R -- FINANCIAL ADVISOR FOR TRANSITION OF RURAL TELEPHONE BANK FROM GOVT. TO PRIVATIZATION

Notice Date

September 1, 2000

Contracting Office

USDA, Rural Development, Operations & Management, Procurement Management Division, NASA Stop 0741, 1400 Independence Avenue, S.W., Washington, DC 20250-0741

ZIP Code

20250-0741

Solicitation Number

RFQ-USDA/RD

Response Due

September 18, 2000

Point of Contact

Veronica M. Moss, Contracting Officer, on 202-692-0110, or fax 202-692-0117.

E-Mail Address

Veronica M. Moss, Contracting Officer, USDA/Rural (veronica.moss@usda.gov)

Description

The U.S. Department of Agriculture's (USDA) Rural Development/Rural Utilities Service (RUS) requires an independent financial advisor to identify, evaluate, and recommend the actions necessary to transition the Rural Telephone Bank (hereafter referred to as the Bank), a Federal Government entity, to a Performance-Based Organization (PBO)and, finally, to a privately-owned entity. The financial advisor shall have expert banking and telecommunications credentials and experience, to provide the Bank with strategic planning guidance and recommendations, mainly in the areas of asset & liability management of the loan portfolio, liquidity and cash flow, and capital funds; organizational and operational issues; and regulatory and environmental issues. The Bank's operations may be subject to oversight by the Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, Federal Reserve System, Farm Credit Administration, U.S. Congress, and Securities and Exchange Commission. The Bank was established on May 7, 1971, to provide a supplemental source of financing under RUS' telecommunications loan program. RUS is a rural development and credit agency within USDA, which assists rural electrification, telecommunications, and water and wastewater service in rural areas. The Bank is a government corporation that functions as an agency of USDA, subject to the supervision and direction of the Secretary of Agriculture. The Administrator of RUS serves as the Governor of the Bank. The Bank's Board of Directors has seven members appointed by the Bank President and six members elected by the Bank's stockholders. By establishing a capital structure which provided for a mised Federal and private ownership, the Bank was designed to ensure rural telecommunications systems access to private sources of capital by establishing a supplemental credit mechanism for borrowers to obtain all or part of their future capital requirements. The Bank's capital structure consists of three classes of stock: Class A, Class B, and Class C. Class A stock was issued to the Bank in exchange for an appropriated $600 million of capital. This provided the Bank with its "seed" money to begin lending operations. Class B stock must be purchased by recipients of Bank loans in an amount equal to 5% of the loan. Class C stock may be purchased by Bank borrowers, entities eligible to borrow from the Bank, and by organizations controlled by Bank borrowers. In addition to providing for a mixed-ownership through the A, B and C classes of stock, the law also provides that the ownership, control, and operation of the Bank be transferred to the Class B and C stockholders after 51% of the Class A stock is retired (known as privatization of the Bank). Detailed descriptions of statutory rights, powers, and authorities of the Bank can be found in Sections 401 through 412 of the Rural Electrification Act of 1936, as amended (RE Act). The President's FY 2000 budget called for establishing the Bank as a PBO. A PBO is a discrete unit of a department that commits to clear management objectives, measureable goals, customer service standards, and specific targets for improved performance. Establishing the Bank as a PBO would require legislation, but it is a step towards privatization, which could take as long as 10 years. The financial advisor shall identify, review, and evaluate concepts, procedures, policies, standards, and controls; consider their effect on all phases of privatization, including, but not limited to preparations & negotiations, transitioning, and post-privatization; make subsequent recommendations. The financial advisor shall be assigned tasks by the Bank's Board of Directors' Privatization Committee, and consult with them at least once a week. Written recommendations will be provided at the end of the contract. Services shall be performed predominantly in South Dakota, and may include other states in the central U.S., such as Montana, Minnesota, Nebraska, and Missouri. RUS shall provide the existing policy and financial data, as needed, for the contract (i.e., accounting data on advances and unadvanced funds, financial data on diskette, etc.). The contractor shall provide the personnel, materials, facilities, and technical expertise to meet the Government's requirements. It shall provide its technical capability statement, technical approach for accomplishing the requirements in the central U.S., business size standard (i.e., if a small -- incl. small disadvantaged, women-owned, 8(a), or HUBZone -- or large business), labor categories and fully loaded hourly labor rates, and 3-5 Federal Government and commercial past performance references (names, addressess, and point of contact telephone numbers) for the past three (3) years to the Government's representative. These factors shall be used as the basis for the evaluation and negotiation of firm fixed price task orders against an IDIQ contract. The hours and rates may be renegotiated prior to any option year exercise. The solicitation provisions that apply to this synopsis/solicitation are: FAR 52.212-1 Instructions to Offerors -- Commercial Items, and FAR 52.212-3 Offeror Representations and Certifications -- Commercial Items, FAR 52.216-18 Ordering,and FAR 52.216-19 Order Limitations. FAR 52.212-4 Contract Terms and Conditions -- Commercial Items and FAR 52.212-5 Contract Terms and Conditions Required to Implement Statutes or Executive Orders -- Commercial Items will be incorporated into the contract that is awarded. The contract is estimated to have a term of one base year and two option years. The guaranteed minimum over the life of the contract would be $100,000 and the maximum would be $300,000. If task orders are obligated against the minimum do not equal $100,000, actual additional costs will be negotiated against the balance. Other USDA agencies may issue place task orders against the contract for similar services.

Web Link

N/A. (N/A.)

Record

Loren Data Corp. 20000906/RSOL010.HTM (W-245 SN492823)