Description
INVESTMENT DIVISIONSTOCK DISTRIBUTION MANAGEMENT SERVICES REQUIREMENTS AND STATEMENT OF WORK 1. Introduction This statement of work describes the tasks and requirements needed by the Small Business Administration??s Investment Division to manage the sale of marketable securities received from Small Business Investment Companies (??SBICs??). 2. Program Background Summary The Investment Division of the U.S. Small Business Administration (SBA) administers the SBIC program, which was created by Congress to stimulate and supplement the flow of private equity capita and long-term debt to small businesses. SBICs are privately-owned and privately-managed venture capital funds. These funds are licensed and regulated by the SBA and are eligible to receive supplemental funding (leverage) from the SBA. Under the terms of the SBIC program, all SBICs must invest only in small businesses. As of June 13, 2007, there were 378 active SBICs, of which 153 receive leverage from the SBA through the issuance of ??participating securities??. Although no new participating securities (PS) SBICs are currently being licensed, the existing PS funds reported over 1,800 investments totaling $1.5 billion in FY 2006. Under the terms of the PS program, SBA is entitled to certain distributions from SBICs and may receive such distributions in the form of either cash or marketable securities (in kind distributions). 3. Objective The Investment Division??s objective is to sell securities it receives within a limited time frame (generally a few weeks, but with some flexibility), while minimizing losses relative to the value of the securities as of the distribution date. To accomplish that objective, SBA is seeking to enter into a contractual arrangement with an organization which is knowledgeable about and proficient in the evaluation and trading of thinly traded equity securities and which has experience in the management of distributions by venture capital funds. 4. Term of the Contract One year with four one-year options. 5. Scope of the Contract The contractor will provide services associated with the management of distributions received by SBA. Such services will include advising SBA as whether securities that an SBIC proposes to distribute qualify as ??Distributable Securities??, as defined in 13 CFR 107.50; developing an appropriate liquidation strategy for each security received, subject to SBA??s objectives and direction; identification and resolution of any legal or other restrictions affecting SBA??s ability to sell securities; trading of securities; establishment and maintenance of relationships with transfer agents and any other third parties necessary to conduct activities under the contract and satisfy SBA??s overall objectives; and preparation of reports to SBA concerning transactions and the status of securities under management. The contractor will provide SBA with same-day notice by telephone and by facsimile or email of any sale of securities, including price and quantity of shares sold, and will follow up with hard copies of trade confirmations by regular mail. The contractor will prepare a monthly activity report containing complete information on each transaction concluded, including any gain or loss on disposition of securities, the number of shares and current market value of any long positions in SBA??s account, and the cost charged to SBA for the period and on a cumulative basis for the fiscal year to date. The contractor shall deliver this monthly report electronically as a Microsoft Excel spreadsheet, no later than 10 calendar days after the end of the month. 6. Place of Performance/Travel The contractor shall perform the duties listed in paragraph 5 at its place of business. As requested, the contractor shall travel to the Investment Division??s place of business located at 409 3rd Street SW, 6th floor, Washington, DC 20416. 7. Confidentiality and Disclosure All information obtained by the contractor from SBA and SBICs shall be disclosed only to SBA personnel and shall not be used for any reason by the contractor and its staff other than performance of its duties required hereunder. The contractor shall sign a confidentiality agreement to safeguard the information provided by SBA or prepared by the contractor with regard to this contract. 8. Proposal Requirements 8.1 General The technical/price proposal is to be submitted in two original and five hardcopies. An electronic version of the proposal should also be submitted in Microsoft Word and/or PowerPoint as appropriate. The technical/price proposal will be incorporated into the contract at contract award. 8.2 Proposal Elements ?X Technical Expertise ?V Demonstrate the proposed team members?? experience in the evaluation and trading of equity securities, including securities that are thinly traded, subject to trading restrictions, or issued by companies that have recently made an initial public offering. Include discussion of the firm??s capabilities in departments that will provide necessary support services (trading desk, legal, etc.) to the broker or other individual who will be SBA??s primary point of contact. Key persons who would be responsible for SBA??s account must be identified specifically. ?X Account documents ?V Any documentation that the contractor will require to establish an account in SBA??s name must be submitted to SBA as part of the proposal. SBA is prepared to provide the contractor with a taxpayer identification number and a signed form W-9; documentation indicating the SBA employees who have responsibility for the account and are permitted to authorize trades and transfers of funds; wire instructions for cash proceeds received from sales of securities; and other information needed for the management of SBA??s account. SBA generally does not enter into supplemental client agreements governing matters such as indemnification, arbitration, provision of cash management or other supplemental services, etc. ?X Method of Payment ?V SBA is not permitted to pay brokerage commissions via a deduction from sale proceeds. Instead, it must pay earned commission by separate wire transfer. Indicate in your proposal whether you are able to accommodate the following suggested procedure (or propose an alternative procedure): For each trade executed, the contractor will generate a trade confirmation showing number of shares sold, sales price, gross proceeds, and commission earned. The contractor will fax or email the confirmation to SBA, which after review and approval of the confirmation will wire the commission amount to the contractor for credit to SBA??s account. SBA expects that this process will normally be completed by the time settlement takes place. Following settlement, the contractor will wire out the gross proceeds from the sale of securities in accordance with standing wire instructions provided by SBA. ?X Proposed costs ?V On a per-share basis. 9. Contract Award Evaluation will be conducted and selection will be made in accordance with the guidelines provided in the Federal Acquisition Regulations (FAR). Award will be made to the party whose proposal represents the best value to the Government considering the quality of the technical proposal and the relative cost. Pursuant to FAR Part 15, SBA reserves the right to award a contract based upon initial responses submitted and without any further discussions with the potential awardees. SECTION M ?V EVALUATION AND AWARD CRITERIA The following technical/cost factors will be used for determining technical acceptability and realistic price/cost. 1. TECHNICAL EVALUATION CRITERIA a. Demonstrated experience (minimum 10 years) in the management of in-kind distributions from venture capital partnerships to third party clients, including pension funds, foundations and other large institutional clients. Must have demonstrated capability to conduct research on venture capital backed companies prior to the IPO process, including company and industry fundamentals, competition and management; evaluate market prospects of venture-backed companies; establish custodial accounts for institutional clients; coordinate with transfer agents, conduct any legal review, and take any other steps necessary to ensure the timely transfer of marketable securities to recipients?? account; and implement administrative support and information systems designed to monitor and account for distribution-related transactions. b. Demonstrated experience (minimum 10 years) offering distribution management services to limited partners of venture capital firms. Must have demonstrated capability to advise clients on sell/hold investment strategies; provide experienced and full-time staff available to provide client services; provide a range of trading options to meet varying client needs; trade a wide range of securities including thinly-traded stocks, recent IPOs, and stocks subject to selling restrictions; and implement and operate administrative support and information systems tailored to the needs of distribution management clients. For each of the criteria listed, the following rating method shall be used in the evaluation of the technical experience and expertise of the offeror: Excellent - Based on the offeror's experience and expertise, no doubt exists that the offeror will successfully perform the required effort. The experience and expertise show a complete understanding of the Statement of Work and a demonstrated capability to perform it. Good ?V Based on the offeror's experience and expertise, little doubt exists that the offeror will successfully perform the required effort. The experience and expertise show an acceptable understanding of the Statement of Work and a demonstrated capability to perform it. Marginal ?V Based on the offeror's experience and expertise, some doubt exists that the offeror will successfully perform the required effort. The experience and expertise show a marginal understanding of the Statement of Work and a limited demonstrated capability to perform it. Poor ?V Based on the offeror's experience and expertise, serious doubt exists that the offeror will successfully perform the required effort. The experience and expertise show significant deficiencies in understanding of the Statement of Work and no demonstrated capability to perform it. An offeror must receive a rating of good or excellent to be considered technically acceptable. 2. PRICE/COST EVALUATION CRITERIA The evaluation will be based on information supplied by the offeror and compared to its existing pricing methodology. Information may also be obtained from references provided by the offeror, as well as other relevant information obtained from other sources known to the Government. The evaluation will consider: (1) the realism of the proposed cost to the requirements, and (2) the realism of proposed costs to current industry practices. The following rating method shall be used in the evaluation of the Price/Cost Realism information: Excellent - Based on the offeror's proposal, no doubt exists that the offeror??s proposed price/cost is realistic. The Price/Cost documentation shows a complete understanding of the requirements, within the standards and workload specified. Good - Based on the offeror's proposal, little doubt exists that the offeror??s proposed price/cost is realistic. The Price/Cost documentation shows an acceptable understanding of the requirements, within the standards and workload specified. Marginal - Based on the offeror's proposal, some doubt exists that the offeror??s proposed price/cost is realistic in one or more areas in the criteria. The Price/Cost documentation shows a marginal understanding of the requirements, within the standards and workload specified. Poor - Based on the offeror's proposal, serious doubt exists that the offeror??s price/cost is realistic. The Price/Cost documentation demonstrates significant deficiencies in understanding the requirements, within the standards and workload specified. An offeror must receive a rating of good or excellent to be considered acceptable under this criterion. 3. SOURCE SELECTION The evaluation will result in identification of technically acceptable proposals. To be acceptable, an offeror must be evaluated as good or excellent in both the technical evaluation and the price/cost criteria. The closing date for receipt of proposals is September 13, 2007 at 14:00 PM eastern time. Proposals must be clearly identifies as such on the envelope or package. Please provide four (4) hard copies of technical and cost proposals SEPARATELY. Deliver to the address set forth below: E-mailed proposals will NOT be accepted. Small Business Administration Office of Procurement & Grant Management 409 Third Street, SW, Suite 5000 Washington, DC 20416 Attention: Maria Manga