DIVISION OF PENSIONS AND BENEFITS PENSION … of pensions and benefits pension payroll disbursement services request for proposal table of contents i. purpose and intent 1 ii. terms

DIVISION OF PENSIONS AND BENEFITS PENSION PAYROLL DISBURSEMENT SERVICES

REQUEST FOR PROPOSAL

Table of Contents

I. PURPOSE AND INTENT 1

II. TERMS AND CONDITIONS 3

A. Applicable Rules and Regulations 3

B. Project Management 4

C. Timetable of Events 4

D. Mandatory Pre-Bid Conference 5

E. RFP Questions from Bidders 5

F. Revisions to the Request for Proposal 6

G. Proposal Due Date 6

H. Oral Presentation and Vendor Site Visitation/Inspection 6

I. Contract Award 7

J. Length of Contract 8

K. Contract Extension 8

L. Vendor Right to Protest 9

M. Termination of Contract 9

N. Contract Continuity/Transitional Period 9

O. Unanticipated Services 9

P. Unanticipated Curtailment of Branch Services 10

Q. Prime Contractor Responsibilities 10

R. Subcontracting 11

S. Assignment 11

PENSION PAYROLL RFP 2006 Page 1

T. Cost Liability 12

U. Ownership of Material 12

V. Data Confidentiality 12

W. Promotional Use Prohibited 13

X. Accounting Records 13

Y. Severability Clause 13

Z. Indemnification 14

AA. Insurance 14

BB. Conflict of Interest 15

CC. Public Records 15

DD. Single Response 15

III. OTHER MANDATORY PROVISIONS 16

A. Financial Statements 16

B. Stockholder Disclosure Form 16

C. Non-discrimination Law 16

D. Collateralization of Deposits 16

E. Proof of Registration Requirements 17

F. Executive Order No. 129 18

G. Executive Order No. 134 19

H. Disaster Recovery Plan 23

I. Image Processing of Public Records and Certification of Image Processing Systems 23

IV. PAYMENT METHOD AND TERMS 25

A. Compensating Balances 25

B. Payment Terms 25


C. Monthly Analysis 25

A. General Requirements 27

B. Summary of Accounts to be Established 28

C. Account Data Information and Requirements 28

D. Check Cashing Requirements 43

E. Stop Payments 44

F. Forgery Investigation 45

H. Web Based 47

I. Report Requirements 49

J. Bank Statements 53

K. Check Specifications 53

L. Check Testing 54

M. Imaging, Storage, Retrieval, and Destruction of Canceled Checks 54

N. Vendor Contact Personnel 58

O. Training 59

P. Conversion/Implementation 60

VI. EVALUATION CRITERIA 61

VII. VENDOR RESPONSE 62

VIII. COST SCHEDULE 71


V. SCOPE OF WORK 27

G. Improperly Endorsed Checks 46


Exhibits Table of Contents

EXHIBIT A: The Future Direction of OIT – Security for Asset Classification and Control EXHIBIT B: Stockholder Disclosure Form EXHIBIT C: Policy Statement – Collateralization Requirements for State Held Deposits EXHIBIT D: Executive Order 134 Certification EXHIBIT E: Executive Order 134 Disclosure of Political Contributions EXHIBIT F: Executive Order 134 Continuing Disclosure of Political Contributions EXHIBIT G: Account Structure and Funds Flow Chart EXHIBIT H: Standard Check Payroll Schedule Calendar Year 2005 EXHIBIT I: Electronic Check Issue File Layout EXHIBIT J: Purged Elements EXHIBIT K: EFT Payroll Schedule Calendar Year 2005 EXHIBIT L: Non Standard Payroll Schedule Calendar Year 2005 EXHIBIT M: Full Reconciliation Balance Sheet EXHIBIT N: Fiscal Year 2004 ACH Reversal Dollar Value Information for Each Disbursement

Account EXHIBIT O: Executive Order 129 Certification EXHIBIT P: Detail ARP Report EXHIBIT Q: Outstanding Check Issue Output File Format EXHIBIT R: Bank Statement EXHIBIT S: Electronic Images – System Certification, Storage, Backup, and Disaster

Prevention/Recovery EXHIBIT T: Destruction Requirements for State Records Canceled Checks and Electronic

Images



REQUEST FOR PROPOSAL

I. PURPOSE AND INTENT The purpose of this request is to solicit proposals from qualified New Jersey banks for the

placement of ten (10) State Accounts and the accurate and timely processing of all banking services associated with these accounts. The accounts are as follows:

1. Pension Payroll, Master Account 2. Teachers Pension and Annuity Fund, ZBA Account 3. Public Employees Retirement System, ZBA Account 4. Police and Firemen’s Retirement System, ZBA Account 5. Prison Officers’ Pension Fund, ZBA Account 6. Consolidated Police and Firemen’s Pension Fund, ZBA Account 7. Judicial Retirement System, ZBA Account 8. Central Pension Fund, ZBA Account 9. State Police Retirement System, ZBA Account 10. Supplemental Annuity and Collective Trust, ZBA Account

The State reserves the right to increase, decrease or consolidate disbursement accounts

as needed, during the course of this contract term. Below is the summary list of banking services, not necessarily all inclusive, that will be

required for consideration of an award. The detailed specifications are delineated in SECTION V, SCOPE OF WORK.


1 Controlled disbursement, positive pay, zero balance account capability 2 Electronic data transmission and receiving capability 3 Branch presence and check cashing capability 4 Web based inquiry/communication system for checks and ACH (direct

deposit) inquiry, stop payments, positive pay, wire transfers, reports, etc. 5 Full account reconciliation services 6 Bank statements and reconciliation reports 7 ACH sending capabilities (CCD, CCD+ and PPD formats) 8 Wire transfer with daylight overdraft coverage capabilities 9 Daylight overdraft coverage up to $450 million

10 ACH exposure line up to $400 million for electronic payments 11 Automated daily balance reporting (prior day and intra day information) 12 Detailed intra-day reporting capabilities 13 Timely reports per RFP specifications 14 Timely, reliable customer service, including technical support and training 15 Paid check imaging, document destruction and data confidentiality 16 Contingency plan and reliable backup in case of system failure 17 Detailed returned and reversed EFT items

On a monthly basis, the Division of Pensions and Benefits pays over $355 million in pension and survivor benefits to nearly 220,000 retirees through its pension payroll accounts. For Fiscal Year 2004, over 70% of the retirees were paid via ACH/Direct Deposit while slightly more than 60,000 retirees received checks each month.

A unique characteristic of the pension payroll is, upon death, a retiree will cease to be eligible for payment. Frequently, the State is not notified of the death of the retiree for several months and must reclaim funds remitted via ACH from the decedents account. This requires the Division of Pensions and Benefits to have critical requirements for detailed ACH reclamation, reversal, and reject transactions.

All accounts require full ARP (see exhibits) and positive pay services.


II. TERMS AND CONDITIONS A. Applicable Rules and Regulations

The vendor must be a state or nationally chartered bank, with a strong presence in the State of New Jersey, employ New Jersey residents, and be in compliance with all federal and/or New Jersey State laws governing all services to be awarded.

The vendor must be a member of an automated clearing house association and be in compliance with all rules and regulations set forth by the National Automated Clearing House Association (NACHA), local ACH association(s) and ACH operators.

The vendor must be a member of the Federal Reserve direct wire system.

It is agreed and understood that any contract placed as a result of this proposal shall be governed and construed and the rights and obligations of the parties hereto shall be determined in accordance with the laws of the State of New Jersey. The TERMS AND CONDITIONS, OTHER MANDATORY PROVISIONS and

PAYMENT METHOD AND TERMS of this Request for Proposal (RFP) will

supersede any and all conflicting terms and conditions, including bank agreements,

submitted by the bank/contractor. The State of New Jersey will not modify its terms

and conditions or execute separate bank agreements.

Proposals that do not conform with or that take exception to the State of New

Jersey’s terms and conditions, other mandatory provisions and payment methods

and terms, as set forth in this RFP, will be considered non-responsive and therefore

rejected.

The entire content of this RFP, all addenda and the bank's proposal will become the

basis for any award and contract. These documents shall, whenever possible, be

construed in harmony. However, if there is a conflict between the terms contained in

these documents, the order of precedence shall be: (1) the addendum(s); (2) the

RFP; and (3) the bank’s proposal.


B. Project Management

The Division of Pensions and Benefits will be responsible for the day to day

operational administration of the accounts and will be the contact agency for

operational issues after contract award.

The Project Manager for this program for the State of New Jersey is:

Francis Peterson State of New Jersey Department of Pensions and Benefits, 7th Floor PO Box 295 Trenton, New Jersey 08625-0295 Phone: (609) 292-5804 Email: [email protected]

The Cash Management Unit will be responsible for any contract related issues. C. Timetable of Events The State reserves the right to modify any of the cited dates upon vendor

notification.

Event Date Issuance of Request August 16, 2005 Mandatory Bidders' Conference September 7, 2005 Proposal Due Date October 14, 2005 Anticipated Award Date December 6, 2005 Conversion/System Testing December 7, 2005 Contract Commencement March 1, 2006


D. Mandatory Pre-Bid Conference

Attendance at the following pre-bid conference is a prerequisite for proposal submission.

DATE: September 7, 2005 TIME: 10:00 a.m. PLACE: State of New Jersey Purchase Bureau Conference/Bid Room, 9th Floor 33 West State Street Trenton, New Jersey

During the conference, the RFP requirements will be reviewed and questions from interested bidders will be addressed.

Any deferred questions arising from the conference will be responded to in writing,

by either hard copy or e-mail to the attendees, or via the OMB Banking Services web site.

E. RFP Questions from Bidders

Before the mandatory pre-bid conference, interested bidders may submit written

questions regarding this document to the Cash Management Unit, on or before

August 29, 2005 to the following address:

Rich Zbyszynski State of New Jersey Department of the Treasury OMB, Cash Management Unit 33 West State Street, 5th Floor P.O. Box 221 Trenton, New Jersey 08625-0221

Or questions can be e-mailed to the following address:

[email protected] Questions will be responded to at the pre-bid conference.


mailto:[email protected]

F. Revisions to the Request for Proposal

If it becomes necessary to revise any part of the RFP prior to the mandatory conference, time permitting, revisions will be made in the form of a written addendum and made available on the OMB Banking Services’ web site. Also, that same addendum will be provided in hard copy to all vendors who attend the conference. If revisions are necessary after the mandatory conference, the revisions will subsequently be provided either in hard copy to the conference attendees, e-mailed to the attendees or, through a notice to the attendees that the revisions are on the OMB Banking Services’ web site.

Acknowledgement of the receipt of all the amendments/revisions will be required

accompanying any proposal submitted. G. Proposal Due Date

In order to be considered for selection, one original, clearly marked "ORIGINAL", signed by an officer who is authorized to bind the respondent contractually, and six (6) copies of the proposal must arrive on or before the date specified in the Timetable of Events, and addressed as follows:

Rich Zbyszynski Department of the Treasury Office of Management and Budget Cash Management Unit 33 West State Street, 5th Floor P.O. Box 221 Trenton, New Jersey 08625-0221 H. Oral Presentation and Vendor Site Visitation/Inspection

Vendors, who submit a proposal in response to this request, may be required to give an oral presentation to the evaluation committee. This will provide an opportunity for the vendor to clarify or elaborate on its proposal. However, an oral presentation does not provide the vendor the opportunity to change the original bid or correct any


deficiencies in its proposal. Vendors should not construe the invitation for an oral presentation to imply any acceptance or rejection of bids.

The Department of the Treasury, Cash Management Unit will schedule the presentations.

At the time of proposal evaluation, the State reserves the right to inspect the vendor’s facilities, including any and all subcontractors’ facilities. After contract award, the State reserves the right to inspect the vendor’s facilities, including any and all subcontractors’ facilities, without prior notice by the State. However, if circumstances warrant prior notice because of security or proprietary considerations, please include an explanation of such reservation in your response. Failure to comply with this request may result in disqualification or termination of the contract. At all times, (1) travel by State personnel to the vendor’s site will be at the State’s expense; (2) travel by vendor personnel to the State of New Jersey will be at the vendor’s expense.

Prior to contract award, the oral presentation and vendor site inspection may be

combined. I. Contract Award

The entire contents of this RFP, all addenda and the bank's proposal will become the basis for any award resulting from this solicitation.

The State of New Jersey reserves the right to reject any or all proposals, to award to

other than the low bidder, to award in whole or in part, and to waive any minor informalities not in compliance with the specifications or terms and conditions of the request if deemed in the best interest of the State to do so.

Any statistics or values shown in the RFP, exhibits or attachments are either based

on past history, or best estimates and are not a guarantee of future volumes and trends.


Future quantities, values or activities may be more or less than those noted herein and could change during the course of the contract term. The State will make no allowances or concessions to a bidder for any alleged misunderstanding because of quantity, character or other conditions.

J. Length of Contract

The contract will be for a four (4) year term. The bank may not close any accounts until officially notified by the Department of the Treasury, Cash Management Unit.

Any agreement executed as a result of this acquisition process is contingent upon

the State Legislature appropriating such funds as necessary, to the extent such funds are necessary, to pay the bank for services rendered.

K. Contract Extension

The State will have the option to extend the contract for three (3) one year periods, or any portion thereof, if it is deemed in the best interest of the State to do so. The vendor will be notified of the State’s intent at least 90 days prior to the expiration date of the existing contract. The vendor will have 15 calendar days to respond to the State’s request. If the vendor agrees to the extension, all terms, conditions and pricing of the original contract and any mutually agreed to changes will apply. At the time of contract extension, an increase in price will be considered. The unit prices during the extension periods may be adjusted utilizing the Consumer Price Index unadjusted for All Urban Consumers, New York-Northern New Jersey Region and Philadelphia-South Jersey Region using a 2/3 to 1/3 weight respectively, as published by the Bureau of Labor Statistics of the United States Department of Labor. For price adjustments during the option periods, the prices may be increased by the same percentage as the percentage increase shown in the index for January of the extension year compared to the Index for January of the prior year or for the most recent reported twelve-month period. At the time of the extension option, the vendor must include in their response to the State the price increases, from and to, for each of the line item charges, along with supporting Labor Statistics documentation. The State will then independently verify the price adjustment.


L. Vendor Right to Protest

A vendor’s right to protest RFP specifications and intent of contract award is

governed by N.J.A.C 17:12.

For all Cash Management contract protests, although N.J.A.C 17:12 references the Director of the Division of Purchase and Property, the Treasurer (or designee) shall be the individual authorized to decide the protests.

M. Termination of Contract

The State reserves the right to terminate any agreement entered into as a result of this RFP providing written notice has been given to the vendor at least 30 days prior to such proposed termination date unless otherwise provided herein. At contract termination, the vendor must cooperate fully with the State and the new contract vendor to affect a smooth transition, which would include transferring all necessary databases, files and other information needed for the continued operation of the application.

N. Contract Continuity/Transitional Period

In the event the service or services are scheduled to end by contract expiration or by termination by the State (at the State's discretion), and if requested by the State, the vendor must continue the service(s) until new services can be completely operational. At no time shall this transitional period extend more than 180 days beyond the expiration date of the existing contract. The vendor will be reimbursed for this service at the rate in effect when this transitional period clause is invoked by the State.

O. Unanticipated Services

Should additional State initiated work be required which is beyond the scope of this RFP, the State of New Jersey reserves the right to negotiate with the awarded vendor reasonable fees for services unanticipated or not existing at the time of the contract award. If required, the State will request a written cost estimate and a


schedule of the work plan. The State must approve the fees and/or work plan prior to

initiation of the work. Upon failure to arrive at a negotiated fee schedule and work plan, the State may, at its option, contract the services through a competitive process.

If additional programming is required, the vendor must be able to provide additional

programming services and make system changes to their internal system within 90 days after State approval. The cost estimate will be based on the hourly rates included in the vendor’s response as specified in SECTION VIII. COST SCHEDULE of this RFP.

P. Unanticipated Curtailment of Branch Services If at any time during the term of the contract, the bank reduces or otherwise alters

the level of Branch Services detrimentally to the State that were in place at the beginning of the contract, the Bank must make arrangements, at its own expense, to maintain the level of Branch Service that was in effect at contract initiation. This requirement will be of significant importance relative to the Pension Payroll Accounts.

Q. Prime Contractor Responsibilities

The selected vendor, and any successor vendor, (in the event of merger/acquisition or other change in operating status), will be required to assume sole responsibility for the complete effort of any contract(s) awarded to the vendor subsequent to its bid submission, and assume all cost incurred by the State, directly or indirectly, in connection with or as a result of the transition. If a merger/acquisition has been announced prior to or during the vendor’s proposal preparation period, identify all relevant or emerging dates surrounding the merger relative to official name change, system changes, account number changes, etc. if known at the time of bid submission. The State will consider the prime contractor, to be the sole point of contact with regard to contractual matters. The prime contractor is responsible for the professional quality, technical accuracy, timely completion of any and all services


awarded to the vendor as a result of the solicitation; and shall without additional compensation, correct or revise any errors, omissions, or other deficiencies in their products, services, reports, equipment, information, etc. in order to meet the requirements as specified herein.

The successful vendor will furnish the names of the officers and management personnel who will be utilized in the fulfillment of any agreement resulting from this RFP.

R. Subcontracting

All subcontractors must be approved by the State. If the vendor has knowledge prior to proposal submission date that any part of the work covered by this request will be subcontracted, the vendor must identify the subcontracting organization, its officers and the contractual arrangements made therewith, and state what services are to be subcontracted. If, during the contract term, the vendor desires to employ or replace any subcontractor, the vendor must provide 90 days written notice to the State. The State will evaluate the replacement firm's qualifications. No replacement firm shall begin work without prior State approval. The prime contractor is totally responsible for adherence by the subcontractor to all provisions of the contract between the vendor and the State. Nothing contained in these specifications or subsequent specifications shall be construed as creating any contractual responsibility between the subcontractor(s) and the State.

S. Assignment

The vendor is prohibited from assigning, transferring, conveying, subletting or otherwise disposing of this agreement or its rights, title or interest therein or its power to execute such agreement to any other person, company or corporation without the previous consent and approval, in writing, by the State. Any attempted assignment without consent shall be null and void. Unless otherwise agreed to by the State in writing, the assignee shall bear all cost incurred by the State, directly or indirectly, in connection with or as a result of such an assignment.


T. Cost Liability

The State of New Jersey assumes neither responsibility nor liability for costs incurred by vendor prior to issuance of an agreement, contract or purchase order. U. Ownership of Material Ownership of all data, material and documentation originated and prepared

exclusively for the State pursuant to any contract shall belong exclusively to the State and shall be delivered to the State upon 30 days notice by the State.

V. Data Confidentiality

All data contained in the documents or files supplied by the State are to be considered confidential and shall be solely for the use of the State. All Account files are presently designated “Confidential” as defined in EXHIBIT A The Future Direction of OIT – Security for Asset Classification and Control. The bank must define their process for meeting the “Confidential” requirements. They must have the ability to secure the data as “Secret” if OMB requires this level of security in the future. The standard for all bank transmission is presently Connect: Direct Secure+. The Secure+ option provides strong authentication, data encryption and data integrity checking. It uses X.509 certificates to positively identify the entities with which vital data is shared and uses Secure Socket Layer (SSL) technology for data encryption. The vendor must document their ability to support Connect: Direct Secure+ and maintain software compatibility with the State on all patches and new releases of the product. The Standard Entry Class (SEC) Codes that are presently used by the various accounts are (CCD, CCD+ and PPD). The State plans on taking advantage of all advancements offered by the ACH Network. The vendor must be able to demonstrate that they have the ability to support these updates to the electronic funds transfer system.


The vendor and all subcontractors will be required to use reasonable care to protect the confidentiality of the data. Any use, sale or offering of this data in any form by the prime contractor, its employees, subcontractors, or assignees may cause termination and legal action to be taken, with all cost of any such legal action to be borne by the vendor.

W. Promotional Use Prohibited The vendor and any subcontractors will be prohibited from advertising or promoting

any trade or business by reference to any agreement or services performed hereunder, including the issuance of news releases, resulting from any award.

X. Accounting Records

The vendor is required to maintain accounting records and other documentation needed for the execution of any and all agreements. This will include, but not be limited to, copies of deposits, monthly invoices and monthly analyses. These records must be made available to the State at all reasonable times during the contract term and for a period up to seven (7) years from the date of final payment. The State reserves the right to have its personnel, its designated representatives or its auditors, monitor and audit as often as the State deems necessary, the activities and related processing and accounting records of the vendor and all subcontractors, to ensure proper compliance to the terms as specified within this document. The vendor(s) must provide adequate facilities for the State auditors to use when they perform their regular and random audits.

Y. Severability Clause In the event that any provision of this RFP or the agreement executed in accordance

herewith shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision, and the agreement shall continue in effect without the invalid provision.


Z. Indemnification

The vendor shall assume all risk of and responsibility for and agrees to indemnify, defend and hold harmless the State and its employees from and against any and all claims, demands, suits, actions, recoveries, judgments, costs and expenses in connection therewith on account of the loss of life, property, or injury or damage to the person, body or property of any person or persons whatsoever, which shall arise from or result directly or indirectly from the work and/or materials supplied under any agreement. This indemnification obligation is not limited by, but is in addition to the insurance obligations contained in this agreement.

AA. Insurance The vendor will furnish to the State such evidence of insurance as the State may

require at the time of award and for all periods during the term of the agreement and any extensions to the agreement.

For all coverage and renewals, the documents must contain the proviso that the

insurance provided shall not be canceled for any reason except after 30 days written notice to the State of New Jersey, Department of the Treasury. All insurance shall be written for not less than any limits of liability herein specified or required by law, whichever is greater.

1. Comprehensive General Liability Policy as broad as the standard coverage forms

currently in use in the State of New Jersey which shall not be circumscribed by any endorsements limiting the breadth of coverage. The policy shall be endorsed to include:

- Broad Form Comprehensive General Liability - Products/Completed Operations - Premises/Operations

The limits of liability for bodily injury and property shall not be less than $1 million per occurrence as a combined single unit.


2. Automobile Liability Insurance which shall be written to cover any automobile

used by the insured. Limits of liability for bodily injury and property damage shall not be less than $1 million per occurrence as a combined single limit.

3. Worker's Compensation Insurance applicable to the laws of the State of New Jersey and Employers Liability Insurance with limits not less than:

- $100,000 Bodily Injury Each Occurrence - $100,000 Disease Each Employee - $500,000 Disease Aggregate Limit BB. Conflict of Interest

No award will be made to a vendor who in the opinion of the Department of the Treasury has interests, business ventures, proprietorships, employment, or public office, which would create a conflict of interest. The State reserves the right to question vendors with respect to actual or potential conflicts of interest.

CC. Public Records

The entire content of each bid response is a public record and, as required by the New Jersey Law, is available for public inspection. Persons who wish to read proposals should make an appointment by calling the Department of the Treasury, Office of Management and Budget, Cash Management Unit at: (609) 633-2164.

DD. Single Response A single response to this RFP may be deemed a failure of competition and at the

option of the Treasurer, the solicitation may be canceled. Alternatively, receipt of only one response may allow the Treasurer to claim it as a valid sole source acquisition of services.


III. OTHER MANDATORY PROVISIONS A. Financial Statements

As part of the proposal the prime vendor and any subcontractors directly involved with providing any part of the services, must submit their latest audited financial statements, or financial comments if a privately held company.

B. Stockholder Disclosure Form

The vendor and all its known subcontractors must complete the enclosed Stockholder Disclosure Form and submit it with the proposal. See EXHIBIT B for the Stockholder Disclosure Form.

C. Non-discrimination Law

All parties to any contract with the State of New Jersey agree not to discriminate in employment and agree to abide by all anti-discrimination laws including those contained within N.J.S.A. 10:2-1 through N.J.S.A. 10:2-4, N.J.S.A 10:5-1 et seq. and N.J.S.A. 10:5-31 through 10:5-38, and all rules and regulations issued hereunder. For additional information on the Non-discrimination law, you may call the Law Reference Library at (609) 292-6230 or visit: http://www.njleg.state.nj.us and select Law and Constitution and then Statutes.

D. Collateralization of Deposits

The State Treasurer shall require from the bank a deposit of bonds, notes, certificates of indebtedness of bill or other obligations of or guaranteed by the United States; or other obligations of or guaranteed by the State of New Jersey; or any other obligation now or hereafter authorized by law as security for public deposits. For the total bank balances resulting from the account, the collateralization requirement must adhere to EXHIBIT C Policy Statement: Department of the Treasury Collateralization Requirements for State Held Deposits.


http://www.njleg.state.nj.us/

E. Proof of Registration Requirements

Public Law 2001, Chapter 134 requires all contractors and subcontractors providing goods/services to State agencies and authorities to provide the contracting agency with proof of registration with the Department of the Treasury, Division of Revenue. The Division of Revenue’s Client Registration Bureau provides proof of registration certificates to all registrants. Business Registration Certificates (BRC) list basic business identification information and unique registration sequence numbers that can be verified by the Client Registration Bureau. Pursuant to an amendment to NJSA 52:32-44, State and local entities are prohibited from entering into a contract with an entity unless the contractor has provided a copy of its Business Registration Certificate as part of its bid submission. As mandated by this bill, failure to submit a copy of the Business Registration Certificate within the bid proposal will be deemed non-responsive and therefore will result in disqualification of the bid proposal. This statute also requires that all contract vendors also submit a copy of the Business Registration Certificate for each subcontractor they intend to use prior to contract implementation. The law prohibits contractors from entering into a contract with a subcontractor who has not provided the contractor a copy of its Business Registration Certificate.

The basic registration process involves filing Form NJ-REG. An overview of the NJ-REG process is found on http://www.state.nj.us./njbgs/bgsclientreg.htm. This page contains links to instructions and paper forms. NJ-REG may be filed online, from http://www.state.nj.us/njbgs/services.html, by selecting “Online Services, One-Stop Business Filing and Registration” and then “Register a Business for Tax and Employer Purposes”. Any questions in regard to business registration requirements can be directed to the Division of Revenue at (609) 292-1730.


http://www.state.nj.us./njbgs/bgsclientreg.htm

http://www.state.nj.us/njbgs/services.html


F. Executive Order No. 129

1. Under the Executive Order 129 issued on September 9, 2004 (“E.O. No. 129”), the State shall not award a contract to a vendor that submits a bid proposal to perform services, or have its subcontractor[s] perform services, outside the United States, unless one of the following conditions is met:

a. The vendor or its subcontractor provide a unique service, and no

comparable, domestically-provided service can adequately duplicate the unique features of the service provided by the vendor and/or its subcontractor; or

b. A significant and substantial economic cost factor exists such that

a failure to use the vendor’s and/or the subcontractor’[s] services would result in economic hardship to the State; or

c. The Treasurer determines that a failure to use the vendor’s and/or

its subcontractor’s services would be inconsistent with the public interest.

2. Source Disclosure Requirements

Pursuant to E.O. No. 129, all vendors seeking a contract with the State of New Jersey must disclose:

a. The location by country where services under the contract will be

performed; and

b. The location by country where any subcontracted services will be performed.

The State prefers the vendor submit with its bid proposal EXHIBIT O Executive Order 129 Certification, completed with the sourcing information required for itself and any proposed subcontractor, identified in its proposal.

If the certification is not submitted with the bid proposal, it shall be submitted within five (5) business days of the State’s request for the information.

Failure to submit sourcing information when requested by the State shall preclude award of a contract to the vendor. 3. Breach of Contract of Executive Order 129 A shift to outsourced services during the term of the contract shall be deemed a breach of contract.

If, during the term of the contract, the contractor or subcontractor, who had on contract award declared that services would be performed in the United States, proceeds to shift the performance of the services outside of the United States, the contractor shall be deemed in breach of the contract, which contract shall be subject to termination for cause, unless the Treasurer shall have first determined in writing that extraordinary circumstances require a shift of services or that a failure to shift the services would result in economic hardship to the State.

The link to Executive Order 129 is: http://www.state.nj.us/infobank/circular/eom129.htm It is important to note that E.O. No. 129 applies to all service contracts.

G. Executive Order No. 134

In order to safeguard the integrity of State government procurement by imposing restrictions to insulate the award of State contracts from political contributions that pose the risk of improper influence, purchase of access, or the appearance thereof, Executive Order 134 was signed on September 22, 2004 (“EO 134”). Pursuant to the requirements of EO 134, the terms and conditions set forth in this section are material terms of any contract resulting from this RFP:


http://www.state.nj.us/infobank/circular/eom129.htm

1. Definitions

For the purpose of this section, the following shall be defined as follows:

a. Contribution – means a contribution reportable as a recipient

under “The New Jersey Campaign Contributions and Expenditures Reporting Act.” P.L. 1973, c. 83 (C.10:44A-1et seq.), and implementing regulations set forth at N.J.A.C. 19:25-7 and N.J.A.C. 19:25-10.1 et seq. Contributions made prior to January 1, 2005 in an amount in excess of $400 during a reporting period are deemed “reportable” under these laws. As of January 1, 2005, contributions in excess of $300 during a reporting period are deemed “reportable” under these laws.

b. Business Entity – means any natural or legal person, business

corporation, professional services corporation, Limited Liability Company, partnership, limited partnership, business trust, association or any other legal commercial entity organized under the laws of New Jersey or any other state or foreign jurisdiction. It also includes (i)all principals who own or control more than 10 percent of the profits or assets of a business entity or 10 percent of the stock in the case of a business entity that is a corporation for profit, as appropriate; (ii)any subsidiaries directly or indirectly controlled by the business entity; (iii)any political organization organized under 26 U.S.C.A. 527 that is directly or indirectly controlled by the business entity, other than a candidate committee, election fund, or political party committee; and (iv)if a business entity is a natural person, that person’s spouse or child, residing in the same household.

2. Breach of Terms of Executive Order 134 Deemed Breach of

Contract

It shall be a breach of the terms of the contract for the Business Entity to (i)make or solicit a contribution in violation of this Order, (ii)knowingly


conceal or misrepresent a contribution given or received; (iii)make or solicit contributions through intermediaries for the purpose of concealing or misrepresenting the source of the contribution; (iv)make or solicit any contribution on the condition or with the agreement that it will be contributed to a campaign committee or any candidate of holder of the public office of Governor, or to any State or county party committee; (v)engage or employ a lobbyist or consultant with the intent or understanding that such lobbyist or consultant would make or solicit any contribution, which if made or solicited by the business entity itself, would subject that entity to the restrictions of EO 134; (vi)fund contributions made by third parties, including consultants, attorneys, family members, and employees; (vii)engage in any exchange of contributions to circumvent the intent of EO 134; or (viii)directly or indirectly through or by any other person or means, do any act which would subject that entity to the restrictions of EO 134.

3. Certification and Disclosure Requirements

a. The State shall not enter into a contract to procure from any

Business Entity services or any material, supplies or equipment, or to acquire, sell or lease any land or building, where the value of the transaction exceeds $17,500, if that Business Entity has solicited or made any contribution of money, or pledge of contribution, including in-kind contributions to a candidate committee and/or election fund of any candidate for or holder of the public office of Governor, or to any State or county political party committee during certain specified time periods. Accordingly, the Business Entity shall submit with its bid proposal Executive Order 134 Certification(s) in the form set forth in EXHIBIT D Executive Order 134 Certification attached hereto, certifying that no contributions prohibited by Executive Order 134 have been made by the Business Entity. A separate Certification is required for each person or organization defined above as a Business Entity. Failure to submit the Certification(s) with the Bid Proposal will be deemed non-responsive and therefore will result in automatic rejection of the bid proposal.


b. Prior to awarding any contract or agreement to any Business

Entity, the Business Entity proposed as the intended awardee of the contract shall report all contributions the Business Entity made during the preceding four years to any political organization organized under 26 U.S.C.527 of the Internal Revenue Code that also meets the definition of a “continuing political committee” within the mean of N.J.S.A. 19:44A-3(n) and N.J.A.C. 19:25-1.7, in the form of the Disclosure attached hereto as EXHIBIT E Disclosure of Political Contributions. A separate Disclosure is required for each person or organization defined above as a Business Entity. Upon receipt of a Notice of Intent to Award a Contract, the intended awardee shall submit to the Office of Management and Budget, Cash Management Unit, the Disclosure(s) within five (5) business days of the State’s request.

c. Further, the Contractor is required, on a continuing basis, to report

any contributions it makes during the term of the contract, and any extension(s) thereof, at the time any such contribution is made. A copy of the Continuing Disclosure of Political Contributions is attached hereto as EXHIBIT F Continuing Disclosure of Political Contributions. A separate Disclosure is required for each person or organization defined above as a business entity.

4. State Treasurer Review

The State Treasurer or his designee shall review the Disclosures submitted pursuant to this section, as well as any other pertinent information concerning the contributions or reports thereof by the intended awardee, prior to award, or during the term of the contract, by the contractor. If the State Treasurer determines that any contribution or action by the contractor constitutes a breach of contract that poses a conflict of interest in the awarding of the contract under this solicitation, the State Treasurer shall disqualify the Business Entity from award of such contract.


H. Disaster Recovery Plan

As part of any contract award, the vendor(s) must maintain a disaster recovery plan designed to minimize any disruption to the services being performed. The bank’s disaster recovery plan, contingency and backup procedures should be made available for review by the State, within ten (10) days of a request by the State. As part of the State’s Disaster Recovery Exercises, these items will be subject to annual review.

The bank must be able to demonstrate, during an inspection of operations and a review of documented procedures that in the event of a system breakdown or catastrophic event, State operations will be minimally affected and State records recovered intact. Given the worst case scenario, the vendor must be completely functional within 24 hours of a major disaster.

The bank must fully cooperate during any and all disaster recovery testing operations initiated by the State. It must be ready to receive and validate test files transmitted or delivered from a State of New Jersey disaster recovery exercise.

For disaster and recovery purposes, the bank must be able to receive and process data files from the State in the following formats: electronic transmission or CD ROM. In addition, the bank must be able to demonstrate that sufficient safeguards are in place to prevent test files from being loaded into a production environment.

I. Image Processing of Public Records and Certification of Image Processing Systems

The Division of Archives and Records Management (DARM) has set forth the standards, procedures and rules for image processing of public records for the preservation, examination and use of such records, including indexing and arrangement thereof as required by Public Law 1953, c. 410 (NJSA 47:3-26) as amended, and PL 1994, c. 140 (NJSA 47:1-12).


Please access the DARM website for the standards, procedures and rules for image processing of public records at the following two sites: http://www.state.nj.us/state/darm/links/njac-15-3-4.html.

http://www.njarchives.org/links/njac-15-3-5.html.


http://www.state.nj.us/state/darm/links/njac-15-3-4.html

http://www.njarchives.org/links/njac-15-3-5.html

IV. PAYMENT METHOD AND TERMS The State will pay for vendor services primarily with fees and compensating balances

when they exist. It is the State's intent to maintain compensating balances at a minimum and to pay for services primarily with fees. However, at the discretion of the Department of the Treasury, cumulative excess balance credits, if available from other State demand account balances, may be used as compensation for the services rendered under this contract.

A. Compensating Balances

The compensating balance must be considered as the total average collected balance of the account(s) less the 10% non-earning Federal Reserve requirement. It is the State’s policy to avoid the maintenance of sizable balances. However, for any balances that do exist, the State requires full compensating balance credit.

The basis for the earnings rate will be determined from the average of each month’s

13-week Treasury Bill auctions. All auctions for which the settlement date falls in that month will be included in the month’s simple average. The coupon equivalent yield of each auction will be used.

The earnings rate developed will be applied each month against the average daily

net collected balance of the account(s) to determine the value of bank services earned that month with compensating balances. If the earnings of the compensating balances exceed the value of total bank services provided in any month, the excess will be applied to subsequent monthly analyses on a continuous basis without regard to calendar year end.

B. Payment Terms If necessary, the bank will invoice the State monthly. The bank must provide the

invoice within 30 days after the close of each month (on a calendar month basis) for

which services were provided. The standard State of New Jersey payment voucher


and instructions for preparation of the form will be provided to the bank after contract

award. One combined invoice and analysis will be required for all ten (10)

accounts.

C. Monthly Analysis

Together with the invoice, the bank must provide a monthly analysis that will contain

on one page of the analysis report; the monthly average collected balance for each account, using a separate line for each account. On the same line for each account, the total monthly activity for each billable category will be presented so that every category of activity for each account appears on one line of the report. A separate report page for each account is not acceptable. The balances and each category of billable activity will be totaled and then carried to the summary page of the analysis. On the summary page, the reserve requirement will be applied against the total collected balance of ALL the accounts, with the average Treasury Bill Yield used to calculate the compensating balance earnings for the month. The contract prices will be applied against the total volumes for each billable category in order to establish the total billing for the month. The State will be invoiced for the total billing less the compensating balance earnings for that month.

The invoice and analysis are to be sent to: Richard S. Zbyszynski Department of the Treasury Office of Management and Budget Cash Management Unit 33 West State Street, 5th Floor P.O. Box 221 Trenton, New Jersey 08625-0221


V. SCOPE OF WORK A. General Requirements The State’s initial requirements will include the establishment and maintenance of

ten (10) bank accounts, and the accurate and timely processing of all banking services related to these accounts, including controlled disbursement, positive pay and zero balance, full bank reconciliation for all disbursement accounts, wire transfer and ACH disbursement services, web based inquiry and processing (i.e., stops, cancels, issues and copies) along with a variety of reporting and communication needs.

The accounts must be established as “Preferred Status” accounts; that is, to

establish a credit line that will be sufficient to cover all daylight overdrafts without penalty or additional charge to the State, and honor all checks presented for payment regardless of the current balance in the accounts. In the rare situation that an overnight overdraft occurs, the State requests that the bank honor all checks and wires without penalty or additional charge to the State. In particular, the bank will cover overdrafts on those occasions when there is a non-bank holiday. Some of the State holidays listed below are not bank holidays.

New Year's Day

Martin Luther King Jr. Day

Lincoln's Birthday

Washington's Birthday

Good Friday

Memorial Day

Independence Day

Labor Day

Columbus Day

Election Day

Veteran's Day

Thanksgiving Day

Christmas Day


The State reserves the right to consolidate existing accounts or establish additional accounts as needed during the contract term.

B. Summary of Accounts to be Established The Department of the Treasury, Cash Management Unit is solely responsible for the

opening and closing of all accounts. Following are the accounts initially anticipated to be established under this contract:

1. Pension Payroll, Master Account 2. Teachers Pension and Annuity Fund, ZBA Account 3. Public Employees Retirement System, ZBA Account 4. Police and Firemen’s Retirement System, ZBA Account 5. Prison Officers’ Pension Fund, ZBA Account 6. Consolidated Police and Firemen’s Pension Fund, ZBA Account 7. Judicial Retirement System, ZBA Account 8. Central Pension Fund, ZBA Account 9. State Police Retirement System, ZBA Account 10. Supplemental Annuity and Collective Trust, ZBA Account

See EXHIBIT G for the Account Structure and Funds Flow Chart. C. Account Data Information and Requirements

All the payroll disbursement accounts will be established as controlled disbursement zero balance, positive pay accounts to be funded daily from the Pension Payroll Master Account.

PLEASE NOTE: The standard check requirements detailed will be applicable to

ALL the check disbursement accounts identified in this RFP and will not be repeated under each account information section.

The State will electronically transmit the check issue information to the bank, by 12:00 p.m. (noon) E.S.T, no later than the check mailing date for all the accounts. See EXHIBIT H Standard Check Payroll Schedule Calendar Year 2005. The


bank will be notified immediately in the event of a transmission failure; likewise, the bank must notify the State Office of Information Technology (OIT) if a transmission is not received in the timeframe established between the State and the bank. OIT will continue attempting electronic transmission until successfully completed. In the event of a faulty transmission, and only as a last resort, the State will produce a CD ROM as backup for the transmission, along with a hard copy report, which will include the following information:

- Number of checks issued - Beginning and ending check numbers - Total dollar amount of transmission

- Check issue date The CD ROM(s) will be sent to the bank via a secured expedited overnight delivery method. All CD ROM(s) will remain the property of the State. When data is received or transmitted electronically to the bank or by the bank, the bank must utilize adequate security techniques in order to insure the protection of the data and the integrity of the system. The bank must have the appropriate contingency plan, either manual or other, as a back-up procedure to receive and process the data.

See EXHIBIT I for the Electronic Check Issue File Layout. The check issue information will be used by the bank to create an outstanding check

file. Each day as the checks are cleared by the bank, a computer match will be made against the outstanding file by check number and dollar amount. The bank will be required to reconcile each check disbursement account and maintain a daily outstanding check file for each account.

All presented checks must be processed through the bank's positive pay system.

With positive pay service, paid-no issue, debit/credit items or rejects should not exist on the bank reconciliation. If these conditions exist, they must be researched by the bank and if found to be valid items, they are to be stripped and re-entered into the system or corrected as required.


Checks that are not bank errors and do not exactly match to the issue file are

exception items. If the exception cannot be corrected by the bank, the check image will appear online for review by the Division of Pensions and Benefits (Pensions). After review, a "pay/no pay" determination will be made. The bank must reject all exception items unless Pensions indicates otherwise.

Items initiated by Pensions, such as adjustments, stop payments, cancellations, etc.,

must be processed as they are received.

All paid items must remain on the bank’s inquiry system for five (5) full calendar months plus the current month before the earliest month's paid items are purged. The paid item and outstanding check information must immediately be made available to Pensions via a web based inquiry/communication system. Outstanding checks must remain on the system for 18 months or until the bank is advised to remove them by Pensions.

It will be the State's policy to periodically cancel, usually once a year, outstanding

checks that are at least one year old. Pensions requires an electronic transmission and a hard copy report of these checks. See EXHIBIT J for the Purged Elements.

All check volumes and ACH volumes are based on Fiscal Year 2004. The check data is based upon the number of checks that cleared the account during the given months. The ACH data is the actual volume for Fiscal Year 2004.

The disbursement amounts quoted per account are based on the actual cleared check and ACH issuances for the months noted. Therefore the average check disbursement dollar amount quoted in the scope of work under each account may not compute accurately to the account detail volumes noted. The check volumes noted are based on the check clearances per month and not actual check issuance.

The check issuance is based on a pre-determined schedule. See EXHIBIT H for the

Standard Check Payroll Schedule Calendar Year 2005. The checks are mailed no less than two (2) days prior to pay date. Most checks issued from these accounts are dated the first day of the month. (Standard checks are always dated the first). Pensions are paid via ACH direct deposit on the first of the month unless


the first of the month falls on a Saturday, Sunday or holiday, then the settlement date of the direct deposit payment will be the last business day of the preceding month. The State requests the bank honor, for cash or deposit, a post dated Pension payroll check.

The ACH direct deposit items will be transmitted to the bank based on a schedule

developed by Pensions annually. See EXHIBIT K EFT Payroll Schedule Calendar Year 2005.

PLEASE NOTE: The standard ACH requirements detailed will be applicable to

ALL the ACH disbursement accounts identified in this RFP and will not be repeated under each account information section.

The bank must be a member of the National Automated Clearing House Association

(NACHA) and follow the rules outlined in the latest published ACH manual. The bank must have electronic transmission sending and receiving capabilities.

Pre-notification

Before any pension recipient enters the ACH Payment System, a pre-notification (pre-note) record will be generated. This pre-notification record will contain all the relevant information pertaining to the recipient’s ACH transaction except for the actual dollar amount which will be zero. The day the pre-notification transmission is sent, Pensions will follow up with a fax and phone call to the bank to confirm the transmission.

Pre-notification Rejections/Corrections

Upon receipt of a pre-notification rejection or correction, the bank will communicate the item count and retiree/recipient name and I.D. numbers through a bank provided web based inquiry/communication system.

Live ACH Transactions

The bank must accept the ACH direct deposit items in the PPD format. Transmission will occur no less than two (2) days prior to settlement/pay date. The State will


make every effort to transmit on the scheduled dates. However, on the very rare occasion, a transmission is sent to the bank one day prior to settlement date, the bank must process the transmission to meet the scheduled payroll settlement date. The bank must process the direct deposit information timely to ensure credit to all recipients’ accounts by the opening of business on pay date (generally the first business day of the month). Bank personnel must telephone the State Office of Information Technology (OIT) Operations personnel by 12:30 p.m. E.S.T. if a file scheduled for transmission, based on Pensions’ processing calendar, has not been received by 12:00 p.m. (noon) E.S.T.

The day the transmission is sent, Pensions will follow up with a fax and phone call to

the bank (ACH operations) to confirm the transmission.

If it is determined by the State, only as a last resort, that a CD ROM will replace the electronic transmission, OIT Operations will call the bank and inform them that a CD ROM will be sent via secured expedited overnight delivery.

Deletions Between the time of the payroll closing date and the release of the transactions to

the ACH clearinghouse, there may be a need to delete ACH transactions from the live transmission. Pensions would prefer to input these items online through a web based inquiry/communication system. In the event that such a system is not available, Pensions will either call the bank or transmit the deletions to the bank via facsimile transmission. The bank must designate an ACH contact person for the State to call in the event one or more individual ACH transaction has to be deleted after the State’s transmission to the bank, and the bank’s transmission to the ACH clearinghouse. In this situation, reversing items will need to be processed as described below. Pensions must receive online or faxed confirmation of these deletions by the next business day.

Reversals

When reversals are required, Pensions will transmit the information (preferably on a web based system). Pensions will either call the bank or transmit the recall/reversal items via facsimile or on the web based system. In the instance of a facsimile


transmission, the successful reversal detailed item will be faxed back to Pensions the next day as a confirmation. The detail will include:

• Recipient Name • Recipient ID Number • Recipient ABA and Account number • Origination date of reversed item • Dollar Amount

The corresponding credit will be reflected as a separate line on the bank statement for each individual fund account. See EXHIBIT N for Fiscal Year 2004 ACH Reversal Dollar Value Information for Each Disbursement Account.

Upon the receipt of an unsuccessful reversal, the bank should provide the return information to Pensions via the web-based system the same day received or no later than the next business day.

In the case of a reversing file initiated by the State, the file will be transmitted to the

originating bank within 24 hours of the discovery of the duplication or error. The bank must delete the individual transaction if the information is received prior to its release to the bank’s ACH operator. If the bank receives the reversing communication from the State after the bank has submitted the ACH file to its ACH operator, the reversing file must be initiated in such time as to be transmitted or made available to the Receiving Depository Financial Institution (RDFI) within five (5) banking days after the settlement date of the duplicate or erroneous file.

Returned/Rejected Items

ACH transactions are returned at the request of the RDFI for various reasons including but not limited to:

• Individual Deceased • Customer Deceased • Beneficiary Deceased • Representative Payee Deceased • Account Number Not Found


• Non-Transaction Account • Invalid Account Number • Account Closed • No Account/Unable to Locate Account

These items must appear on the web based inquiry/communication system with

the following detail for each individual item:

• Recipient Name • Recipient ID Number • Origination Date of Reversed Item • Dollar Amount • Recipient ABA and Account number • Reason for Return/Rejection • Additional Return Reasons or Correcting Information

For the mutual customers of the bank and Pensions it may be necessary for manual ACH reversals/returns/rejections to be processed, these items should appear with the same detail as above.

Rejects An ACH transaction may reject due to any number of reasons; account closed or

frozen, incorrect account number, incorrect bank ABA number, etc. All rejected pre-notes and rejected live transactions as well as rejected information should immediately be made available to Pensions via a web based inquiry/communication system. The reject information must contain the following information:

• Bank ABA Number • Recipient Bank Account Number • Date of Rejection • Settlement Date • Dollar Amount • Recipient Name • Recipient ID Number and/or Membership Number


• ACH Trace Number • Reason for Fail

As a result of a reject and after a return/reversed item report is received, Pensions will issue a check to the appropriate payee with an option in the future to replace with an ACH.

Formal hard copy documentation is not necessary as long as the information is available online.

Notifications of Change (NOC)

For all Notifications of Change, Pensions requires an electronic communication of an NOC as opposed to a paper report. This electronic report is a Pensions requirement. In the event of a system failure, Pensions would accept a paper report.

Non Standard Payroll Schedule A small number of non-standard payments (checks only) are issued up to four times

a month and are based on a predetermined schedule, but not necessarily on the same dates every month. See EXHIBIT L for the Non Standard Payroll Schedule Calendar Year 2005. The non-standard payment information will be transmitted to the bank no later than the check issuance date. Any check reversal information will be included on the non-standard check issuance transmission. Please note: The Division of Pensions and Benefits reserves the right to utilize ACH payments for the supplemental payroll payments at a later date. DESCRIPTION OF ACCOUNTS

1. Pension Payroll, Master Account

This account will be established as the Master Account which will fund all the payroll disbursement accounts. There will be no checks written against the Master Account.


The State will fund the Master Account by a daily wire (approximately 250 annually) from the State’s Cash Management Fund. The total amount wired-in will be based upon the aggregate of the intra-day controlled disbursement and ACH reporting provided by the selected bank. That aggregate amount will be wired to the bank that same day.

2. Teachers Pension and Annuity Fund, ZBA Account

Listed below are the Teachers Pension and Annuity Fund check clearance volumes and ACH disbursements for Fiscal Year 2004. Historically, there has been a 13% increase in disbursement volume annually relative to this account.

Month Checks Paid Direct Deposit July, 2003 12,603 46,659 August, 2003 14,219 47,467 September, 2003 14,177 48,485 October, 2003 12,669 48,781 November, 2003 12,782 49,030 December, 2003 13,191 49,093 January, 2004 12,566 49,171 February, 2004 12,872 49,337 March, 2004 12,993 49,442 April, 2004 12,711 49,514 May, 2004 12,461 49,594 June, 2004 12,638 49,643 TOTAL 155,882 586,216 MONTHLY AVERAGE 12,990 48,851 Following is the dollar activity for Fiscal Year 2004: Total ACH Amount: $1,293,102,663 ACH Average Payment: $2,206 Total Check Amount: $326,831,377 Average Check Payment: $2,097


3. Public Employees Retirement System, ZBA Account

Listed below are the Public Employees Retirement System check clearance volumes and ACH disbursements for Fiscal Year 2004. Historically, there has been a 13% increase in disbursement volume annually.

Month Checks Paid Direct Deposit

July, 2003 41,657 73,727 August, 2003 42,208 74,141 September, 2003 44,399 74,802 October, 2003 40,050 75,133 November, 2003 40,774 75,667 December, 2003 42,566 75,887 January, 2004 40,358 76,091 February, 2004 41,500 76,387 March, 2004 42,011 76,775 April, 2004 41,196 76,979 May, 2004 40,241 77,254 June, 2004 41,282 77,747

TOTAL 498,242 910,590 MONTHLY AVERAGE 41,520 75,883

Following is the dollar activity for Fiscal Year 2004: Total ACH Amount: $961,910,507 ACH Average Payment: $1,056 Total Check Amount: $388,884,448 Average Check Payment: $780

4. Police and Firemen’s Retirement System, ZBA Account

Listed below are the Police and Firemen’s Retirement System check clearance volumes and ACH disbursements for Fiscal Year 2004. Historically, there has been an 8% increase in disbursement volume annually.


Month Checks Paid Direct Deposit

July, 2003 7,836 18,777 August, 2003 7,961 18,882 September, 2003 8,545 19,016 October, 2003 7,494 19,103 November, 2003 7,703 19,286 December, 2003 8,074 19,348 January, 2004 7,672 19,415 February, 2004 7,953 19,520 March, 2004 7,989 19,647 April, 2004 7,863 19,763 May, 2004 7,775 19,859 June, 2004 7,922 20,037

TOTAL 94,787 232,653 MONTHLY AVERAGE 7,899 19,388

Following is the dollar activity for Fiscal Year 2004: Total ACH Amount: $594,102,937 ACH Average Payment: $2,554 Total Check Amount: $217,486,314

Average Check Payment: $2,294

5. Prison Officers’ Pension Fund, ZBA Account

Following is the dollar activity for Fiscal Year 2004: Total ACH Amount: $1,785,452 ACH Average Payment: $1,070 Total Check Amount: $668,082 Average Check Amount: $844

On a monthly basis, on average, 66 checks cleared this account and 139 direct deposit items were issued. There has been an annual 4% decrease in disbursement volume relative to this account because it is a closed fund. The


bank can anticipate this negative trend to continue. Eventually, this account will cease to exist, but not during this contract period.

6. Consolidated Police and Firemen’s Pension Fund, ZBA Account

Listed below are the Consolidated Police and Firemen’s Pension Fund check

clearance volumes and ACH disbursements for Fiscal Year 2004. Month Checks Paid Direct Deposit

July, 2003 330 728 August, 2003 324 725 September, 2003 341 719 October, 2003 299 714 November, 2003 311 713 December, 2003 307 705 January, 2004 298 698 February, 2004 296 693 March, 2004 295 685 April, 2004 290 678 May, 2004 291 674 June, 2004 291 673

TOTAL 3,673 8,405 MONTHLY AVERAGE 306 700

There has been an annual 10% decrease in disbursement volume in this

account because this is a closed fund. The bank can anticipate this negative trend to continue. Eventually, this account will cease to exist, but not during this contract period.


Average Check Payment: $1,320


7. Judicial Retirement System, ZBA Account

Following is the dollar activity for Fiscal Year 2004: Total ACH Amount: $18,082,880 ACH Average Payment: $4,305 Total Check Amount: $3,112,764 Average Check Payment: $4,252

On a monthly basis, on average, 61 checks cleared this account and 350 direct deposit items were issued. Historically, there has been a 6% increase in disbursement volume annually.

8. Central Pension Fund, ZBA Account

Following is the dollar activity for Fiscal Year 2004: Total ACH Amount: $263,963 ACH Average Payment: $132 Total Check Amount: $163,217 Average Check Payment: $75

On a monthly basis, on average, 182 checks cleared this account and 167 direct deposit items were issued.

There has been an annual 3% decrease in disbursement volume relative to this

account because it is a closed fund. The bank can anticipate this negative trend to continue. Eventually, this account will cease to exist, but not during this contract period.

9. State Police Retirement System, ZBA Account

Listed below are the State Police Retirement System check clearance volumes

and ACH disbursements for Fiscal Year 2004. Historically, there has been a 9% increase in disbursement volume annually.


Month Checks Paid Direct Deposit July, 2003 552 1,533 August, 2003 560 1,546 September, 2003 599 1,554 October, 2003 525 1,564 November, 2003 561 1,575 December, 2003 555 1,591 January, 2004 540 1,598 February, 2004 554 1,608 March, 2004 561 1,620 April, 2004 548 1,635 May, 2004 540 1,647 June, 2004 546 1,656

TOTAL 6,641 19,127 MONTHLY AVERAGE 553 1,594


Average Check Payment: $2,542 10. Supplemental Annuity and Collective Trust, ZBA Account

Listed below are the Supplemental Annuity and Collective Trust check clearance

volumes and ACH disbursements for Fiscal Year 2004. Historically, there has been an 18% decrease in disbursement volume annually.

Month Checks Paid Direct Deposit July, 2003 259 405 August, 2003 257 405 September, 2003 266 405 October, 2003 248 402 November, 2003 272 403


December, 2003 263 403 January, 2004 246 403 February, 2004 253 400 March, 2004 256 395 April, 2004 251 394 May, 2004 244 395 June, 2004 240 393

TOTAL 3,055 4,803 MONTHLY AVERAGE 255 400

Following is the dollar activity for Fiscal Year 2004: Total ACH Amount: $1,911,022 ACH Average Payment: $398 Total Checks Issued: $1,157,068 Average Check Amount: $379

Reconciliation Services

On a monthly basis, for ALL disbursement accounts, the bank must provide Pensions with a hard copy or web based ARP report to be received by the 10th of every calendar month for prior months’ activity. The account reconciliation plan (ARP) is a listing of outstanding checks (unpaid report) and consolidated (paid and outstanding) as of the fund statement date. It contains the following fields:

• Check Number • Amount Paid or Outstanding • Date Paid • Date Issued • Sequence Number • Payee I.D. Number • Explanation Field (see codes)


By date, the summary sheet (recap of Posted Items Report) contains in the

aggregate the number of transactions and the amounts posted to the account with grand totals for the month. Fields contained on the report are:

• Date • Items • Paid Checks • Issues • Stops Placed • Stops Removed • Issues Canceled

Along with the hard copy or web based report, the bank must provide Pensions a CD ROM, of the ARP reconciliation report and the paid check images.

All accounting items on the monthly settlement report summary page must be

supported by detail backup information. The “New Issues” monthly total figure must be supported by daily issue total summary reports; the paid checks’ total dollar amount must be supported by a detailed check paid information report; and all cancellations, manual inputs and adjustments must be supported by full detail explanations which include check numbers, amounts and issue dates for all items.

See EXHIBIT M for the Full Reconciliation Balance Sheet. D. Check Cashing Requirements

Upon presentation of acceptable identification (to be identified in your proposal), the bank must cash all checks presented for payment at ALL member bank locations, or locations as contracted by the bank, at no cost to the recipient. It is important to the State that check cashing capability also be extended to your branches outside of New Jersey. The bank must provide a list of all its check cashing facilities by State and in New Jersey by County. It will be important for the bank to meet the check cashing needs of Pension recipients.


Check cashing is a valuable service for the recipients of New Jersey checks. The bank’s capability and commitment to provide a check cashing service over the life of this contract will be one of the more critical factors to be considered in the technical analysis of each submitted proposal.

A check may not be cashed if any one or more of the following conditions exist:

• Improperly endorsed check • Endorsement missing • Incorrect or missing Authorized Signature. (The list of authorized signers will

be provided to the bank for each account.) • Check amount altered

E. Stop Payments

The State must be able to issue stop payments and remove stop payments on

checks. The stop payment information must be integrated with the bank’s ARP and/or issue file. The stop payment and remove stop payment order will be placed by Pensions via a web based inquiry/communication system to be provided by the bank. Pensions must be able to place range stops and batch-input multiple stop payments without the need to sign on for each individual stop payment request or range request. The stop payment will be considered effective for the next day's clearances when placed online, and continue in effect for two years.

For all the accounts identified herein, approximately 3,001 stop payments were

placed in Fiscal Year 2004 with the largest number of stops being placed against the Public Employees Retirement Account (2,062 or 69%), and second, the Teachers Pension and Annuity Account (617 or 21%). .

In the event of a line failure, a back-up stop payment procedure, by telephone or

facsimile, must be maintained. The bank will record the date, the time, the name of the bank representative receiving the order, and the name of the State representative placing the stop order. The bank will confirm all telephone and facsimile stop payment orders by facsimile transmission no later than 10:00 a.m. E.S.T. the following day.


The State requests that stop payments not be labeled or treated as cancellations or voids on the bank reports or on the Check Inquiry System. The stop payment items should clearly be labeled as a “stop payment”.

An original check on which a stop payment has been placed will remain as a stopped

item for two years on all systems unless the stop is officially removed by the State, or until the check is officially canceled or transferred by the State to a canceled check account.

F. Forgery Investigation

There were approximately 57 forgery investigations initiated for all accounts in Fiscal

Year 2004. The State will initiate a forgery investigation by forwarding the original

notarized forgery affidavit and, if available, the original check to the bank. If the

original check is not available, Pensions will forward an imaged copy of the check to

the bank. The bank will assign a unique case number to each investigation and

forward an acknowledgment via e-mail to Pensions with the case number, name of

payee, and check number included in the correspondence.

If the claim is honored, the bank will credit the proper Pensions account. The forgery

affidavit and canceled check will not be returned to the State.

If the claim is denied, the original forgery affidavit, canceled check and "Letter of

Denial" which notes the reason for non-payment of the claim should be returned to

Pensions. The cause for denial of the claim must be consistent with the general law

of negotiable instruments and accepted by the State.

Forgery claims should be resolved by the vendor bank within 60 calendar days of

receipt of the forgery affidavit. If the forgery claim cannot be cleared within the

aforementioned time frame, (e.g. the cashing bank does not make restitution or

provide a “Letter of Denial”) the vendor bank will issue a credit memo to the

appropriate Pensions account.


If the vendor bank is the cashing bank, and a forgery claim is made against the

vendor bank, the claim must be resolved within 21 days of the receipt of the affidavit.

The bank will prepare a monthly status report of forgery investigations in account

number order. This report will be forwarded to Pensions during the first week of

every month. For each outstanding forgery claim, the following information will be

provided:

1) Payee name

2) Bank account number

3) Check number

4) Date check issued

5) Check amount

6) Date of receipt of forgery affidavit

7) Status of claim

8) Bank-assigned case number

If a forgery is not resolved within 60 days after notification by the State, the State reserves the option to withhold the total check amount under investigation from the bank’s monthly invoice submitted to the State.

G. Improperly Endorsed Checks

Improperly endorsed checks returned to the bank by Pensions are not to be considered forged checks. A credit to the proper Pensions account and a credit memorandum must be provided by the bank and received by Pensions within ten (10) working days from the date sent. For all the Pension payroll accounts, there were no improperly endorsed check claims in Fiscal Year 2004.

If an improperly endorsed check is not corrected within 60 days after notification by

the State, the State reserves the option to withhold the total check amount under investigation from the bank’s monthly invoice submitted to the State.


H. Web Based Inquiry/Communication Systems

The bank must provide the State with web access to account information. The

proposed web based system must be menu driven. All accounts must be accessible

from the web.

Only authorized State personnel will be permitted to initiate inquiries. The authorized

personnel will be identified for each account after contract award. The bank must

provide the proper security measures to prevent other bank clients from accessing

Pensions information and conversely, to prevent Pensions from accessing other than

their own information. Also, in the case of emergency and Pensions’ personnel are

unable to gain access to the Pensions Building in Trenton, a web based

inquiry/communication system is necessary for employees to have the ability to use

the system from an off-site location.

It is preferred by Pensions to have the capability to delete both check and ACH

transactions online prior to issue date. Access to NOC, reject, return and reversal

information must be available via the web based inquiry/communication system.

1. Check Inquiry/Communication System

Direct access to check account activity is required. Data should be stored and available for web inquiry covering a minimum of 18 months of the most recent outstanding items, and a minimum of six (6) months of paid activity. The bank must provide training, user manuals and telephone access to technical assistance from 7:00 a.m. E.S.T. to 7:00 p.m. E.S.T.

For all accounts noted herein, approximately 6,121 inquiries were made by the

Division of Pensions and Benefits in Fiscal Year 2004.

Inquiries will include, but not be limited to, a check’s status regarding the following classifications:


• Paid • Outstanding (Not paid) • Stop • Not found

The Web Based Check Inquiry System should be updated daily to reflect new issues, paid items, canceled items and stop payments. The system should also grant authorized users the ability to enter check cancellation information of the original check. The bank should be able to receive and process the replacement check information via the Web Based Check Inquiry System.

Only authorized personnel from the State will be permitted to initiate inquiries.

Authorized personnel will be identified for each account after contract award.

2. ACH Web Based Inquiry

The bank must provide a web based inquiry/communication system to Pensions

for the reporting of all fails, returns, reversals, deletes, and NOC’s. ACH fail

information (pre-note or ACH) provided to Pensions should contain the following

information:

1 Account number 2 Incorrect account number 3 Effective date (Settlement Date) 4 Amount 5 Reason for fail 6 Individual ID 7 Individual name 8 ACH trace number

The system should be capable of warehousing data for 15 days either at the host or

at the bank until transmission execution date. The software should contain the

proper security features to ensure the protection of the data and to maintain the

integrity of the system. The bank should provide adequate operational training to


Pensions personnel, including at a minimum one operating manual with instruction

on its use at no additional cost to the State.

The State should have access to a telephone hot line “help desk” during normal

State working hours (7:00 a.m. E.S.T. to 7:00 p.m. E.S.T). The bank should

provide on-going maintenance and emergency service when necessary.

I. Report Requirements

Along with the reports listed below, the bank must include a list and samples of all major system full ARP and positive pay reports for Pension’s review. At Pension’s discretion, after reviewing the submitted reports, Pensions will determine which reports will be beneficial to them for reconciliation purposes and consequently which reports will ultimately be required. One bank report containing multiple data fields may eliminate the need for multiple reports.

As part of processing the checks and ACH transactions, the State requires that the bank provide reports to the State. The types of reports include, but are not limited to the following:

1. Daily Automated Balance Reporting

All accounts identified in EXHIBIT G Account Structure and Funds Flow Chart and any future accounts established will require daily automated balance reporting in unencrypted BAI2 format via the Internet without the use of a secure card random assigned personal identification number (PIN), or other means that would inhibit the automated retrieval of the bank data. Any encryption format required by the bank must be compatible with the automation of the retrieval process of the bank report, such that a bank report can still be retrieved and unencrypted in an automated fashion. Every working day, by 7:30 a.m. E.S.T., the bank must electronically provide access to account balance information in unencrypted BAI2 format via the Internet without the use of a secure card random assigned personal identification number (PIN), or other means that would inhibit the automated retrieval of the bank data.


For each account the report must include at a minimum the following data fields:

1 Ledger balance

2 Collected balance

3 Total credits

4 Total debits

5 1-day float

6 2-day float

For all the reporting fields, there should always be data reported. Therefore, if there is no amount reported, the bank should input 00.00 in the specific amount field.

As technology improves, the State requires that the chosen vendor remain flexible, throughout the term of this contract and any extensions, as it relates to the method of balance reporting in unencrypted BAI2 format via the Internet without the use of a secure card random assigned personal identification number (PIN), or other means that would inhibit the automated retrieval of the bank data.

2. Daily Controlled Disbursement Reporting

For all the controlled disbursement accounts, the bank must provide daily same day automated controlled disbursement reporting in unencrypted BAI2 format via the Internet without the use of a secure card random assigned personal identification number (PIN), or other means that would inhibit the automated retrieval of bank data. The State requires electronic final notification of same day total check presentments per account in unencrypted BAI2 format via the Internet without the use of a secure card random assigned personal identification number (PIN), or other means that would inhibit the automated retrieval of the bank data, no later than 10:15 a.m. E.S.T. As part of the controlled disbursement services requested, the selected vendor must have the capability of providing the State with aggregate check and ACH


clearance/settlement totals by account in unencrypted BAI2 format via the Internet without the use of a secure card random assigned personal identification number (PIN), or other means that would inhibit the automated retrieval of the bank data.

3. ARP Detail and Summary Recap Report

The bank must provide Pensions the detail and summary ARP reports to be received no later than 10th day of the calendar month for the preceding month’s activity. This report shows the detail check issue information for the reconciliation period and all outstanding items for the past 18 months. The bank must provide a monthly CD ROM of this summary report to include up to 18 months of outstanding check items, or as an alternative, online access to the account information via the bank’s database. The report must include the following:

• Account Name • Account Number • Issue Date/Period Covered • Beginning Check Number • Payee I.D. No. and/or Retirement Number

See EXHIBIT P for an example of the Detail ARP Report. 4. Monthly CD ROM of Paid Check Images

The bank must provide to Pensions a CD ROM of paid check images, front and back, in check number order to be received by the 10th day of the calendar month for the preceding month’s activity. The CD ROM should contain an Index by which the images can be retrieved. The Index list should provide the user the ability to access an image by:

• Account Number • Dollar Amount • Date Paid


• Check Number • Status of Check (Posted or Not Posted) • Issue Date • Issue Description • Bank Sequence Number • CD Volume Number

5. Monthly Outstanding Items Report

The bank must provide to Pensions a sequential listing of the outstanding checks by the 10th day of the calendar month for the preceding month’s activity. Pensions would prefer this report be provided via electronic transmission. The following fields of information must be included on the report:

• Retirement Number (I.D. Number) • Account Name • Social Security Number • Check Issue Date • Check Number • Check Amount

See EXHIBIT Q. for the Outstanding Check Issue Output File Format.

6. Status of Forgery Investigations

See SECTION V. F. Forgery Investigation, for the detail forgery information and report requirements. The forgery investigation status report is to be provided to Pensions monthly.


7. Purged Outstanding Transfer Report

This report is a sequential listing of all outstanding items on the bank system as of a certain period requested by the State. This information is used by Pensions to update Pensions’ records. See EXHIBIT J for the Purged Elements. Once a year, the State will request an outstanding transfer report. Pensions would prefer this report be provided via electronic transmission.

8. MICR Rejection Analysis Report

This report must be produced monthly for Pensions and be available in hardcopy, e-mail or secure web page format. The report should contain the total number of checks processed and the total number of failures including the reason for the failure (signal strength, extraneous ink, waveform, character formation, character spacing, character placement, skewing).

J. Bank Statements

A monthly bank statement is required for the Master Account and all the ZBA accounts. Pensions must have the capability to access and print all the bank statements online as of the end of the month. The appropriate detailed debit and credit memos and bank reconciliation reports, and the hard copy bank statement, must be provided and received by Pensions by the 10th day of the calendar month for the preceding month’s activity. See EXHIBIT R. for a Bank Statement

K. Check Specifications

The State will order all laser check stock and print the checks with specifications as follows:

28 lb. Paper MICR/OCR Bond 7 ½ “ long, 2 ¾ " high


The checks will have a ten (10) digit check number printed on the upper right hand corner of the check which will be MICR encoded on the bottom of the check. The State retains the right to change the check specification requirements upon 90 days prior written notice to the bank.

L. Check Testing

For testing purposes, initially the State will provide the bank between 10 and 25 checks per account for testing purposes. If the bank requires more than 25 checks, please stipulate the quantity required in your proposal submission. Test checks will be made available to the bank when requested. The State will make every effort to keep reject rates reasonable, i.e., within the standards set by the banking community.

M. Imaging, Storage, Retrieval, and Destruction of Canceled Checks

The State requires that the vendor provide the following services: imaging, storage, retrieval, and destruction services for canceled checks as it offers efficient use of state and bank resources. Checks are required to be scanned, converted to electronic images, stored on computer media, and retrieved via the Internet. See EXHIBIT S. Electronic Images - System Certification, Storage, Backup, and Disaster Prevention/ Recovery. The bank will also be responsible for the storage of canceled checks until authorized for destruction by the State. See EXHIBIT T. Destruction Requirements for State Records Canceled Checks and Electronic Images.

The imaging, retention (electronic and paper), retrieval, and destruction services should be reviewed by the New Jersey Division of Archives and Record Management (NJDARM) and certified by the New Jersey State Records Committee (SRC), as stated in New Jersey Administrative Code (NJAC) 15:3-4 Image Processing of Public records and 15:3-5 Certification of Imagine Processing Systems prior to the start date of this contract. See EXHIBITS S. and T. for certification and record destruction requirements, respectively.


The public records image processing system certification process typically takes approximately 4–6 months to complete; therefore, the successful bidder should immediately commit the necessary resources to insure certification prior to the start of this agreement. The process requires the State, in partnership with the successful bidder, to submit an application for “Certification of Imaging Process System” to NJDARM within 30-45 days of the award date. NJDARM representatives will require a site inspection of the image processing system and a review of system maintenance, operation and administration, backup, disaster recovery, and data migration. All processes involved in the imaging system should be documented. The process concludes at a public meeting with mandatory attendance of both the bank and State.

The State recognizes that information submitted may contain confidential and/or

proprietary information about internal bank operations and computer systems. For this section only, the bidder should print on each appropriate page of their response (footer) “Confidential - Exempted from Open Public Records Act P.L. 2001 Chapter 404 and N.J.S.A. 47:1a-1 et seq. (Trade secrets and proprietary information, computer security, security measures and techniques, advantage to bidders.)”

The bank should store the electronic image and canceled checks until authorized for

destruction by the SRC and NJDARM. Essentially, the bank’s image storage system

becomes the repository for official state records; and, therefore, the bank is

responsible for retaining and disposing of public records in accordance with NJAC

requirements for imaging, record retention and destruction as described in EXHIBIT

T. Destruction Requirements for State Records Canceled Checks and

Electronic Images. Under no circumstances shall the bank release any state

record including copies and images of checks, bank statements, logs, etc., to anyone

except authorized individuals of the State. All requests for State records should be

referred to the Office of Management and Budget (OMB). Images should be stored

in a manner that allows immediate retrieval via the Internet for checks imaged within

one (1) year of cancellation and 24 hours for older records.


1. Retrieval

The State retrieves approximately 6500 images annually. The front and

back of a check constitutes one (1) image. The majority of image

retrieval activity usually occurs within nine (9) months from check issue

date; however, the State occasionally needs to retrieve images dating

back seven (7) years from date of issue. Internet retrieval of documents

should be through a web based application capable of operating

Microsoft Windows XP over a TCP/IP network. The bank’s application

should be compatible with Netscape 6.0 or better or Microsoft Explorer

5.1 and better.

Only authorized state or bank personnel should be permitted to initiate

inquires. In order to adequately protect state records the following

security features should be built into the application:

a. The vendor should establish 128-bit encryption connection

secured directly between client and vendor’s servers (https.);

b. Vendor’s system should include password access to the bank’s

web site;

c. Vendor’s system should offer client access control that allows

Pensions to internally establish State users and user passwords.

Pensions estimates approximately 100-150 user accounts; and,

d. Vendor’s system should provide the ability for Pensions to limit

State user’s access to designated bank accounts.

The bank may offer additional security features that may be beneficial to

the State. These features should be listed in the Bank’s proposal as an

optional service. Images retrieved should display both front and back of

the check, print locally as a single document, and include a certification of

authenticity statement on the print out. The following is the State’s

suggested wording for the “certification of authenticity.”


“(Bank Name) certifies that the above image is a true and exact copy of the original issued by the named customer and was produced from original data stored in the archives of (Bank Name) or its predecessors.”

With an estimated 750,000 checks issued per year, the bank’s web

applications should provide the State the ability to perform successful

searches based on the following criteria:

Individual and multiple check searches; Information contained in MICR line including; a. Account Number b. Amount c. Check Number and Data Range Data Range searches enable users to define a period of time during which a check may have been cashed as the state has the potential to re-cycle check serial numbers every 3-5 years.

2. Additional Features Required

The State requires the following features:

a. User option to submit bulk (10+ check images) request with overnight processing (batch processing). b. Ability to receive image (front & back) as a single file attachment (one - image = one attachment) via e-mail. The check serial number should be used as the attachment file number. c. Ability to integrate images with correspondence letters that will print & save at the designated state office. The State will provide the bank with template letters.


3. Image Retrieval Performance

The State recognizes that Internet usage and bandwidth between the

State and Bank impact response times; however, the State expects the

following processing time performance once an inquiry has been received

by the bank system:

1. For search inquiries of check(s) imaged (paid) within 90 days of the inquiry date, the bank system should return the first image within 20 seconds of receiving the request. 2. For search inquiries of check(s) imaged (paid) greater than 90 days from the inquiry date, the bank system should return the image within 40 seconds of receiving the request. 3. If at anytime the bank system projects retrieval times greater than the above specifications, the bank system should present the option to batch process with completion no later than 9 a.m. the next business day.

If during the course of retrieval, the bank is unable to produce a legible

copy of the image, the bank, at no additional cost to the State, should

obtain a copy of the check from the bank of first deposit within five (5)

business days.

4. Federal “Check 21” Legislation

In the event recently approved Federal “Check 21” legislation impacts NJDARM State requirements for check imaging and destruction, the State requires that the bank fully comply with all federally related standards.

N. Vendor Contact Personnel The bank should appoint a senior officer (vice-president or above) and a qualified

substitute as a representative for contact and liaison with the State. This


representative will be solely responsible for insuring that the contract requirements are met, implementing State instructions and resolving problems that may arise on a day-to-day basis during the term of the contract.

The bank should provide the lines of communication (proper contact personnel,

names, locations and telephone numbers) for immediate response to any request for information pertaining to these accounts.

The State requires that the vendor designate a minimum of two individuals for each

category noted below (not necessarily all inclusive) who will be responsible for the daily inquiries, problems, initial and on-going training, etc.

1 ARP Reconciliation

2 Check/ACH transmission and CD ROMs 3 ACH inquiries, rejections, reversals,

deletions, NOC pre-notes 4 Check status inquiry problems

5 Controlled disbursement reporting

6 Wire room

7 Daily balance reporting

8 Check testing

9 Bank Statements, credits and debits

10 Invoice and bank analysis

11 Forgeries

12 Training

In the event a personnel change results in a different liaison being assigned to the State, written notification will be provided 15 days prior to the change becoming effective.

O. Training The bank should be certain that the web based inquiry/communication system is

operating satisfactorily and that State personnel have been properly trained in operating the systems.


The bank should provide adequate training both initially and on-going to ensure that State personnel thoroughly understand all report information and can identify the codes indicated on all reports. All ARP processes and reports should be reviewed by Pensions personnel prior to contract implementation. All systems should be explained and demonstrated to Pensions personnel.

A minimum of one set of operating manuals should be provided to Pensions with any

subsequent additions, deletions or revisions to the manuals promptly forwarded to Pensions. A training outline, synopsis of the major training categories, schedule and trainer's name should be included in the bank's response.

Approximately 100 employees (including system administrators) in Pensions will require system training.

P. Conversion/Implementation

The bank must provide an implementation schedule (to include training and testing) starting with the anticipated award date through contract commencement, and beyond if applicable (for any possible follow-up issues). Provide details where relevant. Include both the bank and State personnel resources that will be required to fulfill the tasks or milestones as proposed and achieve the contract commencement date.


VI. EVALUATION CRITERIA

The State must be satisfied that the bank has the necessary technical expertise, experience and resource capabilities to satisfactorily perform the requisite services stated in this request. The State reserves the right to obtain any information from an independent source to evaluate these criteria. Selection of other than the apparent low bid will be fully documented. An award will be made to that responsible bidder whose bid, conforming to the RFP, will be most advantageous to the State, price and other factors considered.

The following general criteria, not necessarily listed in order of significance, will be used

to evaluate the vendors' proposals. A more detailed evaluation worksheet may be developed which may expand on the technical requirements of the RFP. The State reserves the right to request additional information prior to contract award.

• The bank's overall response to the questions in SECTION VII.

• The bank’s overall experience on projects of similar scope and size.

• Response to possible follow-up inquiries.

• The bank's financial condition and ratings.

• Clarity and completeness of the required reports and documents.

• Web based inquiry/communication system reliability, capabilities and ease of use.

• The adequacy of the security measures, contingency plans and backup procedures.

• The bank’s commitment to provide adequate technical and personnel resources to

satisfactorily meet the requirements of the RFP.

• Capability of the bank to provide the required check cashing services for the term of the

contract as described in the RFP.

• The State's overall assessment of client references and experience.

• Quality of customer service capabilities and turnaround times for problem resolution.

• Completeness and feasibility of the bank’s implementation, testing and training plans.

• Check imaging capabilities. • Ability to accommodate any future State-mandated program changes within a time frame

acceptable to the State.

• Any other information that would assist the State in the selection process.

• Cost.


• VII. VENDOR RESPONSE

The vendor shall prepare responses to the questions listed below which will demonstrate the vendor’s understanding, experience and ability to adequately provide the services as required in this Request for Proposal (RFP). The vendor must address each question in its entirety providing details when warranted. The vendor is encouraged, in its response document, to expand upon any issue, RFP statement or RFP requirement that it deems not adequately addressed by this RFP.

Each vendor is given latitude with respect to the detail it elects to offer. However,

vendors are cautioned that insufficient detail may result in a determination that the bid proposal is materially non-responsive and will result in disqualification of the bid proposal.

Proposals that do not conform with or that take exception to the State of New Jersey’s

requirements as set forth in Section II. Terms and Conditions, Section III. Other

Mandatory Provisions and Section IV. Payment Method and Terms will be

considered materially non-responsive and therefore rejected.

Vendors are instructed to clearly identify any requirement listed in Section V. Scope of

Work of this RFP that the vendor cannot satisfy. Any deviation to the technical specifications must be clearly noted and fully explained. The State reserves the right to accept any minor deviations if it is deemed to be in the best interest of the State.

The vendor assumes responsibility for the complete effort required in this RFP. No

special consideration shall be given after the bids are opened due to a bidder’s failure to be knowledgeable of all the requirements of this RFP. By submitting a proposal in response to this RFP, the bidder represents that it has satisfied itself, from its own investigation, of all the requirements of this RFP.

It is requested that all pages for the response be numbered and that responses

reference the original questions


The vendor shall prepare responses to all the questions listed below which will

demonstrate its understanding, experience and ability to adequately provide the services as required in this RFP.

1. Briefly acknowledge your understanding and acceptance of all the TERMS AND CONDITIONS, OTHER MANDATORY PROVISIONS and PAYMENT METHOD AND TERMS as stated in the RFP.

2. Include a narrative description and a diagram of the corporate structure of which

the bank is a part. Identify the bank processing location(s) that will be utilized in providing services for the Division of Pensions and Benefits.

3. Identify any and all subcontractors, its officers, the contractual arrangements

made therewith and state what services will be subcontracted.

4. Provide the names and contact information for the officers and management personnel (including subcontractors’ personnel) who will be responsible for the fulfillment of the services requested herein; e.g. operations, reporting/bank statements, invoices/analysis, file transmission issues, ACH functionality, wire transfers, web based inquiry/communication system, disaster recovery, technology issues, customer services, and error/adjustments inquiries. Specifically identify and include the physical location (address), telephone numbers, fax numbers and e-mail addresses for the primary contacts and backup individuals who will respond to the day-to-day communications from the Division of Pension and Benefits. See SECTION V., N. Vendor Contact Personnel for specific requirements.

5. For reference purposes, provide the names, addresses, contacts and telephone

numbers of three (3) of your present customers for whom the bank is providing similar services as those requested herein; disbursement accounts, positive pay, controlled disbursement accounts, zero balance accounts, paid check imaging and retrieval services, wire transfers, ACH services, and web based inquiry/communication services. If possible, provide references with volumes equal to or greater than those of the Division of Pensions and Benefits. Include


any other information concerning the bank’s experience that would assist the State in evaluating the bank’s capabilities.

6. Respond to SECTION III. OTHER MANDATORY PROVISIONS:

a. Financial Statements: Bank and any direct subcontractors must include their

most recent audited financial statements or financial comments if a privately held company.

b. Stockholder Disclosure Form: Bank and all subcontractors must complete a

Stockholder Disclosure Form and include copies with each bank proposal. See EXHIBIT B Stockholder Disclosure Form.

c. Non-discrimination Law: Bank must acknowledge anti-discrimination law

N.J.S.A. 10:2-1 through N.J.S.A. 10:2-4, N.J.S.A 10:5-1 et seq. and N.J.S.A. 10:5-31 through 10:5-38, and abide by all rules and regulations issued there under.

d. Collateralization of Deposits: Confirm the bank’s ability to adhere to the

Department of Treasury Collateralization Policy, refer to EXHIBIT C Policy Statement: Department of the Treasury Collateralization Requirements for State Held Deposits.

e. Proof of Registration Requirements: Bank must submit a copy of the

Business Registration Certificate(s). As mandated by Public Law 2001, Chapter 134, failure to submit a copy of the Business Registration Certificate within the bid proposal will be considered materially non-responsive and result in disqualification of the bid proposal.

f. Executive Order No. 129: Confirm the bank’s and all subcontractors’ ability to

adhere to Executive Order No. 129. The State prefers the vendor submit with its bid proposal EXHIBIT O Executive Order 129 Certification, completed with the sourcing information required for itself and any proposed subcontractor, identified in its proposal.


If the certification was not submitted with the bid proposal, confirm the bank’s ability to submit the required document within five (5) business days of the State’s request for the information. g. Executive Order No. 134: Vendors must complete and submit EXHIBIT D

Executive Order 134 Certification within the bid proposal. h. Disaster Recovery Plan: Bank must include a summary of its Disaster

Recovery Plan in the bank’s proposal and detailed plans must be made available for State review. Specifically address your contingency plans for data processing systems, equipment, power, information reporting, or other failures that could affect services or information reporting of data.

i. Image Processing of Public Records and Certification of Image Processing

Systems: Please confirm the bank has reviewed the DARM certification and possesses the technical capabilities to become certified.

7. Describe in detail the bank's customer service operation, procedures,

turnaround/response times, and staffing. Pensions must be responsive to their client’s needs therefore the State requests a 24 hour turn around response time. Complete customer service capabilities and resources may be reviewed at an oral presentation and/or viewed and critiqued by the committee if a site visit is requested by the State.

8. How many checks will the bank require for initial MICR testing purposes and how

often will testing be required? Will the State incur costs for MICR testing services? What is the bank’s standard turnaround time to deliver the results of the initial MICR testing? Describe the bank’s MICR Rejection Standards and what penalties will be incurred by the State if these standards are not met.

9. Describe the bank's positive pay service and procedures. Explain in detail the

procedure for handling exception items and related turnaround times.

10. Confirm the bank’s ability to meet ALL the requirements outlined in this RFP, including: controlled disbursement, positive pay, zero balance accounts, ACH


services, bank reconciliations, document destruction, report specifications, security levels, turnaround times, web based inquiry processing, and wire transfer processing. The bank must reveal any/all services defined in the RFP that it cannot provide according to the specifications. The bank should indicate why they cannot deliver the service or standard requested and offer possible alternatives for the State’s review.

11. Describe the bank's zero balance account capabilities and how they meet the

requirements of the RFP. 12. Describe the features of the proposed web based inquiry/communication system

(Check and ACH). Include relevant screen samples. Can the NOC information for your own customers be received via web with the stipulated detail? In the event of a mass update of account numbers and/or routing number for your own customers are you willing to send us a file in a layout that is mutually agreeable? Can the return/reversal/rejection information for your own customers be received via web? Pensions may require EFT returns of items issued up to 4 years prior (in the event that we are not notified promptly of a retirees death).

13. Describe the security features of the web based system relative to customer data

confidentiality. Specifically, address the bank’s security features that will prevent other clients from accessing Pensions’ information, and conversely, to prevent Pensions from accessing other clients’ information. By what means do you ensure that our accounts are not debited by fraudulent activity?

14. After initially logging onto the inquiry system, can Pensions access other Pension

payroll accounts without having to log off and on for subsequent accounts being viewed?

15. Is there a limit as to the number of stop payments that can be entered without

having to access the system multiple times? Please elaborate. What is the minimum and maximum number of stops that can be placed for checks in a sequential check number series/range at one time? Describe your backup system for stop payment requests. Under positive pay, how long will a stop payment be effective?


16. Describe in detail the bank’s procedure for ACH reversals, recalls and

reclamations, including response time. Explain the credit procedure and time frame for recalled/reversed ACH items. If the RDFI provides provisional credit for recalled items, at what point does it become actual credit. Immediate credit will be expected by Pensions for mutual customers of the bank and Pensions. How will the bank notify the State of ACH failures?

17. Describe the bank's full automated reconciliation service and how it meets the

requirements of the RFP. 18. The bank must include in its proposal a sample report or mock-up of all the reports

stipulated in the RFP with explanations for codes, abbreviations, etc. Also include a list (or sample) of all standard ARP (full) reports and positive pay reports for Pensions’ review. Pensions will determine which reports are beneficial for reconciliation purposes, and which reports will ultimately be required after reviewing the submitted reports. Identify by what media and the timeframe that the required reports be delivered to Pensions.

19. Can the bank meet all the turnaround times for services and reports as stipulated

in the RFP? Please note any exceptions. 20. Identify the bank's check cashing requirements and required identification. Include

an acknowledgment that the bank will cash all properly endorsed checks presented for payment, with no cost to the recipient, at all the bank's branches. Provide a list of all check cashing locations outside New Jersey by State.

21. Include a list of all the bank’s check cashing locations in New Jersey by county.

Provide specific capabilities pertaining to these locations; e.g., maximum number of tellers, lobby size, ATM presence, hours of operation, etc.

22. Confirm that the bank will cash or accept for deposit, a post-dated Pension payroll

check? What timeframe is or is not acceptable? This situation may arise since Pension checks are mailed to recipients at least two days prior to the pay date.


23. Can the bank meet the forgery and improperly endorsed check requirements

including the stipulated 60 day turnaround time for payment to the State? What is the timeframe for reimbursement of forged items that were negotiated at your bank; will provisional credit be provided, if so, when? What assurances can you provide the State that your bank will be proactive/aggressive regarding forgery investigations?

24. Explain your bank's ACH capabilities and constraints, receiving and sending

capabilities and backup procedures. Particularly address your bank's internal security controls regarding the prevention of duplicate transmissions, duplicate returns, over-writes and the prevention of file loss.

25. What security features are incorporated in your ACH and wire transfer system to

guard against fraud and errors? 26. Confirm your bank’s ability to meet the “Confidential” level of data confidentiality

requirements as outlined in EXHIBIT A – Future Direction of OIT- Security for Asset Classification and Control. Describe the bank’s willingness and ability to secure the data as “Secret” if OMB requires this level of security in the future.

27. Confirm that the bank’s standard method of transmission is Connect: Direct

Secure + and explain how your bank will maintain software compatibility on all patches and new releases of this product. Please refer to Section II., V. Data Confidentiality

28. Considering the RFP time schedules, what are the bank's transmission time

deadlines for the receipt of the ACH files and check issue information? Explain the procedures and the timeframes for ACH traces.

29. How extensive is the bank’s history file for both check and ACH transactions? 30. Include a training outline and schedule specifying topics, the time allocated for

each, and identify the trainers. Training must include at minimum all system applications, report explanations/code interpretations.


31. In the event that an individual paid via ACH becomes deceased and is a mutual

customer of Pensions’ and the Bank will the bank notify the State of the recipient’s death with the next ACH into the account (providing the bank is aware that the party is deceased)? If the bank does not notify the Division and we find out by other means that the date of death was several months prior please describe in detail to what extent will the bank facilitate reclamation of funds paid after the date of death.

32. Provide an implementation schedule including timeframes, task target dates and

details where relevant. Implementation schedule should indicate how the March 1, 2006 contract commencement date will be met.

33. For our mutual customers, please confirm that you will be responding to our pre-

note transactions. 34. What mechanisms are available to prevent an RDFI from debiting our account for

a previously returned item? 35. Can the bank electronically provide the daily required automated balance reporting

as defined in the RFP by 7:30 a.m. E.S.T. in the unencrypted BAI2 format via the Internet to Treasury, Cash Management Unit?

36. Describe the bank’s controlled disbursement capabilities, controlled disbursing

location(s), number of current customers using this service and the number of controlled disbursement accounts. What are the percentages of the daily clearings to be received for each presentment? Can an aggregate check and ACH clearance/settlement total be reported by account?

37. For the month of March 2005, what was the earliest and latest time that final

presentment was provided to the bank’s controlled disbursement clients? Confirm the bank will accommodate the State’s 10:15 a.m. E.S.T. final presentment requirement.


38. Will the bank require pre-note testing for any current pre-authorized direct deposit recipients? If yes, will there be a per item charge for this? (For new direct deposit recipients after contract award, pre-notes will be considered billable items).

39. Provide a description or overview of the banks’ check imaging services. Include

samples of screens and copies of paid check images produced from the system. Explain the bank’s ability to deliver paid check images both via the Internet and CD ROM. Indicate the length of time checks are retained after they are scanned and the destruction method used.


VIII. COST SCHEDULE Prices submitted are to be firm and fixed for the term of the contract and are to include

all charges to meet the specifications of this RFP, such as vendor supplied forms, supplies, boxes, postage, travel, overhead, FDIC charges, profit, etc. Payment by the State will be limited only to those categories for which prices are submitted by the selected vendor. *All methods of measurements that differ from the pre-established methods listed below may be clearly identified for each priced item.

Following are the pricing categories that may be appropriate for this RFP. It is not

necessary to provide pricing for each category. When completing the pricing schedule, place a "NA" in each category for which a charge is not applicable.


Account Services and Maintenance 1 Account Maintenance Fee $ /Account/Month 2 ZBA Maintenance Services $ /Account/Month 3 Controlled Disbursement $ /Account/Month 4 Daily Balance Reporting (Prior Day & Intra Day) $ /Month 5 Funds Transfer (Wires In) $ /Per Transfer 6 Funds Transfer (Wires Out) $ /Per Transfer 7 Internal Transfers (Book Transfers) $ /Per Transfer ACH Services

8 ACH Monthly Maintenance $ /Month 9 ACH File Transmission $ /Per File Transmitted 10 ACH Pre-Notes $ /Per Item 11 ACH Returned item $ /Per Item 12 ACH Credits (CCD, CCD+, PPD) $ /Per Credit 13 ACH Debit Block Service $ /Account/Month Check Services

14 Check Paid Positive Pay $ /Per Check 15 Forgery Investigation $ /Per Item 16 Stop Payment (Web Based) $ /Per Stop 17 Stop Payment (Manual) $ /Per Stop Web Based Services

18 Web Based Product Maintenance $ /Month 19 Web Based Check Inquiry $ /Per Inquiry 20 Web Based ACH Inquiry $ /Per Inquiry Paid Check Imaging Services:

21 Web Based Paid Check Image Maintenance $ /Month 22 Web Based Paid Check Image (All Checks Processed) $ /Per Check Imaged OR

23 Web Based Paid Check Image (Per Check Viewed) $ /Per Check Viewed CD ROM Check Images

24 CD ROM Preparation / Maintenance $ Account / Month 25 CD ROM Images $ /Per Item Imaged 26 Programming Fees (If Applicable) $ /Per Hour


Documents

DIVISION OF PENSIONS AND BENEFITS PENSION … of pensions and benefits pension payroll disbursement services request for proposal table of contents i. purpose and intent 1 ii. terms