses potential program integrity and reputational risk as well as dollar risk.

At the current time, there are approximately162 active Intermediaries, with an outstanding principal balance of $137,000,000 owed to SBA. There are approximately 61,128 microloans outstanding with an outstanding balance of $133,300,000 owed to the Intermediaries.

OVERVIEW

OCRM is responsible for providing either primary regulatory oversight, or at a minimum significantly enhanced oversight for SBA 7(a) lenders that do not have a Federal Financial Institution Regulator. The level and type of oversight required depends upon whether the lender is an SBLC, or an NFRL that has a state regulator, as well as the financial condition of the lender, the size and performance of the lender’s SBA portfolio, and the overall risk of the lender to SBA. In order to make these assessments, OCRM conducts extensive lender analysis combined with strategic on-site and off-site (virtual) review activities.

OCRM conducts risk based analyses of SBA Supervised Lenders through strategic reviews of their activities including the performance of their SBA lending operations, the quality of their SBA loan portfolio, their compliance with SBA Loan Program Requirements, and the lender’s financial condition. Through this analysis, trends and risks are identified. As a result of this analysis, OCRM is able to better understand lender and portfolio performance. All of the tasks outlined in the Performance Work Statement, are critical to the effective oversight of SBA Supervised Lenders.

In regard to the Microloan Program, although OCRM is charged with the responsibility for oversight of Intermediaries, historically OCRM has provided assistance to SBA’s Office of Financial Assistance and Office of Economic Opportunity on an individual lender basis only. OCRM intends, through this contract, to conduct a baseline analysis of the Microloan Program.

OBJECTIVES

• SBA is seeking a Contractor who will provide innovative approaches to SBA’s oversight and monitoring processes, and safety & soundness examinations and reviews of SBA Supervised Lenders in accordance with 13 C.F.R. Part 120 and SBA SOPs 51 00 “On-Site Lender Reviews/Examinations” and 50 53 “Lender Supervision & Enforcement”, as amended from time to time. The Contractor will ensure that (1) SBA Loan Program Requirements as defined in 13 C.F.R. 120.10 are being followed by SBA Supervised Lenders, and (2) the assessments of individual SBA Supervised Lenders are provided at the best value possible to the SBA as well as to the SBA Supervised Lenders.

• SBA is seeking a Contractor who has an understanding of the existing process of SBA’s risk-based reviews in accordance with 13 C.F.R. Part 120 and SBA’s SOPs 51 00 and 50 53, as amended.

• SBA is seeking a Contractor who has an understanding of SBA’s Loan Program Requirements, including, but not limited to, SBA regulations in 13 CFR Part 120 and SOPs applicable to loan writing, servicing and liquidating (i.e., SOPs 50 10 (5) “Lender and Development Loan Programs” and 50 57 “7(a) Loan Servicing and Liquidation”, as amended.)

• SBA is seeking a Contractor who can analyze complex financial statements, as well as create financial models to perform sensitivity analyses and stress tests.

• SBA is seeking a Contractor who can provide services consistent with the practices utilized by the various federal banking regulators and servicer rating agencies as part of its overall lender oversight and monitoring efforts.

• SBA is seeking a Contractor who shall ensure that the SBA is provided with services and models that are current, relevant, and reflective of federal government, regulatory and industry best practices, given the constant evolution of generally accepted accounting principles and federal banking regulations.

• SBA prefers the offeror to have, within the past three years, experience performing examinations and reviews under AICPA Standards for Consulting Services. SBA also prefers that offerors be able to demonstrate experience performing examinations and reviews or audits involving financial standards, forensic reviews, agreed upon procedure reviews and reviews for fraud waste and abuse when there was a degree of attestation required.

• SBA is seeking a Contractor that will be capable of providing and utilizing a Virtual Data Room (VDR) solution in response to the requirements associated with Task 1 and Task 15. SBA currently is using a commercial off the shelf solution (COTS) which is acceptable, but will consider an alternative if that alternative provides significant enhancements and/or is significantly cheaper. SBA will not consider a proposal that requires design and development of a VDR. SBA does not anticipate owning a system at the conclusion of the contract. SBA will, however, own all data housed in the virtual data room and the tracking system.

• SBA is seeking a Contractor that will be capable of performing a comprehensive analysis of the Microloan Program, including an evaluation of Intermediary performance, as well as an evaluation of SBA’s MPERS system and Microloan Program review procedures.

• SBA is seeking a Contractor that is familiar with SOP 52 00 “Microloan Program” as well as regulations specifically related to the Microloan Program set forth in 13 CFR §120.700 et seq.

The Contractor shall provide support consistent with these objectives.

ABBREVIATIONS AND DEFINITIONS

5.2.1 Annual Report: A report required within three months after the close of each fiscal year of all SBA Supervised Lenders which includes audited financial statements as well as any program-specific requirements (13 CFR §120.464 and the Community Advantage Participant Guide).

5.2.2 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.

5.2.3 Certification of Capital Compliance: A report required within 45 days following the end of each calendar quarter which presents a calculation of capital and certification of compliance with minimum capital requirements (13 CFR §120.462)

5.2.4 Community Advantage: An SBA pilot loan program which addresses the credit, management, and technical assistance needs of small businesses in underserved markets. CA is designed to provide mission-oriented lenders, primarily nonprofit financial intermediaries, access to 7(a) loan guaranties for loans of $250,000 or less.

5.2.5 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.

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

5.2.7 Day: Calendar day unless otherwise stated.

5.2.8 Delegated Authority Lender: An SBA Lender that is authorized to make credit determinations without prior review by SBA. All such determinations must comply with SBA requirements and are subject to subsequent review by SBA.

5.2.9 Deliverable Date: If a deliverable date falls on a weekend or federally recognized holiday, the due date shall be the next business day. Unless otherwise specified SBA will review all deliverables and provide comments generally within 30 days after receipt of either a draft or a final deliverable.

5.2.10 Findings: Significant issues identified during examinations or reviews (e.g. including but not limited to violations of SBA Loan Program Requirements and SBA Supervised Lender specific requirements). Findings must be specific and supported by documentation.

5.2.11 Industry Accounting Designation: The designation can be found at American Institute of Certified Public Accountants.

5.2.12 Intermediary: an entity participating in the Microloan Program that makes and services Microloans to eligible small businesses and that provides marketing, management, and technical assistance to its Micro-borrowers and potential Micro-borrowers.

5.2.13 Key Personnel: Personnel specifically considered to be essential to the work being performed under this contract are defined at Paragraph 11.

5.2.14 Lender Profile Assessment (LPA): An assessment that is compiled from internal SBA data sources and public federal regulatory information. Data is provided by SBA. A full list of data sources will be provided post award.

5.2.15 Loan Program Requirements: Requirements imposed upon Lenders by statute, SBA regulations, any agreement the Lender has executed with SBA, SBA SOPs, official SBA notices and forms applicable to the 7(a) loan program, and loan authorizations, as such requirements are issued and revised by SBA from time to time.

5.2.16 Microloan Program Electronic Reporting System (MPERS) – The web-enabled system through which Intermediaries submit data and information regarding Program lending and technical assistance/training activities.

5.2.17 PARRiS Risk Assessment Framework Components: Portfolio Performance, Asset Management, Regulatory Compliance, Risk Management and Special Items. The PARRiS Risk Assessment Framework applies to any and all SBA 7(a) lenders.

a) Portfolio Performance: The “P” in the PARRiS Risk Assessment Framework involves, but is not be limited to, a review of lenders’ SBA loan portfolio performance statistics (12 month and 5 year default rates and other performance measurements), as well as review of cash flow impact to SBA (cumulative net cash flow yield), and the lender’s SBA balance sheet.

b) Asset Management: The “A” in the PARRiS Risk Assessment Framework involves, but is not limited to, an assessment of each lender’s ability to manage SBA loans through origination, underwriting, servicing, and resolution stages of the lending lifecycle. Specifically, to measure a lender’s performance in these processes, SBA may review indicators related to: (a) high risk originations; (b) stressed loans; (c) early problem loans; (d) early defaults; (e) loans in liquidation and active purchases. SBA may also review loan files and all policies and procedures related to SBA lending to ensure the lender is adhering to SBA’s and its own asset management requirements and prudent lending standards. This component includes assessing Asset Quality of SBA Supervised Lenders under 13 CFR §120.1050(b).

c) Regulatory Compliance: The “R” in the PARRiS Risk Assessment Framework involves, but is not be limited to, a review of each lender’s compliance with SBA Loan Program requirements. For example, SBA will review compliance with loan eligibility; timely and accurate submission of all 1502 reports; submission of recovery, on-going, and upfront guaranty payments; oversight fees submission; and compliance with corrective actions required. This component includes assessing compliance with SBA Loan Program Requirements by SBA Supervised Lenders under 13 CFR §120.1050(b).

d) Risk Management: The “Ri” in the PARRiS Risk Assessment Framework involves but is not limited to, determining the adequacy of risk management systems. SBA may also review the lender’s SBA Lender Risk Rating(s), as well as SBPS score(s). It may also include information on the State Regulator, if applicable. SBA may also review each lender’s corporate governance structure, SBA operating plan, quality control processes (including fraud deterrence and detection practices), risk classification system, and internal oversight strategy over the SBA loan portfolio.

e) Special Items: The “S” in the PARRiS Risk Assessment Framework involves, but is not be limited to, a review of risk areas that do not fall into any of the above categories, but may pose risk to SBA, such as lenders’ use of loan agents and lender service providers, secondary market sales activity, franchise lending, fraud, waste, and abuse issues, and acquisitions of SBA portfolios.

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

5.2.19 Pre-Plan: A Microsoft Word document that documents the procedures to be performed to meet the examination and review objectives, and examination and review methodology. The objective of the pre-plan is to ensure that each party is well prepared for an efficient and productive examination and review.

5.2.20 Quality Assurance: A program for the systematic monitoring and evaluation of the various aspects of a project, service, or facility to ensure that standards of quality are being met.

5.2.21 Quality Control: Those actions taken by a Contractor to control the production and quality of deliverables to ensure that they conform to the contract.

5.2.22 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.

5.2.23 Quarterly Condition Report: A report required within 45 days following the end of each calendar quarter, which includes quarterly financial statements and any other program-specific requirements (13 CFR §120.464 and the Community Advantage Participant Guide).

5.2.24 Regulated Institution: an institution that is regulated by a Federal Financial Institution Regulator.

5.2.25 Risk Assessment Memorandum: Integral to Contractor's planning stage for any specific Lender review (regardless of whether the review is an S&S Examination, PFR or a PTR). This document serves as the work order on what is to be done and is specific to each SBA Supervised Lender to be reviewed. It establishes specific objectives for the review.

5.2.26 Risk Based Reviews: An in-depth analytical assessment of a financial institution’s administration of the SBA 7(a) loan program.

5.2.27 Risk Data Warehouse - The risk data warehouse is already established. Data mining is facilitated by use of SAS programming and report writing. SBA also refers to our BI Tool in the delegated authority work flow. The BI Tool is programmed in SAS and is a capability that the offeror will use to access SBA’s Risk Data Warehouse

5.2.28 Safety & Soundness examination: An on-site examination of a lender’s management, financial condition, and compliance with regulations, in order to assess the overall health of the lender and the ability of the lender to manage risk. This type of examination is typically conducted by primary regulators of financial institutions.

5.2.29 SAS (Statistical Analysis System), is a software suite developed by the SAS institute for advanced analytics, business intelligence data management and predictive analytics.

5.2.30 SBA: The U.S. Small Business Administration. The terms “Small Business Administration,” “SBA” and the “Government” shall be synonymous and may be used interchangeably in this contract.

5.2.31 SBA SharePoint Site: A website maintained by SBA, using Microsoft’s SharePoint technology, which is used as a secure place to store, organize, share and access information.

5.2.32 SBA Supervised Lender Specific Components: Financial Condition, Management, SBA Supervised Lender-Specific Regulatory Compliance, and SBA Financing Requirement Compliance. The SBA Supervised Lender components apply only to 7(a) lenders that are SBA Supervised Lenders.

a) The Financial Condition component involves, but is not limited to, assessment of Capital, Earnings, Liquidity, and sensitivity to changes in interest rates and other market conditions in accordance with 13 CFR §120.1050(b).

b) The Management component involves, but is not be limited to, the assessment of SBA Supervised Lender-specific management examination procedures, as detailed in SBA SOP 51 00, Chapter 4, Section 6 that are not covered under the PARRiS Risk Management component.

c) The SBA Supervised Lender-Specific Regulatory Compliance component involves, but may not be limited to, assessing compliance with regulations which apply only to SBLCs, NFRLs and CA Lenders, such as specific minimum capital requirements for SBLCs as set out in 13 CFR §120.471, required type and amount of fidelity insurance, required annual and quarterly reports, as well as any other program-specific requirements, such as Community Advantage lender’s number of loans in underserved markets.

d) The SBA Financing Requirement Compliance component involves but is not be limited to assessing compliance with any specific requirements related to warehouse lines, securitizations and participations.

5.2.33 Sensitivity Analysis: A financial modeling technique used to determine how different values of an independent variable will impact a dependent variable under a given set of assumptions.

5.2.34 Stress Test: An analysis of a lender conducted to test the impact of unfavorable economic scenarios which is designed to determine whether a lender has enough capital to withstand the impact of adverse developments. The tests are meant to detect weak spots at an early stage, so preventative action can be taken.

5.2.35 Technical Security Plan: A formal plan that identifies the plan of action to implement and secure the various systems outlined in the Performance Work Statement.

5.2.36 Virtual Data Room: An online repository of information, created by or provided by the Contractor that is used for receipt, storing and distribution of documents.

CONTRACTOR FURNISHED ITEMS

The Contractor shall furnish the necessary personnel, materials, travel, facilities that have fully functional offices and meeting space, teleconference capacities, share space abilities to allow interface between contractor key personnel and SBA staff, 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 Project Manager and an Alternate Project Manager. 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 Project Manager and the Alternate Project Manager of Contact SHALL be employees of the Contractor and cannot be employees of a subcontractor or consultant. The Project Manager and an Alternate Project Manager are considered part of the KEY PERSONNEL and shall have the same qualifications as listed in paragraph 11.

GOVERNMENT FURNISHED PROPERTY AND SERVICES

SBA will provide the Contractor with seating for three individuals in 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 a Contractor employee who has completed all security clearance requirements and has been cleared through SBA OIG and who works at SBA facilities will have access to SBA systems. The Contractor shall be required to attend a post-award conference either in person or via teleconference. The Contracting Officer or designee will notify the Contractor of the date and time of the conference, typically 10 days after award.

PERFORMANCE WORK STATEMENT

The Contractor will assist SBA in providing risk oversight services, which will include conducting on-site Safety & Soundness Examinations in accordance with 13 CFR §120.1050(b), as well as other PARRiS and specialty reviews. The on-site examination and on-site review components are discussed in SOP 51 00, however, SBA expects that from time to time the procedures may be enhanced, and the components may be expanded and organized in a different format.

The Contractor will provide access to a Management Workflow or Tracking System and a commercial off-the-shelf Virtual Data Room, maintain a Management Workflow and Tracking System and Virtual Data Room, and provide technical assistance in accordance with the general scope outlined herein. The Contractor will be required to provide SBA with a detailed description of its proposed methodology for examination, review, coordination, tracking, and follow-up and its plan for implementing its methodology for all tasks identified. The Contractor is expected to work collaboratively with SBA employees, including OCRM and the Office of Capital Access (“OCA”)

Below in sections 8.1, 8.2 and 8.3, are general descriptions of the major services associated with this contract. Section 8.4 describes the requirements for treatment of confidential information, and a requirement that all Contractor and Subcontractor employees performing work under this award sign a conflict of interest statement and confidentiality agreement with SBA prior to the beginning performance. Section 9 contains a more detailed description of all tasks and deliverables associated with the contract.

SBA Supervised Lender Safety & Soundness Examinations, PARRiS and Specialty Reviews

• The Contractor will assist SBA in conducting on-site Safety & Soundness Examinations PARRiS, specialty and other reviews for SBA Supervised Lenders, other lender oversight activities and other assignments. The lender’s practices will be compared to the SBA Supervised Lender’s own policies and procedures, SBA Loan Program Requirements, as well as accepted industry practices. Examinations and Reviews will include the extraction and analysis of data from various SBA data warehouses and lender files, reviews of loan files, reviews of operations, and site visits when required and/or when appropriate. Access to SBA’s data warehouses will be provided post award.

• For each examination or review, the Contractor shall prepare a Report of Examination or Review Report in formats specified by SBA. The Reports of Examination will address each PARRiS risk assessment area (Portfolio Performance, Asset Management, Regulatory Compliance, Risk Management and Special Items), as well as each SBA Supervised Lender-specific risk assessment area (Financial Condition, Management, SBA Supervised Lender-Specific Regulatory Requirements, and SBA Financing Requirements). (See ATTACHMENT 4: Exhibits.)

• The Contractor’s reports for all Safety & Soundness Examinations, PARRiS or other reviews will outline any weaknesses or deficiencies identified, and include findings, conclusions, corrective actions required, and recommendations, if applicable, in accordance with 13 CFR §120.1055(a). The report shall discuss the methodology used for determining the Contractor’s findings. The Contractor shall also produce and prepare other ancillary reports as requested by SBA.

• Safety & Soundness Examinations, PARRiS or other reviews, and other lender oversight activities may be conducted either on-site at lender offices, or through electronic means at other locations, including the SBA office at Washington, DC. The choice of location shall be determined solely by SBA.

1.2 Management Workflow and Tracking System and Virtual Data Room

• The Contractor will be responsible for providing access to a Management Workflow and Tracking System and web-based Virtual Data Room, to be used to support the coordination of lender monitoring, as well as the examination, review, and corrective action process. The Management Workflow and Tracking System and Virtual Data Room will incorporate all information obtained through the performance of contract-related functions, and will include, at a minimum, lender (client) contact information, a record of communications with the lender client, Quarterly Condition and Annual Reports submitted by lenders as well as the Contractor’s analysis of these reports, and a tracking system for the examination and review process and corrective action follow-up.

• The Contractor will be responsible for ensuring that the Management Workflow and Tracking System and Virtual Data Room are internet accessible. The Contractor must demonstrate through the Contractor’s Technical Security Plan its adherence to SBA’s security requirements.

• The Contractor will be responsible for ensuring the Virtual Data Room is accessible to SBA employees, its authorized representatives, and to individual lenders within their respective storage locations. It must provide for upload of information by all users, and accessibility on-line, as well as allowance for viewing and download permissions and other possible communications as defined in the Security Section of this document. SBA owns the data that will be entered into the Virtual Data Room and the Management Workflow and Tracking System, and expects delivery of that data as detailed below in the deliverables chart and in a format that is compatible with SBA IT systems (see Task 13 for more details on this format). In the event that the contract is terminated for convenience or default, the Contractor shall be responsible for providing all of the data in the Virtual Data Room and Management Workflow and Tracking Systems in a compatible electronic format within 24 hours of the CO’s request for such data.

• The Contractor will also be required to provide and maintain the Virtual Data Room and Management Workflow and Tracking System that are accessible to all SBA users (15 individuals) simultaneously 24 hours a day, 7 days a week, 365 days a year, through a secure Internet website. The Virtual Data Room will be used to file and catalogue data, images, and information developed.

• The Contractor shall implement a work paper retention client management service organized in a format approved by SBA.

• The Contractor shall ensure that SBA has access for up to 15 users for the Management Workflow and Tracking System and Virtual Data Room.

1.3 Quality Control Plan / Quality Assurance Plan (QCP/QAP)

• The contractor shall develop, implement, and execute a detailed QCP/QAP that prescribes a set of processes and practices that will ensure that the Contractor is conducting all activities in an agreed upon manner and in accordance with all task orders and SBA directives, and ensure that all Contractor deliverables are of a quality that is acceptable to the government. The QCP/QAP is considered a “living document” and as such, shall be revised by the contractor in consultation with SBA as conditions change and performance issues are identified. The QCP/QAP shall include a provision for regularly scheduled consultations with the COR, and a commitment to respond to technical direction from the COR in a specified manner and time frame.

8.4 Confidentiality Requirements and Conflict of Interest Agreement

· All data provided by SBA or any party other than the Contractor, and all data, documents and reports developed in the performance of the contract (together “Confidential Information”), are privileged and confidential and considered “Confidential Information.” Any of this information that is shared with the SBA Lender, Intermediary, or NTAP is for its confidential use only. All information and data provided to the Contractor (or any of its employees or subcontractors) by any individual, entity, or agency, under this contract is presumed Confidential Information unless notated as public in writing by SBA. The Confidential Information may also include some information which is proprietary to other contractors and for which SBA may have limited rights.

· The Contractor shall not take the following actions without the prior written approval of SBA: (i) disclose the Confidential Information in full or in part in any manner outside of Government employees assigned to the project and Contractor employees or subcontractors, that have a legitimate need to know the information to perform under the contract, as determined by SBA; (ii) make any representation regarding the Confidential Information; and (iii) use the Confidential Information for any purpose other than in connection with its engagement with the SBA during contract performance.

· The Contractor shall safeguard the Confidential Information as set forth in this Agreement and shall return, or certify to the SBA the destruction of, all copies of the Confidential Information at the conclusion of its engagement with the SBA. Additionally, any information contained in the solicitation or provided to the Contractor by any individual, entity, or agency, in the performance of this contract that is related to examination of conditions, reports prepared by or on behalf of, or for the use of the contractor shall be treated as confidential and shall not be released or disclosed outside of SBA.

· The Contractor is responsible for ensuring that all its employees and all of its subcontractors’ employees working under this contract, with access to Confidential Information, execute all Certifications and agreements required by the SBA under this contract and abide by them and the confidential provisions in this contract. The SBA, as it deems appropriate, may require that additional certifications or agreements be completed by the contractor or its subcontractors at any time during contract or task order performance. Unauthorized disclosure of Confidential Information is a basis for contractor and/or contractor employee termination of participation under this contract. The Contractor shall indemnify and hold harmless SBA from and against any and all claims, demands, suits, actions, and liabilities to any degree based upon or resulting from any unauthorized use or disclosure of the Confidential Information.

· Before engaging in any tasks under this contract, a Contractor employee or subcontractor shall be required to sign a conflict of interest agreement with SBA that complies with all conflict of interest provisions contained in this SOW including those found in Part IV, paragraph 55 and in Part VI – Certifications and Representations below.

PERFORMANCE WORK STATEMENT TASKS

Task 1: Technical Assistance and Oversight Activity CLINS 0001, 1001, 2001, 3001 and 4001

The Contractor will be required to provide SBA with technical assistance in the assessment of SBA Supervised Lenders’ overall financial condition as well as 7(a) loan program performance and compliance, using information submitted by lenders, and other data provided and maintained by SBA in the data room warehouse. SBA anticipates that this technical assistance shall be provided either on-site at SBA’s Washington DC Office or at the Contractor’s office located in the DC Metro Area (as defined), in coordination with SBA Staff. Technical assistance will be needed for three primary types of activities:

• Technical assistance in the review and assessment needed for the award of Delegated Authority, the authority given to SBA lenders which allows them to make final credit decisions. All final decisions regarding the award of Delegated Authority are to be made by SBA personnel.

• Technical assistance in the review and assessment of Quarterly, Annual and other Reports submitted by SBA Supervised Lenders, including maintaining administrative records of documents received and reviewed, as well as a warehouse of lender submissions and review documents.

• Technical assistance in analytical and administrative work needed in…