Arbitrage Services and Technical Assistance

The Commonwealth of Kentucky, through the Kentucky Infrastructure Authority (KIA), issued Request for Proposal 082 2000000359 on April 20, 2020, soliciting qualified firms to provide arbitrage services and technical assistance for seven outstanding bond series in Elliott County. The primary deliverables include performing annual arbitrage calculations to comply with Section 148 of the Internal Revenue Code and related Treasury regulations, calculating debt yields and excess earnings, computing rebatable amounts to the U.S. Treasury, preparing IRS forms, providing written reports detailing methodology and recommendations, rendering legal opinions on tax liability, and assisting with potential IRS inquiries. Required qualifications include demonstrated organizational background and experience with similar arbitrage projects, expertise in arbitrage calculation methodology, and staff with specialized qualifications in municipal finance and bond arbitrage compliance. Evaluation criteria consist of a technical proposal scored on a maximum of 600 points, assessed across organizational background and history (50 points), calculation methodology (150 points), experience with similar projects (50 points), overall staff qualifications (150 points), and qualifications of staff performing actual work (150 points), plus an additional 50 points for identifying potential concerns. Cost proposals are scored on a maximum of 400 points based on proposed hourly rates for arbitrage rebate services and technical assistance, with potential oral presentations adding up to 250 additional points for a combined maximum of 1,250 points. Written questions were due by 3:30 p.m. on April 27, 2020, sealed technical and cost proposals were due by 3:30 p.m. Eastern Time on May 8, 2020, submitted via the MOVEit TRANSFER secure file transfer system, and no bidders' conference was required. The anticipated contract term runs from July 1, 2020, through June 30, 2022, with KIA retaining the right to renew for up to two additional two-year periods subject to approval by the Secretary of the Finance and Administration Cabinet and the Legislative Research Commission Government Contract Review Committee.

The procurement offers preferences to Kentucky resident bidders and qualified bidders as defined under KRS 45A.470, though no specific set-asides for disadvantaged enterprises are mentioned in the available documentation. The current incumbent contractor, AMTEC, charged $4.59 per hour for arbitrage rebate services (1,350 estimated hours totaling $6,200) and $50.00 per hour for technical assistance (100 estimated hours totaling $5,000) over the two-year period, providing a baseline for budgeting purposes. The contract is structured as a personal service contract subject to Kentucky procurement laws and standard terms and conditions, including provisions for at-will termination with 30 days' notice, compliance with applicable tax and employment laws, non-discrimination requirements, and access to records for audit purposes. The contract is not effective until approved by the Secretary of the Finance and Administration Cabinet and filed with the Legislative Research Commission Government Contract Review Committee. Vendors were required to submit proposals using the Commonwealth's MOVEit TRANSFER secure file transfer system at https://ftp.ky.gov, with technical support available through the Commonwealth Service Desk at CommonwealthServiceDesk@ky.gov or 502-564-7576 for any submission issues.