VEIP 2023 Addendum No 7 FINAL Rev.pdf

6601 Ritchie Highway NE, Glen Burnie, Maryland 21062 | 410.768.7000 | 800.950.1MVA | Maryland Relay TTY 800.492.4575 | mva.maryland.gov

January 19, 2024

TO ALL PROSPECTIVE PROPOSERS

Addendum No. 7

RE: MVA Solicitation No. V-HQ-24019-S, Addendum #7 Vehicle Emissions Inspection Program (VEIP) Management and Operation

To Whom It May Concern:

1. The Proposal Due Date REMAINS February 1, 2024, by or before 1:00 p.m. (ET)

2. CHANGES to the RFP document have been issued with this Addendum No. 7.

a. Page 54

b. Page 103

3. Revise Section 4.26.4 to read: Within ten (10) Business Days from notification of apparent award, the Offeror must provide the following documentation to the Procurement Officer. If the documentation is not furnished within the specified time, the offeror may be rejected as non-responsible. No contract award may be made until the documentation is provided to and reviewed by the procuring officer.

4. Under Section 4.26.4, add subparagraphs “E” and “F” to read:

E. As set forth in COMAR 21.11.03.10, an MBE subcontractor project participation statement shall be furnished, signed by the offeror and each MBE listed in the MBE participation schedule, which includes:

(a) A statement of intent to enter into a subcontract agreement between the apparent successful offeror and each proposed MBE subcontractor at the time the State contract is awarded to the apparent successful offeror.

(b) A copy of each subcontract agreement between the apparent successful offeror and each proposed MBE subcontractor, that the apparent successful offeror and each proposed MBE subcontractor intend to enter into contingent upon the State’s contract award to the apparent successful offeror, containing all necessary terms, including pricing, required for the MBE to perform its proposed work and for the apparent successful offeror to pay the MBE for its work during the contract term.

F. The procuring officer shall review the documentation submitted above and confirm in writing that the submitted documents meet the requirements of COMAR 21.11.03 regulation, including verifying that all MBE subcontract agreements contain necessary terms, prior to any State contract award with MBE subcontractor participation. If the procurement officer finds that the apparent successful offeror has not complied in good faith, the MVA may require the apparent successful offeror to renegotiate any MBE subcontract agreement with a proposed MBE to attempt to meet compliance, without altering the MBE’s proposed participation included in the MBE utilization affidavit or MBE participation schedule. Any renegotiated MBE subcontract agreement shall be reviewed and approved by the procurement officer for compliance prior to any State contract award to the apparent successful offeror.

5. A REVISED Financial Proposal Form is issued with this Addendum No. 7.

6. Questions and Answers received have been answered in this Addendum No. 7.

Very Truly Yours, Jessica Mettle

Jessica Mettle, Procurement Officer

THIS AMENDMENT IS ISSUED TO CLARIFY, ADD TO, DELETE FROM, CORRECT

AND/OR CHANGE THE PROPOSAL DOCUMENTS TO THE EXTENT INDICATED AND

HEREBY MADE A PART OF THE SAID PROPOSAL DOCUMENTS ON WHICH THE

CONTRACT WILL BE BASED. THIS AMENDMENT BECOMES PART OF THE

PROPOSAL PACKAGE AND MUST BE ATTACHED TO THE OUTSIDE COVER OF THE

PROPOSAL FORM. FAILURE TO DO SAY MAY RESULT IN THE REJECTION OF

YOUR PROPOSAL. COMAR 21.05.02.08 REQUIRES THAT ALL AMENDMENTS ISSUED

BE ACKNOWLEDGED; THEFORE THE ATTACHED RECEIPT MUST BE RETURNED TO

THIS OFFICE. FAILURE TO RETURN THE RECEIPT ACKNOWLEDGING THE

AMENDMENT MAY RESULT IN REJECTION OF YOUR PROPOSAL.

QUESTIONS AND ANSWERS

1. Question: In Addendum No. 3, the State added an extra work allowance in the amount of $500,000 for the 10-year term to be used for regular and emergency repairs to the VEIP facilities.

a. Is this new allowance meant to cover potential needed costs for capital replacements or additions up to the $15,000 per unit cost threshold?

b. Capital replacement/addition events exceeding the $15,000 per unit cost threshold?

c. Normal and/or emergency repairs and maintenance that are not capital cost items?

Answer:

a. No.

b. No.

c. Yes, In the event the MDOT MVA requests work for repairs of its VEIP facilities, the Contract Manager may request the Contractor to obtain quotes for the repair. This quote shall be broken down by labor and material costs and sent to the Contract Manager for approval. The MVA reserves the right to competitively bid any and all specified repairs. Should the MVA elect to have the Contractor perform the repairs, the Contractor shall invoice for labor and material in accordance with these specifications. If the quote is not approved, the Contractor shall have no claim for time, materials, or other costs associated with the preparation of the quote. The approved repair will be paid from the Extra Work Allowance funds established in this Contract. There is no guarantee that any or all the Extra Work Allowance funds will be used during the length of the contract.

2. Question: In the State’s answer to Question #11 provided in Addendum No. 3, the State said that it could not readily provide the actual or estimated total annual costs for capital replacements or additions up to the $15,000 per unit cost threshold. Will the State consider hardcoding in the calculation of the “Total Cost Price Years 1-10, w/ Transition” set forth in the Financial Proposal Form an estimated contractual expenditure amount for these items to ensure all prospective Offerors are competing on equal footing (similar to how the State hardcoded $400,000 for additional kiosks)?

Answer: No.

3. Question: Would the State consider altering the RFP to require Offerors to expressly identify by amount -- (1) fees charged by the Offeror to Hybrid Stations; and (2) fees charged by Hybrid Stations to VEIP customers – in the Offeror’s Technical Proposal so that the State may evaluate those fees as part of the evaluation of the Offeror’s technical solution?

Answer: Offerors approach to subcontractor or customer fee variations should be identified in the Technical Proposal. See the updated RFP Pages 54 and 103, and the updated Financial Proposal included with this Addendum.

4. Question: Currently, the RFP prohibits the actual fees from being included in the

Technical Proposal and instead requires those fees, if any, to be included in the Financial Proposal. Yet, some of those fees charged to either the Hybrid Station or VEIP Customers are not part of the Offeror’s price for services to be paid by the State, hence they are not part of the “Total Cost Price Years 1-10, w/ Transition” nor do they fall within the Financial Evaluation Criteria set forth in the RFP. Therefore, including such fees in the Financial Proposal may unfairly be considered in the evaluation of the most financially advantageous proposal to the State. On the other hand, excluding the actual fees to be charged from the Technical Proposal may lead to inaccurate evaluations of various technical solutions and their effect upon the Approach and Methodology proposed.

Will the State amend the RFP to address this issue?

Answer: See answer to Question 3, above.

5. Question: In Addendum No. 3, the State provided the following answer in response to

Question #92 related to credit card transaction/processing fees and Late Fees collected by the Contractor on behalf of MDOT MVA:

ANSWER: Credit charges will be accrued by the Contractor and reconciled monthly with the State. The Contractor will be directly responsible for all merchant/transaction fees associated with credit card transactions. Transaction fees charged by the credit card companies shall be invoiced back to MVA on the Contractor’s monthly invoice at the provider’s rate to a State agency along with a copy of the credit card company’s actual invoice. Only credit cards approved by MVA for VEIP may be allowed. [emphasis added]

In order to ensure that all prospective Offerors clearly understand and account for credit card fees in their Financial Proposals, we request the State to provide clear answers to the following questions:

a. Is the State saying that the Contractor for the new VEIP will be reimbursed by

MDOT MVA for the transaction fees charged by the credit card companies “at the provider’s rate to a state agency” for credit cards approved by MVA for use in the VEIP? (In other words, will the Contractor only be responsible for absorbing the cost of credit card transaction fees that are in excess of “the provider’s rate to a state agency”?)

b. We understand that rates may change, but what are the “provider’s rates to a State agency” that State of Maryland agencies receive from the various credit card companies and/or credit card processing companies approved by the State (e.g., credit card companies such as Visa, Master Card, Discover Card and American Express and/or credit card processing companies such as Truist/Govolution, LLC and ACI Payments, Inc.)?

c. We understand that the past performance is not a guarantee of future performance, but since Offerors are instructed to provide 10-year pricing, will the state provide a 10-year history of “provider’s rates to a state agency”?

d. Can the State explain precisely which fees are considered part of the “Transaction fees”? For example, do Transaction fees referenced in this answer include all of the fees charged by a credit card company and/or a credit card processing company for processing a credit card for a transaction (e.g., Interchange Fees, Payment Processor Fees, and Assessment Fees)?

a. All credit card transaction fees incurred by the vendor are passed on to MVA. The State provided rate may not be available to the Vendor, therefore the Vendor may provide their credit card rate and/or fee schedules and a copy of the credit card company’s actual invoice. Answer 93 from Addendum 3 is modified to read:

Credit charges will be accrued by the Contractor and reconciled monthly with the State. The Contractor will be directly responsible for all merchant/transaction fees associated with credit card transactions. Vendors are to provide their credit card rate and/or fee schedules to MVA. Transaction fees charged by the credit card companies shall be invoiced back to MVA on the Contractor’s monthly invoice along with a copy of the credit card company’s actual invoice. Only credit cards approved by MVA for VEIP may be allowed.

b. Not available, see Answer 5a, above.

c. Not available, see Answer 5a, above.

d. All fee components that are related to the processing of a credit card transaction would be considered part of the “transaction fee”.

6. Question: Since a significant portion of the fees that the Contractor collects on behalf of

MDOT MVA are Late Fees, will the State provide the annual VEIP Late Fee amounts collected on behalf of the State for the past three years?

Answer: Late fees range from $14-17M annually.

7. Question: Will the State provide anticipated annual VEIP Late Fee amounts for each year of the new 10-year contract term?

Answer: Late fees are dependent on customer behavior, typically ranging between 30-

40% of test revenue.

8. Question: In the State’s answer to Question #14 regarding whether idle testing is required at FIS locations under the new VEIP contract or whether FIS testing will be OBD-only at the FIS locations going forward, the State responded, “If limiting FIS testing to OBD-only testing, Offerors shall propose their solution for working with FIS participants to idle test necessary vehicles at centralized facilities.”

The State’s response of “If limiting” makes it sound like the Offeror is potentially introducing the limitation, which conflicts with the RFP’s language which specifies “OBD-only” in multiple specifications:

- RFP Section 2.3.3.1 states, “The FIS program is intended to provide qualifying public and private fleets with the convenience and economy of including an official Maryland VEIP OBD-only inspection within their maintenance capabilities.” The underlined phrase “OBD-only” in that RFP section was specifically added by the State in the current RFP; that phrase was not included in the 2021 VEIP RFP.

- RFP Section 2.3.3.1.A.c), regarding the inspection equipment the Contractor shall provide for each FIS, states, “OBD testing equipment should be consistent with that being offered by the Contractor in the Hybrid Station.” The underlined word “OBD” was specifically added to the current RFP; it was not included in the 2021 RFP.

- RFP Section 2.3.3.1.A.d) states, “Contractor must propose an approach that will ensure that FIS test equipment provides for the testing of all OBD-eligible subject vehicles, including heavy duty vehicles weighing up to 26,000 lbs”. The underlined phrase “OBD-eligible” was specifically added by the State in the current RFP; that phrase was not included in the 2021 VEIP RFP.

- Vehicles with a GVW above 14,000 lbs tend to need a different OBD scan tool interface and interrogation.

- RFP Section 2.3.3.4.1 (FIS Transition) states: The Contractor, as part of its technical proposal response, shall provide a high-level plan that describes how it will transition the existing FIS program to its data systems, update FIS equipment, transition to OBD-only inspection methods (indicate R-OBD, traditional workstation testing, or a combination), accomplish FIS personnel training, adjust to any changes to subject vehicles, and all other aspects of the FIS program for state review.

- Finally, RFP Section 2.3.3.2.C states that the Contractor is to provide “A plan and schedule for transitioning the FIS program to the new contractor and implementing an OBD-only testing method.”

Based on these ambiguities, we have several questions:

a. Is the existing RFP language specifying OBD-only testing at the FIS locations erroneous?

b. What type of testing does the State prefer to be available at the FIS locations?

c. Will the State provide the actual number of idle tests conducted at the FIS locations over the past three years?

d. Does the State want all FIS to perform idle testing on vehicles with GVW from 14,001 to 26,000 lbs?

e. Does the State want OBD testing on HD vehicles between 14,001 and 26,000 lbs?

f. In the instance that the State is saying that the FIS setup, with regards to idle testing, can differ from FIS to FIS and Offeror to Offeror, will the State describe how we are to indicate such differences on Section 3 of the Financial Proposal? Not applicable.

a. No

b. OBD-only

c. 250 idle tests at FIS from June 1, 2022 to May 31, 2023

d. No

e. Yes

f. Not applicable. FIS testing to be OBD-only.

9. Question: Previous answers regarding what fees and discounts are allowed in the hybrid network have not eliminated ambiguities which remain. While there may be additional Hybrid Network scenarios than the three that follow, MVA may be able to clarify what it deems acceptable by providing answers to the three hypothetical scenarios below.

Accordingly, offerors should be able to design their Hybrid Networks and prepare their Financial Proposal with a shared understanding of requirements. Are the following Hybrid Network scenarios compliant with the RFP and would MVA consider them acceptable technical approaches such that an offeror would not be determined not reasonably susceptible for award?

a. Scenario A: Chevrolet Motors – Initial VEIP Inspections as a normal part of

Chevrolet Motor’s business model

Charges Motorist $50 to perform the VEIP inspection Charges Motorist $14 for the Initial VEIP fee per COMAR Charges Motorist Any VEIP Late Fees per COMAR

Motorist pays Chevrolet Motors $64 plus any VEIP Late Fees Dealership Pays VEIP contractor $14 per COMAR

Dealership Pays VEIP Contractor Late Fees per COMAR Dealership Pays VEIP contractor a per test fee

Dealership Separately Pays whatever credit card fees that it incurs.

VEIP Contractor

Pays the State $14 for the VEIP fee per COMAR Pays the State any VEIP Late Fees Charges the State the Hybrid Test per-test fee per cells C40+C41 of the financial proposal’s pricing sheet Charges the Dealership the per-test fee per Section 5 of the financial proposal’s pricing sheet

b. Scenario B: CERF Motors – Initial VEIP Inspections as a loss leader to get increased traffic per their business model

Charges Motorist $0 to perform the VEIP inspection Charges Motorist $0 for the VEIP fee Charges Motorist $0 for VEIP Late Fees per COMAR Motorists pays CERF $0 CERF Pays VEIP contractor $14 per COMAR regardless of what it charged the motorist CERF Pays VEIP Contractor Late Fees per COMAR regardless of what it charged the motorist CERF Pays VEIP contractor a per test fee CERF Separately Pays whatever credit card fees that it incurs.

Pays the State $14 for the VEIP fee per COMAR Pays the State any VEIP Late Fees Charges the State the Hybrid Test per-test fee per cell C40+C41 of the financial proposal’s pricing sheet Charges the CERF the per-test fee per Section 5 of the financial proposal’s pricing sheet

c. Scenario C: Kia Motors – Free Retest VEIP Inspections as a normal part of Kia

Motor’s business model

Charges Motorist $37.99 to perform the VEIP inspection Charges Motorist $0 for the Free Retest VEIP fee per COMAR Charges Motorist Any VEIP Late Fees per COMAR Motorist pays Kia Motors $37.99 plus any VEIP Late Fees Dealership Pays VEIP contractor $0 per COMAR Dealership Pays VEIP Contractor Late Fees per COMAR Dealership Pays VEIP contractor a per test fee Dealership Separately Pays whatever credit card fees that it incurs.

Pays the State $0 for the VEIP fee per COMAR Pays the State any VEIP Late Fees Charges the Dealership the per-test fee per Section 5 of the financial proposal’s pricing sheet.

Answer: Offerors shall propose and explain their hybrid station customer pricing approach, including any intent to deviate from the State VEIP fee structure, in their Technical Proposal, without including any financial amounts in the technical response.

10. Question: When designing, recruiting and pricing a successful Hybrid Network, Offerors need a clear understanding of allowable fees, including fees that go beyond COMAR’s $14 VEIP fee. When responding to Offeror questions about Hybrid Station allowable fees, the state has repeatedly pointed to COMAR 11.14.08 and COMAR 11.11.05.06.

Most recently this can be seen in the answer to Q&A No. 18 of this RFP’s Addendum No. 3. A careful review of both of those COMAR sections provides no insight into allowable convenience fees.

Does the absence of any reference to convenience fees in COMAR 11.14.08 and

COMAR 11.11.05.06 mean that any and all convenience fees are therefore acceptable to propose? In the alternative, does the absence of any reference to convenience fees in the cited COMAR provision mean that such fees are prohibited?

Answer: Convenience fees are permitted for Hybrid Stations.

11. Question: Respectfully, the response to question 28 from the State did not answer the primary question. We will ask the question differently here. We also note that in the state’s answer, they cite FIS as an example of “customer convenience thresholds for alternative testing options”. The RFP is unclear as to how a motorist in a county that has its solitary centralized station closed can utilize a FIS since the motorist’s vehicle is not a member of the FIS’s fleet.

There are vehicles that are subject to VEIP that per the RFP are not allowed to test at kiosks, hybrid stations, or FIS (answer to FIS question above will provide additional insights as to the scope of FIS testing). And while not clearly defined in the RFP as exclusionary, it seems reasonable to assume that if a vehicle can’t test at a kiosk, then Dedicated Remote OBD is not an option either. The volumes in the Financial Proposal provide additional support for this assumption.

Will the state confirm that if a county’s singular centralized station is closed, vehicles that are not eligible to test at kiosks, hybrid stations or FIS will need to be tested at centralized stations in other counties or at MACs?

Answer: As noted in the RFP, station closure monitoring would commence after contract award based on a station's annual, calendar-year testing volume, including monitoring non-OBD testing volumes. Offeror shall propose customer convenience thresholds for alternative testing options (e.g., kiosks, hybrid stations, FIS) available in that County to replace the centralized testing facility. MACs will not be testing vehicles.

12. Question: Regarding the State’s response to Q&A No. 41(e), it could be interpreted that

“non- sensitive items” the State intends to purchase should be shipped to the MVA warehouse versus the stations. Is that the State’s intent in this response?

Answer: Sensitive and non-sensitive equipment purchased by the State need to be either tagged with a SOM (State of Maryland) label or a RFID tag. It is preferred that all new equipment, sensitive and non-sensitive, be sent to the warehouse, then the State will deliver the items to the assigned location. There may be certain cases where due to the size or the nature of the equipment it is more feasible to deliver the equipment to the end location. If this is the case, State approval is needed before being sent to the end location.

13. Question: The State’s response to Q&A No. 41(e) further appears to indicate that

“sensitive items” the State agrees to purchase would be sent to VEIP stations, versus the MVA warehouse, to be tagged per the State tagging procedures. Is this a correct understanding?

Answer: Correction to Answer 41e in Addendum 3 is incorrect. See answer to Question

12, above.

14. Question: Please provide clarification to the State’s response to the two questions within

Q&A No. 48 concerning the purpose of RFP Appendix 8 and whether there are other immediate transition costs an Offeror is supposed to include in their pricing. The State’s response directing us to RFP Section 2.3.1.7.9 does not seem correct, as this Section is in reference to the possibility of a Contractor having to construct and equip “additional” lanes at VEIP stations if it is unable to meet VEIP performance specifications because of unforeseen demand or circumstances. This provision would be applicable after the start of operations.

a. Is our assumption correct that the “yes” response is only related to the first question included in question 48, e.g. – the only purpose of Appendix 8 is to provide the sq. ft.

a contractor is responsible to maintain?

b. Did the State intend to cite an RFP section other than 2.3.1.7.9 in its answer concerning other immediate transition costs the Offeror shall include in its pricing?

Answer: Appendix 8’s only purpose is to provide the information on the square footage that the contractor will be responsible to maintain. Offeror shall propose their transition costs per the RFP, including Section 2.3.1.7.9, if applicable.

15. Question: The State confirms in their response to question 91 that tablets are considered

PC’s. The inclusion of tablets is a significant departure from prior RFPs which did not allow for tablets as the base system.

a. Can the State share the basis of its conclusion that tablets now satisfy the base system requirements for the inspection system?

b. Did the State receive requests, or solicit information from potential vendors, concerning the use of tablets as the base system PC?

Answer: State reserves the option to implement and require any technology, notwithstanding any other RFP.

16. Question: With regard to the Family and Medical Leave Insurance Program (SB828), the deadline for determination of costs to employers has been extended to October 1, 2024.

Will the State confirm that the future contractor will be able to receive an Equitable adjustment to the contract upon a definition of additional costs to the Contractor by the State?

Answer: MVA will consider an equitable adjustment under the applicable law after the contractor submits detailed documentation to substantiate any increase in costs under the contract and provides information on how these changes impact the contract, specifically

17. Question: The VEIP program anticipated by this procurement requires, but is not limited to,

a. The development of, and subsequent use of, software;

b. The use of mechanisms and machines like gas analyzers;

c. Electronic equipment like computer workstations and OBDII scan tools, and

d. Services and processes including performing vehicle emissions inspections and exchanging data with MDOT MVA computer systems.

Will the State confirm that all of the work performed developing the VEIP software and systems, must be performed entirely within the United States, pursuant to State Finance and Procurement Art. § 12-111, COMAR 21.01.02.01B(24) & (37), COMAR 21.11.15.03, RFP Attachment L, and RFP Addendum 4 Q&A 5?

Answer: This procurement and the resulting contract will be in accordance with all applicable laws.

18. Question: Pursuant to Md. Ann. Code, State Finance and Procurement Article, § 12-111, COMAR 21.01.02.01B(24) & (37), COMAR 21.11.15.03, RFP Attachment L and RFP Addendum 4 Q&A 5, will the State confirm that all of the work performed supporting the VEIP, including but not limited to, software support, diagnostics, troubleshooting, software modifications that will inevitably be needed over the ten-year term of this procurement, and access to the VEIP and MDOT MVA software, systems, and processes, must be performed entirely within the United States?

Answer: This procurement and the resulting contract will be in accordance with all applicable laws.

19. Question: RFP Appendix 6, Payments and Milestones, includes the following provision:

“C. Renewal Period. Payment to the Contractor for any option period to the Contract, if exercised by the MDOT MVA, will be per test administered at the option year price as accepted by the State.” [emphasis added] The current Financial Proposal Pricing Sheet does not include any place to enter per test pricing for the potential renewal option period. Since the potential length of the total contract term in the current RFP is a full 10 years, will the State modify the Financial Proposal Pricing Sheet to include separate Cost Per Test entries for the Five-Year Base Period and the Five-Year Renewal Option Period?

Answer: No. Offerors shall propose a cost per test which is conducive for them to do business for the life of the contract

20. Question: In addendum 4, questions 3 and 4, the State refers to an Offeror’s opportunity to suggest language to ‘negotiate’ with the State or to take exceptions to the State’s terms and conditions. Will the State confirm that it will not ask Offerors to remove exceptions taken in the proposal prior to evaluating those exceptions as part of the technical proposal?

Answer: Exceptions will be considered as outlined in Section 4.17 and 5.32 D of the

RFP.

January 19, 2024

TO ALL POTENTIAL

PROPOSERS: Addendum No. 7

RE: MVA Solicitation No.: V-HQ-24019-S

Vehicle Emissions Inspection Program (VEIP) Management and Operation

To Whom It May Concern:

It is important that you acknowledge receipt of Addendum No. 7 on the referenced solicitation regardless of whether you will be submitting a proposal or not.

If you have any questions regarding this matter, please contact Jessica Mettle, Procurement

Officer, via email at jmettle@mdot.maryland.gov.

Sincerely, Jessica Mettle Jessica Mettle, Procurement Officer

Solicitation No.: V-HQ-24019-S

This acknowledges receipt of the Attached Addendum No. 7.

NAME OF COMPANY DATE

SIGNATURE

mailto:jmettle@mdot.maryland.gov