Statement of Work - UCC Continuations - 2AUG2024.pdf

Statement of Work for Filing COVID-19 EIDL Uniform Commercial Code (UCC)

Continuation Statements

Small Business Administration

Office of Financial Programs Operation (OFPO)

August 01, 2024

1. Background

The Small Business Administration (SBA) obtained a security agreement and filed a Uniform Commercial Code (UCC) financing statements on all personal property for all COVID-19 Economic Injury Disaster Loans (COVID EIDLs) that were made in loan amounts greater than $25,000. The UCC financing statement covers all tangible and intangible personal property, with certain exceptions including registered copyrights, certain non-inventory titled goods, and farm products.

The Uniform Commercial Code (as adopted by most states in some form) requires a "continuation statement" to be filed within 6 months before the 5-year anniversary of the original filing date. A continuation statement is an amendment of a financing statement which:

(A) identifies, by its file number, the initial financing statement to which it relates; and

(B) indicates that it is a continuation statement for, or that it is filed to continue the effectiveness of, the identified financing statement.

As of June 7, 2024, the COVID EIDL portfolio comprises 2.12 million active loans, not charged off or paid in full, in the following categories:

Loan Size Collateral Count (as of June 7, 2024)

≤$25,000 None 766,524 >$25,000 - ≤$200,000 Security agreement on personal property and UCC financing statements 1,161,909

>$200,000 - ≤$500,000

Above plus a full, unsecured personal guaranty from all owners of 20% or more

231,639

>$500,000 Above and a lien against real estate, if available (4,634 of which have real estate liens)

52,355

2. Scope

The Contractor must provide all resources necessary to accomplish the tasks and deliverables described in this work statement. The Contractor must file timely and correct UCC continuation statements to extend the effectiveness of the original UCC financing statements that were filed at loan origination.

3. Specific Tasks / Objectives

Task 1. Pre-Filing Check. SBA will provide the Contractor with data files containing the informa�on needed to check UCC financing statements against Secretary of State records and to file correct UCC continuation statements. The data files will include UCC filing numbers, date of ini�al filing and location of filing (state) and will be provided to the Contractor in a CSV, txt file or similar format within 10 days a�er award.

The projected number of COVID-19 EIDLs that will require a UCC continuation statement during FY2025 is as follows:

Table 1: FY25 Projections Month Year Count October 2024 29

November 2024 163,445 December 2024 429,044 January 2025 283,606 February 2025 155,199 March 2025 57,741 April 2025 15,535 May 2025 14,445 June 2025 11,441 July 2025 14,707 August 2025 13,725 September 2025 11,714 Total 1,170,631

Monthly numbers for FY 2026 and FY 2027 will be provided. They are an�cipated to total approximately 200,000 loans. The above projected number may fluctuate due to payoffs, charge-offs or other ac�vity.

Individual filing dates govern. For example, for a filing that was made on May 24, 2020, a renewal can be filed no earlier than November 24, 2024 (6 months before the 5-year anniversary of the original filing date).

Prior to submi�ng a UCC con�nua�on statement, Contractor must verify with the Secretary of State’s office the accuracy of the following:

• Initial financing statement number

• Debtor’s name - check that the name of the entity is spelled correctly against what the state is showing in its corporate name database, and check if the en�ty is Domes�c (formed in the state SBA is filing in) or Foreign (formed in a different state than the one SBA is filing in).

Contractor must provide SBA with report by the last day of each month of all inaccuracies resul�ng from the Pre-Filing Check. The report must be in SBA’s predetermined format detailing the loan number, the State checked, the Debtor’s name checked, and a descrip�on of the inaccuracy.

Task 2: File UCC Continuation Statements. The Contractor must file correct UCC continuation statements on all active COVID EIDLs that have a valid UCC financing statement (not rejected by the Secretary of State for incorrect borrower name or state of incorporation). This filing must be made as early as 6 months before the 5-year anniversary of the filing date of the original UCC financing statement, but not later than the day before the 5-year anniversary of the filing date of the original UCC financing statement.

Task 3: Monthly Reject Report. The Contractor must provide SBA with a report by the last day of each month in SBA’s predetermined format of each UCC continuation statement that was rejected detailing the loan number, the State checked, the Debtor’s name checked, and a description of the rejection. If the rejection can be cured, SBA will provide corrected information to the Contractor and the Contractor must submit corrected continuation statements for filing.

Task 4: Record of Filed UCC Continuation Statements. The Contractor must deliver to SBA a record by the last day of each month in SBA’s predetermined format of each UCC continuation statement that was filed detailing the financing statement number, the state in which the UCC was filed, the filing date, the filing fee cost, and all confirmation data and documentation received by the Contractor upon filing.

Task 5. File New UCC1 Financing Statements. The Contractor must file new UCC1 Financing Statements on an as-needed basis as directed by SBA. SBA will provide the Contractor with data files containing the location of filing (which Secretary of State) and data fields 1 – 5 of the Form UCC1. A Sample Form UCC1 is attached as Exhibit A to this SOW. Fields 6a, 6b and 7 are to be left unchecked on this version of the form. If an alternative form will be used, Contractor will coordinate with SBA to obtain any additional necessary data, including entity type. The data will be provided to the Contractor in a CSV, txt file or similar format. The Contractor must deliver to SBA a record by the last day of each month in SBA’s predetermined format and content of: (a) each UCC1 financing statement that was filed detailing the financing statement number, the state in which the UCC was filed, the filing date, the filing fee cost and all confirmation data and documentation received by the Contractor upon filing , and (b) each UCC1 financing statement that was rejected and the reason for rejection.

Task 6. Ad Hoc Reports. The Contractor must deliver ad-hoc reports to the SBA on an as-needed basis.

4. Deliverables/Delivery Schedule

Table 2: Deliverables

Deliverable Title Task Reference

Frequency Medium/Format Recipient

UCC Data File needed for Pre-Filing Checks

Task 1 Within 10 days after award

CSV, Txt or Similar Format

Contractor

Report of inaccuracies from Pre-Filing Checks (Refer to Task 1 above for details on what to include)

Task 1 Monthly – by the last day of each month

As requested by SBA; CSV, Txt, Excel and/or Similar Format

SBA

Monthly Reject Report (Refer to Task 3 above for details on what to include)

Task 3 Monthly – by last day of each month

As requested by SBA; CSV, Txt, Excel and/or Similar Format

SBA

Record of Filed UCC Continuation Statements (Refer to Task 4 above for details on what to include)

Task 4 Monthly – by last day of each month

As requested by SBA; CSV, Txt, Excel and/or Similar Format

SBA

Data Files for new UCC1 Financing Statements to be Filed

Task 5 As needed by

SBA

CSV, Txt or Similar Format

Contractor

Record of Filed UCC1 Financing Statements (Refer to Task 5 above for details on what to include)

Task 5 Monthly – by last day of each month

As requested by SBA; Txt, Excel, CSV, and/or Similar Format

SBA

Ad-Hoc Reports Task 6 As Needed As requested by SBA; Txt, Excel, CSV and/or Similar Format

SBA

5. Inspection and Acceptance

The government will review, for completeness, preliminary or draft deliverables submitted by the Contractor, and may return them to the Contractor for correction. Absence of comments by the government will not relieve the Contractor of the responsibility for complying with the requirements of this work statement. Final approval and acceptance of deliverables required herein must be provided to the Contractor in writing by the designated government official. The Contractor must not construe any letter of acknowledgment of receipt as a waiver of review, or as an acknowledgment that a deliverable is in conformance with this work statement. Any approval given during preparation of a deliverable, or approval for shipment does not guarantee the final acceptance of the completed deliverable.

6. Security

a. Physical Security The Contractor must establish and comply with appropriate administrative, technical, and physical safeguards to protect all Government data, property, facilities, and personnel.

i. Data All electronic data and documentation provided or made accessible by the Government, and all electronic data and documentation produced during performance of the services associated with this award are the property of, and are owned by, the Government.

The Contractor must not disclose and must safeguard all data and personnel work products that are obtained or generated in the performance of this contract. The Contractor must not access data or documentation that is not required in the performance of services awarded via this contract/task order, even if the data or documentation is available to Contractor personnel. The Contractor must immediately report any instance of non-compliance with this requirement to the Contracting Officer.

The government may authorize Contractor access to controlled, sensitive, classified, or other government information for use in performance of this contract. The term “government information” includes information furnished by the government and information acquired or developed by the Contractor in performance of the contract. The Contractor must provide immediate written notification the Contracting Officer if a breach of any of the requirements in this section occurs.

The Contractor must not publish or otherwise divulge government information, in whole or in part, in any manner or form, or authorize or permit others to do so, taking such measures as are necessary to restrict access to such information to only those employees needing the information to perform work required by the contract, i.e., on a “need to know” basis. The Contractor is cautioned that its employees and subcontractors have no blanket authorization for access to government information based on their employment status.

Government data, including electronic data, must not be removed from the Government facility without the express permission of the Contracting Officer or the Contracting Officer’s Representative.

Government data including documentation must be surrendered to the Government upon contract completion and upon request. Government personnel, including government security personnel, have the express right to inspect documentation for any reason and at any time during the term of this award. The Contractor must ensure that direct and subcontract employees:

• Only access information required to perform their tasks as specified in this contract, and do not access information that is not required to perform these tasks.

• Ensure continuous government access to their work product in support of this contract.

• Do not email government information to non-government email accounts.

• Do not discuss government information with non-government personnel (including the

Contractor employee’s management).

• Do not remove, or conspire to remove, government information out of a government facility or system, either physical and electronic, without written Contracting Officer or Contracting Officer Representative authorization.

• Comply with non-disclosure agreements.

• Protect the confidentiality of government information, and do not disclose government information to any unauthorized person.

ii. Facilities The Contractor and all associated subcontractors’ employees must comply with all facility access and use policies and procedures, including security policies and procedures. Questions must be referred to the Contracting Officer’s Representative. The Contractor must provide all information required for background checks to meet facility access requirements. The Contractor must comply with all personal identity verification requirements associated with facility access. Should the security procedures at any individual facility change, the Government may require changes in Contractor security matters or processes.

iii. Property and Personnel The Contractor must report threats to government property and personnel employed by or supporting the Government.

To help ensure the protection of the life and health of all persons, and to help prevent damage to property, the Contractor must comply with all Federal, State, and local laws and regulations applicable to the work being performed under this contract. These laws are implemented or enforced by the Environmental Protection Agency, Occupational Safety and Health Administration (OSHA) and other regulatory/enforcement agencies at the Federal, State, and local levels.

The Contractor agrees to use only qualified, responsible, ethical, and capable people to perform the work. Contractor employees must perform services at all times in a professional, ethical manner.

Unprofessional, unethical, or threatening conduct will not be tolerated. Contractor employees with knowledge of unprofessional, unethical, or threatening behavior or conduct by any person must immediately report such behavior or conduct to the Contractor. The Contractor must immediately report receipt of a report concerning such behavior or conduct to the Contracting Officer.

The Contractor and its employees must only conduct business covered by this contract during periods paid for by the government and must not conduct any other business on government premises or government time. The Contractor must not use government time, equipment, materials except for the express purpose of providing government support.

Contract personnel attending meetings, answering Government telephones, and working in other situations where their contractor status is not obvious to third parties must identify themselves as contractors to avoid creating an impression that they are Government officials. The Contractor must also ensure that all documents or reports produced by the Contractor are suitably marked as Contractor products or that Contractor participation is appropriately disclosed.

The Contractor must, at its own expense, immediately remove employees who have displayed or are displaying or engaging in unprofessional, unethical, or threatening behavior or conduct. The Contracting Officer may require that the Contractor remove from the job at its own expense, employees who jeopardize or interfere with mission accomplishment, or endanger or threaten to endanger persons or property, or whose continued employment under this contract is inconsistent with the interest of agency security.

7. Government Furnished Property/Equipment/Information

SBA will not be providing government furnished property or equipment to the Contractor.

8. Type of Contract

The Government anticipates award of a Firm-Fixed-Price/Cost Reimbursement type contract.

9. Period of Performance

The period of performance consists of a base year and 2 option year periods.

Table 3 – Period of Performance

Period Start Date End Date Base October 31, 2024 October 30, 2025 Option 1 October 31, 2025 October 30, 2026 Option 2 October 31, 2026 October 30, 2027

10. Place of Performance

The primary place of performance will be at the Contractor facility or approved alternate work site.

Contractor employees are permitted to telework in accordance with the contract terms and conditions.

11. Hours of Operation

The Contractor is responsible for maintaining an adequate work force for the uninterrupted performance of all tasks and objectives defined within this work statement. When hiring personnel, the Contractor must keep in mind the stability and continuity of the work force are essential.

12. Travel and Other Direct Costs (ODC)

Travel is not required in support of the requirements in this work statement.

13. Key Personnel

Key personnel are those personnel considered essential to successful Contractor performance.

The Contractor agrees that key personnel must not be removed from the contract effort, replaced, or added to the contract without a compelling reason and without compliance with the requirements of this section. The Government will not approve substitutions for the sole convenience of the Contractor.

If any change to the key personnel position becomes necessary (substitutions or additions), the Contractor must immediately notify the Contracting Officer and Contracting Officer’s Representative (COR). All requests for approval of substitutions of key personnel under this contract must be in writing and provide a detailed explanation of the circumstances necessitating the proposed substitutions. The proposed replacement personnel must be of at least substantially equal ability and qualifications as the individuals currently approved for that category unless an exception is approved by the Contracting Officer. Exceptions requested by the Contractor must be submitted in writing and detail the suggested contract price adjustment.

Requests for change to key personnel must include the following –

• Resume of the proposed replacement personnel.

• A comparison of skills and qualifications to those set forth in the accepted resume proposed for substitution.

• A signed employee procurement integrity agreement.

• Number of hours the Contractor will provide at his/her own expense to train the proposed replacement.

• Any other information requested by the Contracting Officer and/or COR to reach a decision.

No substitution or replacement of the key personnel must be approved within the first ninety (90) days after contract award.

14. Conflicts of Interest

No potential organizational conflicts of interest have been identified by the government. The Contractor must ensure that neither the Contractor or any subcontractor is biased because of financial, contractual, organizational, or other interests which relate to the work under this contract. The Contractor agrees it will make an immediate and full disclosure, in writing, to the Contracting Officer of any potential or actual organizational conflict of interest or the existence of any facts that may cause a reasonably prudent person to question the Contractor's impartiality because of the appearance or existence of bias or an unfair competitive advantage. Such disclosure must include a description of the actions the Contractor has taken or proposes to take to avoid, neutralize, or mitigate any resulting conflict of interest.

15. Transition Plan

The Contractor must have an internal transition plan in place with little to no impact on the �mely filing of UCC con�nua�on statements to include the following:

Phase-in Identification of critical steps and technical specifications in assuming full functionality of service as defined in the statement of work, as to not cause any break in the filing of UCC continuation statements.

Back-Up Plan in the event of delays in assuming full functionality of service.

Phase-out Transition out procedures at end of the contract terms, including options.

EXHIBIT A

Sample UCC 1 Financing Statement Form