REDWOODS COMMUNITY COLLEGE DISTRICT

http://www.redwoods.edu/District/BusinessOffice/documents/

RFQAccountCollection3b.pdf

REDWOODS COMMUNITY COLLEGE DISTRICT

2011-12 Request for Qualifications - Account Collection Services

The Board of Trustees of the Redwoods Community College District is initiating a process for the selection of a firm or firms to perform Account Collection Services for a period of one year from the initial date of contract. As part of this process, we are requesting written responses to the

Request for Qualifications (RFQ) to create a list of firms qualified to provide account collection services. The list of qualified firms will be utilized for a period of up to five years.

The District’s intent is to enter into a series of one-year, non-exclusive contracts with one or more firms on the qualified list, in accordance with the District’s standard consulting contract. During the period of this contract, the District may pursue other methods to recover amounts owed including but not limited to using the Chancellor’s Office Tax Offset Program (COTOP).

This RFQ is an informal solicitation of proposals only. It is not intended, nor is it to be construed, as engaging in formal competitive bidding pursuant to any statute, ordinance, policy or regulation.

1.

Mandatory Requirements

A proposal will not be considered unless the Firm submitting the proposal meets the following criteria:

Responses to the RFQ must be received at the following office address:

Matt Hanson, Purchasing Specialist

Redwoods Community College District

7351 Tompkins Hill Rd

Eureka, CA 95501-9300

Proposals are due by 2:00 p.m. November 23, 2012. Late proposals may be rejected at the discretion of the District. It is the responsibility of the submitting Firm to make sure the proposal is delivered to the specified location by the date and time specified above. Proposals must be sealed with the envelopes clearly marked in the lower left hand corner “Sealed

Qualifications for Account Collection

Services”.

Complete, sign, and return the original and one (1) copy and email an electronic copy of the complete proposal to matt-hanson@redwoods.edu. Please e-mail any questions regarding this proposal to Matt Hanson, Purchasing Specialist, at matt-hanson@redwoods.edu.

The last day for submission of written questions is November 15, 2012. All questions will be responded to by email on or before November 16, 2012. To receive a listing of all questions and answers, send an email to matt-hanson@redwoods.edu

by November 15, 2012. To ensure each Proposer receives equal information in preparing their proposal, Proposers are prohibited from directly contacting other District employees during the pre-submission process. No oral interpretations, clarifications or modification to the RFP documents are authorized on behalf of the District and Proposers shall not rely on such interpretations, clarifications, or modifications in preparing their proposals.

This RFQ does not commit the District to award a contract or to pay any costs incurred in the preparation of any proposal responsive to this request. The District reserves the right to accept all or part of any proposal or to cancel in part or in its entirety this RFQ. The District further reserves the right to accept the proposal that it considers to be in the best interest of the

District. While price is a consideration, the District reserves the right to award a contract on the basis of its overall evaluation.

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It is the policy of the District that no person or Firm shall be excluded from participation in, denied the benefits of, or otherwise be discriminated against in the award and performance of any District contract on the grounds of race, ethnicity, creed, religion, color, national origin, age, sex, or sexual orientation.

The Firm must have a demonstrated record of professional, quality work. All collection efforts on the part of the Firm shall be in compliance and consistent with all Federal, state, and local statutes, regulations, applicable state and local Bar rules, procedures, and opinions, and the highest ethical and professional standards, which apply to the collection of debts and credit reporting. These include but are not limited to the following:

California's Fair Debt Collection Practices Act

California's Consumer Credit Reporting Agencies Act

California’s Unfair Business Practices Act

Federal Debt Collection Procedures Act of 1990 (28 U.S.C. §§ 3001-3307);

Privacy Act of 1974, as amended (5 U.S.C. § 552a);

Fair Debt Collection Practices Act (15 U.S.C. §§ 1692a-1692o);

Debt Collection Act of 1982, as amended (31 U.S.C. §§ 3701-3720E);

Fair Credit Reporting Act (15 U.S.C. §§ 1681a-1681u);

Federal Debt Recovery Act (31 U.S.C. § 3718; as amended);

Consumer Credit Protection Act (15 U.S.C. §§ 1671-1679)

2.

Background information

Redwoods Community College District is a political subdivision of the State of California. The

District’s operations consist principally of providing educational services to the local residents of the District. The District is classified as a governmental instrumentality under Internal

Revenue Code Section 115. The College of the Redwoods Foundation is classified as a charitable organization under Internal Revenue Code Section 501(c)(3), both are therefore, exempt from Federal taxes. The accounts receivable that are the subject of this RFQ are primarily delinquent student tuition, fees, fines, and charges.

The District is a single-college District with approximately 4,800 Full-Time Equivalent

Students. It is comprised on one main campus located in Eureka, CA and two education centers, one in Fort Bragg, CA and one in Crescent City, CA.

The District’s unrestricted general fund revenue budget for fiscal year 2011-12 is $27.5 million. The

College of the Redwoods Foundation has assets totaling $5.9 million. The District’s latest financial audit and measure Q financial and performance audit reports and the latest financial and budget reports are available at: http://www.redwoods.edu/District/BusinessOffice/reports.asp

3.

Information and General Conditions

3.1

Definitions

The term District or college as used in these terms shall be construed to include the

Redwoods Community College District, the College of the Redwoods Foundation and all employees, officers, and agents of the Redwoods Community College District.

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The term Firm, Agency, Proposer, Consultant or Contactor as used in these clauses shall be construed to include the Firm and all employees, officers, and agents of said Firm.

3.2

Signature

The proposal must be signed in the name of the Firm and must bear the signature of the person authorized to sign proposals on behalf of the Firm.

3.3

List of Qualified Firms

Successful firms will be included on a list of firms qualified to provide account collection services for the District, referred to as the “qualified list”. Written notification will be made to Firms that will not be included on the qualified list.

3.4

Award of Contract

If a contract is awarded, it will be to a responsible Firm on the qualified list whose proposal is deemed to best meet the needs of the District. Following the selection of the apparent successful Firm, the District will enter into negotiations regarding provisions of a non-exclusive contract. If a satisfactory contract cannot be negotiated, the District may, in its sole discretion, begin contract negotiations with another Firm on the qualified list and terminate negotiations with the originally selected Firm. The District may contract with more than one Firm on the qualified list at any time.

3.5

Supplemental Compensation and Additional Services

If additional services are authorized, the Agreement will be amended in writing to reflect the additional services and supplemental compensation shall be at the rates applicable for the then current engagement year. If additional work is not authorized in writing by the

District’s Chief Business Officer, services will be performed only as far as the work is authorized and may include an explanation regarding the circumstances involved.

3.6

Independent Firm

While performing services pursuant to an Agreement with the District, the Firm is an independent Firm and not an employee, officer, or agent of the District.

3.7

Disputes

Any disputes will attempt to be resolved by informal mediation. The venue for any dispute shall be Humboldt County Superior Court and no other place.

4.

Scope of the Services

The Scope of Work is to be used as a general guide and is not intended to be a complete list of all work necessary to complete the proposed agreement. Firms responding to the RFQ shall be prepared to deliver services and perform the work necessary to provide account collection services within one month of the issuance of a contract.

4.1

The District will determine which accounts will be referred to the Firm. The District retains the right to recall from the Firm, without charge or penalty, any accounts assigned to the Firm. Upon recall by the District, no further collection efforts on recalled accounts will be undertaken by the Firm. If requested by the District, the Firm is expected to immediately clear the customer’s credit report and provide written confirmation.

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4.2

Accounts will be assigned by means of electronic transmission, electronic file, hard copy, or in writing. The assignment will include the following information (Some information may be unavailable for certain accounts): Name(s), Address, Telephone number, Date and Type of Account, Unpaid balance outstanding.

4.3

If the Firm desires to have a copy of any back-up documentation, the Firm will bear the cost of document retrieval and copying.

4.4

Firm shall refrain from selling, publishing or otherwise providing client information for any purposes other than those processes necessary for the collection process.

4.5

Firm will take over all assigned delinquent accounts and initiate standard, lawful, and accepted collection procedures, including but not limited to attempting a first contact by live person telephone call or letter mailed by United States Postal Service (USPS), within

10 working days from the date of the assignment. Firm shall make contact with accounts under the name of the Firm. Firm shall continue collection efforts by contacting account holders at least monthly thereafter by telephone or US mail.

4.6

Within 20 working days from the date of assignment, Firm shall report all uncollected accounts to at least one of the major credit bureaus (Equifax, Experian, TransUnion) and will update credit bureau records regularly to maintain accurate records. Firm will conduct skip tracing and asset searches on accounts, as appropriate. Firm will promptly remove a credit bureau record when legally required to do so. In accordance with the

Fair Credit Reporting Act, the District requires that accounts be cancelled from each credit bureau upon request of District and that the Firm provide a copy of that notification to the District.

4.7

No legal action shall commence on any account without written authorization from the

District’s Chief Business Officer. The Firm will not accept payment of less than the full amount owed in full satisfaction of a debt without written authorization from the

District’s Chief Business Officer.

4.8

Firm shall accept and process all written disputes in compliance with all Federal and

State laws. The District will work with the Firm to validate the debt.

4.9

Firm will pay all costs involved in the collection of the assigned accounts and all costs of handling the processing of payments received, including but not limited to postage, telephone charges, litigation, merchant fees, credit bureau reporting fees, bank fees, NSF or returned payment fees, and transportation. Firm will be responsible for handling the processing of payments received. Firm will accept and process credit and debit card payments via telephone for Visa and MasterCard as a minimum requirement. Firm will at a minimum provide a toll-free number for account holders to call the Firm.

4.10

It is the District’s intent to send a notice to each account holder before referring to

Account Collection Services with the collection costs added to the amount due. It is expected that the Firm will not assess additional fees to the customer’s account, except as follows. Any fee, charge, penalty, etc. that the Firm proposes to assess to the debtor must be disclosed as a specific charge in the Cost of Services section of their proposal.

4.11

At no additional charge to the District, the Firm will provide US Postal Service “ Address

Service Requested” verifications or similar service and address formatting. The District

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2011-12 Request for Qualifications - Account Collection Services will provide the Firm with an electronic listing of addresses. The Firm will process the addresses and return to the District an electronic listing of the original addresses with the cleaned up addresses including forwarding addresses. The District will use these cleaned up addresses to send account statements and other miscellaneous correspondence.

4.12

Firm will maintain confidentiality on all accounts assigned by the District and identify how that confidentiality will be maintained.

4.13

Firm will maintain separate files for each account for audit purposes. Audit of any and all assigned records is left to the discretion of the District at any time. The District shall have the right, at any time during regular business hours, to inspect the records relating to the District’s accounts kept by the Firm at the Firm’s place of business. The Firm must retain said records for four (4) years following the final payment under the proposed contract.

4.14

Firm will maintain a disaster recovery plan to protect the District’s receivables and the confidentiality of the information contained therein.

4.15

Firm will immediately (within 7 working days) return all accounts still pending and remove credit bureau records upon termination of contract by any party.

4.16

The District requires that all accounts be actively collected for twelve (12) months from date of assignment to the Firm. After 12 months of attempting to collect on an account, the Firm may deem an account to be uncollectible, but will at a minimum continue to maintain credit bureau reporting on such accounts. Firm will provide the District with a report of uncollectible accounts every November 30 th

and May 30 th with a record of the efforts to collect and explanation of why account is deemed uncollectible. The District may recall an account at any time without charge or penalty.

4.17

Firm will provide electronic copies, in Microsoft format, of monthly detailed reports reflecting collections, legal actions, adjustments, updated names, updated addresses, updated telephone numbers, updated email addresses, and corrections by the 10th of the following month.

4.18

Firm will provide electronic copies of monthly reports, in Microsoft format, detailing the status of each account, including the customer name and number, the beginning balance, collections received during the month, current balance, and collection status by the 10th of the following month.

4.19

Firm will remit all monies collected to the District by the 10th of the following month after receipt. Remittance shall be made from the Firm to the District by wire transfer, electronic funds transfer, or other means acceptable to the District. The District will then be invoiced for fees earned.

4.19.1

In compliance with section 8776 of the California State Accounting Manual

(SAM) (http://sam.dgs.ca.gov/TOC/8700/8776.htm), “ Any contract made with a collection agency must specify that all funds collected on behalf of a department

[District] will be remitted to that department [District]. The collection agency can then be paid in one of several ways for its services - by a set fee per collection, on an hourly basis, or on a percentage basis, in arrears, based on services rendered .”

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5.

Staffing

5.1

Firm shall assign professional staff as appropriate to conduct the account collection services. The Firm is responsible for the assignment of its personnel.

5.2

Firm may not assign or subcontract any portion of its contract with the District without the written consent of the District’s Chief Business Officer.

5.3

Firm may subcontract with outside attorneys for the sole purpose of performing legal work on accounts only with express written consent of the District’s Chief Business

Officer. The Firm shall not add a processing fee, overhead charge, etc. to legal billings.

6.

A copy of the District’s service contract is included as

Attachment 1 . The contract contains additional requirements that the Firm must meet in order to perform account collection services on behalf of the District.

7.

RFQ Response Requirements

Proposals shall include in the following order:

7.1

All RFQ Amendments

The most recent RFQ Amendment shall be on top of the Proposal.

7.2

Title Page

Indicate “Redwoods Community College District, Account Collection Services,” the name of the Firm, local address, the name of the Firm’s contact person for the purposes of this RFQ, the telephone number of the contact person, email address of the contact person, and the date.

7.3

Table of Contents

Include a clear identification of the material included in the Firm’s response by section and page number.

7.4

Letter of Transmittal

Summarize on a single page your understanding of the work to be performed and explain why you believe your Firm is best qualified to provide the District’s account collection services. Indicate the names of the persons who will be authorized to make representations on the part of the Firm including their titles, email addresses, and telephone numbers. The person authorized to execute the contract on the part of the Firm must sign the transmittal letter.

7.5

Profile of Account Collection Services Firm

7.5.1

State the size, location, history, range of services, and major clients of the office from which the work will be done if the Firm is awarded the contract.

7.5.2

Describe the range of experience that the Firm has in performing account collection services for community college districts, universities and other government entities in California.

7.5.3

Describe the range of activities performed by the office from which the work will be done.

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7.6

Account Collection Services Staffing and Qualifications

7.6.1

Indicate the name and position of the person who will manage the account collection services as specified in this RFQ. Provide a brief resume of this manager’s background, training, and experience.

7.7

Conflict of Interest

7.7.1

Disclose any personal or business relationship your Firm has with the District, or with any of the Board Members or officers of the District.

7.7.2

Describe any failure or refusal to complete a contract, including details and dates within the last five (5) years.

7.7.3

List any disciplinary or investigative action, including audits, in the past five (5) years conducted by any professional body or local, state or federal branch of government of your Firm.

7.7.4

List any and all litigation, pending or final, to which your firm was or is a party that involves related or similar services being solicited in the past five (5) years.

7.8

References

7.8.1

Provide a list of four client references for whom the Firm has provided account collection services in the past two (2) years. Include the name of the client, address, telephone, and name of each client’s manager. Preference will be given to references who are employees of a California public agency.

7.9

Cost of Services

7.9.1

In compliance with section 8776 of the California State Accounting Manual (SAM)

(http://sam.dgs.ca.gov/TOC/8700/8776.htm), “ All funds collected on behalf of a department [District] will be remitted to the department [District].

” The Firm will invoice the District for its agreed-upon fee. Table 1 displays an estimated account aging:

Delinquent Accounts Number of Accounts Total Dollar Amount

90 – 120 516 $110,459

121 – 365 1,487 268,311

366 – 730

731 and over

1,246

2,781

260,476

885,012

TOTAL 6,030 $1,524,258

7.9.2

Firm shall indicate the collection fees required under the contract. It is the

District’s intent to include the collection fee in the debt owed as California

Government Code 16583.1 allows the imposition of a reasonable fee, not to exceed the actual costs, to recover collection costs on a past due account. The Firm will earn its account collection service fee percentage on the account. Except for the account collection service fee percentage and any approved legal charges, such fees

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2011-12 Request for Qualifications - Account Collection Services and charges will be collected only after District debt is satisfied. The District will not collect any charges owed by the debtor to the Firm. Only those fees specified by the Firm in this section will be paid by the District. The Firm shall only collect a fee on payments processed and collected through the Account Collection Services

Firm. Except for Attorney Services , the total fee paid to the Firm shall not exceed the total amount collected by the Firm from the debtor during the contract year, unless the entire debt to the District has been satisfied.

7.9.3

Applicable collection fee percentage will be added by the District using the following procedure: The applicable amount outstanding will be divided by the fee percentage. For example, a $100 balance with a 25.0% collection fee percentage would be adjusted to $133.33 with $33.33 earned by the firm if full payment is collected. The District participates in the Chancellor’s Office Tax Offset Program

(COTOP) with the Franchise Tax Board. Each year, the District transmits a list of accounts to COTOP for tax refund intercept. COTOP charges a 25% fee, calculated as described in this section. For accounts referred to the firm for collection, the percentage fee assessed by the firm, less the COTOP fee will be earned by the firm for payments collected by COTOP. For example, if the collection fee percentage is

30%, COTOP would collect its 25% and the firm would earn the difference or 5%.

7.9.3.1

Account collection service fee as a percentage of amount of delinquent account collected by the Firm: _____%.

7.9.3.2

Attorney services must be expressly approved in writing in advance by the

District’s Chief Business Officer. These fee amounts are applicable for the first year, and may be adjusted annually during the five year agreement.

Attorney hourly fee: $_____. Paralegal hourly fee: $_____.

7.9.3.3

Additional services must be expressly approved in writing in advance by the

District’s Chief Business Officer. These fee amounts are applicable for the first year, and may be adjusted annually during the five year agreement.

Fee, charge, penalty, etc. assessed by the Firm to the debtor, for example

NSF fee (Identify each specific service and the percentage or dollar fee amount): _____% or $_____.

7.10

Additional Information

7.10.1

What is the Firm’s toll-free number for Customer Service? What are the days and hours (Pacific time) of operation for customer service? Where is the customer service center located?

7.10.2

What is the Firm’s policy regarding installment agreements with debtors?

7.10.3

What is the Firm’s policy and procedure for obtaining judgments?

7.10.4

What methodology, approach and resources are used in debt recovery?

7.10.5

What is your Firm’s estimated success rate of collection based upon various types and ages of accounts with date of last activity at 120 days, 1 year, 2 years, and over 2 years?

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7.10.6

Does your Firm have staff that is bi-lingual and do you have collection letters that are available in bi-lingual? What languages does your Firm provide for calls and letters?

7.10.7

Describe your experience in dealing with delinquent tuition bills, fines, etc.

7.10.8

How does the Firm validate address information received from the District before commencing the collection action?

7.10.9

Describe how the firm maintains the confidentiality of records.

7.10.10

The preceding sections shall contain only the information requested. If the Firm desires to present additional information, such additional information shall be presented in this section of the RFQ. If there is no additional information present, indicate, “There is no additional information to present.”

8.

Evaluation and Award of RFQ Responses

8.1

Evaluation Criteria

Evaluation criteria will include but not be limited to the experience and reputation of the

Firm in performing account collection services for community colleges, universities and/or other government entities in California, the experience of the manager who will be responsible for the account collection services, the professional staff available to perform the service, the reputation of the Firm, the cost to perform the service, the availability of the Firm to perform the work within a specified time period, and any other criteria the

District feels is appropriate.

8.2

Award Process

The steps in the award process are as follows:

8.2.1

The District will release the Request for Qualifications (RFQ) on October 22, 2012.

8.2.2

The last day for submission of written questions is November 15, 2012. All questions will be responded to via email on or before November 16, 2012.

8.2.3

Responses are due in to the District by 2:00 p.m. on December 3, 2012.

8.2.4

The District will screen the responses based on the evaluation criteria stated above, and may select finalist(s) to be forwarded to the Board of Trustees for approval.

8.2.5

If any finalists are forwarded for approval, the Board of Trustees will approve the qualified list of firms to provide Account Collection Services at their December 4,

2012 Board meeting. z:\legal\cotop collections\rfq account collection3b.docx

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