U S General Services Administration GSA Smart Pay

U. S. General Services Administration GSA Smart. Pay® 3 (SP 3) Task Order Pricing Basics presented by Shauna Martinez GSA Center for Charge Card Management

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

What is a Refund? (Ref. C. 1, Definitions) • Refunds are – o a monetary payment provided by the Contractor to Agencies/Organizations, based on the dollar or “spend” volume during a specified time period. o expressed in terms of basis points (bps) or cents per transaction ($). § Note: 1 bp = 1/100 th of 1% (or. 01%, or. 0001) o expressed as a single rate that takes into consideration both spend volume and speed of pay. • Refunds may include additional payments for – o improper or erroneous refund payments, and/or o 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 SP 3 Master Contract is – • for products / services that generate interchange, • expressed in terms of bps or cents per transaction, and • the MINIMUM allowable refund for the product / service. SP 3 Contractors MUST provide the minimum rate or higher at the task order level. Fee-based pricing in the SP 3 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. SP 3 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 0 XXX – Base Period 1 XXX – Option Period 1 2 XXX – Option Period 2 3 XXX – Option Period 3 Sub. Example CLIN 0003 ab aa (CLIN 0003, Sub-CLIN ab – Base Period) ab 1003 ab (CLIN 0003, Sub-CLIN ab - Option Period 1) … 2003 ab … zy (CLIN 0003, Sub-CLIN ab - Option Period 2) zz 3003 ab (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 – o Not Separately Priced CLINs (Refund-based) o Separately Priced CLINs (Fee-based) Tier 2 (Value-Added) Product / Service Offerings (Ref. C. 3. 1. 2) • VARIES by Contractor • Separately Priced CLINs

Not Separately Priced (NSP) CLINs (Ref. B. 2. 2) Pricing that considers and includes the cost of all identified contract requirements under a single Tier 1 CLIN Standard Transactions processed through traditional transaction channels (e. g. traditional carded interchange structure) Large Ticket Transactions e. Payables – Supplier-Initiated Payments (SIP) Transactions Processes for exceeding a certain electronically “high dollar” threshold as processed by the connecting suppliers / merchants to the merchant (merchant dependent), for which Government’s supply the brands set a lower chain and/or back-end payment systems interchange rate

What is included in a Not Separately Priced Tier 1 CLIN? (Ref. B. 2. 2, Figure 4) Requirements Business Line General Requirements Purchase • • Travel • • • Integrated • • • Fleet 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 Business Line Specific Requirements See C. 2. 1. 2 Purchase Business Line Scope of Work See C. 2. 1. 3 Travel Business Line Scope of Work See C. 2. 1. 4 Integrated Business Line Scope of Work 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 • 24 -hour EAS Customer Service • Accounts Payable File Review • Association Program Management Tools • Chip & PIN / Signature Cards • Email / SMS Alert Service • e. Payable - Supplier-Initiated Payments (SIP) • Ghost Card • Interchange-Based Government-to- Government (G 2 G) Transactions • Mobile Applications • Mobile Payments • Net Billing • Non-Interchange based Governmentto-Government (G 2 G) Transactions • Real-Time Web Assistance • Single Use Account (SUA) • Tokenization • Virtual Cards Purchase • Convenience Checks • Declining Balance Cards • Foreign Currency Cards Travel Fleet • ATM Access • Declining Balance Cards • Foreign Currency Cards • GSA Smart. Pay Tax Advantage Travel Card Account • No additional business linespecific Tier 1 products or services

Illustration of Not Separately Priced (NSP) Tier 1 CLINs (Ref. B. 4) Purchase Business Line Product/Service CLIN 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] e. Payable – Supplier Initiated Payments (Tier 1) 0003 aa Sales Volume Spend 15 Basis Points As reflected in the Contractor’s Master Contract] 0003 ab Cents per Transaction 20 Cents per Transaction As reflected in the Contractor’s Master Contract]

Separately Priced CLINs (Ref. B. 2. 3) Separate and detailed pricing for specific products and service offerings Tier 2 (Value-Added) Tier 1 (Required) Vary by Contractor Same for All Contractors Convenience Checks ATM Access Non-Interchange Based Govt-to-Govt Includes items such as Additional Data Mining Tools, Combined Charge Card / I. D. Card, Emerging Technology, e. Payables – Buyer Initiated Payments (BIP) and Straight-Through Processing (STP), Optional ATM or Convenience Checks, Software, Telematics

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 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 Non-Interchange based Governmentto- Government (G 2 G) Transactions Purchase Convenience Checks Travel ATM Access Fleet 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 Convenience Checks (Tier 1) (PURCHASE AND INTEGRATED) 0005 ATM Access (Tier 1) (TRAVEL AND INTEGRATED) Fixed Fee [As reflected in the Contractor’s Master Contract] 0005 aa Fixed Fee [As reflected in the Contractor’s Master Contract] 0005 ab Net Basis [As reflected in the Contractor’s Points Master Contract] 0045 aa Fixed Fee [As reflected in the Contractor’s Master Contract] 0045 ab Net Basis [As reflected in the Contractor’s Points 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 indicated C. 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 All Business Lines • • • Additional Authorization Controls Additional Data Mining Tools Additional International Customer Service Combined Charge Card and Identification Card Technology Commercially Offered Convenience Services Emerging Technology e. Payable - Straight-Through Processing (STP) e. Payable - Buyer-Initiated Payment (BIP) Software 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 Purchase Optional ATM Access for Purchase Transactions Travel None Fleet • • After-Hours Road Side Assistance International Fleet Solution Optional Convenience Checks Products and Services Telematics

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. 0018 aa [Proposed by Offeror] Extended Warranty – 2 yrs. 0018 ab [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 : o Spend Volume o Speed of Pay o Average Billing Cycle Length o Numbers of Transactions o Numbers of Account Holders o Carded / Non-Carded Products Utilized o Numbers 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 SP 3 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 Fixed Fee (cannot be more than the Master Contract price) 0005 aa Tier 2: Value-Added Purchase Product/Service Offerings Additional Authorization Controls (Tier 2) 0015 (specify sub. CLIN) (per Master Contract) (cannot be more than the Master Contract price) Additional Data Mining Tools (Tier 2) 0016 (specify sub. CLIN) (per Master Contract) (cannot be more than the Master Contract price) Commercially Offered Convenience Services (Tier 2) 0019 (specify sub. CLIN) (per Master Contract) (cannot be more than the Master Contract price) Software (Tier 2) 0024 (specify sub. CLIN) (per Master Contract) (cannot be more than the Master Contract price)

Example #2 - Breakout Based on Historical Information CLIN Number CLIN 0001 – Standard Transactions (Tier 1) Unit of Measure Subcomponent (to be proposed by the Contractor) Spend Volume Task Order Proposal Single Refund Rate 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) CLIN 0005 aa - Convenience Checks (Tier 1) Determined by Merchant N/A (cannot be less than XX Basis Points in the Master Contract) Fixed Fee N/A (cannot be more than the Master Contract price)

Example #3 – Tiered Approach based on Spend Volume CLIN Number CLIN 0001 – Standard Transactions (Tier 1) Unit of Measure Subcomponent (to be proposed by the Contractor) Task Order Proposal Single Refund Rate 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) Determined by Merchant N/A (cannot be less than XX Basis Points in the Master Contract) Fixed Fee N/A (cannot be more than the Master Contract price) CLIN 0002 - Large Ticket Transactions (Tier 1) CLIN 0005 aa Convenience Checks (Tier 1)

Example #4 – Tiered Approach based on Speed of Pay CLIN Number CLIN 0001 – Standard Transactions (Tier 1) Unit of Measure Subcomponent (to be proposed by the Contractor) Task Order Proposal Single Refund Rate 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 points XXX basis points = (MIN) + (C) -- over 30 calendar days (D) basis points XXX basis points = (MIN) + (D) Determined by Merchant N/A (cannot be less than XX Basis Points in the Master Contract) Fixed Fee N/A (cannot be more than the Master Contract price) CLIN 0002 - Large Ticket Transactions (Tier 1) CLIN 0005 aa Convenience Checks (Tier 1)

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

Term / Condition for Failure to Pay Consistent with Payment Performance Assumptions (Ref. B. 2. 1. 2) 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.

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, 0003 aa, 1001, 1002, 1003 aa, 2001, 2002, 2003 aa, 3001, 3002, and 3003 aa 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 e. Payables CLINs where Refunds are expressed in Cents per Transaction (Ref. B. 2. 1. 2) Payment Performance / Speed of Pay (applicable to CLINs 0003 ab, 1003 ab, 2003 ab, and 3003 ab 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 o Contract Line Item Numbers (CLINs) o Separately vs Not Separately Priced o Transaction Types o Tier 1 (Required) vs Tier 2 (Value-Added) • Task Order Pricing Structure o Historical Information o Pricing Structures Examples o Payment Performance Terms and Conditions Examples

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