DRAFT_SOW_Sources_Sought_Notice__SOL-OAA-14-00016.pdf

SECTION C – DESCRIPTION/SPECIFICATIONS/STATEMENT OF WORK

I. Introduction

The United States Agency for International Development (USAID) currently administers a large portfolio of loans and loan guarantees extended to foreign governments and foreign nongovernmental entities. USAID requires the contractor to have extensive experience in the administration of loans and foreign currency transactions to perform a number of services related to the portfolio. The contract services shall include receipt and disbursement of funds, loan accounting, collections, maintenance of documents, and financial reporting, among others. The characteristics of the loans and loan guarantees, activities to be performed by the contractor, and contractor requirements are summarized below. Under Section II- B.8, the paying and transfer agent (PTA) requirements are distinguished between guarantees where the contractor is the PTA from those where it is not.

Portfolio Characteristics

The portfolio administered by USAID consists of direct loans, loans fully guaranteed by USAID, and portfolios of loans having a partial guarantee.

1. Direct Loans: USAID manages a portfolio of approximately 330 loans with outstanding balances around $15.5 billion, which were made by the agency to borrowers in approximately 30 countries under various foreign assistance programs dating back to the 1960's. With a few exceptions, no direct loans have been made by the agency since the mid-1980's.

The typical direct loan has a final maturity of 40 years, with a 30-year amortization period beginning after 10 years, and semi-annual interest payments.

Some loans are denominated in US dollars others in local currency. Local currency loans may or may not provide for payments to be adjusted to reflect changes in the exchange rate between the local currency and US dollars. Interest rates are usually fixed for the life of the loan.

In many cases, the original loans have been restructured or rescheduled because of the inability of borrowers to meet debt service requirements. Typically, in such cases, a series of defaulted payments is rescheduled to reflect a later maturity date than the original loan. In addition, certain countries have had their loan balances reduced between 50% and 100% and any remaining balances restructured.

At present all loan servicing functions for direct loans are performed under contract with a commercial bank in Washington, D.C.

2. Program Loan Guarantees - Urban and Environmental –Housing Guarantee (HG) Credit Program:

USAID has had about 190 loan guarantees on HG loans, of which approximately 65 have been repaid, and some written off. Of the remaining, 95 current outstanding balances are around $ 750 million. These HG loans were made by U.S.

lenders to foreign governments and non-governmental entities in approximately 22 countries. These loan guarantees, covering 100% of principal and interest, were provided under programs designed to finance housing and urban infrastructure improvements. The guaranteed loans have a variety of final maturities, ranging from 10 to 30 years, often with grace periods before amortization begins. Semi-annual interest payments are either fixed for the life of the loan or indexed to a market rate, such as one-year Treasury yields or LIBOR. Guaranteed loans are, with few exceptions, denominated and repayable in U.S. dollars. Appropriations for the UE (HG) Program were discontinued after FY 2000. The last HG loan under the Program was disbursed in 2002.

As with the direct loan portfolio, a significant number of guaranteed HG loans have been rescheduled under Paris Club terms, with total rescheduled loans balances currently outstanding of around $201.5million as of March 31, 2014.

There are currently several large rescheduling pending. When a guaranteed loan is rescheduled, USAID continues to pay the lender according to the original schedule of interest and principal payments and collects from the borrower according to the new schedule. The rescheduled loan, therefore, is administered as if it were a direct loan. In addition, certain countries have had their loan balances reduced between 50% and 100% and any remaining balances restructured.

At present all loan servicing functions for direct loans and rescheduled loans are performed under contract with a commercial bank subsidiary in Washington, D.C.

3. Sovereign Loan Guarantees – Sovereign guarantees are specifically authorized by

Congress and administered by USAID. Once Congress has authorized the use of a sovereign guarantee, an interagency committee has met to structure the guarantee and agree on terms and conditions. That group has been coordinated by the State Department with active participation of USAID, Treasury, and OMB. These loans are serviced by various financial institutions acting as the Fiscal Agent under separate agreements. The current Sovereign Loan Guarantee portfolio includes:

• Israel: $10 billion (271-AG-001) Program (1992) - The U. S Government arranged a special loan guarantee program with Government of Israel (GOI) which is managed by Department of State, but administered by USAID.

There were eleven (11) borrowings on the books totaling $9.2 billion under the 1992 Program. Currently $5.4 billion is outstanding as of March 31, 2014. The Fiscal Agent (FA) for loans under this Program is The Bank of New York Mellon, New York (as successor to the original FA, U.S. Trust Company).

• Israel: $9.0 billion (271-BG-001) Program (2003) - In 2003, pursuant to the

Emergency Supplemental Appropriations Act of 2003, the U.S. Government arranged another special loan guarantee program (to be disbursed over 3 years) with GOI, managed by State and administered by USAID. There have been 5 loan disbursements under this Program, totaling $4.1 billion, currently outstanding as of March 31, 2014. The Fiscal Agent (FA) for loans under this Program is Midland Loan Services (subsidiary of PNC Bank, Pittsburgh), as successor to Riggs Bank NA.

• Egypt: $1.25 billion (263-EG-001) Program (2003) – In 2003, under the same legislation covering the 2003 Israel (271-BG-001) Program, the U.S Government arranged a special $2.0 billion loan guarantee program for Egypt...

One 10-year loan of $1.25 billion was disbursed in 2005. ($1.25 billion outstanding) as of March 31, 2014. The Fiscal Agent for this loan is Midland Loan Services.

• Jordan: $1.25 billion (278-JG-001-A01) program (2012) - In 2012, under the legislation stated below, the U.S. Government arranged another special loan guarantee program with Government of Jordan (GOJ), managed by State and administered by USAID. Funds were fully disbursed. USAID is authorized, pursuant to Title III of the Department of State, Foreign Operations, and Related Programs Appropriations Act, 2012 (Div. I, Pub. L. 112-74), as applied to fiscal year 2013 funding by Section 1706(j) of the Further Continuing Appropriations Act, 2013. The Fiscal Agent for this loan is Midland Loan Services.

• Tunisia: $485 million (664-TG-001-A01) Bond guarantee program (2012) – In

December 2011, the U.S. Congress authorized the Tunisia loan guarantee program in the Fiscal Year 2012 Consolidated Appropriations Act, managed by State and administered by USAID. Title III of the Department of State, Foreign Operations, and Related Programs, Appropriations Act 2012, Division I of Public Law 112-74. USAID disbursed $30 million in subsidy cost was authorized by congress to cover the face value of the bond guarantee. The Fiscal Agent for this loan is Citibank London.

• Ukraine: $1 Billion (121-UG-001 AO1) 5-year bond guarantee program (2014) authorized by the Congress in the Support for the Sovereignty, Integrity, Democracy, and Economic Stability of Ukraine Act of 2014 (P.L. 113-95); full amount of guarantees was obligated in May 2014 to include $193,800 in subsidy cost. The fiscal agent for this guarantee is Citibank, NA (London).

Additional Sovereign Loan Guarantees may be authorized during the contract’s period of performance

4. Development Credit Authority (DCA) In FY 1999, USAID began to implement the new Development Credit Authority authorized by Congress in FY 1998. This Program provides annual transfer authority allowing USAID Missions to convert portions of their development funds to DCA funds to support DCA credit activities in their countries/areas. DCA helps to mobilize local private sector funds for financing activities related to Missions' strategic objectives. DCA provides partial guarantees (usually 50%) in the form of loan portfolio guarantees (LPG's), loan guarantees (LG's), portable guarantees (PG's) and bond guarantees (BG's). The DCA portfolio has been growing rapidly. There are currently 268 active DCA facilities obligated, totaling a maximum available amount of local lending of $2.5 billion The DCA portfolio can be expected to add approximately 30-40 new guarantee portfolios in each fiscal year with 200 new project deals during the life of the contract.

II. Contractor Requirements

The activities to be performed for USAID by the contractor under the scope of work are widely varied and the degree of expertise needed is very high. This is necessary to insure that the agency's credit programs are effectively administered and that financial reporting on the activities involved meets the high standards required for audited financial statements. This section includes both overall requirements and specific loan-type requirements.

A. General Requirements: The task and deliverables below are required for all loan and loan guarantee types.

1. Fund Transfer Requirements:

2. The contractor must possess the capability to process large foreign and domestic money transfers via SWIFT and the Federal Reserve, and perform receiving and disbursing activities related to its loan, loan guarantee and portfolio guarantee programs, including the maintenance of appropriate deposit and escrow accounts, the provision of required collateral, the investing of collected balances, and the maintenance of financial records related to these activities.

There are two methods of sending electronic funds – Fedwire and SWIFT (Society for Worldwide Interbank Financial Telecommunication). Contractor must confirm which method will be used in order to give the borrower the proper instructions. There are two methods of sending electronic funds before sending funds electronically to USAID using either of the methods, please send an email to the Lead Analyst in M/CFO/CAR/Credit Program that tells us:

a. Amount

b. Approximate date that you will send funds to USAID

3. Loan Accounting and Collections: The contractor must manage a large portfolio of loans, and loan guarantees, involving a large number of foreign borrowers and guaranteed parties in developing countries. With respect to loans, the organization's loan administration resources must include the capacity to service approximately 821 loans, to establish and maintain computerized transactional-based accounting records for each loan on a current basis and related loan histories, and to issue accurate and timely notices of payment due to each borrower.

4. Registration and Transfer of Securities: The contractor must act as registrar, paying and transfer agent, and/or fiscal agent for issuers of securities. The contractor shall perform these services under contract to guaranteed loan borrowers. The services include providing potential purchasers of notes evidencing interests in the loans with copies of documents, canceling old notes of sellers, issuing new notes to buyers, and maintaining related records of ownership. It is the intent of USAID that the contractor shall also perform these functions for some loan guarantees through the Deposit Trust Corporation, and for any new issues, when possible.

5. Maintenance of Documents: The contractor shall handle the filing, storage, retrieval and protection of original documents and other records relating to its credit programs.

In connection with its loan and guarantee programs, USAID generates and receives a variety of documents and records necessary for the continuing management of the programs. These include but are not limited to loan agreements, rescheduling agreements, note holder lists, borrower lists, loan histories, and accounting records.

The records shall be maintained as electronic documents to the greatest extent possible.

The contractor must maintain these records be filed so that they can be easily accessed when necessary and stored to include record imaging so as to be protected from damage or destruction. The quality of service required is equivalent to that required by regulated lending institutions with large commercial loan portfolios. The contractor must maintain loan servicing records in accordance with USAID established policies. Specific documentation retention requirements for each portfolio type are listed in Section B.

6. Financial Reporting: The contractor shall establish and maintain a computerized, loan-related and transactional-based accounting system to provide input from this data base to the agency's automated accounting system and to prepare timely and accurate reports(in excel file format or other agreed-to format) required by the agency from information derived from the data base. The Contractor shall also derive DCA, portfolio data, as appropriate, from the Agency's Credit Management System (CMS).

Contractor will be provided "read only" access to CMS for this purpose.

As a government agency, USAID is required to provide various interested parties, including the Department of the Treasury, Office of Management and Budget and the Congress, with reports on the status and performance of its loan and guarantee programs which shall be provided by the contractor. Also, in compliance with the Government Management and Reform Act of 1994, the agency is required to publish audited financial statements on all of its activities. Loan and guarantee programs constitute a major part of the agency's financial activities.

7. Treasury Report on Receivables (TROR): The U.S. Treasury requires all federal agencies to make a report on receivables due from the public (TROR) on a quarterly basis, which is defined as outstanding debt excluding contingent liabilities. The contractor shall perform the following:

• Prepare the report in accordance to current standards issued by the Department of Treasury.

• Perform quality control reviews to ensure report balances reconcile to contractor-submitted general ledger and trial balances prior to submission.

• Prepare and submit lead sheets and analysis to adequately support report balances.

• Provide TROR reports to USAID at least two weeks prior to quarterly and year-end deadlines established by Treasury’s Financial Management Service

(FMS).

• Assist as needed USAID staff in researching and resolving any discrepancies between the contractor-submitted TROR and other external reports.

8. U.S. Treasury Foreign Credit Reporting System (FCRS): The U.S. Treasury has developed its Foreign Credit Reporting System (FCRS) to facilitate automated reporting by federal agencies of their foreign debt obligations. Treasury requires agencies to submit their data electronically. The contractor shall provide Loan Management with the required files for their review and submission, and shall provide support and analysis to Loan Management and Treasury as required.

9. Annual Confirmation: To ensure the integrity of the financial procedure utilized by the contractor to supply services to USAID and to validate the accuracy of data and reports provided, the contractor shall be required to perform an annual internal audit of the contract activities conducted by a suitably qualified staff experienced in conducting financial audits. The staff must be organizationally independent from the persons responsible for providing other services under the contract.

The loan balance verification process shall begin in April of each year, using the loan balances as of March 31. Loan balances are not provided in the verification process, but rather the Agency debtors are given an inventory of their loans. The country representative, usually the Minister of Finance, is asked to provide USAID with loan balances per the country’s accounting records. The verification letters are prepared by the contractor and CFO staff, a sent to the debtor by the Agency OIG. When responses are received with differences indicated, or no responses are received, the contractor shall work with Agency staff, both CFO and mission FM, to reconcile the differences.

10. Paris Club: The State Department is responsible for negotiation debt relief through its representative in Paris. Each federal agency is required to report arrears, balances, and other relevant data to State in a format specified by Paris Club. The contractor shall be required to furnish Loan Management with periodic reports and data in the specified format for their review and submission to the State Department in response to arrears, balances and cash flow data.

11. Rescheduling: An individual loan subject to Paris Club negotiations typically has portions of its arrears rescheduled into a new loan or loans according to the agreed terms. The terms are expressed in multi-lateral, bi-lateral or implementing agreements.

Loan Management is responsible for making all adjustments in the outstanding and new loans as result of the rescheduling.

The contractor shall perform all the calculations associated with rescheduling activities, and cooperate with Loan Management in reporting to the State Department by providing the required reports. The contractor shall provide Loan Management with an analysis of rescheduled loans based on the Paris Club minutes and recommendations for adjustments to the loan system. Loan Management shall review, and after making any required changes, the contractor shall post the loan system.

12. Subsidy Reestimates: The contractor shall assist the agency in the development and preparation of the annual subsidy reestimates for both Direct Loans and Loan Guarantees. The subsidy reestimates process is an annual comparison of prior subsidy estimates for each previously disbursed loan/guarantee cohort; and actual loan/guarantee cash flows and updated assumptions about expected performance of the cohort. Cohorts are grouped by the fiscal year in which the subsidy funds were obligated.

The contractor shall assist in the following calculations (in excel file format):

a) Update for change in interest/discount rate between time of loan obligation

(guarantee commitment) and disbursement (“interest rate reestimate”);

b) Update for changes in technical/default assumptions (e.g., forecast technical assumptions) (“technical reestimate”).

Delinquency and Past Due Amounts: The contractor shall not be required to undertake collection activities directly with borrowers except for notification of payments due, payments past due and methods of calculation of amounts due and past due. The contractor shall maintain a complete history of delinquency and default on each loan and efforts made to collect past due amounts. The contractor shall, with the assistance of USAID designated representatives, develop a system for notifying field personnel of past due amounts and receiving notification of collection efforts undertaken by USAID.

USAID will provide the contractor with a monthly report of all collection activities undertaken by the regional controllers and USAID Washington DC, so that a complete record of collection activities can be maintained. The monthly report should include at a minimum, region, accounting station, USAID loan number, USAID collector name, name of person contacted, when, and a condensed version of the conversation.

The contractor shall not be responsible for contacting borrowers directly, except for the routine notification described above and will not be held accountable for the success of collection efforts.

The contractor shall be responsible for the accurate and timely production of notices of amounts due and past due and reports necessary for effective collection efforts.

The contractor shall be responsible for the Housing Guarantee payments due to the lender by the borrower if the loan repayment is delinquent by requesting an advance of funds from USAID to cover the delinquent amount due to the lender by the borrower.

See section B.4. for details.

The contractor shall be responsible for Housing Guarantee payments due to the lender by the borrower if the loan repayment is delinquent by requesting an advance of funds from USAID to cover the amount due to the lender from the borrower.

13. Financial Data: The contractor shall provide USAID all financial information from records maintained by the contractor necessary to prepare financial statements and other reports on the status of the loans. The data shall be furnished to the agency on an agreed upon schedule and using an electronic format that allows the agency to maintain related general ledger accounts and subsidiary accounts on a current basis. Specifically, the contractor shall provide the financial data that is:

a. Maintained in accordance with current Federal Credit accounting statues, standards, regulations;

b. Detailed transactional based and identifiable to specific loans;

c. In a format to allow interfacing into the agency’s financial management system (Momentum Financials).

14. Reports: The contractor shall prepare the reports included in the attached Reports Listing relating to USAID loan portfolio using data from records maintained by the contractor or supplied by USAID. In addition, the contractor shall provide ad hoc reports to USAID from the data maintained in its records upon request (in excel file format). It is expected that most of the routine exchange of data between the contractor and the agency will take place electronically, through either direct system link or website.

15. Website: The contractor shall be required to provide account information to USAID Washington Office, USAID regional controllers and borrowers through an interactive modular drop down menu on-line web based system allowing the user to select the parameters. The Contractor shall provide web based reporting that allows access to deliverables required of the contractor by the USAID Washington Office and USAID regional controllers and provide a report database that allows access to deliverables required of the contractor by the USAID Washington Office and USAID regional controllers. The contractor shall provide adequate security to deny unauthorized users access to the database.

B. Portfolio-specific Requirements. Direct Loans, loan guarantees and loan portfolio guarantees, each have somewhat different requirements that the contractor shall meet while certain requirements are common to all programs.

Task Direct Loans

Loan Guarantee Programs

Sovereign Loans

Guarantees

DCA

Payment Due Notification to Borrowers

X X

Receipt of Loan Payments X Receipt of Fee Payments X Guarantee Claim Payments

X X X

Loan Accounting X X Fee Accounting X X Maintenance of Documents

X X X X

Paying and Transfer Agent

X

1 . Payment Due Notification to Borrowers: The Contractor shall notify borrowers and participating lenders of amounts due. The notice of payment due (NPD) shall be in English and shall include instructions for wire transfer of funds. The notices shall be sent directly to borrowers, participating lenders, or as instructed by USAID designated representative using either facsimile transmission, telex, or e-mail. Copies of NPDs shall be sent to USAID designated representatives. For each loan type:

a . Direct Loans: (NPD) shall list the portion of the payment which represents principal, interest, past due amounts, penalties and fees. The notices shall be sent at least 60 days prior to the due date of payments.

b . DCA Loan Guarantees: The contractor shall notify participating lenders of the amount of fees due to USAID at least 30 days prior to the date such fees are due. USAID will provide information to the contractor necessary to prepare NPD’s within 35 days of the due date of payments. The contractor will not be responsible for the accuracy or timeliness of the information provided to it by USAID for this purpose.

2. Receipt of Loan Repayments: Payments on the loans in the USAID direct loan portfolio are normally made by wire transfer to the U.S. Treasury accounts at the Federal Reserve Bank of New York. Occasionally, payment is made by other means.

The contractor shall daily determine the payments received by wire, using the Treasury’s Collections Information Repository (January 2013) replacing Cash Link II system (backup) as the primary supporting documentation_, and compare these with the amounts due. If the amount received by wire or otherwise, is different from that appearing in the NPD, the Contractor shall ascertain the reason for the difference, if possible, notify the borrower and designated Contracting Officer’s Representative (COR) of the difference within 5 days after receipt of payment, and request payment of any amounts still owed. If no payment is received by the due date, the Contractor shall notify the borrower and USAID designated representatives within 5 days of after the due date.

3. Receipt of fee payments: The contractor shall daily determine the fee payments received by wire from participating lenders, using the Cash Link System, and compare these with the amounts due. If no payment is received by the due date or the amount received is different from that appearing in the NPD, the contractor shall notify the participating lender and USAID designated representatives within five days and request payment of any amounts still owing.

4. Guarantee Claim Payments: When a Housing Guarantee guaranteed loan borrower fails to make a payment on time or a payment is less than the amount owed to noteholders, the contractor shall request funds from USAID sufficient to make the requested payments to noteholders and make the necessary accounting entries to record the amounts due USAID. The contractor is not responsible for providing funds for claim payments; the funds will be transferred by the USAID office of Financial Management from funds set aside to pay guarantee claims. Normally, there will be sufficient time between the due dates for receipt of payments to the noteholders for necessary funds to be obtained from USAID. In order to maintain the marketability of guaranteed loans, it is important that noteholders be paid on time and in full. Therefore, the contractor shall use its commercially reasonable efforts to obtain sufficient funds from USAID in time to make required payments of principal and interest to noteholders when due, including notifying USAID designated representatives loans collections data and Prompt Payment reconciliations updated to reflect recoveries from borrowers for amounts paid by USAID on behalf of Borrowers, and at least 30 days prior to the end of each fiscal year shall provide data on projected annual collections and estimated potential USAID payments for the following fiscal year.

Under DCA agreements the contractor shall not be responsible for claim payments in any regard. Claims will be submitted by USAID to the guaranteed party. The contractor plays no roll, claim payments for DCA will made by the USAID/CFO office directly to pay Under DCA the contractor shall not be responsible for claim payment in any regard. Claims will be submitted by USAID to guaranteed party. The contractor plays no roll in claim payments for DCA . The USAID/CFO office directly pays the guaranteed claims.

5. Loan Accounting: The contractor shall maintain a permanent subsidiary accounting ledger for each loan for the purpose of calculating the loan balance, amortization of principal and interest, penalties and fees owed and for recording the receipt of payments. Each loan ledger shall also provide for the calculation of accrued interest and interest and fees due, but unpaid. Accounting entries to subsidiary ledgers shall be made promptly so an accurate trial balance and summary statement of activity can be produced at least weekly. The accounts shall also provide for the production of statements of past due amounts and the aging thereof. Data from ledgers maintained by the contractor shall be furnished to USAID designated representatives on an agreed upon schedule and using and electronic format that allows the agency to maintain related general ledger and subsidiary accounts on a current basis.

6. Fee Accounting: The contractor shall maintain records, by participating lender, giving the date and amount of fees due and payments received and the amounts remaining unpaid. The contractor shall also maintain records by participating lender, of the date and amount of balances outstanding (utilization) of credit facilities, as reflected from QLS data derived from the Agency’s Credit Management System (CMS). The contractor shall provide USAID a monthly report of fee payment activity, by participating lender, including a listing of payments past due and the aging thereof. The contractor shall provide USAID all financial information from records maintained by the contractor necessary to prepare financial statements relating to loan portfolio guarantees. The data and reports shall be furnished USAID on an agreed upon schedule and using an electronic format that allows the agency to maintain related accounts on a current basis.

7 Maintenance of Documents: The contractor shall take custody of all documents which evidence loan agreements and rescheduling thereof, file these in a manner to make them readily identifiable, and available when needed. The contractor must receive, retain, file, and store accounting records necessary to substantiate accounting entries made to subsidiary loan ledgers and to produce reports(in excel file format) required under the contract. These documents shall be made available on request to persons designated by the COR for the purpose of auditing financial statements and other reports prepared by or for the agency.

In addition, for each loan type portfolio the following are required:

a. Direct Loans: The contractor shall retain copies of all documents for payments, collections, notices and other evidential matter to support transactions for loan activities.

b. Loan Guarantee Program and DCA: The contractor shall retain copies of all documents supplied to it by USAID, by participating lenders, and prepared by the contractor regarding notification of fees due and receipt and disbursements of funds in connection with loan portfolio guarantees. In addition, the contractor shall provide copies of loan documents to prospective buyers of notes upon request.

c. Sovereign Direct Loans: The Contractor shall coordinate with the Fiscal Agent for loan data and maintain loan files and record of amounts due, amounts collected, and provide monthly financial reports of the portfolio to USAID designated representatives.

8 Paying and Transfer Agent Responsibilities: Loan Guarantees – Urban and Environmental (HG) Program

a. There are two categories of fully-generated loans: about 188 loans that are covered by Paying and Transfer Agent (PTA) agreements, and other specific loans that are not subject to such agreements (separate fiscal agency agreements). The PTA agreements require substantial fees to be paid to the agent by the borrowers (i.e. paid by borrower to PTA), both at time of closing and annually thereafter. The existing PTA contracts will be transferred to the contractor at the beginning of the contract period. Also it is the intent of USAID that the contractor shall be the sole organization to perform paying and transfer agency duties for USAID and borrowers during the period of the contract, which would include any new loans closed. The PTA contracts currently generate around $200,000 per year in fees to the PTA.

Because of the fees paid by borrowers to the PTA, the contractor shall not require additional compensation on covered loans from USAID for the PTA duties and responsibilities. However, since the other specific loans do not have such contracts and fees attached, the contractor will otherwise not be compensated for the PTA services rendered on this loan.

b. Paying and Transfer Agent: The contractor shall perform the duties of Paying and Transfer Agent (PTA) for both the covered and non-covered guaranteed loans. These duties shall consist of:

1. maintaining a register of noteholders and issuing replacement notes,

2. calculating payments due and notifying borrowers of same including breakdown of principal, interest fees and late charges, if any,

3. receiving payment from borrowers and USAID

4. disbursing funds to noteholders,

5. notifying USAID of the failure of borrowers to make payments on loans when due, and,

6. providing specified reports to USAID.

c. Escrow Agent: The contractor shall perform the duties of Escrow Agent (EA) with respect to guaranteed loans in escrow at the beginning of the contract period of any HG loan refinanced requiring an escrow account made during period of the contract. These duties shall consist of:

1. opening an escrow account and receiving deposit of funds,

2. investing funds as directed in the escrow agreement, and

3. disbursing funds from escrow upon authorization.

For performing these duties, the contractor shall receive the following fees (paid by borrower to Escrow Agent):

a) upon the signing of each Escrow Agent Agreement and the opening of each escrow account, a setup fee of $1,000, and

b) a fee equal to 1.25% of all earnings on the investment of escrowed funds, to be collected at the end of each month for earnings received during the month.

If UE (HG) escrow arrangements are required, it is the intent of USAID to require that borrowers utilize the contractor as Escrow Agent during the period of the contract. Also, the existing escrow contract and balances shall be transferred to the contractor at the beginning of the contract period.

d. Loan Guarantee Accounting: In carrying out its role as Paying and Transfer

Agent, the contractor shall maintain and update sufficient accounting records on each UE (HG) loan to allow the calculation of payments due and past due. This data shall include loan balances, amortization schedules, methods of interest and fee calculation, principal, interest and fees payable, payments received and the like.

C. Other Requirements

1. Compliance with Federal Policies and Procedures: The contractor shall maintain all accounts, records, schedules, ledgers, reconciliations, and other information provided under the contract in accordance with written policies and procedures developed by the contractor and deemed by USAID to be consistent with good internal control principles and practices. In addition the accounts, records, et. al., shall be established and maintained in a form and detail that allows internal and external auditors to verify their accuracy using normal audit procedures. Also, all accounts and records must be maintained in compliance with the following accepted standards:

• Statements issued by the Federal Accounting Standards Advisory Board

• OMB Bulletin Number A-129;

• Relevant Department of Treasury, OMB and GAO standards, circulars and bulletins;

• USAID accounting policies, and

• FASB and GASB accounting principles.

2. Audit: To ensure the accuracy and integrity of the data and reports supplied by the contractor, the contractor shall designate an appropriately qualified staff of auditors, either regularly employed by the contractor or retained for this purpose, to prepare an annual audit plan of the activities performed under the contract, have it approved by the USAID Office of the Inspector General, perform the plan as approved, and present a report which details the results of the audit to the Contractor Officer Representative(COR) annually.

Any material deficiencies in internal controls or accounting procedures revealed by the audit shall be disclosed in the report, along with recommendations for correction. All audit work papers shall be made available to authorized agency personnel and persons designated by the COR to perform audits of the agency’s financial statements.

3. FMFIA Compliance: The contractor will comply with OMB Memoranda M-14-04;

Instructions for meeting the agency's Fiscal Year (FY) 2013 reporting requirements under the Federal Information Security Management Act of 2002 (FISMA) (Title III, Pub. L. No.

107-347) to include reporting instructions on the agency's privacy management program.

For all contracts, the following language from Division A, Section 101(h), Title VI, Section 622 of the Omnibus Appropriations and Authorization Act (P.L. 105-277), Part 39-Acquisition of Information Technology, Section 39. 101 Policy, should be included to encompass Federal Desktop Core Configurations (FDCC):"(d) In acquiring information technology, agencies shall include the appropriate information technology security policies and requirements, including use of common security configurations available from the National Institute of Standards and Technology's website at http://checklists.nist.gov”.

4. Maintenance of contractor books and records: The contractor shall maintain true and complete books of accounts and records with regard to its activities in performance of the contract in accordance with generally accepted accounting principles and sound business practices. The books of accounts and records shall be such as are sufficient to substantiate the contractor’s activities under the contract and shall be acceptable to USAID. Contractor shall submit the actual names, addresses of individual(s) that interact with the Housing guarantees, such as Borrower information and corresponding noteholder’s of approximately 140 loan guarantees to the COR. A schedule of the Notices of Payment (NPD) to be distributed for the current fiscal year and through the end of the contract Award period within each corresponding fiscal year. A copy of the entire loan accounting records and/or image to support the Continuity of Operation Programs (COOP) requirement for back up records within six (6) months of the Award period and its authorized representatives shall have the right to audit such contractor books and records at USAID’s request during the period of this contract.

5. Location: The contractor shall furnish all personnel, facilities and equipment necessary to perform its duties under the contract. The contractor may perform services under the contract in any location within the United States that allows for the timely and efficient performance of such services. Because many of the USAID personnel who will need to have contact with contractor personnel are located in Washington, D.C., the contractor shall be required to have an office within the Washington, D.C. Metropolitan area staffed by contractor employees with sufficient authority to respond promptly to agency requests, for example meetings to discuss loan performance and issues.

6. Periodic Activity Reports – Deliverables: The contractor shall provide to USAID timely and comprehensive reports on the contractor’s activities under the contract. These reports shall be provided monthly, unless otherwise indicated. The following activity reports are required:

• Receiving and Disbursing Activities

• Collection Activities

• Data Exchange

• Internal Audit Reports (Annual)

These activity reports shall note any unusual activity levels and any difficulties encountered under the contract, along with recommendations to improve performance.

Contractor shall also be prepared to provide on a reasonable basis ad hoc reports required by USAID to meet internal and external requirements for credit portfolio information.

7. Federal Charter: The contractor must be owned or controlled by a financial institution charted by the appropriate federal or state authority. The contractor must be covered by insurance of the Federal Deposit Insurance Corporation.

http://checklists.nist.gov/

8. Transition Requirement: Arrangements are made to allow for the seamless transition of information from the current contractor to the final selectee, if required, to include all electronic and hardcopy records (to include adequate and secure storage of existing government records).

III. Position Descriptions of Key Personnel

The contractor’s Program Manager under this contract shall be the primary point of contact for USAID and is designated Key Personnel in accordance with the provisions of this contract. Any changes to the Key Personnel require approval from the designated USAID representative. This person shall maintain an office within a close proximity to the Ronald Regan Building, 1300 Pennsylvania Ave., NW, Washington, DC in order to respond to impromptu emergency meetings between the COR and other USAID representatives.

A. Responsibilities: The roles and responsibilities for the Program Manager shall provide the duties specifically herein:

• Meet with COR and other Agency representatives regularly, at least once a month, to ensure contract compliance of all federal laws, statues, regulations, guidelines, polices, and procedures. The Program Manager shall also attend emergency impromptu meetings between the COR and other USAID personnel.

• Maintain all contractual issues and ensure that performance and output complies sustains audit.

• Manage staff tasks and personnel issues; assign and reassign tasks, evaluate workloads, evaluate staff performance and deliverables, ensure contractor performance and outputs sustain audits, oversight of all financial statements etc.

B. Qualifications: Key field personnel, both Program supervisor and technical. Incumbent degree qualifications (to include transcripts/license) must include the following:

• Certified Public Account with an undergraduate degree in computer science

OR

• Master’s of Computer Science with Master’s degree in accounting; both must include 5-years experience in international banking

OR

• 15-years experience in international banking to include expert knowledge of database manipulation and 4-year degree in computer science, with thorough knowledge of portfolio loan management, foreign currency banking transactions and foreign currency transfers.

A change in key personnel: A change in key personnel must be reported immediately to the Contracting Officer Representative who reports that information to the Contracting Officer for approval.

[END OF SECTION C]

[END OF SECTION C]