GSA SmartPay ® 3 (SP3) Task Order Pricing Basics presented by - PowerPoint Presentation

GSA SmartPay® 3 (SP3) Task Order Pricing Basics presented by Shauna Martinez GSA Center for Charge Card Management

Agenda Refunds vs Fee-Based PricingMaster Contract Pricing Structure Contract Line Item Numbers (CLINs) Separately vs Not Separately Priced Transaction TypesTier 1 (Required) vs Tier 2 (Value-Added)Task Order Pricing StructureHistorical InformationPricing Structures ExamplesPayment Performance Terms and Conditions Examples

What is a Refund? (Ref. C.1, Definitions)Refunds are – a monetary payment provided by the Contractor to Agencies/Organizations, based on the dollar or “spend” volume during a specified time period. expressed in terms of basis points (bps) or cents per transaction ($). Note: 1 bp = 1/100th of 1% (or .01%, or .0001)expressed as a single rate that takes into consideration both spend volume and speed of pay. Refunds may include additional payments for – improper or erroneous refund payments, and/or invoice adjustments.

What is Interchange? (Ref. C.1, Definitions)A fee paid by the merchant’s financial institutions to the card issuing bank for processing its customer merchant payment transaction. Typically expressed in a percentage of the total transaction amount passed on to the merchant through the merchant financial institution’s fees.

Master Contract - Refunds vs. Fees (Ref. C.1, Definitions)Refund-based pricing in the SP3 Master Contract is – for products / services that generate interchange, expressed in terms of bps or cents per transaction, andthe MINIMUM allowable refund for the product / service.SP3 Contractors MUST provide the minimum rate or higher at the task order level.Fee-based pricing in the SP3 Master Contract is – for products / services that do not generate interchange, expressed in terms of cents / dollars per the unit of measure indicated, and the MAXIMUM allowable fee for the product / service. SP3 Contractors MAY provide discounts at the task order level.

Contract Line Item Number (CLIN) Sequencing (Ref. B.4, Figure 6) CLIN Structure CLINs by Contract Period Sub-CLIN Example 0XXX – Base Period aa ab … … zy zz 0003ab ( CLIN 0003, Sub-CLIN ab – Base Period ) 1XXX – Option Period 1 1003ab ( CLIN 0003, Sub-CLIN ab - Option Period 1) 2XXX – Option Period 2 2003ab ( CLIN 0003, Sub-CLIN ab - Option Period 2) 3XXX – Option Period 3 3003ab ( CLIN 0003, Sub-CLIN ab - Option Period 3)

Pricing Structure Tiers and CLINs and Transaction Types… OH MY!

Pricing Structure Tier 1 (Required) Product / Service Offerings (Ref. C.3.1.1) SAME for each Contractor Reflected as either – Not Separately Priced CLINs (Refund-based)Separately Priced CLINs (Fee-based) Tier 2 (Value-Added) Product / Service Offerings (Ref. C.3.1.2)VARIES by ContractorSeparately Priced CLINs

What is included in a Not Separately Priced Tier 1 CLIN?(Ref. B.2.2, Figure 4) Business Line Requirements General Requirements Business Line Specific Requirements Purchase C.1 Definitions C.2 Scope and Terms C.2.1.1 Agency/Organization Eligibility Determinations C.3 Payment Solutions Management C.4 Customer Service, Training and Communication C.5 Additional Program Focus Areas C.6 Quality and Risk C.7 Data Management, Transaction Support and Reporting C.8 Security Requirements See C.2.1.2 Purchase Business Line Scope of Work Travel See C.2.1.3 Travel Business Line Scope of Work Integrated See C.2.1.4 Integrated Business Line Scope of Work Fleet See C.2.1.5 Fleet Business Line Scope of Work

What is included in a Not Separately Priced Tier 1 CLIN?(Ref. C.3.1.1) All Business Lines PurchaseTravel Fleet 24-hour EAS Customer Service Accounts Payable File Review Association Program Management Tools Chip & PIN / Signature Cards Email / SMS Alert Service ePayable - Supplier-Initiated Payments (SIP) Ghost Card Interchange-Based Government-to- Government (G2G) Transactions Mobile Applications Mobile Payments Net Billing Non-Interchange based Government-to-Government (G2G) Transactions Real-Time Web Assistance Single Use Account (SUA) Tokenization Virtual Cards Convenience Checks Declining Balance Cards Foreign Currency Cards ATM Access Declining Balance Cards Foreign Currency Cards GSA SmartPay Tax Advantage Travel Card Account No additional business line-specific Tier 1 products or services

Illustration of Not Separately Priced (NSP) Tier 1 CLINs(Ref. B.4) Purchase Business LineProduct/ServiceCLIN Unit of Issue Minimum Required Refund per Master Contract Minimum Price / Basis Points Offered by the Contractor Tier 1: Required Purchase Products/Services Standard Transactions (Tier 1) 0001 Spend Volume 20 Basis Points [As reflected in the Contractor’s Master Contract] Large Ticket Transactions (Tier 1) 0002 Determined by Merchant 15 Basis Points As reflected in the Contractor’s Master Contract] ePayable – Supplier Initiated Payments (Tier 1) 0003 0003aa Sales Volume Spend 15 Basis Points As reflected in the Contractor’s Master Contract] 0003ab Cents per Transaction 20 Cents per Transaction As reflected in the Contractor’s Master Contract]

What is included in Tier 1 Separately Priced CLINs?(Ref. C.3.1.1) Master Contract Requirements included in Tier 1 Separately Price CLINs C.1 DefinitionsC.2 Scope and Terms C.2.1.1 Agency/Organization Eligibility Determinations C.2.1.2 – C.2.1.5 Business Line Specific Requirements C.3 Payment Solutions Management C.4 Customer Service, Training and Communication C.5 Additional Program Focus Areas C.6 Quality and Risk C.7 Data Management, Transaction Support and Reporting C.8 Security Requirements All Business Lines Purchase Travel Fleet Non-Interchange based Government-to- Government (G2G) Transactions Convenience Checks ATM Access None

Illustration of Tier 1 Separately Priced CLINs (Ref. B.4) Product/Service CLIN Unit of Issue Maximum Fixed Fee / Net Basis Points Tier 1: Required Purchase Products/Services Non-Interchange Based Government- to-Government Transaction (Tier 1 ) ( ALL) 0004 Fixed Fee [As reflected in the Contractor’s Master Contract] Convenience Checks (Tier 1) (PURCHASE AND INTEGRATED) 0005 0005aa Fixed Fee [As reflected in the Contractor’s Master Contract] 0005ab Net Basis Points [As reflected in the Contractor’s Master Contract] ATM Access (Tier 1) (TRAVEL AND INTEGRATED) 0045     0045aa Fixed Fee [As reflected in the Contractor’s Master Contract] 0045ab Net Basis Points [As reflected in the Contractor’s Master Contract]

What is included in Tier 2 Separately Priced CLINs?(Ref. C.3.1.1) Master Contract Requirements included in Tier 2 Separately Priced CLINs unless otherwise indicatedC.1 Definitions C.2 Scope and Terms C.2.1.1 Agency/Organization Eligibility Determinations C.2.1.2–C.2.1.5 Business Line Specific Requirements C.3 Payment Solutions Management C.4 Customer Service, Training and Communication C.5 Additional Program Focus Areas C.6 Quality and Risk C.7 Data Management, Transaction Support and Reporting C.8 Security Requirements All Business Lines Purchase Travel Fleet Additional Authorization Controls Additional Data Mining Tools Additional International Customer Service Combined Charge Card and Identification Card Technology Commercially Offered Convenience Services Emerging Technology ePayable - Straight-Through Processing (STP) ePayable - Buyer-Initiated Payment (BIP) Software Optional ATM Access for Purchase Transactions None After-Hours Road Side AssistanceInternational Fleet SolutionOptional Convenience Checks Products and ServicesTelematics

Illustration of Tier 2 Separately Priced CLINs(Ref. B.4) Product/Service CLIN Unit of Issue Minimum Refund/Maximum Fixed Fee or Net Basis Points Offered Tier 2: Base Period: Commercially Offered Convenience Services – Extended Warranty 0018     Extended Warranty – 1 yr. 0018aa [Proposed by Offeror] [Proposed by Offeror] Extended Warranty – 2 yrs. 0018ab [Proposed by Offeror] [Proposed by Offeror]

Task Order Historical Information (Ref. B.1.5) Required to be provided by the Agency/Organization in the task order request Consider including historical information (broken out by FY and business line) for : Spend VolumeSpeed of PayAverage Billing Cycle LengthNumbers of TransactionsNumbers of Account Holders Carded / Non-Carded Products UtilizedNumbers of Delinquencies Anomalies in data should be clarified for Contractors Explain dramatic +/- in # of accounts, spend, transactions and what the expected trend is for coming FYs

Task Order Level Refunds (Ref. B.2.1.2) Agencies can require SP3 Contractors to break out pricing based on specific goals or assumptions. When requested by the agency:Contractor breakouts shall show the portion of the single refund rate associated with – the minimum refund under their master contract, and any assumptions related to historical and / or projected payment information, such as spend volume or speed of pay.

Example #1 – No Breakout Component Product/Service CLIN Unit of Issue Task Order Basis Points / Fixed Fee Tier 1: Required Purchase Products/Services Standard Transactions (Tier 1) 0001 Spend Volume (cannot be less than XX Basis Points in the Master Contract) Large Ticket Transactions (Tier 1) 0002 Determined by Merchant (cannot be less than XX Basis Points in the Master Contract) Convenience Checks (Tier 1) 0005 0005aa Fixed Fee (cannot be more than the Master Contract price) Tier 2: Value-Added Purchase Product/Service Offerings Additional Authorization Controls (Tier 2) 0015 (specify subCLIN) (per Master Contract) (cannot be more than the Master Contract price) Additional Data Mining Tools (Tier 2) 0016 (specify subCLIN) (per Master Contract) (cannot be more than the Master Contract price) Commercially Offered Convenience Services (Tier 2) 0019 (specify subCLIN) (per Master Contract) (cannot be more than the Master Contract price) Software (Tier 2) 0024 (specify subCLIN) (per Master Contract) (cannot be more than the Master Contract price)

Example #2 - Breakout Based on Historical Information CLIN Number Unit of Measure Subcomponent (to be proposed by the Contractor) Task Order Proposal Single Refund Rate CLIN 0001 – Standard Transactions (Tier 1) Spend Volume XXX basis points (MIN) + (A) + (B) + ( C) Component Breakout -- Minimum per Master Contract (MIN) basis points -- Portion of single refund based on total spend remaining steady at historical rates for 2016 with less than .5% increase per year. (A) basis points -- Portion of single refund based on an Agency average speed of pay of 3 business days or less. (B) basis points --Portion of single refund based on an Agency average billing cycle of 15 calendar days or less. (C) basis points CLIN 0002 - Large Ticket Transactions (Tier 1) Determined by Merchant N/A (cannot be less than XX Basis Points in the Master Contract) CLIN 0005aa - Convenience Checks (Tier 1) Fixed Fee N/A (cannot be more than the Master Contract price)

Example #3 – Tiered Approach based on Spend Volume CLIN Number Unit of Measure Subcomponent (to be proposed by the Contractor) Task Order Proposal Single Refund Rate CLIN 0001 – Standard Transactions (Tier 1) Spend Volume -- Minimum per Master Contract (MIN) basis points Refund Eligible Net Charge Volume for the Period with an Average Speed of Pay of <= 5 Business Days -- $10 million or less (A) basis points XXX basis points = ( MIN) + (A) -- over $10 million and less than $25 million (B) basis points XXX basis points = ( MIN) + (B) -- over $25 million and less than $50 million (C) basis points XXX basis points = ( MIN) + (C) -- over $50 million (D) basis points XXX basis points = (MIN) + (D)CLIN 0002 - Large Ticket Transactions (Tier 1) Determined by Merchant N/A (cannot be less than XX Basis Points in the Master Contract) CLIN 0005aa - Convenience Checks (Tier 1) Fixed Fee N/A (cannot be more than the Master Contract price)

Example #4 – Tiered Approach based on Speed of Pay CLIN Number Unit of Measure Subcomponent (to be proposed by the Contractor) Task Order Proposal Single Refund Rate CLIN 0001 – Standard Transactions (Tier 1) Spend Volume -- Minimum per Master Contract (MIN) basis points Average Speed of Pay in Calendar Days for the Period applied to Refund Eligible Net Charge Volume for the same period. -- 1-7 calendar days (A) basis points XXX basis points = ( MIN) + (A) -- 8-15 calendar days (B) basis points XXX basis points = ( MIN) + (B) -- 16-30 calendar days(C) basis pointsXXX basis points = (MIN) + (C)-- over 30 calendar days(D) basis pointsXXX basis points = (MIN) + (D) CLIN 0002 - Large Ticket Transactions (Tier 1) Determined by Merchant N/A (cannot be less than XX Basis Points in the Master Contract) CLIN 0005aa - Convenience Checks (Tier 1) Fixed Fee N/A (cannot be more than the Master Contract price)

Example #5 – Incorrect Breakout CLIN Number Unit of Measure Subcomponent (to be proposed by the Contractor) Order Proposal Single Refund Rate CLIN 0001 – Standard Transactions (Tier 1) Spend Volume XXX basis points (MIN) + (A) + (B) -- Minimum per Master Contract (MIN) basis points -- Sales Refund (A) basis points -- Productivity Refund based on Gross Refund Tables attached (B) basis points CLIN 0002 - Large Ticket Transactions (Tier 1) Determined by Merchant N/A (cannot be less than XX Basis Points in the Master Contract) CLIN 0005aa - Convenience Checks ( Tier 1) Fixed Fee N/A (cannot be more than the Master Contract price)

Task orders shall include specific terms and conditions to address the event that an agency/organization fails to make payment consistent with the payment performance assumptions used as a basis for the task order level refund(s) awarded.Term / Condition for Failure to Pay Consistent with Payment Performance Assumptions(Ref. B.2.1.2)

Example Term / Condition for CLINs where Refunds are expressed in Basis Points (Ref. B.2.1.2) Payment Performance / Speed of Pay (applicable to CLINs 0001, 0002, 0003aa, 1001, 1002, 1003aa, 2001, 2002, 2003aa, 3001, 3002, and 3003aa only .  If the Contractor does not receive payment within an average speed of three (3) business days for a period of six (6) consecutive months, the Contractor may deduct five (5) basis points from the net agency refund due at the end of the 6-month period as a penalty.  Such penalty shall continue until the average speed of pay returns to an average of 3 business days for three (3) consecutive months.  The Contractor must provide a warning to the COR not less than 60 calendar days prior to the end of any such 6-month period wherein penalties may likely be assessed and must provide proof to the COR to document and substantiate any claim for any refund penalty proposed.  

Example Term / Condition for ePayables CLINs where Refunds are expressed in Cents per Transaction (Ref. B.2.1.2) Payment Performance / Speed of Pay (applicable to CLINs 0003ab, 1003ab, 2003ab, and 3003ab only).   If the Contractor does not receive payment within an average speed of three (3) business days for a period of six (6) consecutive months, the Contractor may deduct two (2) cents per transaction from the net agency refund due at the end of the 6-month period as a penalty.  Such penalty shall continue until the average speed of pay returns to an average of 3 business days for three (3) consecutive months.  The Contractor must provide a warning to the COR not less than 60 calendar days prior to the end of any such 6-month period wherein penalties may likely be assessed and must provide proof to the COR to document and substantiate any claim for any refund penalty proposed.   

Agenda Refunds vs Fee-Based Pricing Master Contract Pricing Structure Contract Line Item Numbers (CLINs)Separately vs Not Separately Priced Transaction TypesTier 1 (Required) vs Tier 2 (Value-Added)Task Order Pricing StructureHistorical Information Pricing Structures Examples Payment Performance Terms and Conditions Examples

QUESTIONS? Shauna Martinez: shauna.martinez@gsa.govJoline McDonald: joline.mcdonald@gsa.gov OR Contact your agency/organization’s assigned GSA Center for Charge Card Management (CCCM) Point of Contact