1 of 1 STATEMENT OF BEST VALUE INVITATION TO NEGOTIATE NUMBER 01F12GC1 FL ACCESS MAILING / SCANNING / INDEXING SERVICES As a result of negotiations conducted by the Department’s Negotiation team with the short listed vendors for Invitation to Negotiate (ITN) Number 01F12GC1 for FL ACCESS MAILING/SCANNING/INDEXING SERVICES (Mail/Scan), the selection of Pitney Bowes Management Services, Inc., for the provision of Mail/Scan Services represents the best value for the state of Florida, based on the selection criteria set forth in ITN Section 5.1. ITN No. 01F12GC1 was released on May 24, 2012. The Department received four responsive replies by the due date of July 6, 2012. Based on the evaluation process established in the ITN, the Department commenced negotiations with two vendors, Pitney Bowes Management Services, Inc., (Pitney Bowes) and Xerox State & Local Solutions, Inc., (Xerox). The Department’s negotiation team negotiated concurrently with Pitney Bowes and Xerox. After three rounds of negotiations and three Interim Revised Replies (IRR’s) with each vendor, a normalized understanding about each vendor solution was achieved. Each vendor provided a response (IRR 4) attesting to its ability to meet all of the requirements in the ITN, as well as providing pricing to be considered by the Department. A comparison of the key attributes of the Pitney Bowes and Xerox proposals is reflected in the September 26, 2012, “Deal Summary” document, attached. The two vendors then provided their responses (IRR 5) to a potential Department offer of space within its Winewood campus, revealing that the option would not be cost-beneficial to the Department. However, Xerox did include a price reduction in its IRR. A summary of the revised price impact of the vendor responses is reflected in the “Pricing Summary – Round 5 Revised” document, attached. Based on the IRR’s, along with information received and discussed in previous negotiation meetings, on October 4, 2012, the negotiation team unanimously voted to move forward with negotiations with one vendor, Pitney Bowes. Following face-to-face and teleconference call negotiations between Pitney Bowes and the negotiation team, the Department and Pitney Bowes arrived at agreement on all material terms of a potential contract for services. On October 22, 2012, the negotiation team unanimously agreed to recommend to the Secretary or his designee that the Mail/Scan Services contract be awarded to Pitney Bowes as providing best value to the state based on the selection criteria set forth in ITN Section 5.1. The results of the negotiations with Pitney Bowes are summarized in the October 23, 2012, “Statement of Best Value” document, attached. On October 23, 2012, an award to Pitney Bowes was approved. Selection of Pitney Bowes for award of the contract provides the best value to the State of Florida, based on the selection criteria set forth in ITN Section 5.1, the vendor comparisons reflected in the “Deal Summary” and the “Pricing Summary – Round 5 Revised”, and the results of the additional negotiations with Pitney Bowes reflected in the “Statement of Best Value” document. The vendor’s proposed deliverables and price are reflected in the attached “Deliverables and Price” document. These deliverables and price provide the best value to the State of Florida based on the selection criteria set forth in ITN Section 5.1, the vendor comparisons reflected in the “Deal Summary” and the “Pricing Summary – Round 5 Revised”, and the results of the additional negotiations with Pitney Bowes reflected in the “Statement of Best Value” document.
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STATEMENT OF BEST VALUE INVITATION TO NEGOTIATE NUMBER 01F12GC1
FL ACCESS MAILING / SCANNING / INDEXING SERVICES As a result of negotiations conducted by the Department’s Negotiation team with the short listed vendors for Invitation to Negotiate (ITN) Number 01F12GC1 for FL ACCESS MAILING/SCANNING/INDEXING SERVICES (Mail/Scan), the selection of Pitney Bowes Management Services, Inc., for the provision of Mail/Scan Services represents the best value for the state of Florida, based on the selection criteria set forth in ITN Section 5.1. ITN No. 01F12GC1 was released on May 24, 2012. The Department received four responsive replies by the due date of July 6, 2012. Based on the evaluation process established in the ITN, the Department commenced negotiations with two vendors, Pitney Bowes Management Services, Inc., (Pitney Bowes) and Xerox State & Local Solutions, Inc., (Xerox). The Department’s negotiation team negotiated concurrently with Pitney Bowes and Xerox. After three rounds of negotiations and three Interim Revised Replies (IRR’s) with each vendor, a normalized understanding about each vendor solution was achieved. Each vendor provided a response (IRR 4) attesting to its ability to meet all of the requirements in the ITN, as well as providing pricing to be considered by the Department. A comparison of the key attributes of the Pitney Bowes and Xerox proposals is reflected in the September 26, 2012, “Deal Summary” document, attached. The two vendors then provided their responses (IRR 5) to a potential Department offer of space within its Winewood campus, revealing that the option would not be cost-beneficial to the Department. However, Xerox did include a price reduction in its IRR. A summary of the revised price impact of the vendor responses is reflected in the “Pricing Summary – Round 5 Revised” document, attached. Based on the IRR’s, along with information received and discussed in previous negotiation meetings, on October 4, 2012, the negotiation team unanimously voted to move forward with negotiations with one vendor, Pitney Bowes. Following face-to-face and teleconference call negotiations between Pitney Bowes and the negotiation team, the Department and Pitney Bowes arrived at agreement on all material terms of a potential contract for services. On October 22, 2012, the negotiation team unanimously agreed to recommend to the Secretary or his designee that the Mail/Scan Services contract be awarded to Pitney Bowes as providing best value to the state based on the selection criteria set forth in ITN Section 5.1. The results of the negotiations with Pitney Bowes are summarized in the October 23, 2012, “Statement of Best Value” document, attached. On October 23, 2012, an award to Pitney Bowes was approved. Selection of Pitney Bowes for award of the contract provides the best value to the State of Florida, based on the selection criteria set forth in ITN Section 5.1, the vendor comparisons reflected in the “Deal Summary” and the “Pricing Summary – Round 5 Revised”, and the results of the additional negotiations with Pitney Bowes reflected in the “Statement of Best Value” document. The vendor’s proposed deliverables and price are reflected in the attached “Deliverables and Price” document. These deliverables and price provide the best value to the State of Florida based on the selection criteria set forth in ITN Section 5.1, the vendor comparisons reflected in the “Deal Summary” and the “Pricing Summary – Round 5 Revised”, and the results of the additional negotiations with Pitney Bowes reflected in the “Statement of Best Value” document.
Mission: Protect the Vulnerable, Promote Strong and Economically Self- Sufficient Families,
and Advance Personal and Family Recovery and Resiliency.
Rick Scott, GovernorRick Scott, Governor
David Wilkins, SecretaryDavid Wilkins, Secretary
DRAFT
FL ACCESS Mailing / Scanning / Indexing Services
ITN # 01F12GC1
Deal Summary
September 26, 2012
DRAFT
ITN Process Requirement
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Functional Response
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Process Activity Pitney Bowes Xerox Notable Differences
Intake & Prep • Utilizing their local facility to receive and prepare documents
• Utilizing the Image API facility for all activities
• Local Tallahassee processing centers
Document Capture
• Pitney Bowes management system (PBMS) is COTS based , industry standard, document imaging solution
documents directly into iCenter, web scanning, iCapSure remote scanning, forms recognition
• Print and Outbound Mail Services (Print / Mail)
Mail Scan system Development, Implementation, Operations and Management
Project ImplementationProposed phased implementation• Phase 1 – improvements by utilizing forms
and client-facing procedures in place today. Implement operational consolidation and technology to realize efficiency gain
• Phase 2 – Implement technology innovations to enhance customer experience. Use e-forms that support real-time data validation and ingestion and tablet based tools
• Apply barcodes to documents - PBMS already prints and mails for DCF
Project Implementation• Design• Develop• Test• Detailed Project plan• Tasks, resource and time allotted
Image API has a library of processes and suite of software application productsAmerican National Standards Institute (ANSI)/Association for Information and Image Management (AIIM) quality standardsStandard hardware and software for scalability
Site Administrative Sub-work team 62 Implementation Cutover 52
Business Continuation and Contingency Planning
46
Site Readiness Audit 7
Implementation Project Planning - Complete 92 Days 76 Days
•All durations based upon draft project plans proposed by Vendors in first IRR
•Both Vendors have stated they would be ready to go by December 31, 2012 but given current
delays this Go-Live date is at risk
•Both Vendors have stated they could modify existing plans to bring the deliverable date down to
a more reasonable duration given their current understanding of scope and timing
•Both Vendors have already invested in pre-award activities e.g. recruiting
DRAFT
Key Vendor Assumptions
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Key Assumptions
Assumption Pitney Bowes Xerox
1 Alternative options to parsing include: (1) PBMS will provide the unique document type and subtype for each unique document on the page (and the additional fields), but refer these values in the XML data to the single page, or (2) PBMS will clone (but not parse) the page and index each page as a unique document.
11% of incoming documents are received via the mail channel; 89% of documents are received through the fax channel. Xerox assumes that we will be able to negotiate in good faith with DCF to clarify the mix and make appropriate adjustments if the max changes significantly.
2 Approximately 5% of incoming electronic pages will include multiple documents and will require splitting or cropping/cloning to meet current DCF requirement
95% of all incoming faxes have a unique identification number consisting of either: case number, social security number or Medicaid number.
3 The documents received by facsimile and PDF will be 60% typed and 40% Handwritten
Average number of pages per document is 5.2 pages.
4 The documents received via mail will be 10% typed and 90% handwritten
DCF will initiate Level II background checks
5 DCF understands that if they select to parse pages (includes the tasks of cloning and cropping, indexing each "new" unique document) the cost per document will increase by .045
The Xerox Team and the Department will meet to define reporting requirements, including format,frequency, distribution, data points, etc.
6 The upper threshold at which our blended pricing would potentially be increased is 20% physical/80% electronic on amonthly basis. The lower threshold at which we our pricing would potentially be decreased is 8% physical/92% electronic on a monthly basis.
98% of all incoming fax documents will correctly have a unique identification number consisting of at least one of the following: a. Case Number b. Social Security Number c. Medicaid Number
7 Vendor will meet for hour SLA as defined by business Based on the reduced resolution of faxed documents, 10% will require some clean-up to include data entry on the unique case number or Medicaid ID, and; 2% will require substantial cleanup including the search by Last Name, First Name, and DOB.
8 Vendor will meet for hour SLA as defined by business
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Identified Risk & Mitigation
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Risks identified by Pitney Bowes Mitigation Strategy
Staffing/recruiting is not completed in accordance with staff model and project timeline
PBMS will “over-hire” to ensureadequate staffing is in place and trained
Transfer of institutional knowledge not completed on time
PBMS will work with DCF to accomplish knowledge transfer and will identify concerns as soon in the timeline as possible so that corrective action can betaken
Facility not ready for processing in accordance with project timeline
Utilize PBMS national processing center
DCF validation data set andconnectivity/data transfer are not ready and tested per the project schedule
PBMS will work with DCF to complete the design and testing of the data set and connectivity / data transfer methods
Risks Identified by Xerox Mitigation Strategy
Level II Background screening may take 4-5 weeks to complete for job candidates.
Delays with Contract Award date or Contract Effective date
PO Box Cut- Over / Implementation of new PO address on out-going correspondence
• Xerox providing Project Management related services • ImageAPI has the Operational Technical Solution
– Pitney Bowes has no partners
• Five rounds of Pricing and Solution clarifications• The final round of negotiations had each vendor:
1. Affirm their understanding of the solution requirements2. Attest their solution meets the solution requirements. 3. Confirm their solution and description of how it meets, or exceeds, the
needs of the Department4. List all assumptions required for further Vendor evaluation5. Describe how their solution addresses best value6. Validate the pricing and formulas used by DCF to ensure total cost was
calculated correctly7. Propose revised pricing for a multi-year deal
• Both Vendor’s responded directly to the final DCF request above
• Status update:– Move forward held on 10/4/12 to determine next action
– Negotiation team voted 5 -0 to move forward with Pitney Bowes only
– Attachment I (SOW) sent on 10/5/12 to Pitney Bowes
– Four vendor meetings to develop SOW held (10/8, 10/10, 10/12 and 10/15)
– No outstanding items from SOW to resolve
– Legal review of draft SOW completed – 10/15/12
– Recommendation for Award meeting held on 10/22/12
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DRAFT
Review of ITN Selection Criteria (Best Value)Based on selection criteria in Section 5.1:• Vendor’s articulation of their project approach and solution, and the
ability of the approach and solution to meet the Department’s needs
• The innovation of the approach and solution
• Vendor references and track record implementing similar solutions to the one specified in this ITN
• Experience and skills of proposed staff relative to the proposed approach and solution
• Vendor’s Pricing
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DRAFT
Update of Negotiation Phase Status
The following is a Pitney Bowes specific summary aligned with the Selection Criteria• Approach and Solution highlights
– Meets all requirements from the ITN– 4 Hour document processing time 98% of the time, Monday through Saturday, 8am to
6pm and balance by noon the next business day– Industry standard index and image accuracy– No change orders for In-scope items identified subsequent to operations Go-Live– Vendor declined offer of DCF space
• Innovation includes:– Ability to deliver identical service with ~50 FTE costing approximately $1.516 million per
year utilizing enhanced business processes and off-the-shelf technology– Immediate application of bar codes to outbound mail, with DCF approval, at no cost– Value Added Services – Enhanced Return Mail Processing, Address Search and Update,
Post processing document management– Value Add Technology (Phase 2+) – Document capture kiosk, e-forms, mobile and tablet
tools, enhanced proof of mailing – Not part of current cost per document
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DRAFT
Update of Negotiation Phase Status
The following is a Pitney Bowes specific summary aligned with the Selection Criteria:• References and track record for Pitney Bowes
– Supports Public and Private clients performing Mailing, Scanning and Indexing Services
– Two rounds of references
• 1st round was evaluation phase from submitted references
• Round 1 reference checks scored 49 out of 50 during the evaluation phase of the ITN
• 2nd round conducted during Negotiation Phase with 3 additional reference checks completed
– Overall theme of references:
• Good partner
• Provides very good customer service
• Very satisfied with staff
• Provides innovative solutions to assist in advancing client organizations goals and objectives
• All references stated they wouldn’t hesitate contracting with Vendor in the future
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DRAFT
Update of Negotiation Phase Status –Reference Details
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Reference Check
Reference NameScope Contract Value / Reference Quotes
Verified –Evaluation
State of Indiana Social Services
Document imaging of 30,000 case management files across 26 field office
2009 –2014, $1,000,000“Pitney Bowes has been very, very adaptable to state changes”
Verified –Evaluation
FL DHSMV Inbound and Outbound mail, recording and imaging/ scanning of inbound checks and related documentation and printing of required documents and letters.
2009 – 2014, $834,000 per year“PBMS excels in their willingness to work with the Department on issues that arise and on suggesting ways to reduce costs.... Customer satisfaction appears to be important.”
Verified –Evaluation
US House of Representatives
Mail Services 2011 – 2019, $88,000,000, $11,000,000 per year“Implemented new processes. Did very well. Very accommodating and easy to work with”
Verified –Negotiation
Lockheed Martin -FDIC Scanning /Electronic Data Discovery Services
Imaging and indexing services. 100% scanning and indexing of documents. Since July 2009 – Pitney Bowes has processed 20,365 boxes = 40,730,000 documents That equates to approximately 13,576,666 documents a year.
2009 – 2013, $25,000,000
Verified –Negotiation
Lockheed Martin Automated Litigation Support – 100% scanning and indexing of physical and electronic documents
2007 –2013, $5,000,000“Pitney Bowes has been very responsive and good to work with. No issues with them as a sub-contractor.”
Verified –Negotiation
REI / NCAA Mail, Scan and Index and help desk support200-300k in 3 month period, 500k annually
“Worked with this Provider for over 20 years at a law firm and now with the NCAA and has always received superior performance. The Provider has always met or exceeded the requirements.”
Not Verified – Provided in Reply to ITN
US Department of Justice
Mail and Messenger Services, Faxing Services, Copy/Scan Services, Supply Services and Records Management Services
2010 – 2015, $30,000,000
DRAFT
Update of Negotiation Phase Status
The following is a Pitney Bowes specific summary aligned with the Selection Criteria:
• Experience and skills of proposed staff– Mail Scan facility located in Tallahassee
– Existing DCF staff in Wildwood will be considered for Tallahassee operation
– Extensive Mail, Scan, Indexing experience across the organization to assist with a quick launch for DCF
– The Service Delivery Manager will have a minimum of five years service delivery management experience; three years as the Service Delivery Manager for the development, implementation and/or operation of mail, scan and indexing program with comparable size and complexity
– The Service Delivery Manager shall have successfully managed the delivery of services for document imaging for a customer(s) with a similar scope of services
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DRAFT
Update of Negotiation Phase Status
• The following is a Pitney Bowes specific summary aligned with the Selection Criteria:
The List below identifies value-added components negotiated into the SOW by the negotiating team:
• Revised pricing tier from 6 – 12 million documents to 5 – 13 million documents per year at the $0.175 per document
• Provides an additional million unit buffer on both sides of the current annualized average of 8.66 million documents per year
• Pitney Bowes will review decreasing cost / document if hard copy document mix falls below 92% / 8%
• Vendor agrees that maximum percentage change in cost per document will not exceed 7% Annually
• Additional Vendor assumptions mitigated by negotiations team:– Vendor agreed to improve ratio of Electronic to Physical document Mix from
90 /10 to 80 / 20 and review if mix exceeds 80 / 20 for 3 consecutive months– Vendor agreed to improve percentage of all incoming documents that may
require cropping from 5% to 15% and review if mix exceeds 15% for 3 consecutive months
– Vendor will review the mix of typed (60%) to handwritten (40%) during quarterly meetings with DCF
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DRAFT
Key Performance Measures & Remedies
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Metric Performance Measure Remedy
Transition and conversion activities
Failure to achieve operational readiness and commence mail, imaging and indexing services on the agreed upon “go-live” date.
$10,000 per day
Disaster Support Failure to execute the Disaster recovery plan in response to declared disaster when agreed Performance Measures will be impacted
$5,000 per incident
Receipt and intake of electronic documents
Failure to ingest DCF supplied electronic documents during business hours Monday through Saturday 8 AM to 6 PM
If PBMS sFTP server not available for more than 30 minutes, $3000.00 for first 30 minutes and $1000.00 for each additional 30 minutes or portion thereof for an incident.
Remedy not to exceed $5000.00 per day.Includes failure due to elements within PBMS control.Remedy will not apply during the transition period to the Disaster Recovery location.
Document processing within the four (4) hour Turn-Around Time
Failure to process 98 % of documents within 4 hours defined as 4 business hours from the time of receipt Monday through Saturday 8 AM to 6 PM, with items received after 2 PM completed by noon the next business day; and the remaining 2% by end of next business day.
If percentage of documents not delivered within the turn-around-time is 10% or less of the daily receipts, remedy is $.175 for each document exceeding the turn- around time
If percentage of documents not delivered within the turn-around-time is over 10% the remedy is $.235 for each document over 10% exceeding the turn- around time
Ensure Index Accuracy Failure to accurately index 98.00% of all documents by type or sub-type, measured on a monthly basis
Excludes errors due to incorrect data in the DCF View Table
If monthly accuracy is below 98%, $0.235 per incorrectly indexed document over 2%
Ensure Image Quality Failure to ensure 99.98% image quality on all documents scanned, measured on a monthly basis, unacceptable images
If monthly accuracy is below 99.98%, $0.175 per unacceptable document over .02%
DRAFT
Next Steps
• Based on the process outlined in ITN Section 5. Selection Criteria– 5.1 Selection Criteria: Defines best value criteria– 5.3 Negotiation Phase Process for Final Selection– 5.4 Final Selection and Notice Of Intent To Award Contract– 5.4.4 Secretary’s Approval
• Recommendation sent to Secretary/Designee - 10/22/12• Secretary/Designee makes award - 10/22/12 • Post award to VBS - 10/23/12• Contract sent to EOG to for contract review - 10/30/12 • Final award date target – 11/02/12
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DELIVERABLES AND PRICE
a) This is a combination fixed price (unit cost) and cost reimbursement contract.
b) The Department will pay the Provider for units of services rendered as provided in the following fee schedule:
Mailing / Scanning / Indexing
Services
Original
Term
Renewal
Term
Volume (in Millions) Cost per
Document*
Cost per
Document*
0 to 2 $ 0.190 $ 0.190
2 to 5 $ 0.180 $ 0.180
5 to 13 $ 0.175 $ 0.175
13+ $ 0.170 $ 0.170
*Pricing is to be based on the definition of a document as:
A page or set of pages that may have one or more images and one or more document types on a page and associated with an individual ACCESS participant or individual ACCESS case. A document may be comprised of the entire contents of an envelope or electronic transmission or it may be comprised of selected pages, portions of pages, or a combination thereof. When the Department has one set of materials being indexed to one ACCESS participant or ACCESS case, the Department would call this a document. Physical and Electronic files may be associated with more than one ACCESS participant or case. For this scenario, the document is split into separate documents according to the association with the correct participants or case.
Included in pricing:
Post processing; Physical and electronic document retention not to exceed 60 calendar days; Shredding and other final disposition as directed by the Department.
c) The Department will pay the Provider for the delivery of service units for a total dollar amount not
to exceed the following:
i) $656,250.00 for state fiscal year 2012-2013;
ii) $1,575,000.00 for state fiscal year 2013-2014;
iii) $1,575,000.00 for state fiscal year 2014-2015; and
iv) $1,575,000.00 for state fiscal year 2015-2016; for a total contract amount not to exceed $5,381,250.00, subject to the availability of funds.
d) The monthly cost per document will be based on the monthly volume multiplied times twelve to determine the volume tier that should be applied to each document processed for the purpose of creating the most current months invoice.
e) The Provider agrees to no price modifications due to a change in the physical to electronic document mix, up to 20% physical documents per month, or a need to conduct cloning for up to
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15% of documents per month. If either circumstance occurs over three (3) consecutive months, the parties agree to immediately meet to discuss a potential contract amendment related to cost concerns. Any agreed to price increases for this purpose shall not exceed a 7% increase annually of the cost per document identified in the cost table above.
f) The parties also agree to discuss a pricing reduction on a cost per document basis, if after 3 consecutive months, the physical to electronic document mix changes below 8% physical.
g) The Department will reimburse the Provider for expenditures of postage to return original documents to the Departments customer mail, for a total reimburse amount not to exceed $10,000.00 for the initial term subject to the availability of funds.
h) The Provider will also provide to the Department without additional charge the following project deliverables and documentation:
Status Reports
Project Plan
Transition Plan
Functional Design Document
Detailed Design Document
Systems Operations and Interface Procedures Manual
