Integrated Banking and Investment Services, Purchasing Card, Merchant Services Credit Card Processing, and LockboxRequest for Proposals

GENERAL INFORMATION

PurposeThis Request for Proposals (RFP) provides interested vendors with sufficient information to prepare and submit proposals for consideration by the Pennsylvania State System of Higher Education (PASSHE), Commonwealth of Pennsylvania, to satisfy its need for integrated banking and investment services, purchasing card, merchant services credit card processing, and lockbox. PASSHE intends to enter into individual contractual relationships for each service category listed in this RFP.

Issuing OfficeThis RFP is issued by PASSHE. The sole contact point for this procurement action is:

Mr. Scott A. BaileyProcurement ManagerPASSHE Office of the ChancellorDixon University Center2986 North Second StreetHarrisburg PA 17110sbailey@passhe.edu

Questions must be submitted via e-mail to the issuing office by November 10, 2005, to ensure sufficient time to prepare responses.

From the issue date of this RFP until a determination is made regarding the selection of a contractor(s), all contacts concerning this RFP must be made through the issuing office. Any violation of this condition is cause for PASSHE to reject a contractor’s proposal. If it is later discovered that any violations have occurred, PASSHE may reject any proposal.

ScopeThis RFP contains instructions governing the proposals to be submitted, materials to be included therein, and general evaluation criteria.

Incurring CostsPASSHE is not liable for any cost incurred by the vendor prior to the issuance of a contract.

Contractor ResponsibilitiesEach proposal must be signed by the individual representative of the contractor who has contracting authority (see Appendix A, Cover Page). That individual will be the sole point of contact with regard to contractual matters. Vendors must certify

that they are not currently under suspension or debarment by the Commonwealth of Pennsylvania, any other state, regulatory commission, or the federal government. Additionally, vendors must certify that they are not tax delinquent with either the Pennsylvania Department of Revenue or the Pennsylvania Department of Labor and Industry. Vendors must acknowledge that, if they are currently under suspension or debarment, or if they owe delinquent taxes, their proposal may not be accepted or considered.

Rejection of ProposalsPASSHE reserves the right to reject any and all proposals received as a result of this request, or to renegotiate with any and all competing vendors. PASSHE also reserves the right to certify the top vendor by on-site visit of PASSHE representatives.

Economy of PreparationProposals should be prepared simply and economically, providing a straightforward, concise description of the contractor’s ability to meet the requirements of this RFP.

Addenda to the RFPIf it becomes necessary to revise any part of this RFP, addenda will be posted at the following web site: http://www.passhe.edu/content/?/office/finance/procurement/opportunities. The information contained on this web site is current and accurate. It is the contractor’s responsibility to check this site periodically to obtain any changes to the solicitation. The contractor must acknowledge all addenda in the proposal response.

Debriefing ConferenceContractors whose proposals are not selected will be notified of the name of the selected contractor via PASSHE’s Procurement web site and will be provided the opportunity to be debriefed. The issuing office will schedule the time and location of the debriefing. The purpose of the debriefing is not to compare proposals, but to provide information that may assist individual contractors in preparing proposals in the future.

News ReleasesNews releases pertaining to this RFP may not be made without PASSHE’s approval, and then only in coordination with the issuing office.

Response DateTo be considered, the proposal must arrive at the issuing office before NOON, Eastern Standard Time (EST), on December 2, 2005. Contractors mailing proposals should allow sufficient mail delivery time to ensure timely receipt of their proposals. Late submissions will not be accepted. Directions to the Dixon University Center are located at: http://www.passhe.edu/content/?/office/academic/dixon/directions.

ProposalsProposals must be submitted as one (1) original and one (1) copy to the issuing office. The format of proposals should roughly mirror the structure of applicable RFP sections. In addition, all proposals must include an electronic version on CD in Microsoft Word and Excel formats. The information must include both the Technical

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and Cost Data on separately labeled disks. Contractors must name each file using their company name, e.g., ABCCONSULTING.Tech and ABCCONSULTING.Cost.

Please note that your ORIGINAL PROPOSAL MUST contain the proposal cover page (found in Appendix A of the RFP) with an ORIGINAL SIGNATURE of an official of your company authorized to bind your company to the provisions of its proposal. No other distribution of proposals will be made by the contractor. The contents of the proposal of the successful contractor and this RFP will become contractual obligations, if and when a contract is executed. For this RFP, the proposal, as submitted, must remain valid during the entire solicitation, award process, and contract finalization process.

CostThe cost component of your proposal must be submitted separately in a sealed envelope at the same time as the proposal. Cost information must follow the format provided for category-specific costs and must be inclusive of all costs that PASSHE could incur.

Disclosure of Proposal ContentsProprietary and price information provided in your proposal will be held in confidence to the best of PASSHE’s ability under the applicable laws of the Commonwealth of Pennsylvania. Unsuccessful proposals will not be revealed or discussed with competitors.

ContractIt is PASSHE’s intent to enter into one or more five-year contracts as a result of this RFP. It is proposed that, if a contract is entered into as a result of successful negotiations, the selected contractor(s) will be required to sign a standard Commonwealth of Pennsylvania contract. This agreement will contain the provisions shown in the sample documents attached as Appendix B.

Pre-Proposal ConferencePASSHE will hold a pre-proposal conference to respond to questions concerning this RFP. The conference will be held on November 15, 2005, at 10:00 A.M. EST in Room 120, Duncan Hall, Dixon University Center, 2986 North Second Street, Harrisburg, Pennsylvania. This conference will be available via video conferencing, and responses to questions submitted will be available on PASSHE’s Procurement web site.

BACKGROUND INFORMATION

DESCRIPTION OF THE ORGANIZATIONSitesPASSHE comprises 14 Universities, four branch campuses, several regional centers, and the McKeever Environmental Learning Center. The Universities are situated in rural, suburban, and small-town settings throughout Pennsylvania, in the communities of Bloomsburg, California, Cheyney, Clarion, East Stroudsburg, Edinboro, Indiana, Kutztown, Lock Haven, Mansfield, Millersville, Shippensburg, Slippery Rock, and West Chester. The four branch campuses are in Oil City (Clarion), Kittanning and Punxsutawney (Indiana), and Clearfield (Lock Haven). The

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Office of the Chancellor is the central administrative office of PASSHE and is situated in Harrisburg, the capital city of Pennsylvania, at the Dixon University Center.

SyTEC is the acronym assigned to PASSHE’s System Technology Consortium. SyTEC is a consortium of PASSHE that was created by action of the Board of Governors at its meeting on March 22, 2001. SyTEC is charged with creating a shared administrative system (SAP) that will allow the Universities to share data and work within the same platform for certain administrative functions, such as procurement and campus management. At present, ten Universities and the Office of the Chancellor use this platform for financial and procurement activity. PASSHE uses the human resources module for all entities.

MissionAs established by the founding legislation, Act 188 of 1982, the primary mission of PASSHE “is the provision of instruction for undergraduate and graduate students to and beyond the master’s degree in the liberal arts and sciences, and in the applied fields, including the teaching profession.” While the Universities share a common mission, each also embraces specific spheres of excellence. Additionally, the purpose of PASSHE is “to provide high quality education at the lowest possible cost to students.”

GovernanceA 20-member Board of Governors, which comprises four legislators, three students, the Governor or a designee, the Secretary of Education or a designee, and 11 citizens appointed by the Governor, sets general policy for PASSHE.

OrganizationThe Board of Governors has “overall responsibility for planning and coordinating the development and operation of the System.” The Board appoints the Chancellor, who serves as the chief executive officer of PASSHE, and the University presidents. Each University has an 11-member council of trustees, which carries out Board policy and deals with a variety of local issues. The Chancellor is an ex-officio member of each council.

Academic ProgramsUniversities in PASSHE provide a wide range of associate’s, bachelor’s, master’s, and doctoral degree programs, offering teacher, administrator, and supervisory certificates, as well as a range of lifelong learning opportunities. More than 250 degree and certificate programs in more than 120 areas of study are offered. Prerequisite coursework and counseling are afforded students planning to enter professional schools for engineering, health-related sciences, and law.

Indiana University of Pennsylvania (IUP) offers graduate instruction at the doctoral level. Other PASSHE Universities also may offer doctoral programs in conjunction with IUP or with any other institution chartered to award doctoral degrees. The Universities are fully accredited by the Middle States Association of Colleges and Schools. Academic programs are individually accredited by appropriate national organizations.

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EnrollmentA total of 107,251 undergraduate and graduate, part-time and full-time students attend PASSHE Universities. More than 90% are in-state students, and 64% remain in Pennsylvania after graduation.

FacilitiesThe total University campuses comprise a total of 4,698 acres. A total of 862 buildings (24,991,533 square feet) house classrooms, residences, administrative offices, and student support services.

AlumniThere are more than 586,000 PASSHE alumni, including more than 375,000 who live in Pennsylvania.

EmployeesPASSHE employs more than 12,150 professional and support staff, most covered by collective bargaining agreements, making it the 16th largest employer in the state.

CostsTuition at PASSHE Universities is $4,906 per year for Pennsylvania undergraduate students and from $7,360 to $12,266 per year for nonresident students. The graduate student tuition is $5,888 per year for Pennsylvania residents and $9,422 per year for nonresidents. Resident students also pay a $125-a-year instructional technology fee; nonresidents pay $188. Room and board charges vary, as do local fees. Students may apply for a variety of state and federal financial assistance programs, and campus scholarships, grants, and loans.

HistoryThe state Universities spent the first 100 years of existence training teachers for Pennsylvania’s schools. The Normal School Act of 1857 established regional teacher training institutions throughout the Commonwealth. The School Code of 1911 called for the state purchase of all normal schools, and by 1921 the current configuration of 14 state-owned Universities was established. The 14 normal schools evolved from state normal schools, to state teachers’ colleges, to state colleges. On November 12, 1982, Act 188 was signed into law establishing the Pennsylvania State System of Higher Education on July 1, 1983. Thus, the 13 former state colleges joined with Indiana University of Pennsylvania to achieve university status.

Banking StatusIn May of 1983, the Board of Governors approved centralized management of PASSHE’s cash assets. As a result of competitive bidding, the Office of the Chancellor executed a three-year contract with PNC Bank, N.A. (PNC), for centralized banking and trust services. The services were re-bid in 1986 and 1991, and PNC was again awarded the contracts. In 1996, CoreStates Bank was awarded the contract. In 2001, the contract was awarded to National City Bank. The current contract expires on May 31, 2006. The current contract for central banking services, the trust agreement, and the PASSHE Board of Governors’ investment policy are available on PASSHE’s Treasury web site.

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WORK STATEMENT

ObjectivePASSHE desires to contract with exceptional providers of integrated banking and investment services, purchasing card, merchant services credit card processing, and lockbox to meet its needs for these services.

PASSHE REQUIREMENTSAccount Structure and ServicesEach University (14 total), the Office of the Chancellor, payroll operations, and a number of other various System-level accounts require an individual demand deposit account (DDA). Each DDA must be capable of funding the following types of transactions:

1. Fed Wire System2. Automated Clearing House System (ACH)3. Interest income allocation from PASSHE’s Investment Fund4. Mailed-in deposits5. Book transfer funds between PASSHE entities6. Controlled disbursement

The cash balances of each individual DDA are utilized by PASSHE’s Investment Fund (the Fund) for investment purposes. The Fund will provide daily liquidity to the individual DDAs, as required, and allocate investment income monthly on a dollar/day participation basis.

In turn, each DDA should be able to fund a corresponding controlled disbursement account (CDA). Proposals should mirror the current structure PASSHE has in place. Each DDA and CDA should function as zero balance accounts.

The 10 Universities and the Office of the Chancellor, who use the shared administrative system (SAP), currently receive a daily file of prior-day activity of DDA and CDA transactions. Once received, this file is loaded into SAP and reflected on the appropriate entity’s general ledger. The keystone of PASSHE’s cash management system is the group or area that monitors PASSHE DDAs and derives the daily cash position for investment. (See PASSHE’s Treasury web site.) In corporate terminology, this function is the “cash desk.” Integration of treasury operations and investment services is a critical factor in the success of achieving full and continuous investment of PASSHE’s working capital while providing for discrete transaction tracking and reporting for each PASSHE entity. With today’s technology, this function is automated.

Current account structure and historical monthly volumes of various types of transactions are available at PASSHE’s Treasury web site.

Account Reconciliation ProgramEach PASSHE entity with a CDA is required to utilize Positive Pay. Under this plan, the company will receive a data file from a PASSHE entity listing checks issued,

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including check number, check date, and amount of the check. The company will pay no checks without matching the check with the transmitted data from a PASSHE entity. Monthly, the company will generate a data file listing checks paid, date paid, amount debited to the account, data for outstanding checks (check date, amount of check, and check number), and detailed explanations for debit and credit adjustments. Payroll OperationsPayroll operations are managed centrally in Harrisburg through the use of the SAP HR/Payroll module. Biweekly, two data files are created by payroll operations, direct deposit and payroll check, and are transmitted to the bank for processing. For funding of payroll, cash is moved internally from each entity’s DDA to a dedicated payroll DDA. The payroll DDA then funds the disbursement account for paychecks, funds the direct deposit ACHs, and funds a separate accounts payable DDA account. The payroll account structure also is fully invested in PASSHE’s Investment Fund. PASSHE’s payroll administrator allocates interest earned to PASSHE entities. PASSHE currently uses and will continue to use the Electronic Federal Tax Payment System (EFTPS) to make federal payroll tax deposits and support addendum records to deposit state taxes with Pennsylvania, Indiana, Maryland, New Jersey, Ohio, Virginia, and West Virginia, as well as domestic relations payments.

Electronic Transfers Several PASSHE entities use electronic (ACH) movement of funds for purposes of payroll and vendor payment. SAP is used to originate a NACHA-compliant file. This file is then transmitted via FTP to the bank for processing. It is expected that this activity will continue and expand.

Treasury Management SystemCurrently, the Universities, the Office of the Chancellor, and payroll operations use a check management and global information reporting web-based treasury management system to perform services such as stop payments, on-line check images, balance inquiries, and small-volume fund transfers, as well as downloading reports and notices regarding account activity. PASSHE’s Treasury office also uses the same system solely to perform large-volume, batch-processed ACH transfers, including transfers between PASSHE entities and vendor payments. For time- and cost-efficiency, the successful company will propose similar capabilities that meet the needs of the Universities, the Office of the Chancellor, payroll operations, and the Treasury office.

Cash ConcentrationPASSHE entities deposit funds, such as tuition and fees, in local bank accounts, which may not be covered by the contract resulting from this RFP. When the available balance reaches a predetermined amount, the PASSHE entity transfers those funds to their central banking DDA account using a method chosen by each PASSHE entity. This functionality could be included as part of the web-based treasury management system. The predetermined amount will be established by the respective PASSHE entities. These transactions are repetitive, except for the amount, and provide for an inexpensive, safe concentration mechanism to move money from local bank accounts.

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Investment ServicesPASSHE requires investment services with both a short- and intermediate-term strategy to optimize income given the constraints of safety of principal and liquidity. This need is satisfied with a short-term investment fund (STIF) and an intermediate-term investment fund (ITIF). With respect to short-term investment services, liquidity is a major consideration. While the investment portfolios are to be actively managed, unnecessary trading, particularly for inconsequential yield improvements, is discouraged. A general practice of buying quality investments and holding those investments until maturity is followed. Accounting of investment activity will be on both a cost basis and, for risk evaluation purposes, marked-to-market. A copy of PASSHE’s Investment Policy is available on PASSHE’s Treasury web site.

PASSHE operates a University Loan Program. The loan program utilizes the STIF or ITIF as a financing vehicle. A note outlining terms and conditions of the loan is executed by the participating University and the Office of the Chancellor and is kept in custody as an asset of the portfolio. A sample note is available on PASSHE’s Treasury web site for information purposes.

On a periodic basis, PASSHE provides estimated cash flow schedules to the investment manager. Historical activity of cash flows and balances will be discussed at the pre-proposal conference.

For the purpose of investment services and providing custodial services for securities purchased, PASSHE has relied on the service provider to act in a fiduciary capacity. Accordingly, the vendors have been required to indicate appropriate insurance coverage.

Whether delivery of investments is in physical or book entry form, the vendor’s records are required to indicate that PASSHE is the owner of the security. PASSHE has historically reserved the right to validate the integrity of security safekeeping, whether held by the company or by a third party.

PASSHE requires monthly reporting of all investment activity for monitoring and financial statement preparation. Monthly, the Office of the Chancellor receives an asset inventory report and a statement of transactions for the STIF, the ITIF, and the two funds combined. In addition, a monthly performance statistics letter for the portfolio is received. A copy is available on PASSHE’s Treasury web site. PASSHE entities receive a statement of assets consisting of their investment position in PASSHE’s Investment Fund.

Purchasing Card/Travel CardPASSHE uses a commercial card program, which includes a purchasing card and travel card. Currently, 13 Universities and the Office of the Chancellor use this program. Volumes of $10.5 million were recently reported for a 12-month period. It is expected that these activities will continue and increase in the future.

Most entities use both a purchasing card and travel card due to liability issues and to meet the needs of each entity. PASSHE entities have the ability to customize the service to meet their needs, including “real time” adjustments to credit limits and

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card termination via secure Internet applications. A progressive rebate program is used and has been used by providers of this service in the past. Implementation support, controls, reporting, and financial systems integration are expected to continue at current levels or to expand.

Merchant Services Credit Card ProcessingPASSHE entities use merchant services credit card processing. The current contract provides authorizations for all major nationally branded cards. Retail operations on campus, such as bookstores and dining services, may not be covered by the existing contract; however, tuition payments and fees, camps, and conferences are included and comprise the bulk of activity and dollars processed. Credit card processing, whether directly on campus via lockbox or on the Internet, should be integrated fully so data reporting is consistent and timely.

LockboxEight PASSHE entities use lockbox service. It is expected that this service will continue to be required depending on the needs of the Universities. Volumes for six of the Universities who use PASSHE’s banking contract are available on PASSHE’s Treasury web site.

Check StockMost PASSHE entities secure their check stock directly from third-party vendors. Occasionally, some PASSHE entities use the service provider to purchase check stock. In this instance, the actual cost will be passed directly to the entity placing the order.

Deposit Collateral PolicyPASSHE’s deposits are collateralized in accordance with Act 72 of 1971, available on PASSHE’s Treasury web site. While such collateral is required, experience demonstrates that uninvested funds are minimal due to the daily DDA sweep and the availability of overnight repurchase agreements for investment by PASSHE’s Investment Fund.

Payment MethodologyPayment of cash management services is made quarterly in hard dollars. A complete consolidated account analysis statement of charges and related transactions, with a breakdown by entity, is sent to the Office of the Chancellor monthly. The statements should list each service provided, along with the corresponding volume, unit charge, and total charge. PASSHE entities also receive an account analysis statement of charges corresponding to their activity.

Payment of investment services also will be made quarterly in hard dollars. The Office of the Chancellor receives a consolidated bill for investment services that depicts the breakout of charges, by PASSHE entity by month, submitted quarterly.

Payment for all services is made after PASSHE reviews the analyses, allocates certain charges, and collects the funds centrally to be applied to the appropriate quarter’s fees. PASSHE will deposit such payment via ACH, and payment will be made as agreed upon by the parties involved.

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RELATIONSHIP

PASSHE has and expects to continue to have partnerships with vendors that not only provide for the contractual obligations of each party, but also for sharing new concepts and ideas that are mutually beneficial. Today’s rapidly changing technologies have created many new possibilities and opportunities that PASSHE has optimized through its relationships. PASSHE recognizes that not all technologies are limited to electronic services, but may include best administrative practices. PASSHE has looked and will continue to look to those possibilities to play a major role in the way we do business now and provide reengineering opportunities for the future. PASSHE expects to share this responsibility with vendors. Information, knowledge, and suggestions are expected regarding ways in which to use technologies and leverage the resources of both organizations to help PASSHE meet its statutory mission of providing the best possible education for the lowest cost.

INFORMATION REQUIRED FROM THE CONTRACTOR

Proposals must be submitted in the format and order outlined below. To be considered, the proposal must respond to all qualification requirements, as well as service-category-specific requirements only for those categories for which the company wishes to be considered. Any other information thought to be relevant should be provided as an appendix to the proposal.

QUALIFICATION REQUIREMENTSContractor ResponsibilitiesEach proposal must be signed by the individual representative of the contractor who has contracting authority (see Appendix A, Cover Page). That individual will be the sole point of contact with regard to contractual matters. Vendors must certify that they are not currently under suspension or debarment by the Commonwealth of Pennsylvania, any other state, regulatory commission, or the federal government. Additionally, vendors must certify that they are not tax delinquent with either the Pennsylvania Department of Revenue or the Pennsylvania Department of Labor and Industry. Vendors must acknowledge that, if they are currently under suspension or debarment, or if they owe delinquent taxes, their proposal may not be accepted or considered.

Understanding of the OrganizationProvide a statement of understanding of the Pennsylvania State System of Higher Education and of the needs of the organization regarding banking services. General and category-specific information should be provided.

Implementation/Transition RequirementsProvide a detailed description of the implementation/transition process, including testing. Provide a sample implementation/transition schedule.

Provide data on the average lead time for an implementation/transition of the type that has been explained in this RFP. Outline critical factors that may affect that lead time. Describe support provided during implementation/transition, including training, technical support, user manuals, and on-site visits. Explain the company’s

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process for assigning an implementation/transition team. General and category-specific information should be provided. Information specific to the category or categories for which your company is submitting a proposal is critical within this requirement.

Customer Service RequirementsProvide staffing and organizational information specific to customer service representatives for the type of relationship outlined in this RFP. Explain the kinds of ongoing customer support service provided. Describe the responsibilities of customer service personnel, including the chain of command for problem resolution. General and category-specific information should be provided.

New Technologies, Service Enhancements, and Resource Leveraging RequirementsDescribe your strategic advantage to PASSHE regarding investment in technologies, new products and services, reengineering opportunities, and ways to leverage your resources to help PASSHE meet its mission of providing the best possible education at the lowest possible price. Provide cost containment ideas in this section. General and category-specific information should be provided.

Corporate Experience/CapabilityProvide background of prior work accomplished that is similar to the services requested. In addition to a general overview of experience, please provide category-specific information for the following items:

1. Experience in providing the services delineated in the “Work Statement” section.a. How many clients? Provide some typical examples.b. Types of similar clients (higher education, government).c. Types of similar services.d. How long has your company provided the services?

2. Explain specifically how your company will oversee and support PASSHE’s account. As part of this explanation, provide résumés of key operations personnel involved in day-to-day management of PASSHE’s activities.

3. Explain your company’s policies or programs for supplier diversity and equal opportunity.

Corporate Financial ConditionProvide proof of and direction toward profitability. Contractors also should submit the most recent analyses and rating(s) by independent rating agencies, such as Moody’s Investors Service, Standard & Poor’s, or Fitch’s.

Reference AccountsPlease provide a list of at least five reference accounts with contact person, telephone number, and e-mail contact information. Include a description of services provided to these customers and their similarity to the requirements of this RFP. Services provided should correspond to proposed categories.

Service-Category-Specific RequirementsProvide a concise description of how your company will provide each of the services delineated below. At a minimum, all posed questions should be referenced and answered. This information should include an explanation of the process and also

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portray your company’s capacity, industry leadership, and use of technology. The extent of detailed information provided should be limited to what is necessary for PASSHE to appreciate the company’s capabilities. No cost data should be submitted with the technical proposal.

CATEGORY-SPECIFIC REQUIREMENTS

Category 1, Treasury OperationsPlease provide the most recent trust audit and the SAS 70 audit report.

Failure to submit the SAS 70 audit report will result in disqualification.

Demand Deposit Accounts1. Are check disbursements self-cleared, or does your company use a

correspondent?2. Can your company provide automated zero balance transactions?3. Does your company fully utilize the Fed Wire System?4. Can your company provide interest income allocation from PASSHE’s

Investment Fund?5. Can your company receive mailed-in deposits? Does your company provide

written confirmations?6. Demonstrate your company’s ability to capture PASSHE’s banking activity

electronically and provide examples of necessary analyses, billing statements, and customer account statements.

7. Describe your company’s experience with respect to controlled disbursement and zero balance transactions.a. How many clients? Provide some typical examples.b. Types of similar services.c. How long has your company provided the services?

8. Can your company provide book transfers of same-day funds among PASSHE entities?

9. Can your company provide controlled disbursements? How late in the day does your company offer total clearings?

10. Can your company provide full reconcilement, including Positive Pay, for CDAs?

11. Does your company provide CD imaging of paid checks? If so, how long are the original checks kept on file?

12. What type of notification does your company provide for confirmation of receipt of Positive Pay files, and what is your company’s process for notification of nonreceipt?

13. Does your company accept Positive Pay files via FTP? If so, in what format? Describe any time restrictions when your company can receive a Positive Pay file?

14. Does your company provide daily data transmission of prior day activity? If so, what format does your company use (e.g., BAI2), and what time is the file available? Will this file capture activity in the DDA and CDA accounts?

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Payroll Operations1. Describe your company’s experience in providing services to a similar payroll

system.2. Is your company capable of receiving a payroll ACH direct deposit transaction

file? Can this file be received in advance and released automatically at a predetermined date?

3. Does your company fully support EFTPS to make federal payroll tax deposits?4. Does your company have the capability to provide for ACH addendum

records to EFTPS for the deposit of state taxes in Pennsylvania, Indiana, Maryland, New Jersey, Ohio, Virginia, and West Virginia? To domestic relations?

5. Describe what method your company will use to communicate information changes for ACH activity, such as failed direct deposits and stop direct deposits.

Automated Clearing House1. Does your company fully utilize the Automated Clearing House System?2. Please answer the following with respect to your company’s web-based

treasury management system:a. What is the cutoff time to receive a file for next-day settlement?b. What are your company’s security control procedures, including

verification of files received and totals confirmed?c. Does your company offer flexibility after receipt of an ACH file?

3. What type of information can your company provide in the reporting of ACH transactions on a DDA statement?

Treasury Management System1. Does your company provide a web-based treasury management

system that can be used to perform stop payments, balance reporting, and funds transfers (wires, ACHs, and book transfers) and view on-line check images between statement cycles? Is it capable of generating notices and reports regarding account activity?

2. Does your company provide a web-based treasury management system that can accommodate batch-processed ACH transfers?

3. Can PASSHE be able to view suspect checks on-line and have the option to approve or reject payment? Can PASSHE be notified via email regarding the existence of a suspect check?

4. Can PASSHE be able to view the current status of an individual check on-line?

5. Does your company offer any other services through the treasury management system, including cash concentration services, in addition to those requested above? If so, please provide a list of additional services.

Investment Services1. Can your company provide short-term and intermediate-term

investment management services as described in PASSHE’s Investment Policy? (Yes/No)

2. Does your company’s system currently provide for dollar-in/dollar-out cost basis accounting and marked-to-market capability? (Yes/No)

3. Who will provide custody services for PASSHE’s assets?

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4. Which corporate entity ultimately has responsibility for PASSHE’s assets?

5. Describe your company’s experience with integration of investment services and treasury operations.a. How many clients? Provide some typical examples.b. How long has your company provided the services?

6. Provide a statement of willingness to accept fiduciary responsibility in accordance with the trust agreement, available on PASSHE’s Treasury web site.

7. Demonstrate adequate agreements to ensure security safekeeping.

“Cash Desk”1. Describe how your company will integrate treasury operations with

investment services as described in the Work Statement.2. Will integration of cash management and investment services require that

the funds leave your company daily? (Yes/No)

Category 2, Purchasing Card/Travel Card1. Describe in detail your company’s plan to support the issuance, integration,

and training process necessary for migration to the offered product. 2. What type of card(s) does your company issue? Explain the relative benefits

of available brands.3. Describe your company’s processing capabilities. Does your company use

any subcontractors?4. Describe in detail the controls your company provides. Specific information

regarding purchasing unit use, transaction limits, card limits, vendor limits, use of SIC codes, industry limits, Internet use, fraudulent use protection, and other applicable controls should be included.

5. Describe your company’s process for changing card limitations for individual cards, as well as the security controls for this process.

6. Describe the differences between your company’s purchasing card and travel card programs, if any.

7. Describe your company’s reporting capabilities, media used, levels of customization, compatibility with spreadsheet and database software packages, and ability to integrate with ERP systems. Describe in detail your company’s experience integrating with SAP. Submit samples of the most commonly used reports.

8. Does your company support daily invoice reconciliation? Is this on-line?9. Describe your company’s capabilities for reporting sales tax and 1099 status.

Can federal and state sales taxes be identified and eliminated from billing? Can your company capture and report Minority- or Women-Owned Business transaction data?

10. Does your company have a supplier recruitment program? If so, please describe. What level of support does your company provide in persuading vendors to accept the card?

11. Describe the relative importance of this type of business to your company. Information on revenue generated as a percent of gross income, staffing levels, etc., should be included to validate this statement.

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Category 3, Merchant Services Credit Card Processing1. What credit and debit cards does your company process?2. What services related to credit card acceptance and processing does your

company provide?3. Does your company require purchase or leasing of terminal equipment? If

leasing, are upgrades included?4. Does your company provide processing services through the Internet?5. Does your company provide equipment, if needed, as well as equipment for

temporary, high-volume periods, such as registration in August and January?6. Will your company provide training at no additional cost for University

personnel working directly with credit card payments?7. What is your company’s response time for researching a charge-back

inquiry?8. To how many merchants does your company currently provide credit

processing services? What is the average monthly volume per merchant?9. Funds are to be transmitted to the depository account at the central bank by

daily electronic transfer. What is your company’s recommended transmittal method?

10. In the event of a system failure, what backup arrangements are in place?11. Please describe the value your company can add to minimize costs

associated with merchant sales processing.12. What is your company’s average transaction time? Assume one complete

transaction from the last keystroke to printing the receipt. Please give a detailed response and explain any assumptions you use (e.g., type of terminal).

13. Will your company provide a customer service team assigned to the Universities’ merchant locations?

14. Describe any plan for web-based transactions that will maximize revenue.

Category 4, Lockbox1. Describe how your company’s lockbox services will integrate with our cash

management operations.2. Please provide the average monthly volumes for your company’s wholesale

lockbox for the past 12 months. Indicate items, dollars, number of lockboxes, and number of customers.

Mail Processing 1. At what mailing addresses does your company accept payments? 2. Provide the schedule for post office pickups of lockbox mail for weekdays,

weekends, and holidays.3. Is the mail picked up by an externally managed courier or by your company’s

personnel?4. Is there a unique five-digit zip code assigned exclusively for receipt of

lockbox items? If so, is it included in the post office’s first sorting pass?5. Provide the latest Phoenix-Hecht Postal Survey reflecting your company’s

current smoothed total float averages for all Phoenix-Hecht mailing locations in Pennsylvania. Include elapsed hours mail time, elapsed days mail time, availability, and total float.

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Lockbox Processing1. Describe the lockbox department’s processing workflow. Detail your

company’s quality control checkpoints and the components that are controlled directly by the lockbox manager. Provide a schematic or flow chart of the processing procedures.

2. Is your company’s lockbox service capable of accepting credit card payments?

3. What will the deposit times be for our lockbox, and how were they determined?

4. Can your company combine multiple deposits to a single daily ledger credit for statement purposes?

5. What is your company’s ledger cutoff time for lockbox deposits? For weekends and holidays? What is the latest mail pickup to be included in the last deposit? Will your company process and deposit all customers’ payments on the same ledger day as received? If not, when are these items deposited?

6. Will your company permit customization of remittance tickets to meet the needs of each PASSHE entity?

Check Processing and Funds Availability1. Describe how your company will compute the availability that is passed to

the customer’s lockbox (e.g., by item, fractional availability, float factor, or other). Which department is responsible for assigning availability?

2. If availability is determined by individual check endpoint, provide your company’s latest availability schedule that will apply to our lockbox. Include a schedule for weekends, if applicable. If this schedule does not pertain to checks of all dollar amounts, explain.

3. Is availability assignment made continuously as checks are released for collection, or is assignment made at certain times throughout the day? Explain.

4. Is your company offering us your best availability schedule? If not, quantify the difference and explain how we can obtain your best availability.

5. Explain the impact of Check 21 Legislation, if any, on check processing and/or funds availability.

Data Transmission1. Describe your company’s procedures for capture and transmission of

remittance detail, such as account or invoice number, MICR line, or other data, for automated posting of accounts receivable records.a. Describe steps taken to assure validity of data.b. Is the original check retained in the lockbox department until data capture

is completed, or is the check sent for collection prior to data capture?c. What backup arrangements are in place in case of system failure?

2. In what standard formats does your company transmit? Will your company customize to meet PASSHE entities’ needs?

3. What is the minimum lead time to initiate a daily tape/data transmission output?

4. Describe procedures to ensure that transmissions are received successfully and contain all remittance detail.

5. How does your company communicate exception item information?

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6. Does your company provide on-line access to our account? Does your company provide multiple reporting or multiple data transmission in a 24-hour period?

Deposit and Balance Reporting1. Describe systems and methods used by your company to make deposit and

balance reporting information available. Include the ability to report through systems operated by another financial institution or non-bank vendor and/or directly to our computer or treasury management system.

2. At what time of day can your company report the total amount that will be credited to our accounts?

3. Does your company provide the ability for customized reporting?

COST PROPOSAL REQUIREMENTSComplete all requested items in Appendix C, Cost Proposal, in the format provided for those categories for which your company would like to be considered. The cost information requested is required to support the reasonableness of your proposal and is for internal PASSHE use only in the evaluation process. This portion of the proposal must be bound and sealed separately from the remainder of the technical proposal.

CRITERIA FOR QUALIFICATIONEvaluation of ProposalsAll proposals will be reviewed and evaluated by a committee of qualified personnel selected by PASSHE. The committee will recommend for selection the proposal(s) that most closely meets the requirements of this RFP and satisfies PASSHE’s needs.

Selection CriteriaThe following areas of consideration will be used in making the selection:

1. Understanding the need.2. Soundness of approach.3. Vendor qualifications/experience.4. Cost.

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