RFO 14-144083 - 21st Century Project Assessment

August 22, 2014
CALIFORNIA DEPARTMENT OF TECHNOLOGY

REQUEST FOR OFFER 14-144083
Assessment of State Controllers 21
st
Century Project

The California Department of Technology (Department of Technology) is soliciting a
Contractor to provide an independent assessment of the SAP solution for the State
Controllers Offices 21
st
Century Project. Please review this Request for Offer (RFO)
entitled Department of Technology RFO #14-144083 Assessment of State Controllers
21st Century Project. In submitting your offer, you must comply with the instructions
contained herein. The services required are identified in the Statement of Work (SOW)
(Exhibit A).

Responses to this RFO will be reviewed, and the award made, using the IT Master
Service Agreement (MSA) Best Value Evaluation (Attachment 1).

Responses are due by 10/01/2014, by 2:00 p.m. Pacific Time. Mail or deliver one (1)
original, three (3) copies, and one (1) CD/DVD-ROM or flash drive of your response
clearly labeled to the Department Contact named below. Questions regarding this RFO
must be sent via email by the date stated in the Key Action Dates. An official response
will be released to all interested vendors via a Question and Answer document.

Department Contact:
Ms. Sandy Louie
California Department of Technology
Procurement and Contracting Services Branch
916-431-3600
Sandy.louie@state.ca.gov
Parcel Post (FedEx, UPS, etc.)
or Hand Delivered
United States Postal Service (USPS)
Attn: Ms. Sandy Louie
10860 Gold Center Drive Suite 200
(Security Desk)
Rancho Cordova, CA 95670
Attn: Ms. Sandy Louie
Mail Stop Y18
P.O. Box 1810
Please seal and mark your response Request for Offer Do Not Open, and list the
RFO number 14-144083 on the front of your package.

NOTE: Neither email submittals, nor fax transmittals of proposals will be
accepted for this RFO. Under no circumstances shall late deliveries be accepted.
Al l responses received after the due date and time shall be returned to the vendor
unopened.
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CALIFORNIA DEPARTMENT OF TECHNOLOGY RFO #14-144083
ASSESSMENT OF 21
ST
CENTURY PROJ ECT

Assessment of 21
st
Century Project

1. BACKGROUND

The State Controllers Office (SCO) is responsible for issuing pay to employees of the
state civil service, California State University (CSU) and J udicial Council. There are
currently over 160 departments and 24 CSU campuses in the State of California. The
state workforce is comprised of approximately 275,000 employees, represented by 21
state civil service bargaining units and 10 CSU bargaining units. Employees are located
throughout California and in other states, and range from elected officials, managers
and supervisors, and higher education faculty, to rank and file workers in a variety of
occupations.

In May 2004, the Department of Finance (DOF) approved the Feasibility Study Report
(FSR) for the 21
st
Century Project. The FSR established that the existing Human
Resource Management System (HRMS)/payroll systems operated by the SCO were
outdated and did not meet the needs of todays government. Based on this approval,
the SCO initiated a two-phased procurement process. The purpose of the first
procurement was to select a commercial off-the-shelf (COTS) software product to
support the states human resource management needs; the second phase was to
secure the services of an experienced integrator to implement the COTS solution.

In April 2005, the software procurement was finalized and SAP was selected as the
COTS software for the States new HRMS/payroll system, called MyCalPAYS. The
second phase of the procurement process began in May 2005 with the release of a
Request for Proposal (RFP) for systems integrator services. In J une 2006, the contract
was awarded to a vendor. That contract was later cancelled and an RFP for a new SI
vendor was released. Upon conclusion of the two-stage procurement and evaluation
process, SAP Public Services, Inc. was selected for contract award. The contract with
SAP Public Services, Inc. was approved by DGS on February 2, 2010.

The accepted strategy of Special Project Report (SPR) 4 consists of a complete build of
the MyCalPAYS system, followed by an SCO-only pilot, followed by a second larger
pilot, and then the implementation of three sequential waves of departments of as
many as 85,000 employees each. When the contract was executed a month later than
anticipated in the final proposal, a decision was made to combine the two pilots and
deploy them on the second pilots go-live date, September 2011.

In early 2011, it became evident the existing conversion methodology to extract,
transform and load the legacy data into the SAP system was not working, and that it
would not be feasible for converting the large employee populations planned for each
wave. A re-planning effort in April and May 2011 concluded that a September 2011 go-
live, for even a reduced population, was not viable. SPR 5 recommended extending the
project for one additional year. The roll-out of Pilot 1 (J une 2012) would include only the
SCO and would demonstrate whether the system functioned as contractually and legally
required and, if not, allow for a window of time to address any issues while ensuring that
any risk of payroll errors would be limited to only the employees of the State Controller.
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The SCO population was selected to manage system rollout with limited risk given the
SCOs small employee population, representing roughly one half of one percent (0.5%)
of the ultimate State employee population to be paid using the new system. Pilot 2
would follow three months later adding just 10,000 new State employees to the system
to ensure it worked for a population significantly larger than that of Pilot 1, but still small
relative to the total State employee population to be served by the system. Pilot 2
would then be followed by a phased deployment of the remaining departments in three
successive waves assuming the system worked.

In J une 2012, the SCO deployed Pilot 1 of the MyCalPays system. The pilot revealed a
significant volume of troubling errors. The SCO worked with SAP in good faith to go
through the errors and ensure that SAP was addressing them as contractually required.
SAP did not cure the issues as required and, in October 2012, the SCO issued a cure
letter to compel SAP to fulfill its contractual obligations. While the SCO hoped SAP
would successfully cure its systems failure to deliver an accurate, stable, and reliable
payroll, SAP failed to cure as contractually required. For the next several months errors
in pay produced by the payroll system continued and SAP failed to provide the SCO a
viable recovery plan to address them. Consequently, in February 2013, SAPs failure to
meet its contractual obligation to cure, left the State with no choice but to terminate the
contract with SAP as the system integrator for the MCP system. Following this
termination, the Department of Technology suspended the 21st Century Project pending
approval of an evaluation of the lessons learned and a go-forward strategy/plan.

In J une 2013, the SCO and SAP participated in contractual mediation. After it became
clear that the mediation process was at an impasse, it was ended. On
November 21, 2013, the SCO filed a lawsuit against SAP for breach of contract.

There are seven (7) project team members (both staff and consultants) in the Project
Management Office remaining at SCO but the State will make all concerted effort to
identify and make available project staff regardless of state department that currently
work for to ensure the assessment team has access to the most knowledgeable
resources.

Please see Attachment 5 for the project organization chart as of J anuary 2013.

The state is going to conduct several project assessments including:
1. A MyCalPAYS system/software assessment,
2. An options and alternatives analysis for a different system, and
3. A project management assessment.

The first step is to understand what California received for its money, what is reusable
and what the estimated cost to complete the project is. The scope of Assessment 1
includes the following:
Determining how well the current MyCalPAYS design and system meet the
States business and legal requirements, including identifying which requirements
are not satisfied by the system.
Determining what portion of the current MyCalPAYS design and system may be
usable.
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Determining the estimated cost to complete the system ensuring that it is
compliant with the States business and legal requirements, with no material
changes to the current system.

Assessment 2 is an options and alternatives assessment. The objective is to determine
alternatives to the current planned approach.

Assessment 3 is a project management assessment. The objective of this assessment
is to determine the effectiveness of the project management.

This RFO is for the first assessment. Vendors who performed work on the 21
st
Century
Project are prohibited from bidding this assessment. The awarded vendor will be able to
submit offers on subsequent assessments, and will only be able to submit offers on any
subsequent project work that is not the result of a recommendation from the
assessment. Assessments 2 and 3 will be conducted in the future.

2. KEY ACTION DATES

Adherence to the following schedule of dates and times is required. If the
Department of Technology finds it necessary to change any of these dates, it will be
accomplished by issuing an addendum.

KEY ACTION DATES DATE
Release of RFO 8/22/14
Last Day to Submit Questions 9/3/14
Release of Answers to Questions 9/5/14
RFO Response Submission Due Date (2:00 PM, PT) 10/1/14
Interviews* 10/13/14-10/17/14
Proposed Award Date 10/27/14
*Interviews are not required and will be conducted at the sole discretion of the Department. A 1-2 day advance
notice will be given when interviews will take place, but team members must plan on attending an interview
within the dates shown for interviews as noted above.

3. AUTHORITY TO CONTRACT OUT

This solicitation is being conducted under the policies and procedures developed
by the Department of General Services (DGS) as provided under Public Contract
Code (PCC) sections 12100 et seq.

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4. CONSULTANT ADMONISHMENT OF FOLLOW-ON CONTRACTS

No person, firm, or subsidiary thereof who has been awarded a consulting services
contract, or awarded a contract which includes a consulting component, may submit
a bid for, nor be awarded a contract for, the provision of services, procurement of
goods or supplies, or any other related action which is required, suggested, or
otherwise deemed appropriate in the end product of the consulting services
contract. Therefore, any consultant that contracts with the State to develop and
provide formal recommendations for the acquisition of IT products or services is
precluded from contracting for any work recommended in the formal
recommendation.

5. BUDGET AMOUNT

The contract shall not exceed $1,275,000 and there is no obligation on the
Department of Technologys part to utilize the entire amount.

6. RFO RESPONSE GUIDELINES

Responses to this RFO shall contain all data/information requested and shall
conform to the format described in this RFO. It is the responsibility of the
Respondent to provide all required data, and any other information deemed
necessary, for the Department of Technology to determine and verify the
Respondents ability to produce the deliverables defined in the SOW, Exhibit A.

Unless otherwise specified, all electronic files and media submitted in response to
this RFO must be in formats compatible with the Department of Technologys
standard desktop computing environment, which consists of Microsoft (MS)
Windows 7 SP 1, MS Office Suite 2010, and Adobe Acrobat Reader XI, et al.

7. RFO RESPONSE CONTENT

The following shall be submitted in the RFO response, in the order specified below
and will be reviewed for completeness as pass or fail. Any response that fails may
be deemed non-responsive.

a. Cover Letter
A cover letter signed by the individual authorized to bind the company that
must state that they agree to all of the terms and conditions set forth in this
RFO.

b. Table of contents
A table of contents that lists the following response sections.

c. Methodology and Work plan
Provide a detailed methodology and work plan identifying:
(1) Each deliverable, including non-payable deliverables (e.g., status reports)
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(2) The methodology for how the work will be undertaken including any
proposed tools (e.g., testing software).
(3) Specific activities to implement the methodology (e.g., Contractor will
review the following documents (and include list of documents)).
(4) All resources needed from the state (e.g., project staff to interview, system
environment to conduct tests) and when they will be needed (e.g., start of
step 1 and ending in step n).

d. Timeline/Schedule and responsible and involved parties
Identify when activities will start and end and who on the vendors team is
leading each activity.

e. Required State Resources
Identify state resources needed by function (e.g., Project Manager, Subject
Matter Expert), if any, for each activity, and the effort and duration of state
resources. This will enable the State to know when to make the resources
available.

f. Staff Experience/resumes
The response must include a completed Staff Experience Worksheet
(Attachment 2) with attached resume(s) and any additional attachments
necessary detailing current or past experience of the consulting team members
(not the firms experience) being proposed for this engagement. Team
members are defined as any resource being proposed, whether at the prime or
subcontractors firm. Staff experience worksheet is not required or necessary
to be submitted for the engagement manager or administrative support staff.
Sufficient detail should be provided for the Department of Technology to
confirm experience commensurate with technical assessment services
requested in the SOW. Only include engagements with commensurate
experience for the role the team member is being proposed on Attachment 2
and on the resume.

g. References
Two (2) references (each submitted on a separate Attachment 3) which have
used similar services for each proposed team member (not the firm) identified
for this effort that can confirm the team members knowledge, skills, and
experience. Experience must have occurred in the last ten (10) calendar
years. A reference must be external to the Respondents organization and
corporate structure. References must support the depth and breadth of
experience required. References are to include customer name and address,
and the name, telephone number and e-mail address of a contact person. For
purposes of this solicitation, the Department of Technology may be used as a
reference, including current or former Department of Technology employees.
The Department of Technology staff may contact referenced organizations to
verify the information provided. Negative responses from references may be
cause for rejection of the response/offering.

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h. A signed Security and Confidentiality Statement (Attachment 4).

i. A completed Payee Data Record (Std. 204) available for download at the
following link: http://www.documents.dgs.ca.gov/osp/pdf/std204.pdf

j. Cost Worksheet
A completed Cost Worksheet (Exhibit B-1). All costs shall be filled in by the
Respondent. Provide the classification(s) and hourly rate(s) for the description
of services/task(s) described in this RFO SOW (Exhibit A). Proposal costs to
this RFO are subject to the Department of General Services' Leveraged
Procurement Agreement dollar limitations for IT MSA acquisitions. If you have
more deliverables than is noted in Exhibit B-1, please add rows and then
complete for the additional deliverables. The number of deliverables in this
exhibit is no indication of the expected number of deliverables for this
engagement.

k. The complete IT MSA agreement including the signed STD 213 that shows the
contract number, IT MSA term dates, and the DGS Contract Administrators
signature, including any supplements must be included with only the original
response (not copies) and only on the CD/DVD-ROM or flash drive.

l. A completed Bidder Declaration (GSPD-05-105) available for download at the
following link: http://www.documents.dgs.ca.gov/pd/delegations/GSPD105.pdf.
When completing the declaration, all subcontractors proposed for participation
in the contract must be identified.

8. ADMINISTRATIVE INFORMATION

a. This RFO and the Respondents response will be incorporated by reference
into the resulting Contract.

b. Upon RFO response opening, all documents submitted in response to this
RFO will become the property of the State of California, and will be regarded
as public records under the California Public Records Act (Government Code
Section 6250 et. seq.) and subject to review by the public.

c. Upon an executed Contract, the Contractor shall submit a signed Conflict of
Interest, Statement of Economic Interest Form 700 (provided by the
Department of Technology Contract Administrator) for himself, his employees
and any subcontractors assigned to this effort. Further information is available
at the following address: http://www.fppc.ca.gov.

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d. Federal Tax Administration Requirements
The Department of Technology must notify the United States Internal Revenue
Service (IRS) prior to executing, or amending, any contract to disclose, or
provide access to, federal tax information (FTI) to a Contractor or Sub-
Contractor, at least 45 calendar days prior to the disclosure of FTI, to ensure
appropriate contractual language is included and that Contractors are held to
safeguarding requirements. This procedure conforms to IRS Publication 1075,
Exhibit 12 - 45-DAY NOTIFICATION REQUIREMENTS. If an unfavorable
response is received by the IRS, the contract will be terminated immediately,
per General Provisions Information Technology (GSPD-401), clause 23,
Termination for Default.
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EXHIBIT A
STATEMENT OF WORK

1. OBJECTIVE

Three (3) separate assessments will focus on key objectives that are required to
develop a strategic direction to move the project forward.

Assessment 1 [the assessment called for in this statement of work (SOW)] is the
MyCalPAYS system and software assessment. The objective of this assessment is
to determine which of the system requirements are met by the system, what could
be leveraged from the project if the State moved forward with the current software
and design, and what is the estimated cost to complete the project as planned.

2. TERM/PERIOD OF PERFORMANCE

a. The period of performance for the Contract shall be from two weeks after the
proposed award date noted in Section 2 Key Action Dates and J une 30, 2015,
with option to extend for one additional 12 month term at the original rates
evaluated and considered.

b. The Contractor shall not be authorized to deliver or commence the performance
of services as described in this SOW until written approval has been obtained
from all entities. Any delivery or performance of service that is commenced prior
to the signing of the Contract shall be considered voluntary on the part of the
Contractor and non-compensable.

c. Consistent with the terms and conditions of the original solicitation, and upon
mutual consent, the Department of Technology and the Contractor may execute
written amendments for changes to this Contract that were evaluated and
considered.

3. QUALIFICATIONS

a. Mandatory Qualifications
The firm and proposed team members must have the following minimal
mandatory experience. Additional points will be provided for additional years of
experience in the various categories.

i. Firm Experience
1. A public sector practice that has been in existence for at least five years.
2. Performed at least two successful (as determined by client satisfaction)
information technology project assessments, including one similar to this
assessment, within the last five years.
3. Five years experience with Human Capital Management (HCM), payroll
processing, and Enterprise Resource Planning (ERP) systems.

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ii. Team members experience (each team member must fulfill at least one of
these requirements):
1. Two full implementation cycles of SAP payroll
2. Five years SAP payroll experience
3. System assessment
b. Desirable Qualifications
Additional points will be provided for team members who meet the desirable
qualifications noted below:

1. SAP payroll implementation experience in a public sector environment
2. Experience with resolving troubled SAP payroll implementations
4. PROJECT DELIVERABLES

Deliverable(s) are expected that will provide conclusions related to the following
areas:

a. Determine which system requirements are met and which ones remain unmet by
the MyCalPAYS system. A deliverable will be expected that describes in detail
the methodology, any assumptions made, and a listing of the system
requirements determined to be met and those that are not met by the system.

b. Determine, of the products delivered, what can be used to complete the project.
(For example, this may include project artifacts, the solution, etc.) The Contractor
shall identify what deliverables are useable given the Contractors understanding
of the requirements that have been met, what requirements remain unmet, and
an analysis of the scalability of the existing design to the statewide population.
The Contractor shall identify all areas that must be redesigned in order for the
system to serve the 240,000 statewide workforce population.

c. Determine the cost for a vendor to complete (as needed) modification and
implementation of the MyCalPAYS system based upon the findings and
recommendations arrived at above. The Contractor will identify a single price that
a prospective integrator is likely to charge to complete the project pursuant to the
terms of the SCO-SAP integration contract including the warranty. The
Contractor shall include an explanation reflecting how it arrived at the price
estimate along with any assumptions made in developing the price.

In short, the findings and recommendation deliverable(s) must answer the following
questions:
1. Which requirements are met by the MyCalPAYS solution, as currently
implemented?
2. What requirements have not been met with the MyCalPAYS solution?
3. What portion of the current MyCalPAYS design and system may be usable?
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4. What is the estimated cost for a vendor to complete (as appropriate)
modifications and implementation of the system ensuring that it is compliant with
the stated system requirements?

In addition to developing the payable deliverable(s) that answers the questions
noted above, the Contractor shall also:
1. Develop a Table of Contents for the final deliverable, to be approved by the
State, within three months of contract signing.
2. Provide draft findings and recommendations, for input by the State, at least 30
State business days before the final findings and recommendation deliverable is
due.
3. Update the project work plan activities and schedule within 30 calendar days of
contract start date, and every two weeks thereafter to reflect the most current
agreement of work to be done and timeframe in which to complete it.
4. Develop and present monthly written status reports with the detail noted below in
Section 6 Contractor Reporting.
5. Develop and present written presentations that identify draft findings and
recommendations to the Department of Technology and State Controllers Office.
6. Develop and present written presentations with final findings and
recommendations. (Expect five briefings to take place, including at least two to
the Legislature.)
7. Ensure all contractor team members working on this engagement complete the
States Confidentiality Agreement, Conflict of Interest forms, the Information
Security Policy and Computer Use Statement, and the Security Awareness
training. The Confidentiality Agreement must be completed prior to
commencement of work on this contract.

5. ACCEPTANCE OF DELIVERABLES

It shall be in the States sole determination as to whether a deliverable has been
successfully completed and acceptable to the State.

a. Payment for tasks performed under this Contract shall be by Firm Fixed by
deliverable. It shall be the Department of Technologys sole determination as to
whether the tasks and deliverables identified in this Contract or in a
supplemental Work Authorization (WA), Exhibit A-2 have been successfully
completed and are acceptable. The approval process is outlined in Section 11
Performance.

b. The Contractor costs related to rework of unacceptable work products shall be
costs of the Contractor, and shall not be billed to the Department of
Technology.

c. The Contractor shall meet all deliverable completion dates, as agreed to in the
Contract or in a WA.

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6. CONTRACTOR REPORTING

The Contractor will submit (and then meet to discuss) monthly written status
reports in MS Word format to the Department of Technology Contract
Administrator as directed. The reports shall be detailed regarding current status
and future activities. Status reports are not considered payable deliverables under
the terms of this Contract. These reports shall include, but not be limited to:

a. A summary of the work completed during the reporting period, showing actual
versus planned.

b. Identification of tasks that are behind schedule, identification of remediation
activities, and an estimation of impact on the project schedule.

c. The status of the overall engagement and all phases/projects, including
discussion of risks, problems encountered, and proposed solutions.

d. The tasks expected to be completed in the next reporting period.

e. Ad hoc reporting as required.

7. CONTRACTOR RESPONSIBILITIES

a. The Contractor will provide its own equipment and software necessary to
perform the required duties, except for the SAP software in question, which the
State will provide.

b. The Contractor shall work independently with limited support from the SCOs
project team.

c. The Contractor only needs limited technical support from SCO to provide
access to the MyCalPAYS environment.

d. The Contractor shall designate a primary contact person to whom all project
communications may be addressed and who has the authority to make
decision on all aspects of the services.

e. The Contractor will notify the Department of Technology, in writing, within five
(5) calendar days of any changes in the personnel assigned to the tasks by
completing Exhibit A-3 Personnel Change Order Request/Authorization form.
If a Contractor employee is unable to perform due to illness, resignation, or
other factors beyond the Contractors control, the Contractor will make every
reasonable effort to provide suitable substitute personnel. The substitute
personnel shall have equal or better qualifications and meet all MSA
requirements and must be approved in advance of any performance under the
Contract by the Department of Technology Contract Administrator via an
approved Personnel Change Order Request/ Authorization form, Exhibit A-3
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and submission of Experience Worksheet, Attachment 2 that describes the
candidates experience vis--vis the requirements in this RFO. If an employee
remains in the Contractors employ, the Contractor may not remove the
employee or reduce the hours the employee is providing on this contract.

f. The Contractor personnel shall perform their duties on any of the premises of
the Department of Technology or State Controllers Offices facilities located
within the greater Sacramento area during regular State working hours, and at
all other times as required to successfully provide the services described in this
SOW. The MyCalPAYS system is currently hosted at the States Data Center
(OTech) in Rancho Cordova. State work hours are typically between 8:00 a.m.
and 5:00 p.m.

8. DEPARTMENT OF TECHNOLOGY RESPONSIBILITIES

a. Designate a Contract Administrator to whom all Contractor communication may
be addressed, and who has the authority to act on all aspects of the services.
This person will review the SOW and associated documents with the
Contractor to ensure understanding of the responsibilities of both parties.

b. Provide Contractor personnel with standard cubicle and/or office working
facilities at any of the Department of Technology sites and/or other locations
specified by the Department of Technology (i.e., State Controllers Office), as
necessary, with limited network connectivity to access team working
documents.

c. Ensure access is provided to State Controllers Office staff and management,
offices and operation areas, as required, to complete the tasks and activities
defined under this Contract.

d. Facilitate gaining access to project staff who have left the State Controllers
Office but work for the State in another department.

e. Perform review and approval or rejection of draft and final deliverables within
twenty (20) State business days.

9. UNANTICIPATED TASKS

a. In the event that additional work must be performed which was wholly
unanticipated and is not specified in the SOW, but which in the opinion of both
parties is necessary to the successful accomplishment of the general scope of
work outlined, the procedures outlined in this Section will be employed.

b. For each item of unanticipated work not specified in the SOW, a WA will be
prepared in accordance with the form provided as Exhibit A-2, WA form.

c. It is understood and agreed by both parties to this Contract that all of the terms
of this Contract shall remain in force with the inclusion of any such WA. Such
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WA shall in no way constitute a Contract other than as provided pursuant to
this Contract nor in any way amend or supersede any of the other provisions of
this Contract.

10. WORK AUTHORIZATIONS (WA)

a. Each WA shall consist of a detailed statement of the purpose, objective, or
goals to be undertaken by the Contractor and all information requested to be
provided per Exhibit A-2, WA form.

b. All WA must be in writing prior to beginning work and signed by the Contractor
and the Department of Technology.

c. The Department of Technology has the right to require the Contractor to stop
or suspend work on any WA.

d. Personnel resources will not be expended (at a cost to the Department of
Technology) on task accomplishment in excess of estimated work hours
required unless the procedure below is followed:

1) If, in performance of the work, the Contractor determines that a WA to be
performed under this Contract cannot be accomplished within the
estimated work hours, the Contractor will immediately notify the
Department of Technology in writing of the Contractors estimate of the
work hours which will be required to complete the WA in full. Upon receipt
of such notification, the Department of Technology may:

a) Authorize the Contractor to expend the estimated additional work
hours or service in excess of the original estimate necessary to
accomplish the WA;

b) Terminate the WA; or

c) Alter the scope of the WA in order to define tasks that can be
accomplished within the remaining estimated work hours.

2) The Department of Technology will notify the Contractor in writing of its
decision with seven (7) State business days after receipt of the
notification. If notice of the decision is given to proceed, the Contractor
may expend the estimated additional work hours or services. The
Department of Technology agrees to reimburse the Contractor for such
additional work hours.

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11. PERFORMANCE

The Department of Technology will be the sole judge of the acceptability of all work
performed and all work products produced by the Contractor as a result of this
SOW. Should the work performed or the products produced by the Contractor fail to
meet the Department of Technology conditions, requirements, specifications,
guidelines, or other applicable standards, the following resolution process will be
employed, except as superseded by other binding processes:

1. The Department of Technology will notify the Contractor in writing within twenty
(20) State business days after submission of any final deliverable of any
acceptance problems by identifying the specific inadequacies and/or failures in
the services performed and/or the products produced by the Contractor.

2. The Contractor will, within five (5) State business days after initial problem
notification, respond to the Department of Technology by submitting a detailed
explanation describing precisely how the deliverable adheres to and satisfies
all applicable requirements, and/or a proposed corrective action plan to
address the specific inadequacies and/or failures in the deliverable. Failure by
the Contractor to respond to the Department of Technologys initial problem
notification within the required time limits may result in immediate termination
of the Contract.

In the event of such termination, the Department of Technology shall pay all
amounts due the Contractor for all work approved prior to termination.

3. The Department of Technology will, within five (5) State business days after
receipt of the Contractors detailed explanation and/or proposed corrective
action plan, notify the Contractor in writing whether it accepts or rejects the
explanation and/or plan. If the Department of Technology rejects the
explanation and/or plan, the Contractor will submit a revised corrective action
plan within three (3) State business days of notification of rejection. Failure by
the Contractor to respond to the Department of Technologys notification of
rejection by submitting a revised corrective action plan within the required time
limits may result in immediate termination of the Contract. In the event of such
termination, the Department of Technology shall pay all amounts due the
Contractor for all work approved prior to termination.

4. The Department of Technology will, within three (3) State business days of
receipt of the revised corrective action plan, notify the Contractor in writing
whether it accepts or rejects the revised corrective action plan proposed by the
Contractor. Rejection of the revised corrective action plan will result in
immediate termination of the Contract. In the event of such termination, the
Department of Technology shall pay all amounts due the Contractor for all
work approved prior to termination.

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12. PROBLEM ESCALATION

The parties acknowledge and agree that certain technical and project-related
problems or issues may arise, and that such matters shall be brought to the
Department of Technologys attention. Problems or issues shall normally be
reported in regular status reports. There may be instances, however, where the
severity of the problem justifies escalated reporting. To this extent, the Contractor
will determine the level of severity and notify the Contract Administrator.

13. CANCELLATION

The Department of Technology may exercise its option to terminate the Contract at
any time with 30 calendar days prior written notice. In the event of such
termination, the Department of Technology shall pay all amounts due the
Contractor for all deliverables approved prior to termination.

14. OTHER CONTRACT CONSIDERATIONS

a. The Contractor will act as prime contractor under this Contract. In addition to
identifying all personnel proposed to work under this Contract, the Contractor
shall also identify its sub-contractor affiliation, as applicable.

b. Should sub-contractors need to be changed for this engagement after contract
execution, the Department of Technology reserves the right to approve all sub-
contractors prior to the performance of any work by the sub-contractor on a
Bidder Declaration (GSPD-05-105).

c. Nothing contained in this Contract shall create any contractual relationship
between the State and any sub-contractors, and no sub-contract shall relieve
the Contractor of its responsibilities and obligations hereunder. The Contractor
is fully responsible to the Department of Technology for the acts and omissions
of its sub-contractors and of persons either directly or indirectly employed by
any of them.

d. If a sub-contractor is a California Certified Small Business (SB) and/or Disabled
Veteran Business Enterprise (DVBE), then those amounts paid to certified sub-
contractors shall be identified on the Contractors invoice(s).

e. The Contractor's obligation to pay its sub-contractors is an independent
obligation from the States obligation to make payments to the Contractor. As a
result, the State shall have no obligation to pay or to enforce the payment of any
moneys to any sub-contractor.

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15. CONTRACT REPRESENTATIVES

All notices required by, or relating to, this Contract shall be in writing and shall be
sent to the parties of the Contract at the address below unless changed from time
to time, in which event each party shall so notify the other in writing, and all such
notices shall be deemed duly given if deposited, postage prepaid, in the United
States mail or e-mailed and directed to the addresses then prevailing.

The Contract Administrators during the term of this contract will be:

State: California Department of Technology Contractor: TBD
Name: Mary Winkley Name:
Phone: 916-403-9614 Phone:
e-mail: Mary.winkley@state.ca.gov e-mail:

Direct all contract inquiries to:

State: California Department of Technology Contractor: TBD
Unit: Procurement & Contracting Services Name:
Name: Sandy Louie Address:
Address: P.O. Box 1810 MS Y-18
Phone: 916-431-3600 Phone:
Fax: 916-463-9909 Fax:
e-mail: Sandy.louie@state.ca.gov e-mail:

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EXHIBIT A-1
STAFF RESOURCE RESUMES

Placeholder for Staff Resource Resumes (to be added upon contract execution)
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EXHIBIT A-2
WORK AUTHORIZATION FORM

WORK AUTHORIZATION NUMBER PAGE(S)
of
TITLE

TASK SUMMARY (Brief description of tasks to be performed under work authorization)

START DATE COMPLETION DATE

TOTAL ESTIMATED LABOR HOURS TOTAL ESTIMATED COST

This task will be performed in accordance with the Work Authorization and the
provisions of Contract Number
APPROVALS

CONTRACTOR PROJ ECT MANAGER NAME TITLE

SIGNATURE DATE

DEPARTMENT OF TECHNOLOGY CONTRACT ADMINISTRATOR NAME TITLE

SIGNATURE DATE

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EXHIBIT A-3
PERSONNEL CHANGE ORDER REQUEST/AUTHORIZATION
CHANGE ORDER NO.___
Contractor Name=________________Contract Number =__TA-_________
Proposed Start Date =_________ or upon approval by the Contract Administrator,
whichever occurs later

Description of Change:
Current:

Proposed:

Name of Proposed Contractor Personnel (including phone number and email address):

SOW Personnel Classification:

Hourly Rate:
MSA Personnel Classification:

Attachment 3 included?
Resume Attached?
Reason for Change:

Approval:
Changes identified above are in accordance with the terms and condition of the contract.
By signing below, the Contractor Official has confi rmed that the proposed staff meets the MSA
personnel classification requirements and any requirements listed in the Statement of Work
(Exhibit A). The Contract Admini strators signature below indicates that he/she has confirmed
that the proposed staff meets the requirements l isted in the Statement of Work (Exhibit A).

Contractor Official (Print name & Sign) / Date Contract Administrator (Print name & Sign) / Date

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EXHIBIT B
BUDGET DETAIL AND PAYMENT PROVISIONS

1. Payment for services performed under this Contract shall be Firm Fixed by Deliverable. It
shall be the Department of Technologys sole determination as to whether a task has been
successfully completed and is acceptable. Signed acceptance is required from the
Department of Technology Contract Administrator before processing an invoice for payment.

2. Upon successful completion/acceptance of each deliverable, the Contractor will submit an
invoice for payment associated with the individual payment amounts. Payment shall be
based on the cost worksheet and approval by the Department of Technology.

3. Invoices shall be submitted in triplicate, and shall identify the deliverable and cost. (Should a
Work Authorization be executed, the invoice shall be submitted in triplicate and include labor
and costs charged for each task. Invoices shall be submitted monthly, in arrears, identifying
Contractor personnel by name and classification, hourly rate of pay, and hours expended by
deliverable.) Invoices shall be due and payable, and payment shall be made, only after the
Department of Technology acceptance of hours worked and/or completion of each task
under this Contract.

4. The Contractor costs related to items such as travel and per diem are costs of the
Contractor, shall be inclusive of the hourly rate submitted, and will not be paid separatel y
as part of this Contract.

5. Submit your invoice using ONE, of the following options referencing the Contract Number or
Agency Order Number:

a. Send via U.S. Mail in TRIPLICATE to:
Financial Management Branch Accounting Office
P.O. Box 1810
OR
b. Send electronically to: APInvoices@state.ca.gov

6. It is mutually agreed that if the Budget Act of the current year and/or any subsequent years
covered under this Contract does not appropriate sufficient funds for the program, this
Contract shall be of no further force and effect. In this event, the State shall have no liability
to pay any funds whatsoever to the Contractor or to furnish any other considerations under
this Contract and Contractor shall not be obligated to perform any provisions of this
Contract.

7. If funding for any fiscal year is reduced or deleted by the Budget Act for purposes of this
program, the State shall have the option to either cancel this Contract with no liability
occurring to the State, or offer a contract amendment to the Contractor to reflect the reduced
amount.

8. Payment will be made in accordance with, and within the time specified in, Government
Code Chapter 4.5, commencing with Section 927. Payment to small/micro businesses shall
be made in accordance with and within the time specified in Chapter 4.5, Government Code
927 et seq.
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EXHIBIT B-1
COST WORKSHEET

The Contractor shall provide all labor, materials, and equipment necessary to provide
the consulting services for Assessment of 21
st
Century Project in accordance with the
specifications described in the SOW, Exhibit A, at the rates specified below. Payment
for services performed under this contract shall be Firm Fixed by Deli verable.
Submission of this information is required.

DELIVERABLE 1
" [ Click here TITLE OF DELIVERABLE 1]"
CONSULTANT NAME /
MSA CLASSIFICATION
RATE / HOUR
COST
NORMAL DISCOUNTED

Total Cost Deliverable 1
DELIVERABLE 2
CONSULTANT NAME /
MSA CLASSIFICATION
RATE / HOUR
COST
NORMAL DISCOUNTED

DELIVERABLE 3
CONSULTANT NAME /
MSA CLASSIFICATION
RATE / HOUR
COST
NORMAL DISCOUNTED

DELIVERABLE 4
CONSULTANT NAME /
MSA CLASSIFICATION
RATE / HOUR
COST
NORMAL DISCOUNTED

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A. Total Deliverables 1 - 4
(Sum of all deliverables)

B. 10% of Cost for Deliverables 1 4
(Line A multiplied by 10%)

C. Total Contract Value
(Sum of Line A + Line B)

The vendor shall set aside 10% of the total contract value to be used for Unanticipated
Tasks and document the total amount available for Unanticipated Tasks. When an
unanticipated task is approved to be performed via an approved WA, Exhibit A-2, it
shall be invoiced against the team members names shown below and at the indicated
Rate per Hour. The Department of Technology will maintain a listing of Unanticipated
Task charges and review to ensure they do not exceed the contract allowed amounts.

Team Member Name MSA Classification Rate / Hour
Normal Discounted

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EXHIBIT D
SPECIAL TERMS AND CONDITIONS TO SAFEGUARD FEDERAL TAX INFORMATION

Federal statute, regulations and guidelines require that all contracts for services relating
to the processing, storage, transmission, or reproduction of federal tax returns or return
information, the programming, maintenance, repair, or testing of equipment or other
property, or the providing of other services, for tax administration purposes include the
provisions contained in this exhibit. (See 26 U.S.C. 6103(n); 26 C.F.R. 301.6103(n)-
1(a)(2) and (d); Internal Revenue Service (IRS) Publication 1075, Tax Information
Security Guidelines for Federal, State and Local Agencies (Rev. 8-2010), Section 5.5
and Exhibit 7.)

The contractor agrees to comply with 26 U.S.C. 6103(n); 26 C.F.R. 301.6103(n)-1;
IRS Publication 1075 (Rev. 8-2010); and all applicable conditions and restrictions as
may be prescribed by the IRS by regulation, published rules or procedures, or written
communication to the contractor. (See 26 C.F.R. 301.6103(n)-1(d); IRS Publication
1075 (Rev. 8-2010).)

I. PERFORMANCE

In performance of this contract, the Contractor agrees to comply with and assume
responsibility for compliance by his or her employees with the following requirements:

(1) All work will be done under the supervision of the Contractor or the Contractor's
employees.

(2) Any return or return information made available in any format shall be used only for
the purpose of carrying out the provisions of this contract. Information contained in
such material will be treated as confidential and will not be divulged or made known
in any manner to any person except as may be necessary in the performance of this
contract. Disclosure to anyone other than an officer or employee of the contractor
will be prohibited.

(3) All returns and return information will be accounted for upon receipt and properly
stored before, during, and after processing. In addition, all related output will be
given the same level of protection as required for the source material.

(4) The Contractor certifies that the data processed during the performance of this
contract will be completely purged from all data storage components of his or her
computer facility, and no output will be retained by the contractor at the time the
work is completed. If immediate purging of all data storage components is not
possible, the Contractor certifies that any IRS data remaining in any storage
component will be safeguarded to prevent unauthorized disclosures.

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(5) Any spoilage or any intermediate hard copy printout that may result during the
processing of IRS data will be given to the agency or his or her designee. When this
is not possible, the Contractor will be responsible for the destruction of the spoilage
or any intermediate hard copy printouts, and will provide the agency or his or her
designee with a statement containing the date of destruction, description of material
destroyed, and the method used.

(6) All computer systems receiving, processing, storing, or transmitting Federal tax
information must meet the requirements defined in IRS Publication 1075. To meet
functional and assurance requirements, the security features of the environment
must provide for the managerial, operational, and technical controls. All security
features must be available and activated to protect against unauthorized use of and
access to Federal tax information.

(7) No work involving Federal tax information furnished under this contract will be
subcontracted without prior written approval of the IRS.

(8) The Contractor will maintain a list of employees with authorized access. Such list will
be provided to the department and, upon request, to the IRS reviewing office.

(9) The department will have the right to void the Contract if the contractor fails to
provide the safeguards described above.

II. CRIMINAL/CIVIL SANCTIONS

(1) Each officer or employee of any person to whom returns or return information is or
may be disclosed will be notified in writing by such person that returns or return
information disclosed to such officer or employee can be used only for a purpose
and to the extent authorized herein, and that further disclosure of any such returns
or return information for a purpose or to an extent unauthorized herein constitutes a
felony punishable upon conviction by a fine of as much as $5,000 or imprisonment
for as long as 5 years, or both, together with the costs of prosecution. Such person
shall also notify each such officer and employee that any such unauthorized further
disclosure of returns or return information may also result in an award of civil
damages against the officer or employee in an amount not less than $1,000 with
respect to each instance of unauthorized disclosure. These penalties are prescribed
by IRC sections 7213 and 7431 and set forth at 26 CFR 301.6103(n)-1.

(2) Each officer or employee of any person to whom returns or return information is or
may be disclosed shall be notified in writing by such person that any return or return
information made available in any format shall be used only for the purpose of
carrying out the provisions of this contract. Information contained in such material
shall be treated as confidential and shall not be divulged or made known in any
manner to any person except as may be necessary in the performance of the
contract. Inspection by or disclosure to anyone without an official need to know
constitutes a criminal misdemeanor punishable upon conviction by a fine of as much
as $1,000 or imprisonment for as long as 1 year, or both, together with the costs of
prosecution.
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Such person shall also notify each such officer and employee that any such
unauthorized inspection or disclosure of returns or return information may also result
in an award of civil damages against the officer or employee [United States for
Federal employees] in an amount equal to the sum of the greater of $1,000 for each
act of unauthorized inspection or disclosure with respect to which such defendant is
found liable or the sum of the actual damages sustained by the plaintiff as a result of
such unauthorized inspection or disclosure plus in the case of a willful inspection or
disclosure which is the result of gross negligence, punitive damages, plus the costs
of the action. These penalties are prescribed by IRC section 7213A and 7431.

(3) Additionally, it is incumbent upon the contractor to inform its officers and employees
of the penalties for improper disclosure imposed by the Privacy Act of 1974, 5
U.S.C. 552a. Specifically, 5 U.S.C. 552a(i)(1), which is made applicable to
contractors by 5 U.S.C. 552a(m)(1), provides that any officer or employee of a
contractor, who by virtue of his/her employment or official position, has possession
of or access to agency records which contain individually identifiable information, the
disclosure of which is prohibited by the Privacy Act or regulations established
thereunder, and who knowing that disclosure of the specific material is prohibited,
willfully discloses the material in any manner to any person or agency not entitled to
receive it, shall be guilty of a misdemeanor and fined not more than $5,000.

(4) Granting a contractor access to FTI must be preceded by certifying that each
individual understands the agencys security policy and procedures for safeguarding
IRS information. Contractors must maintain their authorization to access FTI through
annual recertification. The initial certification and recertification must be documented
and placed in the agency's files for review. As part of the certification and at least
annually afterwards, contractors should be advised of the provisions of IRC Sections
7431, 7213, and 7213A (see Exhibit 6, IRC Sec. 7431 Civil Damages for
Unauthorized Disclosure of Returns and Return Information and Exhibit 5, IRC Sec.
7213 Unauthorized Disclosure of Information). The training provided before the initial
certification and annually thereafter must also cover the incident response policy and
procedure for reporting unauthorized disclosures and data breaches. (See Section
10) For both the initial certification and the annual certification, the contractor should
sign, either with ink or electronic signature, a confidentiality statement certifying their
understanding of the security requirements.
1

III. INSPECTION

The IRS and the Agency shall have the right to send its officers and employees into the
offices and plants of the contractor for inspection of the facilities and operations
provided for the performance of any work under this contract. On the basis of such
inspection, specific measures may be required in cases where the contractor is found to
be noncompliant with contract safeguards.

1
A 30 minute disclosure awareness training video produced by the IRS can be found at:
http://www.irsvideos.gov/Governments/Safeguards/DisclosureAwarenessTrainingPub4711
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REFERENCES
26 U.S.C. 6103(n)

Pursuant to regulations prescribed by the Secretary, returns and return information may
be disclosed to any person, including any person described in section 7513 (a), to the
extent necessary in connection with the processing, storage, transmission, and
reproduction of such returns and return information, the programming, maintenance,
repair, testing, and procurement of equipment, and the providing of other services, for
purposes of tax administration.

26 C.F.R. 301.6103(n)-1 Disclosure of returns and return information in
connection with procurement of property and services for tax administration
purposes.
(a) General rule. Pursuant to the provisions of section 6103(n) of the Internal Revenue
Code and subject to the requirements of paragraphs (b), (c), and (d) of this section,
officers or employees of the Treasury Department, a State tax agency, the Social
Security Administration, or the Department of J ustice, are authorized to disclose
returns and return information (as defined in section 6103(b)) to any person
(including, in the case of the Treasury Department, any person described in section
7513(a)), or to an officer or employee of such person, to the extent necessary in
connection with contractual procurement of
(1) Equipment or other property, or
(2) Services relating to the processing, storage, transmission, or reproduction of such
returns or return information, the programming, maintenance, repair, or testing of
equipment or other property, or the providing of other services, for purposes of tax
administration (as defined in section 6103(b)(4)).
No person, or officer or employee of such person, to whom a return or return
information is disclosed by an officer or employee of the Treasury Department, the
State tax agency, the Social Security Administration, or the Department of J ustice,
under the authority of this paragraph shall in turn disclose such return or return
information for any purpose other than as described in this paragraph, and no such
further disclosure for any such described purpose shall be made by such person,
officer, or employee to anyone, other than another officer or employee of such
person whose duties or responsibilities require such disclosure for a purpose
described in this paragraph, without written approval by the Internal Revenue
Service.
(b) Limitations. For purposes of paragraph (a) of this section, disclosure of returns or
return information in connection with contractual procurement of property or services
described in such paragraph will be treated as necessary only if such procurement
or the performance of such services cannot otherwise be reasonably, properly, or
economically carried out or performed without such disclosure.
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Thus, for example, disclosures of returns or return information to employees of a
contractor for purposes of programming, maintaining, repairing, or testing computer
equipment used by the Internal Revenue Service or a State tax agency should be made
only if such services cannot be reasonably, properly, or economically performed by use
of information or other data in a form which does not identify a particular taxpayer. If,
however, disclosure of returns or return information is in fact necessary in order for such
employees to reasonably, properly, or economically perform the computer related
services, such disclosures should be restricted to returns or return information selected
or appearing at random. Further, for purposes of paragraph (a), disclosure of returns or
return information in connection with the contractual procurement of property or services
described in such paragraph should be made only to the extent necessary to
reasonably, properly, or economically conduct such procurement activity. Thus, for
example, if an activity described in paragraph (a) can be reasonably, properly, and
economically conducted by disclosure of only parts or portions of a return or if deletion
of taxpayer identity information (as defined in section 6103(b)(6) of the Code) reflected
on a return would not seriously impair the ability of the contractor or his officers or
employees to conduct the activity, then only such parts or portions of the return, or only
the return with taxpayer identity information deleted, should be disclosed.

(c) Notification requirements. Persons to whom returns or return information is or may
be disclosed as authorized by paragraph (a) of this section shall provide written
notice to their officers or employees

(1) That returns or return information disclosed to such officer or employee can be
used only for a purpose and to the extent authorized by paragraph (a) of this
section;
(2) That further inspection of any returns or return information for a purpose or to an
extent unauthorized by paragraph (a) of this section constitutes a misdemeanor,
punishable upon conviction by a fine of as much as $1,000, or imprisonment for
as long as 1 year, or both, together with costs of prosecution;
(3) That further disclosure of any returns or return information for a purpose or to an
extent unauthorized by paragraph (a) of this section constitutes a felony,
punishable upon conviction by a fine of as much as $5,000, or imprisonment for
as long as 5 years, or both, together with the costs of prosecution;
(4) That any such unauthorized further inspection or disclosure of returns or return
information may also result in an award of civil damages against any person who
is not an officer or employee of the United States in an amount not less than
$1,000 for each act of unauthorized inspection or disclosure or the sum of actual
damages sustained by the plaintiff as a result of such unauthorized disclosure or
inspection as well as an award of costs and reasonable attorneys fees; and
(5) If such person is an officer or employee of the United States, a conviction for an
offense referenced in paragraph (c)(2) or (c)(3) of this section shall result in
dismissal from office or discharge from employment.
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(d) Safeguards. Any person to whom a return or return information is disclosed as
authorized by paragraph (a) of this section shall comply with all applicable conditions
and requirements which may be prescribed by the Internal Revenue Service for the
purposes of protecting the confidentiality of returns and return information and
preventing disclosures of returns or return information in a manner unauthorized by
paragraph (a). The terms of any contract between the Treasury Department, a State
tax agency, the Social Security Administration, or the Department of J ustice, and a
person pursuant to which a return or return information is or may be disclosed for a
purpose described in paragraph (a) shall provide, or shall be amended to provide,
that such person, and officers and employees of the person, shall comply with all
such applicable conditions and restrictions as may be prescribed by the Service by
regulation, published rules or procedures, or written communication to such person.
If the Service determines that any person, or an officer or employee of any such
person, to whom returns or return information has been disclosed as provided in
paragraph (a) has failed to, or does not, satisfy such prescribed conditions or
requirements, the Service may take such actions as are deemed necessary to
ensure that such conditions or requirements are or will be satisfied, including
(1) Suspension or termination of any duty or obligation arising under a contract with
the Treasury Department referred to in this paragraph or suspension of
disclosures by the Treasury Department otherwise authorized by paragraph (a)
of this section, or
(2) Suspension of further disclosures of returns or return information by the Service
to the State tax agency, or to the Department of J ustice, until the Service
determines that such conditions and requirements have been or will be satisfied.
(e) Definitions. For purposes of this section
(1) The term Treasury Department includes the Internal Revenue Service and the
Office of the Chief Counsel for the Internal Revenue Service;
(2) The term State tax agency means an agency, body, or commission described in
section 6103(d) of the Code; and
(3) The term Department of Justice includes offices of the United States Attorneys.

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IRS Publication 1075 (Rev. 8-2010) Section 5.5 Control over Processing

Processing of FTI, in an electronic media format, including removable media,
microfilms, photo impressions, or other formats (including tape reformatting or
reproduction or conversion to punch cards, digital images or hard copy printout) will be
performed pursuant to one of the following procedures:

5.5.1 Agency Owned and Operated Facility

Processing under this method will take place in a manner that will protect the
confidentiality of the information on the electronic media. All safeguards outlined in this
publication also must be followed and will be subject to IRS safeguard reviews.

5.5.2 Contractor or Agency Shared Facility Consolidated Data Centers

Recipients of FTI are allowed to use a shared facility but only in a manner that does not
allow access to FTI by employees, agents, representatives or contractors of other
agencies using the shared facility.

Note: For purposes of applying sections 6103(l), (m) and (n), the term agent includes
contractors. Access restrictions pursuant to the IRC authority by which the FTI is
received continue to apply. For example, since human services agencies
administering benefit eligibility programs may not allow contractor access to any
FTI received, their data within the consolidated data center may not be accessed
by any contractor of the data center.

The requirements in Exhibit 7, Contract Language for General Services, must be
included in the contract in accordance with IRC Section 6103(n).

The contractor or agency-shared computer facility is also subject to IRS
safeguard reviews.

Note: The above rules also apply to releasing electronic media to a private contractor or
other agency office even if the purpose is merely to erase the old media for
reuse.

Agencies utilizing consolidated data centers must implement appropriate
controls to ensure the protection of FTI, including a service level agreement
(SLA) between the agency authorized to receive FTI and the consolidated data
center. The SLA should cover the following:

1. The consolidated data center is considered to be a contractor of the agency
receiving FTI. The agency receiving FTI whether it is a state revenue,
workforce, child support enforcement or human services agency is
responsible for ensuring the protection of all FTI received. However, as the
contractor for the agency receiving FTI, the consolidated data center shares
responsibility for safeguarding FTI as well.

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2. Provide written notification to the consolidated data center management that
they are bound by the provisions of Publication 1075, relative to protecting all
federal tax information within their possession or control. The SLA should also
include details concerning the consolidated data centers responsibilities
during a safeguard review and support required to resolve identified findings.

3. The agency will conduct an internal inspection of the consolidated data center
every eighteen months (see section 6.3). Multiple agencies sharing a
consolidated data center may partner together to conduct a single,
comprehensive internal inspection. However, care should be taken to ensure
agency representatives do not gain unauthorized access to other agencys
FTI during the internal inspection.

4. The employees from the consolidated data center with access to FTI,
including system administrators and programmers, must receive disclosure
awareness training prior to access to FTI and annually thereafter and sign a
confidentiality statement. This provision also extends to any contractors hired
by the consolidated data center that has access to FTI.

5. The specific data breach incident reporting procedures for all consolidated
data center employees and contractors. The required disclosure awareness
training must include a review of these procedures.

6. The Exhibit 7 language must be included in the contract between the recipient
agency and the consolidated data center, including all contracts involving
contractors hired by the consolidated data center.

7. Identify responsibilities for coordination of the 45-day notification of the use of
contractors or sub-contractors with access to FTI.

Note: Generally, consolidated data centers are either operated by a separate state
agency (example: Department of Information Services) or by a private contractor.
If an agency is considering transitioning to either a state owned or private vendor
consolidated data center, the Office of Safeguards strongly suggests the agency
submit a request for discussions with Safeguards as early as possible in the
decision-making or implementation planning process. The purpose of these
discussions is to ensure the agency remains in compliance with safeguarding
requirements during the transition to the consolidated data center.

26 U.S.C. 7213. Unauthorized disclosure of information

(a) Returns and return information
(1) Federal employees and other persons
It shall be unlawful for any officer or employee of the United States or any
person described in section 6103(n) (or an officer or employee of any such
person), or any former officer or employee, willfully to disclose to any person,
except as authorized in this title, any return or return information (as defined in
section 6103(b)). Any violation of this paragraph shall be a felony punishable
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upon conviction by a fine in any amount not exceeding $5,000, or
imprisonment of not more than 5 years, or both, together with the costs of
prosecution, and if such offense is committed by any officer or employee of the
United States, he shall, in addition to any other punishment, be dismissed from
office or discharged from employment upon conviction for such offense.
(2) State and other employees
It shall be unlawful for any person (not described in paragraph (1)) willfully to
disclose to any person, except as authorized in this title, any return or return
information (as defined in section 6103(b)) acquired by him or another person
under subsection (d), (i)(3)(B)(i) or (7)(A)(ii), (l)(6), (7), (8), (9), (10), (12), (15),
(16), (19), or (20) or (m)(2), (4), (5), (6), or (7) of section 6103.
Any violation of this paragraph shall be a felony punishable by a fine in any
amount not exceeding $5,000, or imprisonment of not more than 5 years, or
both, together with the costs of prosecution.
(3) Other persons
It shall be unlawful for any person to whom any return or return information (as
defined in section 6103(b)) is disclosed in a manner unauthorized by this title
thereafter willfully to print or publish in any manner not provided by law any
such return or return information. Any violation of this paragraph shall be a
felony punishable by a fine in any amount not exceeding $5,000, or
imprisonment of not more than 5 years, or both, together with the costs of
prosecution.
(4) Solicitation
It shall be unlawful for any person willfully to offer any item of material value in
exchange for any return or return information (as defined in section 6103(b))
and to receive as a result of such solicitation any such return or return
information. Any violation of this paragraph shall be a felony punishable by a
fine in any amount not exceeding $5,000, or imprisonment of not more than 5
years, or both, together with the costs of prosecution.
(5) Shareholders
It shall be unlawful for any person to whom a return or return information (as
defined in section 6103(b)) is disclosed pursuant to the provisions of section
6103(e)(1)(D)(iii) willfully to disclose such return or return information in any
manner not provided by law. Any violation of this paragraph shall be a felony
punishable by a fine in any amount not to exceed $5,000, or imprisonment of
not more than 5 years, or both, together with the costs of prosecution.
(b) Disclosure of operations of manufacturer or producer
Any officer or employee of the United States who divulges or makes known in any
manner whatever not provided by law to any person the operations, style of work,
or apparatus of any manufacturer or producer visited by him in the discharge of his
official duties shall be guilty of a misdemeanor and, upon conviction thereof, shall
be fined not more than $1,000, or imprisoned not more than 1 year, or both,
together with the costs of prosecution; and the offender shall be dismissed from
office or discharged from employment.
(c) Disclosures by certain delegates of Secretary
All provisions of law relating to the disclosure of information, and all provisions of
law relating to penalties for unauthorized disclosure of information, which are
applicable in respect of any function under this title when performed by an officer or
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employee of the Treasury Department are likewise applicable in respect of such
function when performed by any person who is a "delegate" within the meaning of
section 7701(a)(12)(B).
(d) Disclosure of software
Any person who willfully divulges or makes known software (as defined in section
7612(d)(1)) to any person in violation of section 7612 shall be guilty of a felony and,
upon conviction thereof, shall be fined not more than $5,000, or imprisoned not
more than 5 years, or both, together with the costs of prosecution.
(e) Cross references
(1) Penalties for disclosure of information by preparers of returns
For penalty for disclosure or use of information by preparers of returns, see
section 7216.
(2) Penalties for disclosure of confidential information
For penalties for disclosure of confidential information by any officer or
employee of the United States or any department or agency thereof, see 18
U.S.C. 1905.

26 U.S.C. 7213A. Unauthorized inspection of returns or return information

(a) Prohibitions

(1) Federal employees and other persons
It shall be unlawful for

(A) any officer or employee of the United States, or

(B) any person described in subsection (l)(18) or (n) of section 6103 or an officer or
employee of any such person, willfully to inspect, except as authorized in this title, any
return or return information.

(2) State and other employees

It shall be unlawful for any person (not described in paragraph (1)) willfully to inspect,
except as authorized in this title, any return or return information acquired by such
person or another person under a provision of section 6103 referred to in section 7213
(a)(2) or under section 6104 (c).

(b) Penalty

(1) In general
Any violation of subsection (a) shall be punishable upon conviction by a fine in any
amount not exceeding $1,000, or imprisonment of not more than 1 year, or both,
together with the costs of prosecution.

(2) Federal officers or employees
An officer or employee of the United States who is convicted of any violation of
subsection (a) shall, in addition to any other punishment, be dismissed from office or
discharged from employment.
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(c) Definitions
For purposes of this section, the terms inspect, return, and return information have
the respective meanings given such terms by section 6103 (b).

26 U.S.C. 7431. Civil damages for unauthorized inspection or disclosure of
returns and return information

(a) In general
(1) Inspection or disclosure by employee of United States
If any officer or employee of the United States knowingly, or by reason of
negligence, inspects or discloses any return or return information with respect
to a taxpayer in violation of any provision of section 6103, such taxpayer may
bring a civil action for damages against the United States in a district court of
the United States.
(2) Inspection or disclosure by a person who is not an employee of United States
If any person who is not an officer or employee of the United States knowingly,
or by reason of negligence, inspects or discloses any return or return
information with respect to a taxpayer in violation of any provision of section
6103, such taxpayer may bring a civil action for damages against such person
in a district court of the United States.
(b) Exceptions
No liability shall arise under this section with respect to any inspection or disclosure
-
(1) which results from a good faith, but erroneous, interpretation of section 6103,
or
(2) which is requested by the taxpayer.
(c) Damages
In any action brought under subsection (a), upon a finding of liability on the part of
the defendant, the defendant shall be liable to the plaintiff in an amount equal to the
sum of -
(1) the greater of -
(A) $1,000 for each act of unauthorized inspection or disclosure of a return or
return information with respect to which such defendant is found liable, or
(B) the sum of -
(i) the actual damages sustained by the plaintiff as a result of such
unauthorized inspection or disclosure, plus
(ii) in the case of a willful inspection or disclosure or an inspection or
disclosure which is the result of gross negligence, punitive damages, plus
(2) the costs of the action, plus
(3) in the case of a plaintiff which is described in section 7430(c)(4)(A)(ii),
reasonable attorneys fees, except that if the defendant is the United States,
reasonable attorneys fees may be awarded only if the plaintiff is the prevailing
party (as determined under section 7430(c)(4)).
(d) Period for bringing action
Notwithstanding any other provision of law, an action to enforce any liability created
under this section may be brought, without regard to the amount in controversy, at
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any time within 2 years after the date of discovery by the plaintiff of the
unauthorized inspection or disclosure.
(e) Notification of unlawful inspection and disclosure
If any person is criminally charged by indictment or information with inspection or
disclosure of a taxpayer's return or return information in violation of -
(1) paragraph (1) or (2) of section 7213(a),
(2) section 7213A(a), or
(3) subparagraph (B) of section 1030(a)(2) of title 18, United States Code, the
Secretary shall notify such taxpayer as soon as practicable of such inspection or
disclosure.
(f) Definitions
For purposes of this section, the terms "inspect", "inspection", "return", and "return
information" have the respective meanings given such terms by section 6103(b).
(g) Extension to information obtained under section 3406
For purposes of this section -
(1) any information obtained under section 3406 (including information with
respect to any payee certification failure under subsection (d) thereof) shall be
treated as return information, and
(2) any inspection or use of such information other than for purposes of meeting
any requirement under section 3406 or (subject to the safeguards set forth in
section 6103) for purposes permitted under section 6103 shall be treated as a
violation of section 6103. For purposes of subsection (b), the reference to section
6103 shall be treated as including a reference to section 3406.
(h) Special rule for information obtained under section 6103(k)(9)
For purposes of this section, any reference to section 6103 shall be treated as
including a reference to section 6311(e).
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ATTACHMENT 1
BEST VALUE EVALUATION

All offers will be reviewed for responsiveness to the requirements of the RFO. If a
response is missing required information, it may be deemed non-responsive. The
Selection Team will compare responsive offers based on the best value criteria in
order of importance as described below. Further review is subject to the Department of
Technologys discretion.

1. Staff Experience Worksheet (Attachment 2) and Consultant resumes;

2. Workplan/approach and methodologies to be used during engagement;

3. Completed Cost Worksheet Requirements (Exhibit B-1);

4. References (Attachment 3):

a. Customers identified in Attachment 3 References, may be contacted. The
reference will be interviewed in areas such as: compliance with provisions of
contract, timeliness of project completion, and success factors. Each reference
will be posed a specific set of questions and their responses documented.
Negative responses from references may be cause for rejection of the
response/offering;

b. If the Respondent has previously contracted with and performed services for
the State, the Department of Technology will contact the Department of
General Services to review Contractor Evaluation Reports; and

c. References are current, within the past ten (10) years, and are similar in size,
service, and scope of service to this RFO.

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ATTACHMENT 2
EXPERIENCE WORKSHEET

CANDIDATE NAME "[ Click here Title of Cert]" CERTIFICATION NUMBER AND
EXPIRATION DATE

EDUCATIONAL BACKGROUND
HIGHEST DEGREE OR (GLOBAL EQUIVALENT) ATTAINED YEAR AWARDED
Bachelors Masters Doctoral
FIELD OF STUDY (ADVANCED DEGREE/EQUIVALENT) EDUCATIONAL INSTITUTION NAME

LICENSES AND CERTIFICATIONS YEAR AWARDED

SAP BACKGROUND
LIST AND DESCRIBE PROFESSIONAL EXPERIENCE YEARS OF EXPERIENCE

INFORMATION TECHNOLOGY BACKGROUND
LIST AND DESCRIBE PROFESSIONAL EXPERIENCE YEARS OF EXPERIENCE

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SAP EXPERIENCE
PROJ ECT MANAGEMENT/PORTFOLIO NAME (OR DESCRIPTION)

PERSONAL ROLE/INVOLVEMENT TERM (START MM/DD/YY AND END MM/DD/YY)
to
CLIENT COMPANY/ORGANIZATION NAME CONTACT PERSON

ADDRESS CITY STATE ZIP CODE

PHONE FAX EMAIL ADDRESS

SCOPE OF SERVICES CANDIDATE PROVIDED (NOT SCOPE OF THE PROJ ECT CANDIDATE WORKED ON)
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ATTACHMENT 3
STAFF REFERENCES
Complete a separate form for each reference.
BIDDERS NAME

CONSULTANT TEAM MEMBERS NAME FOR WHOM THIS REFERENCE IS BEING PROVIDED

CLIENT COMPANY/ORGANIZATION DATES OF SERVICE (MM/YY)
to
ROLE TEAM MEMBER PLAYED ON ENGAGEMENT (e.g., Technical Lead, Project Manager):

STREET ADDRESS

CITY STATE ZIP CODE

CONTACT PERSON NAME PHONE NUMBER

PROJ ECT NAME/DESCRIPTION

DESCRIPTION OF SERVICES TEAM MEMBER (NOT COMPANY) PROVIDED
Describe the services provided BY THE PROPOSED TEAM MEMBER ONLY for this client as it relates to the RFO SOW
Requirements. The description of services must be detailed and comprehensive enough to permit the Department of Technology to
assess the similarity of these services to the work anticipated in the award of the Contract resulting from this RFO.
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ATTACHMENT 4
SECURITY AND CONFIDENTIALITY STATEMENT

As an authorized representative and/or corporate officer of the company named below, I agree that all
persons employed by this company will adhere to the following policy:

All information belonging to the California Department of Technology, the State Controllers Office,
or its affiliated agencies is considered sensitive and/or confidential and cannot be disclosed to any
person or entity that is not directly approved to participate in the work required to execute this
Contract.

I certify that I will keep all project information, including information concerning the planning,
processes, development or procedures of the Project, confidential and secure. I will not copy, give
or otherwise disclose such information to any other person unless the Department of Technology
has on file a Security and Confidentiality Statement signed by the other persons, and the disclosure
is authorized by the Department of Technology and necessary for the Project. I understand that the
information to be kept confidential includes, but is not limited to, specifications, administrative
requirements, terms and conditions, data, concepts and discussions, as well as written and
electronic materials. I further understand that if I leave this project before it ends, I must still keep all
project information confidential. I agree to follow any instructions provided by the Project relating to
the confidentiality of project information.

I fully understand that any unauthorized disclosure I make may be basis for civil or criminal penalties
and/or disciplinary action (for state employees). I agree to advise the Contract Administrator
immediately in the event of an unauthorized disclosure, inappropriate access, misuse, theft or loss
of data.

All materials provided for this Project, except where explicitly stated will be promptly returned or
destroyed, as instructed by an authorized Department of Technology representative. If the materials
are destroyed and not returned, a letter attesting to their complete destruction which documents the
destruction procedures must be sent to the Contract Administrator at the Department of Technology
before payment can be made for services rendered. In addition, all copies or derivations, including
any working or archival backups of the information, will be physically and/or electronically destroyed
within five (5) calendar days immediately following either the end of the contract period or the final
payment, as determined by the Department of Technology.

All personnel assigned to this project shall be provided a Security and Confidentiality Statement and
will be expected to sign and return it to the representative listed below before beginning work on this
project.

REPRESENTATIVE NAME TITLE PHONE NUMBER

COMPANY NAME

STREET ADDRESS

CITY STATE ZIP CODE

SIGNATURE DATE

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ATTACHMENT 5
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ATTACHMENT 5
21
ST

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ATTACHMENT 5
21
ST

43

RFO 14-144083 - 21st Century Project Assessment

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RFO 14-144083 - 21st Century Project Assessment

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August 22, 2014

CALIFORNIA DEPARTMENT OF TECHNOLOGY

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