REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
June 27, 2023
FROM
ENSEN MASON, Auditor-Controller/Treasurer/Tax Collector
SUBJECT
Title
Agreement with Jonas Collections and Recovery, Inc. dba C&R Software for Debt Collection System
End
RECOMMENDATION(S)
Recommendation
Approve Agreement, including non-standard terms, with Jonas Collections and Recovery, Inc. dba C&R Software, for implementation services and subscription to software to replace the County’s core debt collections system, in an amount not to exceed $3,535,885, for the five-year period of July 1, 2023, through June 30, 2028.
(Presenter: John Johnson, Assistant Auditor-Controller/Treasurer/Tax Collector, 382-7004)
Body
COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
Improve County Government Operations.
Operate in a Fiscally-Responsible and Business-Like Manner.
FINANCIAL IMPACT
Approval of this item will not result in the use of additional Discretionary General Funding (Net County Cost). The implementation cost was funded by the Asset Replacement Reserve as part of the 2022-23 Budget approved by the Board of Supervisors on June 14, 2022 (Item No. 103) and the annual subscription cost for use of the software will be reimbursed through collection revenue. Sufficient appropriation and revenue have been included in the Auditor-Controller/Treasurer/Tax Collector’s (ATC) 2023-24 budget and will be included in future recommended budgets.
The total cost of the recommended agreement is $3,535,885 and includes an implementation cost of $1,678,385 in 2023-24 and an annual subscription cost of $414,375, plus $50,000 a year for additional programming services, for 2024-25 through 2027-28. Additional programming services may be required in the case of future legislative changes, changes in business practices, or as other programming needs arise. These programming services will be utilized on an as-needed basis and charged accordingly. As such, if the County does not require any additional programming services, the County will not incur those costs.
|
Item |
2023-24 |
2024-25 |
2025-26 |
2026-27 |
2027-28 |
Five-Year Total |
|
Implementation |
$1,678,385 |
|
|
|
|
$1,678,385 |
|
Subscription |
|
414,375 |
414,375 |
414,375 |
414,375 |
1,657,500 |
|
Additional Programming |
|
50,000 |
50,000 |
50,000 |
50,000 |
200,000 |
|
Total |
$1,678,385 |
$464,375 |
$464,375 |
$464,375 |
$464,375 |
$3,535,885 |
BACKGROUND INFORMATION
ATC’s Revenue Recovery Division (RRD) provides debt collection services to San Bernardino County (County) departments and the Superior Court. Although the primary software application currently used by RRD to perform all facets of collection activity is being sunset on December 31, 2023, RRD will continue to use the existing vendor until a new system is implemented. On August 9, 2022 (Item No. 13), the Board of Supervisors approved Agreement No. 22-739 with Ontario Systems, LLC d/b/a Finvi (Finvi) for continued maintenance and support services, in an amount not to exceed $815,558, for the software through June 30, 2025. Once Finvi announced their system’s end of life, they agreed to work with ATC to help with the transition to the new system.
The recommended solution, Debt Manager from Jonas Collections and Recovery, Inc. dba C&R Software (C&R Software) will provide infrastructure and software as a service. Debt Manager will replace the core debt collection system used in RRD with functionality that includes maintaining all account history, such as calls made and received; notating all correspondence, computing balances owed and payments received; sending letters and requests for information to locate assets; submitting tax intercept to include preparing submission modifications, deletions, and posting money received; tracking next steps for workflow on the collection accounts; and interfacing automated batch jobs for gathering and updating demographic information.
The initial implementation of the new system is anticipated to occur over a 12-month timeline, with an anticipated go-live date of July 1, 2024. The successful and accepted implementation date will mark the beginning of the Maintenance and Support phase via Annual Subscription, which will last for the duration of the term of the contract.
The Agreement is the standard County contract, which was negotiated between the parties to include certain non-standard terms and omit certain standard terms. These non-standard and missing terms include the following:
1. The Agreement does not include certain standard County insurance requirements, including the waiver of subrogation.
• The County standard contract requires contractors to carry appropriate insurance at limits and under conditions determined by the County’s Risk Management Department.
• Potential Impact: No waiver of subrogation may allow C&R Software’s insurer to bring suit against the County, which could result in expenses that exceed the total Agreement amount.
2. C&R Software’s liability to the County is limited as follows: (a) direct damage only for claims arising from C&R Software’s breach of anti-corruption and anti-bribery law, third party intellectual property infringement by the software, and fraud, gross negligence, and willful misconduct; (b) the amount payable in the 36 months prior to a claim arising from C&R Software’s breach of data security, breach of confidentiality or violation of data privacy laws; and (c) direct damages in the amount payable by the County in the 18 months prior to a claim arising from all other claims.
• The County standard contract does not include a limitation of liability.
• Potential Impact: Claims could exceed the liability cap and the Agreement amount, leaving the County financially liable for the excess.
ATC recommends approval of the Agreement, including the non-standard terms, which are typical within the information technology industry, as these services are critical for RRD collections operations.
PROCUREMENT
On March 4, 2022, ATC issued Request for Proposal (RFP) No. ACT122-ACTT-4463 for the Debt Collection System Replacement Project. Three proposals were received by the April 4, 2022, bid closing date and were deemed eligible for evaluation.
|
Vendor |
Location |
Cost |
|
Jonas Collections and Recovery, Inc. dba C & R Software |
Fairfax, VA |
$3,335,885 |
|
Collections Solutions Software |
Woodland Hills, CA |
$3,291,082 |
|
WCG, Inc. |
San Francisco, CA |
$7,186,100 |
An evaluation sub-committee comprised of individuals from the Purchasing Department and ATC evaluated the proposals. The criteria used to evaluate the proposals included responses to Revenue Recovery business and technical requirements, implementation approach, maintenance and operation support, two-day vendor demonstrations simulating business use cases, and best and final offers. The evaluation sub-committee recommended awarding a contract to C&R Software. No formal appeals were received during the protest period ending May 18, 2023.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Bonnie Uphold, Supervising Deputy County Counsel, 387-5455) on May 10, 2023; Risk Management (Victor Tordesillas, Director, 386-8621) on May 30, 2023; Purchasing (Michelle Churchill Tagle, Supervising Buyer, 387-2070) on May 26, 2023; Finance (Penelope Chang, Administrative Analyst, 387-4886) on June 8, 2023; and County Finance and Administration (Paloma Hernandez-Barker, Deputy Executive Officer, 387-5423) on June 9, 2023.