Kyle Janek , M.D., Executive Commissioner VENDOR CONFERENCE

1. Kyle Janek, M.D., Executive Commissioner VENDOR CONFERENCE Electronic Benefit Transfer (EBT) Services Request for Proposals No. 529-15-0007 July 25, 2014 (1:30 – 4:30 PM)

2. Welcome • Introductions • Stephanie Harrison, Procurement Manager, Procurement & Contracting Services (PCS) • Peggie J. Laser, Procurement Manager, Procurement & Contracting Services (PCS) • Kay Jones, Director for Lone Star Business Services, Office of Social Services Eligibility Operations • Robert L. Hall, Director of Enterprise Procurement Operations: RFP Team and HUB Programs • CJ Brandt, Special Counsel for Contracts • Housekeeping Items

3. HHSC Procurement Roles • PCS - Responsible for procurement activity • Program - Responsible for project scope, requirements, performance, results, contract management/monitoring • HUB - Responsible for monitoring HUB activity • Legal – Questions/answers regarding legal issues

4. Vendor Conference Overview • Procurement Activities • RFP Overview • HUB Overview • Legal Overview • Question Submittal ========================== • Break ========================== • Preliminary Responses to Questions • Closing

5. PCS Procurement Activities • Sole Point of Contact • Source for Questions & Answers • Procurement Schedule • Solicitation Access http://www.hhsc.state.tx.us/contract/529150007/announcements.shtml • Submission Requirements • Solicitation Amendments • Oversees Screening & Evaluation Process • Award Information

6. HHSC Sole Point of Contact Information Stephanie Harrison, Procurement Manager Texas Health and Human Services Commission Procurement and Contracting Services (PCS) 4405 N. Lamar Blvd, Building 1 Mail Code: 2020 Austin, Texas 78756 Phone (512) 206-4707 Fax (512) 206-5006 Stephanie.Harrison@hhsc.state.tx.us

7. Procurement Schedule • RFP Release Date July 10, 2014 • Vendor Conference July 25, 2014 • Vendor Questions Due (2:00 PM CT)July 31, 2014 • Response to Questions Posted (est.) August 14, 2014 • Proposals Due (2:00 PM CT)September 8, 2014 • Tentative Award Posting (est.) November 21, 2014 • Anticipated Contract Start Date February 2, 2015

8. Questions & CommentsRFP Section 3.2 • All questions and comments regarding the RFP must be submitted to the HHSC Point of Contact. • Questions must reference the appropriate RFP page and section number and should be submitted by the deadline set forth in Section 1.3 of the RFP. • HHSC may not respond to questions received after the deadline. • HHSC’s responses to vendor questions will be posted to the HHSC website. • HHSC reserves the right to amend answers prior to the proposal submission deadline.

9. Number of Copies – RFP Section 3.14.1 • Submit one (1) original (clearly marked) and ten (10) of copies of the proposal. An authorized representative must sign the original proposal in ink. • In addition, submit two (2) electronic copies of the proposal on portable media, such as a compact disk, compatible with Microsoft Office 2010. Any disparities between the contents of the original printed proposal and the electronic proposal will be interpreted in favor of HHSC. • Electronic copies of the proposal - must include attachments, financial documents, signed forms, and all other documents included in the proposal. • PDF files should be prepared in a format that allows the Optical Character Recognition (OCR) text recognition (in a searchable format). HHSC will not accept Proposals by facsimile or e-mail.

10. Additional Requirements RFP Section 3.14.3 All proposals must be: • sequentially page-numbered and include the Respondent’s name at the top of each page; • organized in the sequence outlined in Section 3.15; • in Arial or Times New Roman font, size 12 for normal text, no less than size 10 for tables, graphs and appendices.* • Proposals may not include materials or pamphlets not specifically requested in this RFP. *For the purpose of this RFP and in cases where complex graphics, architecture diagrams, and/or project work plans are necessary, the use of larger paper folded down to 8½ by 11” and a larger font size is allowable.

11. Due Date & Location - RFP Section 3.14.2 • Submit all copies of the proposal to HHSC’s PCS Division no later than September 8th by 2:00 PM Central Time as listed in the RFP Section 1.3., Procurement Schedule. All submissions will be date/time stamped when received by PCS. The clock in the PCS office is the official timepiece for determining compliance with the deadlines in this procurement. HHSC reserves the right to reject late submissions. It is the Respondent’s responsibility to appropriately mark and deliver the proposal to HHSC by the specified date. • Physical Address for hand delivery and overnight and commercial mail: HHSC Procurement and Contracting Services (PCS) Division Attn: Stephanie Harrison 4405 North Lamar Boulevard, Bldg. 1 Austin, Texas 78756 • All proposals become the property of HHSC after submission.

12. Office of Social ServicesEligibility Operations Kay Jones Director for Lone Star Business Services

13. Request for Proposals No. 529-15-0007 RFP Overview • Mission and Background • Texas EBT System Overview • Project Objectives • Contract Terms • Scope of Work • Performance Measures

14. Mission and Background • HHSC’s mission for this procurement is to obtain a total EBT-4 solution for the delivery of Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF) benefits in an uninterrupted, timely, accurate, and cost-effective manner. • The single vendor benefit delivery approach (EBT-4) will replace Texas EBT’s current multi-vendor approach (EBT-3).

15. Texas EBT System Overview • Texas EBT System has been operating statewide since 1994. • operates 24 hours a day, seven (7) days a week. • Lone Star Card is similar to a debit card. • Texas EBT System delivers SNAP and TANF benefits to approximately 2 million Texas households. • Texas clients can access their benefits at approximately 18,700 participating retail locations across Texas. • In calendar year 2013, approximately 200 million SNAP and TANF transactions were processed through the EBT system.

16. Project Objectives • Engage a single vendor to provide a cost-effective total EBT-4 solution • Increase the efficiency of government and private sector EBT operations • Provide an infrastructure upon which subsequent programs and services can be added • Be responsive to the needs of EBT stakeholders (clients, taxpayers, retailers, Third-party Processors (TPP), financial institutions, state and federal partners, other state agencies, client advocates, and agency staff) • Provide a seamless transition of services from EBT-3 to EBT-4 to ensure minimal disruption in service delivery to Texas clients, the retail community and agency staff • Ensure the best interest/best value for the State of Texas while taking maximum advantage of competitive sources and low-to-moderate risks

17. Contract Terms • HHSC will award one (1) fixed price contractfor Electronic Benefit Transfer Services. • Initial term of the contract will be six (6) years with up to four (4) additional years in any combination of months or years. • Monthly payment for ongoing services relating to the Cost per Case Month (CPCM) pricing methodology will be based on the number of “active cases” per month. • Implementation costs will be paid over the seventy-two (72) month initial term of the contract.

18. Scope of Work • HHSC will enter into a contract with a single vendor who provides or subcontracts for transaction processing, retailer management, customer service, and all other services/ supplies/functions for the EBT-4 system.

19. Scope of Work The Awarded Vendor is required to perform all EBT Services as an integrated whole which include: • A one-time conversion of data from the EBT-3 system; • Client EBT Account Establishment and Maintenance; • Primary and secondary cardholder record creation and maintenance; • Card Production, Issuance, Replacement; • Administrative Terminal Processing and User Training; • Administrative Terminal user account setup and maintenance; • Financial and non-financial activity tracking by individual user; • PIN assignment and PIN selection functionality; • Transaction Processing; • Customer Service for Clients; • Retailer Services; • EBT-only POS Device Deployment, Maintenance, and Replacement; • TPP Services; • Settlement and Reconciliation; • Adjustments and Dispute Resolution; • Retailer, Client, and Agency Training; • Report generation, archival and access; • Testing; • Disaster Services; and • Transition and Database Conversion at the contract’s end.

20. Scope of Work The Implementation Phase • The implementation phase of the proposed EBT system is divided into three parts: design, development, and conversion. • Design Period • finalize Implementation Plan • finalize user requirements • develop detail conversion plan • develop test plans, training materials, retailer and TPP agreements • Development Period • configure and test the system • Develop user manuals and materials

21. Scope of Work The Implementation Phase (continued) • Conversion Period • convert state-supported retailer network • convert state-supported retailer POS terminals and PIN pads • install interfaces to HHSC eligibility system • convert EBT database (at least 2 trial runs) • modify call center IVR • training delivery • deplete existing card stock and produce a new Lone Star Card

22. Scope of Work The Operations Phase – key activities/functions: • Project Management - provide sufficient staff to perform EBT-4 services. • Change Management - establish a comprehensive strategy to manage change and control scope of the operation. • Management Plans - submit, implement and maintain management plans as specified by HHSC. • EBT Host System - create, operate, and maintain Host system processing functionality to handle transactions and data base inquiries as they relate to EBT-4. • Transaction Processing - authorization of client initiated SNAP and TANF transactions from transaction acquirers authorized to participate in EBT-4.

23. Scope of Work Operations Phase (continued) • Settlement and Reconciliation - activities to settle, balance, and reconcile the EBT accounts. • Training - support ongoing training requirements for clients, retailers, State of Texas and federal systems users, and Awarded Vendor staff. • Core System Reports – create, distribute, archive and facilitate access to all daily, weekly and monthly reports. • Disaster Services - disaster preparation and contingency planning • continuity of operations for vendor’s system, and • provision of benefits to victims of disasters.

24. Scope of Work Client Services • Operate and maintain an EBT Call Center to provide customer service to clients participating in the Lone Star EBT Program. • Provide Interactive Voice Response (IVR) services. • Provide clients with options to get additional information or assistance from a Customer Service Associate (CSA), and must be available in English and Spanish. • Produce and distribute EBT cards and PINs.

25. Scope of Work Retailer Management services: • State-supported retailer network • State-supported retailer databases/documentation • Execute new Retailer Agreements for state-supported retailers • Deploy and manage Point-of-Sale (POS) devices with appropriate software and PIN pads for state-supported retailers • Retailer Training • Help Desk for state-supported retailers • Retailer support and reports • Develop, update and distribute the Lone Star Operating Rules • Retailer portal

26. Scope of Work Third-Party Processor (TPP) Services • The Awarded Vendor will be responsible for executing agreements with TPPs before the TPP is certified to the EBT-4 system. • The Awarded Vendor must certify and ensure that TPPs connected to the EBT-4 system comply with state and federal rules and regulations, including the Lone Star Operating Rules. • The Awarded Vendor will be responsible for ensuring that all retailers that accept TANF meet state and federal participation requirements; for submitting a list each quarter to HHSC of all retailers that accept TANF; and for conducting an annual assessment of TANF retailer participation.

27. Performance Measures HHSC will monitor the Awarded Vendor’s performance through a monitoring plan that includes, but is not limited to: • periodic site visits (can be either announced or unannounced), and desk reviews; • periodic reports provided by the Vendor; • status meetings with Vendor and other stakeholders; • accessing the Vendor’s systems and databases; • EBT system financial reconciliation and reports; and • routine contact and interaction with the Vendor.

28. HUB Subcontracting Plan(HSP) RequirementsRobert HallDirector of Enterprise Procurement Operations: RFP Team and HUB Programs

29. Agenda Topics • RFP Section 4 Historically Underutilized Business Participation Requirements • HUB Subcontracting Plan Development and Submission • HSP Quick Checklist – Handout • HSP Methods • HUB Subcontracting Notification Form • HSP Prime Contractor Progress Assessment Report

30. Historically Underutilized Business Participation Requirements

31. I. RFP Section 4.0 Historically Underutilized Business Participation Requirements • HUB Participation Goals – Section 4.3 • Potential Subcontracting Opportunities – Section 4.5 • Centralized master Bidders List and HUB directory – Section 4.5 • Vendor Intends to Subcontract – Section 4.6

32. I. RFP Section 4.0 Historically Underutilized Business Participation Requirements • Minority or Women Trade Organizations – Section 4.6.2 • Self Performance – Section 4.7 • HSP Changes After Contract Award – Section 4.8 • Reporting and Compliance with the HSP – Section 4.8

33. II.HUB Subcontracting Plan (HSP) Development and Submission Note: All Respondents must submit a HSP regardless if its intent is to subcontract or self perform all the work under the Contract.

34. If HSP is inadequate, response will be rejected HUB GOALS Special reminders and instructions HSP Information Page

35. HSP Quick Checklist ** See Checklist Handout**

36. ii HSP Methods Note: There are five (5) Method Options to choose from in order to develop and submit the HSP. Respondent’s should indicate their response which Method Option was selected.

37. METHOD OPTIONS A Respondent may choose from one of the following methods when completing the HSP: • Method I – if 100% of your subcontracting opportunities will be performed using onlyHUB vendors; • Method II – if one or more of the subcontracting opportunities identified will be performed using HUB protégé’s; • Method III – if a combination of HUBs and Non-HUBs are used to perform the subcontracting work identified AND the HUB goal identified in the solicitation is met or exceeded;

38. METHOD OPTIONS A Respondent may choose from one of the following methods when completing the HSP (cont.): • Method IV – if a combination of HUBs and Non-HUBs are used to perform the subcontracting work identified AND the HUB goal identified in the solicitation is not met or exceeded; and • Method V - if the Respondent intends to self perform all of the work utilizing their own resources, equipment, employees, and supplies.

39. ALL METHODS For ALL Methods the following steps are required to be completed on the HSP Form: • Page 1 - Section 1 - Respondent and Requisition Information. • Page 2 - Company and Requisition Information. • Page 2 - Section 2(a) – Subcontracting Intentions. • Section 4 – Affirmation and Sign.

40. Step by Step HSP Information Page Respondent and Requisition Information

41. Company Name and Requisition # Subcontracting Intentions: Declaration: Check – “Yes” if you plan to subcontract Check – “No” if you will not be subcontracting any portion of the contract

42. Step by Step Section 4; Affirmation Signature Affirms that Information Provided is True and Correct.

43. METHOD I • If all (100%) of your subcontracting opportunities will be performed using only HUB vendors, complete: • All of the steps in Sections 1, 2, and 4 of the HSP. • Section 2 b. – List all the portions of work you will subcontract, and indicate the percentage of the contract you expect to award to HUB vendors. • Section 2 c. – Yes. • HSP GFE Method A (Attachment A) – Complete this attachment for each subcontracting opportunity.

44. Step by Step Complete Section 2-b;List all the portions of work you will subcontract, and indicate the % of the contract you expect to award to all HUBs. Complete Section 2-c; Yes if you will be using only HUBs to perform all SubcontractingOpportunities in 2-b.

45. HSP GFE Method A (Attachment A) Complete this attachment (Sections A-1 and A-2) and List Line # and Subcontracting Opportunity. HUBSubcontractor Selection for this Subcontracting Opportunity

46. METHOD II • If any of your subcontracting opportunities will be performed using HUB protégés, complete: • All of the steps in Section 1, 2 and 4 of the HSP. • Section 2 b. – List all the portions of work you will subcontract, and indicate the percentage of the contract you expect to award to HUB vendors. • HSP GFE Method B (Attachment B) – Complete Section B-1, B-2 and B-4 only for each subcontracting opportunity as applicable.

47. Step by Step Complete Section 2-b;List all the portions of work you will subcontract, and indicate the % of the contract you expect to award to HUB Protégés. Skip Sections 2-c and 2-d.

48. HSP GFE Method B (Attachment B) Complete Sections B-1; and B-2 only for each HUB Protégé subcontracting opportunity.

49. HSP GFE Method B (Attachment B) B-4 List the HUB Protégé(s) Selected to perform the subcontracting opportunity

50. METHOD III • If you are subcontracting with HUBs and Non-HUBs, and the aggregate percentage of subcontracting with HUBs in which the HUB Goal identified in the solicitation is met or exceeded, complete: • All of the steps in Section 1, 2, and 4 of the HSP. • Section 2 b. – List all the portions of work you will subcontract, and indicate the percentage of the contract you expect to award to HUB vendors and Non HUB vendors. • Section 2 c. – No. • Section 2 d. – Yes. • HSP GFE Method A (Attachment A) – Complete this attachment for each subcontracting opportunity.