Tennessee State Government



STATE OF TENNESSEETREASURYREQUEST FOR PROPOSALS # 30901-44320AMENDMENT # 1FOR ACTUARIAL AUDIT OF THE JUNE 30, 2019 TCRS ACTUARIAL VALUATIONDATE: MARCH 10, 2020RFP # 30901-44320 IS AMENDED AS FOLLOWS:This RFP Schedule of Events updates and confirms scheduled RFP dates. Any event, time, or date containing revised or new text is highlighted.EVENTTIME (central time zone)DATEUPDATED OR CONFIRMEDRFP IssuedFebruary 13, 2020CONFIRMEDDisability Accommodation Request Deadline2:00 p.m.February 19, 2020CONFIRMEDPre-response Teleconference10:00 a.m.February 20, 2020CONFIRMEDNotice of Intent to Respond Deadline2:00 p.m.February 21, 2020CONFIRMEDWritten “Questions & Comments” Deadline2:00 p.m.February 28, 2020CONFIRMEDState Response to Written “Questions & Comments”March 10, 2020CONFIRMEDResponse Deadline 2:00 p.m.March 24, 2020CONFIRMEDState Completion of Technical Response Evaluations April 3, 2020CONFIRMEDState Opening & Scoring of Cost Proposals April 6, 2020CONFIRMEDState Notice of Intent to Award Released andRFP Files Opened for Public InspectionApril 9, 2020CONFIRMEDEnd of Open File PeriodApril 16, 2020CONFIRMEDState sends contract to Contractor for signature April 17, 2020CONFIRMEDContractor Signature Deadline2:00 p.m.April 24, 2020CONFIRMEDState responses to questions and comments in the table below amend and clarify this RFP.Any restatement of RFP text in the Question/Comment column shall NOT be construed as a change in the actual wording of the RFP document.QUESTION / COMMENTSTATE RESPONSEIn prior years, has the state contracted with an auditing firm to perform audits of TCRS? If so, could you provide the vendor name, and contract number if applicable?TCRS contracted with Gabriel Roeder Smith & Company in 2010 for an audit of the July 2009 Actuarial Valuation. The Contract/Edison ID number was 18761.If there is a contract for these services, could you provide the total spend on that contract?TCRS spent $59,862 on the Actuarial Review of the July 1, 2009 Actuarial Valuation.The RFP notes this audit will be for the 2019 actuarial results. Will this again be done for 2020? Are these services needed on an annual basis, and will they procured regularly each year moving forward? It is not anticipated that these services will be procured for the 2020 actuarial results. Currently, TCRS funding policy requires an actuarial audit at least once every 10 years. TCRS will procure the services when needed.In Section C.1 of the proposed Contract, we see there is a limitation of liability for the Contractor. Will this be limited to the amount of the contract value or some other value?Section C.1. of the Pro Forma Contract limits the amount of money that the State may spend under the contract. That amount is set after the contract is awarded and is based on the contractor’s proposed cost.Is the State willing to limit the vendor’s indemnification obligations in Sections D.17 to third party claims?No. This is a standard term in State contracts. Is the State willing to limit the vendor’s indemnification obligations in Section D.19 to third party claims arising directly out of the vendor’s gross negligence, willful misconduct, or fraudulent acts as related to the Services provided under this Contract? The vendor agrees to be liable for the reasonable cost of attorneys’ fees, court costs, expert witness fees, and other litigation expenses for the State to enforce the terms of the ContractNo. This is a standard term in State contracts.Is the State willing to limit the vendor’s indemnification obligations in Section D.20(d) to third party claims caused by an unauthorized dissemination of the State’s protected health information (PHI) as defined by HIPAA, including the costs of responding to an actual breach of PHI, the costs of responding to a government enforcement action related to the breach, and any fines, penalties, or damages paid by the State because of the confirmed violation as fully and finally determined by a court of competent jurisdiction? No. This is a standard term in State contracts.Please confirm that Sections D.17, D.19, and D.20(d) are subject to Section C.1, the liability cap.Section D.17 is subject to Section C.1 by its terms (see the second to last sentence). Sections D.19 and D.20(d) involve Contractor obligations and are therefore not subject to Section C.1, which involves the maximum amount of money the State will pay under the contract. See response to Question 4. We see on Page 35 of the RFP the statement: “The audit shall not include an examination of underlying census data, a gain?and loss analysis, or a review of the previous years’ valuations.”? However, in the Contract, there is a provision regarding HIPAA and HITECH protections and indemnification.? Will there be personal health information and/or personal identifiable information exchanged for this project (i.e., is this a Level One audit to be performed using edited data that is to be assumed to be accurate and complete)?? There will not be any PHI or PII included in any data provided to the contractor to support the actuarial audit. The HIPAA/HITECH provisions in the RFP are part of the state standard language for all RFPs issued.When was the last Level One audit of TCRS’s actuarial valuation performed?? Please identify the firm that performed it, the fees charged for it, and any changes in the assumptions or methods.Please refer to response in question #1. There were not changes in assumptions or methods used for actuarial valuations as a result of the actuarial audit.When was the last time these plans had an actuarial audit?? What was the fee charged?? How did the scope differ, if any, from this audit?Please refer to response in question # 1. The scope for this actuarial audit includes a review of the Hybrid Plan for State Employees and Teachers that became effective July 1, 2014 for all state employees and teachers.Is a copy of the most recent actuarial audit report of these plans/groups available and can you provide a copy?Yes. The audit report is attached to this Amendment as Attachment 1Is a copy of the June 30, 2019 valuation report(s) that will be audited available and can you provide a copy?The June 30, 2019 actuarial valuation reports will be provided once results for both the Legacy and Hybrid plans have been adopted by the TCRS Board of Trustees. The reports will be made available to the contractor selected to perform the audit services.Will there be a single point of contact on the TCRS side for this project? Yes. Jamie Wayman, Director of TCRS will be the single point of contact.Will the TCRS contact also act as the main contact with the retained actuary?Yes, but the State will also provide contact information for the retained actuary.Who is the retained actuary (if a copy of the valuation report is not provided) that performed the June 30, 2019 valuation being replicated?Findley, Inc., is the TCRS retained actuary.Was there a different retained actuary who performed the June 30, 2018 valuation?? If so, why was the retained actuary changed and did valuation results change materially when the retained actuary changed?Findley, Inc. was the retained actuary for both the June 30, 2018 and June 30, 2019 actuarial valuations.The scope in section A.2 in the contract does not mention GASB 67/68 related elements in the list of items being audited nor does it mention GASB 67/68 in the list of items excluded.? Please confirm whether or not the actuarial audit covers GASB 67 and 68 reporting information. The scope of services does not include a review of GASB 67 and 68 reporting information.Your insurance coverage requirements currently ask for $10 million in Errors and Omissions/Cyber insurance coverage. Would you be willing to accept lesser insurance coverage limits for Errors and Omissions/Cyber policies given that this is just an audit? If so, what would the acceptable amount of coverage be for these items? Would you be willing to lower the insurance coverage for respondents who have annual SOC 2 audits?No. The State is not willing to accept lesser insurance coverage limits as requested. Would you be willing to accept a limit on the amount of indemnification provided in an amount not to exceed 5 times the fees paid under this project?No. Would you be willing to accept any type of dispute resolution language and/or mandatory arbitration language? No. The State cannot agree to arbitration. Can the due date of the finished report be delayed or expressed as a period starting from the date that complete data for the project has been delivered?Section A.4. of the Pro Forma Contract contemplates this issue and provides, “Notwithstanding the foregoing, if the Contractor is prevented from delivering the report by July 30, 2020 as a result of the failure of the State and/or the System’s Actuary to provide required data to the Contractor as outlined in the project plan, then the Contractor's time in which to provide the report shall be extended to such date as shall be mutually agreed upon by the parties.” When were the last?three audits done?? Were any of them the same scope as this audit?? If not, when was the last audit that was most similar to the scope of this audit?This is the third time that TCRS has procured these services. An actuarial audit was previously performed on the July 1, 1999 and July 1, 2009 actuarial valuations. The scope is similar to the prior actuarial audits.What firm(s) did the last three audits?The actuarial audits performed on the July 1, 1999 and July 1, 2009 actuarial valuations were performed by Buck Consultants and Gabriel Roeder Smith & Company, respectively.Is the firm that did the last audit prohibited from bidding on this audit?NoWhat was the fee paid for the last two audits?? Was the scope the same as this audit?The fees paid for the actuarial audits performed on the July 1, 1999 and July 1, 2009 actuarial valuations were $39,000 and $59,862, respectively.Can you provide a copy of the June 30, 2019 actuarial valuation report?Refer to response in question # 13.We understand that the contractor will not be required to attend more than three on-site meetings.? How many meetings did the contractor attend on site for the last audit?The contractor for the actuarial audit of the July 1, 2009 actuarial valuation did not attend any meetings on site. All communications were by telephone or email.In the pro forma contract, can we add the phrase, “as awarded by a court of competent jurisdiction” to follow the statement “The Contractor further agrees it shall be liable for reasonable cost of attorney’s fees, court costs, expert witness fees, and other litigation expenses” in Section D.19 of the pro forma contract? Our E&O insurance policies (which follow the “American Rule”) generally limit reimbursement to awarded attorney’s fees. The “American Rule” provides generally that each party is responsible for paying its own attorney's fees, regardless of whether they win or lose. Our Errors and Omission policy applies this rule and does not provide coverage in situations where we contractually agree to pay another party’s attorney’s fees without a corresponding award of liability. Therefore, our requested exception to add the phrase “awarded by a court” is made solely to accommodate requirements under our E&O insurance policy, and not for avoidance of application of the indemnification provisions.While the State understands this concern, this language is part of the State-standard contract terms. The provision uses the word “reasonable,” which should provide respondents some assurance of how this provision would work in practice in the unlikely event of litigation between the parties.Will the actuary provide full test life details, including decrements, benefit calculations, annuity values, both for PVB and entry age, PVFS, or will they only provide summary information?We will work with the contractor and retained actuary to provide the data necessary for completion of the actuarial audit. When was the last actuarial audit of TCRS performed?The last actuarial audit was performed on the July 1, 2009 actuarial valuation and final report was dated June 18, 2010.In the last audit, were there issues identified that required changes to the actuarial assumptions, methods, or valuations?No. See response to question # 10.The term of the contract is 36 months, but it appears that the requested services are anticipated to be completed in 2020. Does the State expect the auditing actuary to provide any follow-up services, to ensure that any recommended changes are implemented by the System’s actuary?No. The term of the contract is thirty-six (36) months to accommodate unexpected delays that might require the services to be delivered later than expected pursuant to Section A.4. of the Pro Forma Contract.Add a new Section A.8. to the Pro Forma Contract as follows:A.8. Non-Solicitation. During the term of this Contract and for a period of twelve (12) months after the date that Contractor last provides services to the State under this Contract, neither party shall knowingly and directly solicit for employment or as an independent contractor any person employed by the other, if such person was directly involved in the performance of this Contract, without the express consent of the other party. This provision shall not apply to any individual whose employment has been terminated for a period of three (3) months or longer before any such solicitation occurs or to any offers of employment initiated by either party prior to the execution of this Contract. Add new attachment as RFP Attachment 6.6 Pro Forma Contract Attachment 1 Actuarial Audit Report (See attached PDF)Add new attachment as RFP Attachment 6.6 Pro Forma Contract Attachment 2 The Tennessee Department of Treasury Gifts and Solicitations Policy as shown below:Add a new Section A.9. to the Pro Forma Contract as follows:A.9. Gifts and Solicitations Policy. The Contractor shall not offer to give, or give, any gift to any employee of the State or to any member of a Board, Commission or Committee administratively attached to the State that would violate the State’s Gifts and Solicitations Policy included as Attachment 2 to this Contract. RFP Amendment Effective Date. The revisions set forth herein shall be effective upon release. All other terms and conditions of this RFP not expressly amended herein shall remain in full force and effect.ATTACHMENT 1ACTUARIAL AUDIT REPORTSee attached PDFATTACHMENT 2The Tennessee Department of Treasury Gifts and Solicitations PolicyNo employee or any member of a Board, Commission or Committee administratively attached to the Department shall solicit, accept or agree to accept, directly or indirectly, on behalf themselves or their immediate family, any gift in violation of state law including, but not limited to, any gratuity, service, favor, entertainment, lodging, transportation, loan, loan guarantee rebate, money, any promise, obligation or contract for future awards or compensation or any other thing of monetary value, from any individual or entity that:Has, or is seeking to obtain, contractual or other business or financial relations with the Treasury Department or the Tennessee Consolidated Retirement System;Conducts operations or activities that are regulated by the Treasury Department;May bid on future procurement from the Department or a Board, Commission, or Committee administratively attached to the Department based on the employee’s reasonable belief that the person or entity intends to submit a bid; orHas an interest that may be substantially affected by the performance or nonperformance of the employee’s official duties.Generally, gifts from a lobbyist or an employer of a lobbyist are prohibited; however, the following are exceptions to the general gift prohibition:A gift given for nonbusiness purpose and motivated by a close personal friendship and not by the position of the employee, and specifically authorized and defined by the Ethics Commission;Informational materials in the form of books, articles, periodicals, other written materials, audiotapes, videotapes, or other forms of communication;Sample merchandise, promotional items, and appreciation tokens if they are routinely given to customers, suppliers or potential customers or suppliers in the ordinary course of business;Unsolicited tokens or awards of appreciation, honorary degrees, or bona fide awards in recognition of public service in the form of a plaque, trophy, desk item, wall memento, and similar items, provided that any such item shall not be in a form which can readily be converted to cash;Benefits resulting from business, employment, or other outside activities of the employee or the employee’s immediate family, if such benefits are customarily provided to others in similar circumstances and are not enhanced due to the status of the employee;Opportunities and benefits made available to all members of an appropriate class of the general public, including but not limited to, discounts afforded to the general public or prizes and awards given out in public contests;Expenses of out-of-state travel, if such expenses are paid for or reimbursed by a governmental entity or an established and recognized organization of elected or appointed state government officials;Food, refreshments, amenities, goody bags, entertainment, or beverages provided as part of a meal, reception or similar event including tradeshows and professional meetings; andFood, refreshments, meals, foodstuffs, entertainment, beverages that are provided in connection with the following: an event where the employee is a speaker or part of a panel discussion at a scheduled meeting of an established or recognized membership organization which regularly meets at in-state events in which invitations are extended to legislative or executive branch employees. The value of the items shall not exceed fifty dollars ($50.00) per person, per day.** The amount may be increased to reflect the percentage of change in the average consumer price index. The Ethics Commission publishes the increased amount on its website.For other gifts offered which are not included in the exceptions above, the employee must obtain the written approval of the Assistant Treasurer for Legal, Compliance, and Audit. ................
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