Solicitation RFP-MHS-FY Chronic Homelessness Pay for Success Project. Bid designation: Public

Transcription

1 5 Solicitation RFP-MHS-FY Chronic Homelessness Pay for Success Project Bid designation: Public County of Santa Clara 4/21/2014 5:51 PM p. 1 6

2 Chronic Homelessness Pay for Success Project 5 Bid Number Bid Title RFP-MHS-FY Chronic Homelessness Pay for Success Project Bid Start Date Apr 21, :47:38 PM PDT Bid End Date Jun 20, :00:00 PM PDT Question & Answer End Date May 28, :00:00 PM PDT Bid Contact Robert Dominguez Management Analyst Bid Contact Eva Ching HEALTH CARE PROGRAM ANALYST I Pre-Bid Conference May 1, :00:00 PM PDT Attendance is optional Location: Location: TBD. Agenda for Pre-proposal Conference will be distributed along with a time and location via BidSync by Tuesday, April 29, Please bring copies of this RFP and its correlating appendices and attachments to the pre-proposal conference. Copies will not be provided by the County in efforts to preserve paper resources. Description Since early 2013, the County of Santa Clara (the County ) has been developing a Pay for Success ( PFS ) project, the goal of which is to reduce chronic homelessness in the County through the provision of housing and an array of supportive services. The County plans to more fully develop and implement the project in two stages. First, through this Request for Proposals ( RFP ), the County will identify a lead agency ( Lead Agency ) that will assist the County and its consultant Third Sector Capital Partners, Inc., ( Third Sector ) with finalizing the service model and financing structure for the project, securing operating capital, identifying additional service providers to partner with the Lead Agency and creating the contract that will memorialize the deal. In the second stage, the Lead Agency and the County will execute a PFS contract subject to approval by the Board of Supervisors. Under the PFS contract, the Lead Agency will coordinate the PFS project, manage sub-contractors, and may provide direct services to the project s participants. We expect the PFS contract will have a term of seven years, including a six-year service delivery period. 4/21/2014 5:51 PM p. 2 6

3 MENTAL HEALTH DEPARTMENT REQUEST FOR PROPOSALS (RFP) RFP-MHS-FY Chronic Homelessness Pay for Success Project RFP RELEASE DATE: Monday, April 21, 2014 RFP RESPONSES DUE DATE: Friday, June 20, 2014 by 12:00pm Proposals submitted late will not be considered Proposals must be delivered to: Santa Clara Valley Health & Hospital System Mental Health Department Attention: Don Casillas, Contracts Manager 828 S. Bascom Avenue, Suite 200 San Jose, California RFP CONTACT: Address all questions and clarifications to Bidsync, 4/21/2014 5:51 PM p. 3

4 Santa Clara County Mental Health Department RFP-MHS-FY : Chronic Homelessness Pay for Success Project TABLE OF CONTENTS SECTION TITLE PAGE I PROJECT OVERVIEW 3 II RFP TIMELINES AND EVENTS 11 III CONDITIONS GOVERNING THE PROCUREMENT 14 IV RESPONSE FORMAT AND CONTENT 20 V REQUIREMENTS AND BIDDER SUBMITTAL 22 VI EVALUATION 27 APPENDICES All applicable Appendices must be submitted with the proposal. Appendix A Cover Sheet Appendix B Projected Budget and Instructions Appendix C Identification of Subcontractors Appendix D Customer References Appendix E Vendor s Questionnaire Appendix F Non-Collusion Declaration Appendix G Confidential Information Public Record Act Appendix H Cultural Competence Form Appendix I Declaration of Local Preference ATTACHMENTS The Attachments listed below are reference materials and do not have to be submitted with the proposal. Attachment A Contracting Principles Attachment B Sample Agreement Attachment C Insurance Requirements Attachment D Center for American Progress Fact Sheet Attachment E Fact Sheet Regarding Massachusetts Juvenile Justice Pay for Success Project Attachment F Santa Clara County Pay for Success Case Study Attachment G Pay for Success Project Flow Chart 4/21/2014 5:51 PM p. 4 2

5 Santa Clara County Mental Health Department RFP-MHS-FY : Chronic Homelessness Pay for Success Project SECTION I PROJECT OVERVIEW A. PURPOSE Since early 2013, the County of Santa Clara (the County ) has been developing a Pay for Success ( PFS ) project, the goal of which is to reduce chronic homelessness in the County through the provision of housing and an array of supportive services. The County plans to more fully develop and implement the project in two stages. First, through this Request for Proposals ( RFP ), the County will identify a lead agency ( Lead Agency ) that will assist the County and its consultant Third Sector Capital Partners, Inc., ( Third Sector ) with finalizing the service model and financing structure for the project, securing operating capital, identifying additional service providers to partner with the Lead Agency and creating the contract that will memorialize the deal. In the second stage, the Lead Agency and the County will execute a PFS contract subject to approval by the Board of Supervisors. Under the PFS contract, the Lead Agency will coordinate the PFS project, manage sub-contractors, and may provide direct services to the project s participants. We expect the PFS contract will have a term of seven years, including a six-year service delivery period. B. ABOUT PAY FOR SUCCESS AND SOCIAL INNOVATION FINANCING PFS is a performance-based approach to contracting and procurement in which a state or local government makes payments only if and when a service provider achieves specified social outcomes. This approach is fundamentally different from traditional fee-for-service or cost-reimbursement models of government-funded social service provision. Governments across the country have begun to use PFS to invest in preventive social services for vulnerable populations, seeking more effective and efficient ways to meet the needs of these populations. PFS contracts typically include a rigorous evaluation, which can objectively determine whether the PFS service is achieving its intended social outcomes, and therefore whether success payments should be made by the government. This approach has the benefit of ensuring that public resources are only expended for demonstrated successful outcomes. To ensure service providers have the working capital necessary to provide services before success payments are made, PFS projects are generally funded by Social Innovation Financing ( SIF ), a mechanism through which third party funders support the delivery of services until an independent evaluator determines whether government success payments should be made. These funders can be philanthropic entities, independent social investors, commercial banks, or a combination of these entities. The funders bear most or all of the risk associated with the potential that the PFS provider fails to meet the desired outcomes, resulting in non-payment by the government. In exchange for bearing this risk, the funders often receive a return of their investment, with interest, if the desired outcomes are achieved or exceeded. The return to the funders often varies depending on the level of success achieved by the PFS project. The PFS service provider may also receive performance incentives or success payments based on the achievement of outcomes and contract terms. An overview of Social Impact Bonds, a type of SIF, created by the Center for American Progress, is included as an additional resource in Attachment D. 4/21/2014 5:51 PM p. 5 3

6 Santa Clara County Mental Health Department RFP-MHS-FY : Chronic Homelessness Pay for Success Project C. PAY FOR SUCCESS IN OTHER JURISDICTIONS Several PFS projects have launched in other jurisdictions across the country addressing different issue areas, including New York City, NY (juvenile justice); New York State (recidivism of incarcerated young adults); Salt Lake City, Utah (early childhood education); and the Commonwealth of Massachusetts (juvenile justice). One example is the project in Massachusetts, which aims to reduce recidivism and improve employment outcomes for young men emerging from the juvenile justice and dependency systems who are at high risk of re-offending. The PFS service provider for this project is Roca, Inc., a nonprofit that delivers an evidence-based intervention for at-risk young men, training them in job readiness, educational readiness, and life skills. Over the course of the seven-year project, Massachusetts will make up to $27 million in success payments based on metrics demonstrating decreases in incarceration, increases in job readiness, and increases in employment attained by the young men participating in the Roca program. Massachusetts success payments are generally calibrated to correlate with the decrease in state expenditures as a result of improved outcomes for this population (e.g., fewer days of incarceration resulting in decreased public safety costs). The project received $18 million in upfront financing from commercial and philanthropic funders with additional capital from $3.3 million in deferred service fees from the service provider. The project is the largest financial investment in a PFS initiative in the U.S. to date. A fact sheet for the project is provided in Attachment E as an additional resource to this RFP. D. PAY FOR SUCCESS IN SANTA CLARA COUNTY Santa Clara County s interest in PFS grew out of a community-based exploration, led by Catholic Charities of Santa Clara County and Step Up Silicon Valley, with technical assistance from Third Sector and funding from The Health Trust. The County worked closely with these partners to fully understand PFS s implications for the County, to engage with potential service providers and funders, and to identify areas where PFS might be best suited to address the County s social challenges. In August 2013, the County Board of Supervisors engaged Third Sector (with support from the Sobrato Family Foundation and the Silicon Valley Community Foundation) to finalize and implement two PFS projects to improve outcomes for two target populations: the chronically homeless and those suffering from acute mental illness. This RFP pertains to the homelessness project. The County expects to initiate a procurement process for the acute mental health project in the coming months. Attachment F summarizes the development of PFS activities in Santa Clara County. E. HOMELESSNESS IN SANTA CLARA COUNTY On any given night, 7,631 people are homeless in Santa Clara County, of whom 2,509 can be classified as chronically homeless. 1 An individual who is chronically homeless is defined by the United States Department of Housing and Urban Development ( HUD ) as an adult with a disabling condition or a family with at least one adult member with a disabling condition who has been continuously homeless for one year or more and/or has experienced four or more episodes of homelessness within the past three years. Studies have shown that the chronically homeless consume significant and disproportionate government resources in the form of emergency room visits, jail time, and other social services. The County is currently working with the Economic Roundtable, a nationally renowned research institute, to Santa Clara County Homeless Point-in-Time Census and Survey (available at 4/21/2014 5:51 PM p. 6 4

7 Santa Clara County Mental Health Department RFP-MHS-FY : Chronic Homelessness Pay for Success Project capture the public costs of homelessness in Santa Clara and establish a baseline against which the efficacy of future interventions could be measured. F. PERMANENT SUPPORTIVE HOUSING There is compelling evidence that providing chronically homeless individuals with housing and an array of supportive services can significantly decrease their use of government-funded services while significantly improving their quality of life. This combination of housing and supportive services is commonly referred to as permanent supportive housing or PSH. Use of PSH to address chronic homelessness is based upon two philosophies: Housing First and Harm Reduction. Under a Housing First approach, housing is the highest priority service provided to homeless individuals in light of evidence that other supportive services (e.g., health care, substance abuse treatment, etc.) have little effect when a person is still living on the street. Under the Harm Reduction approach, homeless individuals are not required to achieve sobriety or satisfy other preconditions in order to receive housing and related services. Although recovery from mental health and substance abuse disorders is critical to improving outcomes, the Harm Reduction approach acknowledges that persons may be at different places along the continuum of recovery and behavior change. The focus of PSH is helping participants manage behavioral problems that impede their ability to meet tenancy obligations and achieve overall wellness goals. 2 PSH generally includes: Permanent housing that is affordable to the individual, including assistance with locating and accessing the housing unit; 3 Intensive case management, including assistance with enrolling in benefit and government assistance programs, assistance with maintaining housing, and assistance with developing support networks and meaningful daily activities; and Primary medical care, outpatient mental health services, and substance abuse treatment services, as needed. This PFS effort will build upon and expand the work of the Housing 1000 s Care Coordination Project currently underway in Santa Clara County. Housing 1000 s mission is to house 1,000 of the most vulnerable homeless men and women in the community, and the Care Coordination Project works toward this goal by linking provision of intensive case management and related services with permanent housing. The County expects this PFS project to work in tandem with these ongoing efforts as the community employs multiple strategies to reduce homelessness in Santa Clara County. G. THE LEAD AGENCY The organization selected through this RFP process will be afforded the opportunity to enter into exclusive contract negotiations with the County to serve as the Lead Agency for the Chronic Homelessness Pay for Success Project. During the negotiation process, the Lead Agency will work closely with the County to finalize the project s service model and financing structure, secure operating capital, identify any additional service 2 Synthesized from the 100,000 Homes Campaign, the National Alliance to End Homelessness and the Corporation for Supportive Housing. 3 Generally, a unit is affordable if the individual pays no more than 30% of their adjusted gross monthly income (from employment, SSI, or other sources), if any, in rent. 4/21/2014 5:51 PM p. 7 5

8 Santa Clara County Mental Health Department RFP-MHS-FY : Chronic Homelessness Pay for Success Project providers that will partner with the Lead Agency, and construct the contract(s) that will memorialize the deal. Although the County does not necessarily expect the Lead Agency to provide all the services necessary to achieve its desired outcomes, the Lead Agency must possess the knowledge, resources, and sophistication necessary to oversee all aspects of the program and will be ultimately responsible for delivering the desired social outcomes. Because many of the mental health, intensive case management, drug treatment, and medical services provided through this project will be Medi-Cal funded, the Lead Agency must possess sophisticated understanding of the rules and requirements governing provision of Medi-Cal-funded services. Given the size of the anticipated target population for this program, the County expects that a single Medi-Calcertified agency will provide all out-patient mental health and case management services to program participants. To ensure that the Lead Agency possesses the skills and resources necessary to successfully integrate Medi-Cal-funded services into the overall program, the Lead Agency must (1) be a current Medi-Cal provider certified by the Santa Clara County Mental Health Department or another county mental health department, (2) demonstrate the capacity to become a Medi-Cal certified provider during the deal construction process, or (3) formally partner with a certified Medi-Cal provider and propose a structure under which both the Lead Agency and its partner will be jointly responsible for ensuring that the desired outcomes are achieved. H. PROJECT GOALS AND DESIRED OUTCOMES The goal of this PFS project is to improve the quality of life for the subset of chronically homeless individuals who are the most costly frequent users of the County s safety net. This PFS project hopes to achieve the outcome of stabilizing these chronically homeless individuals in permanent supportive housing or an alternative long-term housing situation. Providing PSH should improve the target population s health and quality of life and also decrease its use of emergency and other costly County services. To measure progress towards achieving this desired outcome, the County s working definition of the success that would trigger a payment under this project is completion of a 12-month, uninterrupted stay in permanent supportive housing by a program participant. 4 Further, the County s use of PFS will help it to: Implement performance-based contracting; Leverage outside funding to enable service providers to scale up effective programs; Assess whether performance-based service delivery using rigorous evaluation is a cost-effective and efficient way to invest in preventive services; Demonstrate whether County investments in permanent supportive housing create cashable fiscal savings, increased revenues, improved efficiency of services, and the extent to which savings are sufficient to pay for the programs themselves; and Test and refine tools for identifying the highest-need and highest-cost members of the homeless population. 4 As set forth in Section V, the County requests that bidders provide feedback on this working definition, including any alternative definitions of success that should be considered. 4/21/2014 5:51 PM p. 8 6

9 Santa Clara County Mental Health Department RFP-MHS-FY : Chronic Homelessness Pay for Success Project I. PARTNERS AND ROLES i. County of Santa Clara The County will enter into a contract with the Lead Agency under which it will make success payments if and when successful outcomes are achieved. The County Executive s Office will oversee the project, in collaboration with the Office of Supportive Housing, Department of Mental Health, and Office of the County Counsel. ii. Third Sector Capital Partners, Inc. Thanks to the generous support of the Health Trust, the Sobrato Family Foundation and the Silicon Valley Community Foundation, the County has contracted with Third Sector, a nonprofit organization with substantial expertise in the PFS arena, to advise the County on its exploration and development of its two PFS projects. Third Sector has supported the County by: Identifying potential sources of savings from PFS projects; Identifying target populations that might benefit from a PFS project; and Educating potential funders and service providers in the County about the PFS model. Going forward, Third Sector will assist the County with crafting the overall financial structure and economic modeling of the project, the development of the PFS contracts, and identifying and engaging local and national funders that have interest in supporting a PFS project in Santa Clara County. iii. Lead Agency As noted above, the Lead Agency will oversee all aspects of service delivery and will be ultimately responsible for delivering the desired social outcomes. The Lead Agency: Enters into a PFS contract with the County; Is responsible for achieving the negotiated outcome(s) for the target population; Will develop and implement partnerships with service providers to assist in achieving these outcomes and will likely deliver services directly; Ensures access to housing units for permanent supportive housing; Ensures coordination of treatment services for the target population; Has the flexibility to change or modify its service delivery methods and providers to ensure outcomes are achieved; and Collects and shares data with the County to allow for evaluation of outcomes. iv. Funder(s) Funders are the institutions or individuals that provide the SIF necessary to underwrite PFS service provision. Funders may or may not expect a return of their principal along with some interest, depending on their individual preferences. They accept some or all of the inherent risk of non-payment if outcomes are not achieved. 4/21/2014 5:51 PM p. 9 7

10 Santa Clara County Mental Health Department RFP-MHS-FY : Chronic Homelessness Pay for Success Project v. Independent Evaluator The County will select an independent evaluator who will be responsible for verifying and validating whether the success outcome(s) for which the County will make success payments are achieved. vi. Other Service Provider(s) The Lead Agency may subcontract with other service providers to provide specific services and/or interventions. The County anticipates that organizations other than the Lead Agency will provide services under a subcontract with the Lead Agency, with the exception of any Medi-Cal-funded services. NOTE: Service providers that do not wish to serve as the Lead Agency will not be selected through this RFP process, and therefore should not submit a bid. Instead, Lead Agency Bidders will identify any other service providers with which they intend to collaborate in providing services. These other service providers are encouraged to collaborate with Lead Agency Bidder(s) in creating the Lead Agency Bidder s response to this RFP, and to provide that Lead Agency Bidder with a letter of support. See Attachment G for an overview of the flow of funds and services for a PFS program. J. TARGET POPULATION The County intends this project to benefit chronically homeless individuals who are the costliest to serve and the highest-users of County services. These individuals may be identified through a variety of tools and resources, including the Economic Roundtable s study of the County s chronically homeless population. The target population will likely: Be chronically homeless; Be homeless at the time of referral; Have more than one of the following conditions: serious mental illness, chronic health conditions, and/or substance use disorders. Individuals with these conditions will therefore require primary medical care, behavioral health services, and dental services, and half or more will need specialized substance abuse, mental health, and medical services; Have histories of hospitalization, institutionalization, substance abuse, poor compliance with medication regimens, and difficulties participating in structured activities and living independently; Be eligible for Medi-Cal and/or Supplemental Security Income ( SSI ); 50% or more will likely qualify for specialty mental health services; Be currently uninsured; Have either no income or annual total income of less than $15,000; and Lack family or other support networks. K. GENERAL REQUIREMENTS FOR LEAD AGENCY The Lead Agency must demonstrate the capacity to perform the following functions: 4/21/2014 5:51 PM p. 10 8

11 Santa Clara County Mental Health Department RFP-MHS-FY : Chronic Homelessness Pay for Success Project Develop a robust, coordinated, evidence-based service delivery model that includes housing, mental health, intensive case management, medical, and drug treatment services; Provide all of these services or assemble and closely manage a team of service providers that collaborate to provide these services; Assist the County and Third Sector in raising SIF; Conduct ongoing administration and/or management of the program to achieve target outcomes; Collect and provide data for the independent evaluator to measure program outcomes. Given the importance of successful integration of Medi-Cal-funded services into the program, the Lead Agency must (1) be a current Medi-Cal provider certified by the Santa Clara County Mental Health Department or other county mental health department, (2) demonstrate the capacity to become a Medi- Cal certified provider during the deal construction process, or (3) formally partner with a certified Medi- Cal provider and propose a structure under which both the Lead Agency and its partner will be jointly responsible for ensuring that the desired outcomes are achieved. L. CONTRACTING PROCESS As noted above, the organization selected through this RFP process will be afforded the opportunity to enter into exclusive contract negotiations with the County to serve as the Lead Agency for the Chronic Homelessness Pay for Success Project. The contracting process will have two phases: Phase I - Deal Construction: The selected organization will collaborate with the County to finalize the details of the project (e.g., services, outcomes, contracting and financing structure, evaluation process, etc.) and prepare the contractual agreement(s) memorializing the deal. We anticipate this process will take approximately 8 months. Phase II Contract Execution and Service Provision: After the completion of the deal construction phase, the Lead Agency and the County will execute a PFS contract, subject to approval by the Board of Supervisors. Service provision will begin thereafter. The County may enter into a short-term agreement with the successful Bidder(s) to provide limited funding to cover costs that the Lead Agency will incur during the deal construction process. Because provision of such funding is not guaranteed, a successful Bidder will demonstrate the capacity to undertake this effort regardless of the availability of such funding. Accomplishing the goals of this RFP and subsequent deal construction process will require the coordinated efforts of several service providers, third-party funders, and intermediaries. As such, a successful Bidder must demonstrate the willingness and skills necessary to collaborate effectively with other service providers, the County, potential funders, and prospective evaluators. M. ANTICIPATED COMPENSATION STRUCTURE As noted above, PFS is a performance-based approach to contracting that is fundamentally different from traditional fee-for-service or cost-reimbursement models generally utilized in the County s service contracts. The details of the compensation structure for the Chronic Homelessness Pay for Success Contract will be negotiated during the deal construction process (Phase I), but the County anticipates the compensation provisions of the contract will utilize the following structure: 4/21/2014 5:51 PM p. 11 9

12 Santa Clara County Mental Health Department RFP-MHS-FY : Chronic Homelessness Pay for Success Project The County will make payments if and only if the specific outcomes set forth in the contract are achieved; To ensure the Lead Agency and any subcontracted service providers have the working capital necessary to provide services before any success payments are made, third party funders (i.e., philanthropic entities, independent social investors, and/or commercial banks) will provide the Lead Agency with working capital commensurate with the cost of service delivery; Because the third party funders bear most or all of the risk associated with the potential failure to achieve desired outcomes, the success payments made by the County will exceed the amount paid to the Lead Agency by the third party funders by an amount calibrated to provide the funders with a reasonable rate of return; and The Lead Agency can also elect to bear some risk of non-success and receive performance incentives or a portion of the success payments if success is achieved. The County intends to allocate approximately $2 million annually for success payments for this PFS project. The County s working definition of success for purposes of this project is any single 12- month uninterrupted stay in permanent supportive housing by a program participant. Given the $2 million annual success payment budget and the working definition of success, the County anticipates that the program will serve approximately 90 clients at any given time. To ensure that success payments can generate the reasonable rate of return necessary to obtain third party financing and account for the rate of non-success, the annualized budget for service provision under the contract will likely need to average $20,000 or less per participant. Accordingly, as set forth in the section regarding budgets below, Bidders should construct their RFP response such that the annualized cost per program participant, excluding costs that are reimbursable through Medi-Cal from federal reimbursement and/or local match or other offsets (e.g., a portion of participants SSI payments, tenant-paid rent, etc.), is no more than $20,000. 4/21/2014 5:51 PM p

13 Santa Clara County Mental Health Department RFP-MHS-FY : Chronic Homelessness Pay for Success Project SECTION II RFP TIMELINE AND EVENTS A. CALENDAR OF EVENTS NOTE: Dates and/or the process in this timeline may be changed by the MHD if deemed necessary. The MHD will make every effort to adhere to following anticipated schedule: Event Date 1 RFP Release April 21, Requested RSVPs for the Pre-Proposal Conference April 28, Pre-Proposal Conference from 3:00 5:00 AM PST May 1, Required Non-binding Letter of Intent to Submit a Proposal by 12:00 PM PST May 14, Deadline to submit RFP questions through BidSync - 3:00 PM PST May 28, PROPOSALS DUE by 12:00 PM PDT June 20, Proposal Evaluation July 9, Vendor interviews (if needed). Note: All vendors must keep this date available for interviews and/or to respond to supplemental questions. 2:00 5:00 PM July 18, Notice of Intent to Award Sent July 24, Protest Deadline by 3:00 PM PST July 31, Estimated date for Notice of Award August 11, Estimated Contract Negotiation Start Date August 26, 2014 Communication with County Employees As of the issuance date of this RFP and continuing until the final date for submission of proposals, contact with Santa Clara County employees is strictly limited. All personnel representing the County are specifically directed not to hold meetings, conferences or technical discussions with any vendor for purposes of responding to this RFP. Any vendor found to be acting in any way contrary to this directive will be disqualified from entering into any contract that may result from this RFP. B. EXPLANATION OF EVENTS 1. RFP Release This RFP is being issued by the Santa Clara Valley Health & Hospital System Mental Health Department ( MHD ). Copies of this RFP including supporting documents may be obtained from Bidsync s web site at 2. Pre-Proposal Conference RSVP 4/21/2014 5:51 PM p

14 Santa Clara County Mental Health Department RFP-MHS-FY : Chronic Homelessness Pay for Success Project The County requests that parties who are interested in attending the Pre-Proposal Conference submit their intention to attend by to by April 28, This should include the following: Name of organization and Contact information for participating representatives (names, titles, addresses, phone numbers, and addresses). 3. Pre-Proposal Conference A pre-proposal conference has been scheduled as specified in Section II.A., Calendar of Events. The agenda for the Pre-Proposal Conference will be distributed along with a time and location via BidSync by April, 29, The pre-proposal conference will include a review of the RFP and response to questions. Although the pre-proposal conference is optional, providers are strongly encouraged to attend this conference. Please bring copies of this RFP and its correlating appendices and attachments to the preproposal conference. Copies will not be provided by the County in efforts to conserve resources. Oral responses given at the conference are not binding on the County. Any responses submitted or asked at the conference that, in the County s judgment, alter the content of the RFP, will be provided in writing, as an addendum to the RFP. All addenda will be posted on 4. Letter of Intent to Submit a Proposal The County will be able to develop a more efficient process for reviewing responses if the staff understands the number of applicants that intend to submit responses. Therefore, each organization intending to submit a response to this RFP is required to send an indicating their interest to Don.Casillas@hhs.sccgov.org by 12:00 PM PST on May 14, The should contain the subject line Intent to Submit a Proposal and briefly describe the proposed project and any identified potential partner organizations. Organizations that submit a Letter of Intent may ultimately decline to submit a proposal. 5. Deadline to Submit RFP Questions through BidSync Potential Bidders may submit written questions regarding this RFP via BidSync until the deadline as indicated in Section II.A., Calendar of Events. The County will not respond to questions submitted in any other manner or format. Please cite the RFP Section, subsection and page number that each question is in reference to. Example: [RFP Section III, subsections B & D.12, pgs. 14, 15]. Answers to questions received by the deadline will be responded to on the bid management site The County does not guarantee that it will respond to questions submitted after the closing date and time for written questions. 4/21/2014 5:51 PM p

15 Santa Clara County Mental Health Department RFP-MHS-FY : Chronic Homelessness Pay for Success Project Written responses to written questions regarding the substance of the RFP, and any material changes to the RFP, will be issued as an addendum, and posted on The County reserves the right to post addenda until the RFP closing date and time. 6. Proposal Due Date Proposals must be received no later than the deadline specified in Section II.A., Calendar of Events. All proposals received will be time stamped. Late proposals will not be accepted. All deliveries via express carrier should be addressed as follows: Santa Clara Valley Health and Hospital System Mental Health Department Attention: Don Casillas, Contracts Manager 828 South Bascom Avenue, Suite 200 San Jose, California Proposals must be sealed and labeled on the outside of the package to clearly indicate that they are in response to the RFP # and title as referenced on the cover page. 7. Proposal Evaluation An Evaluation Committee ( EC ) will review and evaluate the proposals and make a recommendation for an award. The EC will evaluate proposals in accordance with scoring criteria published in this RFP. 8. Vendor Interviews At the County s option, one or more bidders may be selected as a finalist and invited to proceed to the next round of evaluations and/or interviews. All bidders must keep the possible interview date available as indicated in Section II.A., Calendar of Events. 9. Notice of Intent to Award Contract The County will notification letters to bidders advising them of the County s intent to award the contract. At County s option, multiple bidders may be selected 10. Protest Bidders whose proposals were not selected may file a written protest. Please see Section III of this RFP for a detailed description of the protest procedures. 4/21/2014 5:51 PM p

16 Santa Clara County Mental Health Department RFP-MHS-FY : Chronic Homelessness Pay for Success Project SECTION III CONDITIONS GOVERNING THE PROCUREMENT This section of the RFP describes the procurement events as well as the conditions governing the procurement. A. PROTEST PROCEDURES The County will send an to all proposers informing them of the proposal that was selected. Proposers whose proposals were not selected may file a written protest ( Protesters ) as set forth below. 1. Filing a Protest The protest of an award must be in writing. The following must be written on the cover of the protest: Protest Relating to RFP-MHS-FY : Chronic Homelessness Pay for Success Project. The written protest must be ed, faxed, or mailed to the MHD at the following address: Santa Clara Valley Health and Hospital System Mental Health Department RFP-MHS-FY Attention: Don Casillas, Contracts Manager 828 South Bascom Avenue, Suite 200 San Jose, California Don.Casillas@hhs.sccgov.org Fax: (408) All protests must be received by the designated Contracts Manager within five (5) business days after the MHD issued the Notice of Intent to Award. Any protests received after this time will not be considered. 2. Contents of Protest The written protest must contain the following information: (1) the name, street address, electronic mail address, telephone, and facsimile number of the protesting party ( Protester ); (2) signature of the Protester or its representative; (3) clearly stated grounds for the protest as set forth in Section (A)(3) Grounds for Protest below; (4) copies of any relevant documents referred to by the protest; (5) the form of relief requested; and (6) the method by which the Protester would like to receive the Department s written protest decision. The written protest must clearly state the grounds for the protest. Protests should be concise and logically arranged. 3. Grounds for Protest Protests shall be based only on one or more of the following grounds: a. The Protester believes the County failed to follow the procedures and adhere to requirements set forth in the solicitation or any addendum thereto. b. The Protestor believes there was misconduct or impropriety by County officials or evaluation 4/21/2014 5:51 PM p

17 Santa Clara County Mental Health Department RFP-MHS-FY : Chronic Homelessness Pay for Success Project team members. c. The Protester believes there was abuse of process or abuse of discretion by County officials or evaluation team members. 4. Protest Resolution Process a. Informal Review by the Chief Operating Officer The County s Chief Operating Officer ( COO ), or his designee, will review a timely protest and attempt to informally resolve it expeditiously. Upon review of the protest, the COO will determine whether the protest has any merit and will send the Protester a written protest decision. b. Request for Independent Review by the County Executive If the Protester believes the COO s written response did not resolve the protest, the Protester may send a request to have the protest formally reviewed by the County Executive or his designee. Requests for a formal review by the County Executive must be in writing and submitted no later than five (5) days from the date the COO sent out the protest decision. If no request is received with the five (5) days, the COO will determine that the Protester does not seek further review. The written request independent review must be ed, faxed, or mailed to the MHD at the same address listed under Section III (A)(1) Filing a Protest. c. Formal Review by County Executive The COO, or his designee, will forward the protest to the County Executive within two (2) business days after receiving Protester s written request for formal review. The COO is required to provide the Protester with the following: 1) written notification that the protest is being forwarded to the County Executive; 2) the County Executive s contact information; and 3) notification that the Protester has ten (10) business days to provide the County Executive with any additional documents that the Protester believes is relevant to the review of the protest. The COO will also have ten (10) business days from the date of the written notification to forward any additional documents relevant to the County Executive. Protester may not present any additional grounds for protest, arguments, or narratives that were not included in the original protest. The County Executive shall conduct an independent review of the protest to determine whether the grounds for the protest have merit. Only the information contained in a timely protest shall be considered by the County Executive. The County Executive shall only consider the documents each party has submitted, grounds for protest, and grounds to reject the protest. The County Executive will issue a written decision to both the COO and the Protester within twenty five business (25) days of receiving a protest. However, if extended time is necessary 4/21/2014 5:51 PM p

18 Santa Clara County Mental Health Department RFP-MHS-FY : Chronic Homelessness Pay for Success Project 5. Remedies for the County Executive to issue a decision, a notification to both parties will be sent. If the Protester failed to specify in its written protest the method by which the Protester would like to receive the County Executive s written decision, the decision will be sent via U.S. mail. All decisions of the County Executive shall be final. If the County Executive sustains a protest in whole or in part, the County Executive shall refer the matter back to the COO for redress in conformance with the County Executive s decision. If the County Executive rejects the protest, then the County may proceed with awarding the contract(s). B. GENERAL 1. INCURRING This RFP does not commit the County to award, nor does it commit the County to pay any cost incurred in the submission of the Proposal, or in making necessary studies or designs for the preparation thereof, nor procure or contract for services or supplies. Further, no reimbursable cost may be incurred in anticipation of a contract award. 2. CLAIMS AGAINST THE COUNTY OF SANTA CLARA Neither your organization nor any of your representatives shall have any claims whatsoever against the County or any of its respective officials, agents, or employees arising out of or relating to this RFP or these RFP procedures, except as set forth in the terms of a definitive agreement between the County and your organization. 3. BASIS FOR PROPOSAL Only information supplied by the County in writing in connection with this RFP should be used as the basis for the preparation of Bidder s proposal. 4. FORMS OF PROPOSALS No oral, telephone, facsimile, or electronic proposals will be accepted. 5. AMENDED PROPOSALS A Bidder may submit an amended proposal before the deadline for receipt of proposals. Such amended proposals must be complete replacements for a previously submitted proposal and must be clearly identified as such in the Letter of Transmittal, (Section III, Response Format and Organization). The County personnel will not merge, collate, or assemble proposal materials. 6. WITHDRAWAL OF PROPOSAL Bidders will be allowed to withdraw their proposals at any time prior to the deadline for receipt of proposals. The Bidder must submit a written withdrawal request signed by the Bidder s duly authorized representative addressed to the Contracts Manager at: 4/21/2014 5:51 PM p

19 Santa Clara County Mental Health Department RFP-MHS-FY : Chronic Homelessness Pay for Success Project Santa Clara Valley Health and Hospital System Mental Health Department Attention: Don Casillas, Contracts Manager 828 South Bascom Avenue, Suite 200 San Jose, California Withdrawal requests should also be sent via to 7. LATE RESPONSES In order for a proposal to be considered, the proposal must be received in person or via courier or mail to the place specified above no later than the RFP due date and time. The MHD time and date stamp will be the basis for determining timeliness of proposals. 8. NO PUBLIC PROPOSAL OPENING There will be no public opening for this RFP. 9. CALIFORNIA PUBLIC RECORDS ACT (CPRA) All proposals become the property of the County, which is a public agency subject to the disclosure requirements of the California Public Records Act ( CPRA ). If Bidder proprietary information is contained in documents submitted to County, and Bidder claims that such information falls within one or more CPRA exemptions, Bidder must clearly mark such information CONFIDENTIAL AND PROPRIETARY, and identify the specific lines containing the information. In the event of a request for such information, the County will make best efforts to provide notice to Bidder prior to such disclosure. If Bidder contends that any documents are exempt from the CPRA and wishes to prevent disclosure, it is required to obtain a protective order, injunctive relief, or other appropriate remedy from a court of law in Santa Clara County before the County s deadline for responding to the CPRA request. If Bidder fails to obtain such an order prior to the County s deadline for responding to the CPRA request, County may disclose the requested information. Bidder further agrees that it shall defend, indemnify, and hold the County harmless against any claim, action, or litigation (including but not limited to all judgments, costs, fees, and attorney s fees) that may result from denial by County of a CPRA request for information arising from any representation, or any action (or inaction), by the Bidder. 10. CONFIDENTIALITY All data and information obtained from the County of Santa Clara by the Bidder and its agents in this RFP process, including reports, recommendations, specifications and data, shall be treated by the Bidder and its agents as confidential. The Bidder and its agents shall not disclose or communicate this information to a third party or use it in advertising, publicity, propaganda, or in another job or jobs, unless written consent is obtained from the County. Generally, each proposal and all documentation, including financial information, submitted by a Bidder to the County is confidential until a contract is awarded, when such documents become public record under state and local law, unless exempted under CPRA. 4/21/2014 5:51 PM p

20 Santa Clara County Mental Health Department RFP-MHS-FY : Chronic Homelessness Pay for Success Project 11. ELECTRONIC MAIL ADDRESS Most of the communication regarding this procurement will be conducted by electronic mail ( ). Potential bidders agree to provide the Contracts Manager with a valid address to receive this correspondence. 12. USE OF ELECTRONIC VERSIONS OF THE RFP This RFP is being made available by electronic means. If accepted by such means, the Bidder acknowledges and accepts full responsibility to insure that no changes are made to the RFP. In the event of conflict between a version of the RFP in the Bidder s possession and the version maintained by the Mental Health Department the version maintained by the Mental Health Department must govern. 13. ASSIGNMENT OF CLAYTON ACT, CARTWRIGHT ACT CLAIMS In submitting a response to a solicitation issued by the County, the responding person and/or entity offers and agrees that if the response is accepted, it will assign to the County all rights, title, and interest in and to all causes of action it may have under Section 4 of the Clayton Act (15 U.S.C. Sec. 15) or under the Cartwright Act (Chapter 2 (commencing with Section 16700) of Part 2 of Division 7 of the Business and Professions Code), arising from purchases of goods, materials, or services by the responding person and/or entity for sale to the County pursuant to the solicitation document. Such assignment shall be made and become effective at the time the County tenders final payment to the responding person and/or entity. 15. CONFLICTS OF INTEREST Bidder is subject to all federal, state and local conflict of interest laws, regulations and policies applicable to public contracts and procurement practices, including but not limited to California Government Code section 1090 et seq. and section et seq. If awarded this Contract, Bidder will covenant that it presently has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of this Contract. Bidder will further covenant that, in the performance of this Contract, it will not employ any contractor or person having such a conflict of interest. 16. POLITICAL REFORM ACT DISCLOSURE REQUIREMENT Bidder, including but not limited to contractor s employees and subcontractors, may be subject to the disclosure and disqualification provisions of the California Political Reform Act of 1974 (the Act ), that (1) requires such persons to disclose economic interests that may foreseeably be materially affected by the work performed under the Contract, and (2) prohibits such persons from making or participating in making decisions that will foreseeably financially affect such interests. If the disclosure provisions of the Act are applicable to any individual providing service under the Contract, Bidder shall, upon execution of the Contract, provide the County with the names, 4/21/2014 5:51 PM p

21 Santa Clara County Mental Health Department RFP-MHS-FY : Chronic Homelessness Pay for Success Project description of individual duties to be performed, and addresses of all individuals, including but not limited to Bidder s employees, agents and subcontractors, that could be substantively involved in making a governmental decision or serving in a staff capacity and in that capacity participating in making governmental decisions or performing duties that would be performed by an individual in a designated position, (2 CCR 18701(a)(2)), as part of Bidder s service to the County under the Contract. Such individuals shall file Statements of Economic Interests within 30 days of commencing service under the Contract, annually by April 1, and within 30 days of their termination of service under the Contract. 17. COUNTY RIGHTS The County reserves the right to do any of the following at any time: a. Reject any proposal without indicating any reason for such rejection; b. Waive or correct any minor or inadvertent defect, irregularity or technical error in a proposal, or in the RFP process, or as part of any subsequent contract negotiation; c. Request that bidders supplement or modify all or certain aspects of their proposals or other documents or materials submitted; d. Request the Bidder make an oral and/or written presentation if more information is deemed necessary; e. Terminate this RFP and issue a new RFP; f. Modify the selection process, the specifications or requirements for materials or services, or the content or format of the proposals; g. Extend a deadline specified in this RFP, including deadlines for accepting proposals; h. Negotiate with any or none of the bidders; i. Modify the final contract from terms described in this RFP; j. Terminate failed negotiations with a Bidder without liability, and negotiate with other bidders; k. Disqualify any Bidder on the basis of a real or apparent conflict of interest, or evidence of collusion that is disclosed by the proposal or other data available to the County; l. Disqualify any Bidder on the basis of non-compliance with obligations under existing or past contracts with the County and any related obligations; m. Request that services be provided by certain staff of a Bidder, or request that certain staff of a Bidder be excluded from providing services as determined by the County to be in its best interest; n. Award multiple contracts if it is deemed necessary to provide the specified services; o. Reject a Bidder s proposal if any of the RFP forms are left blank or are materially altered; p. Reject a Bidder s proposal if any document or item necessary to the proposal is incomplete, improperly executed, indefinite, ambiguous, or is missing; q. Reject a Bidder s proposal for any attempt to improperly influence any member of the Evaluation Panel; r. Reject any proposal if your agency or a related agency is currently in litigation with the County of Santa Clara, or the County is contemplating litigation against your agency or a related agency relating to contract performance; s. Reject any proposal for any false, misleading or otherwise unresponsive statements, documents or information provided to the County either through disclosure or nondisclosure if, in the County s judgment, the false, misleading or otherwise unresponsive statements, documents or information are material. t. Reject a Bidder s proposal where the Bidder is in breach of, or in default under, any other 4/21/2014 5:51 PM p

22 Santa Clara County Mental Health Department RFP-MHS-FY : Chronic Homelessness Pay for Success Project agreement with the County; u. Reject any proposal if your agency or a related agency is currently being investigated by the County of Santa Clara for non-performance of obligations under any contract with the County, and such non-performance or alleged non- performance has resulted in actual nonrenewal or termination of your contract with the County. SECTION IV RESPONSE FORMAT AND CONTENT These instructions outline the guidelines governing the format and content of the proposal and the approach to be used in its development and presentation. Only that information which is essential to an understanding and evaluation of the proposal should be submitted. No limitation on the content of the proposal is intended in these instructions and inclusion of any pertinent data or information is permitted within the page requirements. A. NUMBER OF RESPONSES Bidders shall submit only one proposal, but may include more than one option or alternative offer of service in the proposal. B. NUMBER OF COPIES Bidders must provide one (1) original and nine (9) identical copies of their proposal. All documents must be three-hole punched. The original must be stamped original and contain original signatures on the necessary forms. The remaining sets should be copies of the originals. Only one copy of the Bidder s financial statements (as required by Section IV.C. of this RFP) is required to be included with the original proposal. Do not staple the proposal. Use tab dividers to separate each copy of the proposal (not each section of the proposal). Each tab divider should clearly show the Bidder s name. Bind each copy using binder clips. Bidders must also provide ONE electronic copy of their complete proposal in CD-ROM media, prepared in a format that is compatible with Microsoft Office 2007 (Word and Excel). The Bidder s financial statements (as required by Section IV.C. of this RFP) may be in PDF format. However, the PROPOSALS AND BUDGETS MUST BE IN WORD AND EXCEL RESPECTIVELY. The CD shall be included in the envelope/package that contains the original proposal and its copies. C. PROPOSAL FORMAT The County will not accept handwritten proposals. Offers shall type or computer generate their proposals on standard 8 1/2 x 11 paper (larger paper is permissible for charts, spreadsheets, etc.) using 12 point font with 1.5 line spacing and 1 inch margins. Entire proposal must be paginated. Hard copies should utilize both sides of the paper where practical. Proposals must have a table of contents that corresponds to the sections and appendices. Do not attach any information that is not requested. 4/21/2014 5:51 PM p

23 Santa Clara County Mental Health Department RFP-MHS-FY : Chronic Homelessness Pay for Success Project D. PROPOSAL PACKET SEQUENCE AND CHECKLIST Proposal Packet Assembly Checklist Order Document Format Completed 1 Appendix A Coversheet Signed and Word document provided on notarized Bidsync. 2 Appendix I Local Preference - Declaration of Local Business Form. Word document provided on Bidsync. NOTE: Only if declaring Local Preference. 3 Executive Summary Word document; Times New Roman with font size of 12 on letter size paper; 1.5 spacing and 1 inch Organizational Information: Bidder should provide charts, outlines and brief biographies of only the staff that will be directly providing the proposed services. Limit each biography to 1 page. Proposal Narrative Requirement: A.1. Organizational Overview A.2. Program Description and Scope of Services. Appendix B Projected Budget and Cost Response. All amounts must be projected in U.S. dollars and shall be accompanied by a budget narrative. Appendix C Identification of Subcontractors Appendix D Customer Reference Appendix E Vendor s Questionnaire Appendix F Non-Collusion Declaration Appendix G Confidential Information Public Records Act Appendix H Cultural Competence Form Audited Financial Statement and Management Letter. margins. Word document; Times New Roman with font size of 12 on letter size paper; 1.5 spacing and 1 inch margins. Word document; Times New Roman with font size of 12 on letter size paper; 1.5 spacing and 1 inch margins. Excel and Word documents provided on Bidsync. Word document provided on Bidsync. Word document provided on Bidsync. Word document provided on Bidsync. Word document provided on Bidsync. Word document provided on Bidsync. Word document provided on Bidsync. Bidder Generated Standard Format for the Audited Financial Statement and Management Letter. The County does not guarantee the accuracy of the formulas in these forms nor is responsible for any errors or omissions. Bidders assume all responsibility for the accuracy of the information provided either on the forms included with this RFP or other formats. E. INSTRUCTIONS TO BIDDERS A proposal and all attachments shall be in English, complete, and free of ambiguities, alterations, and erasures. The proposal must be executed by a duly authorized officer or agent of Bidder. In the event of conflict between words and numerals, the words shall prevail. 4/21/2014 5:51 PM p

24 Santa Clara County Mental Health Department RFP-MHS-FY : Chronic Homelessness Pay for Success Project F. NON-CONFORMING SUBMISSIONS A submission may, at the sole discretion of the County, be construed as a non-conforming proposal, ineligible for consideration or incomplete if it does not comply with the requirement of this Request for Proposal. SECTION V REQUIREMENTS & BIDDER S SUBMITTAL A. EXECUTIVE SUMMARY This section must include a summary of the key aspects of the PFS program proposed by the Bidder, and principal reasons the Bidder should be selected as the Lead Agency. It must not exceed one page. This summary is separate from the maximum allowable number of pages. B. BASIC ORGANIZATONAL INFORMATION This section must not exceed four pages and relates only to the Lead Agency and not any potential subcontractors. Please include the following: 1. Your company s complete name, business address, including headquarters and all local offices, and telephone numbers. The name, mailing address, and telephone number of the person the County should contact regarding the proposal. 2. Indicate any offices or facilities located within the Santa Clara County that have meaningful delivery of service capabilities and directly enhance your firm s ability to perform services throughout Santa Clara County. 3. A basic description of your organization, including the number of employees, longevity of the organization, client base, areas of specialization, and expertise. 4. The jurisdiction in which your company is organized and the date of such organization. 5. A complete disclosure if your company has defaulted in its performance on a contract during the past five years which has led the other party to terminate the agreement, and if so, the identity of the parties involved and the circumstances of the default or the termination. 6. A list of any lawsuits filed against your company, its subsidiaries, parent, other corporate affiliates, or subcontractors in the past five years and the outcome of those lawsuits. C. PROPOSAL NARRATIVE The proposal narrative should reflect the Bidder s understanding of PFS and SIF and should explain how the Bidder intends to use this opportunity to provide and/or coordinate services that stabilize chronically homeless individuals in permanent supportive housing, reduce costs to taxpayers, and improve outcomes for the target population. The proposal narrative should be written in a concise 4/21/2014 5:51 PM p

25 Santa Clara County Mental Health Department RFP-MHS-FY : Chronic Homelessness Pay for Success Project manner. The County will disregard material that is not directly relevant to the information requested below. The proposal narrative should be limited to 20 pages, with 1.5 spacing, 12-point font, and one-inch margins. 1. Organization Overview (25 points) a. Describe the Bidder s mission and programs; b. Describe the Bidder s organizational infrastructure and management team as they relate to its capacity to serve as the Lead Agency for this project; c. Indicate prior experience in collaborating with or coordinating public and/or private entities for service delivery, and provide letters of support (if applicable) from at least one such entity in an appendix to the proposal; d. Discuss past experiences and current relationships that demonstrate the Bidder s ability to partner with the County and Third Sector to obtain private financial resources in support of this project; e. Demonstrate familiarity with the target population and the coordination and delivery of services to that population; and f. Identify areas of training or capacity building necessary to successfully deliver the required services. 2. Program Description and Scope of Services (45 points) a. Describe the components of the Bidder s proposed PFS program model(s), including individual services that have the potential to meet the outcomes and objectives of this RFP. Please cite existing evidence that supports the effectiveness of the proposed model(s), and its components; b. Identify any other public and/or private entities, including subcontractors, with which the Bidder intends to collaborate in order to execute programming; 5 c. Confirm that the Bidder (1) is a current Medi-Cal provider certified by the County Mental Health Department, (2) has the capacity to become a Medi-Cal certified provider during the deal construction process, or (3) will formally partner with a certified Medi-Cal provider to jointly ensure that the desired outcomes are achieved and if so, describe this structure; d. Please describe how the Bidder s proposed PFS program will maximally leverage Medi- Cal funding in order to maximize the resources available to provide non-medi-cal funded support and services; 5 NOTE: The County expressly reserves the right to approve or disapprove a Lead Agency s use of particular subcontractors; final selection of any subcontractors by the Lead Agency will occur during the deal construction process, and will occur in consultation with the County and subject to the County s approval. 4/21/2014 5:51 PM p

26 Santa Clara County Mental Health Department RFP-MHS-FY : Chronic Homelessness Pay for Success Project e. Please describe how the Bidder s proposed PFS program model will fit in with the current Care Coordination Project efforts in Santa Clara County; f. Propose a strategy for identifying and ensuring that 90 housing units will be available for this project, at the rates set forth in the Bidder s budget. Please describe any existing relationships with property owners, or the bidder s knowledge of the availability of specific properties; g. Describe the means and methods the Bidder intends to use to pursue data-driven performance management throughout the duration of a multi-year contract as it relates to this specific RFP, and its past experience using similar tools; h. Provide a projection of the anticipated success rate for program participants for each 12- month period of program enrollment. Specifically, for the first 12-month period, the projection should capture the likelihood that a participant will complete 12 consecutive months of supported tenancy; for the second 12-month period, the projection should capture the likelihood that a program participant will complete 24-months of consecutive supported tenancy; etc. 6 Describe, in detail, the basis used to determine the Bidder s anticipated success rates (e.g., outcomes previously achieved through provision of similar services, empirical research on the efficacy of similar programs, etc.); i. Provide feedback on the County s working definition of success for purposes of this project, which is any single 12-month stay in permanent supportive housing, and propose any alternative success definitions that should be considered; j. Propose appropriate metrics and outcomes for assessing the success of the PFS intervention and describe how the necessary data could be acquired and used to assess the impact of the provided services; k. Identify any potential funders that the Bidder suggests approaching as potential SIF funders, and describe current relationships with these parties; and l. Identify any questions or concerns related to the County s program goals set forth in this RFP and/or obstacles to achieving such goals, including the Bidder s ability gaps. D. BUDGET AND COST RESPONSE (25 Points) The Cost Response should include a narrative and a proposed budget for implementation and execution of the PFS project. Please note that the proposed budgets are not binding, but should be thoughtful and thorough. Written responses should be limited to three pages with 1.5 spacing, with 12-point font and one-inch margins. Budget proposals will not count against the overall page limit. Phase I - Deal Construction. Propose a budget of costs the Bidder expects to incur during the deal construction process, prior to the execution of the PFS contract (e.g., staff costs during deal construction, expanding the Bidder s current capacity to fulfill the requirements as a lead agency, 6 For example, if 100 people enroll in the program for which the anticipated success rate is 80%, 80 (=100*80%) participants will be expected to achieve 12 months of consecutive tenancy. If the success rate for participants in the second year of the program is 90%, then 72 participants (=80*90%) will be expected to achieve 24 months of consecutive tenancy. 4/21/2014 5:51 PM p

27 Santa Clara County Mental Health Department RFP-MHS-FY : Chronic Homelessness Pay for Success Project etc.). This budget should be completed using the spreadsheet provided as Appendix B and should be accompanied by a narrative, which explains and describes the Bidder s projected costs. Note: As set forth in Section I.L above, the County may or may not provide funding or reimbursement for expenses incurred by the Lead Agency during the deal construction process. Furthermore, the County is not liable for any costs incurred by vendors in the preparation and presentation of response proposals submitted in response to this RFP. Phase II Service Provision. Bidders should submit a pro forma PFS budget for a six-year service delivery period by completing the spreadsheet provided as Appendix B. The first worksheet of Appendix B provides specific guidance on completing the Phase II pro forma budget, which should include: The costs of service delivery, rental subsidies, and any applicable revenues; The number of individuals to be served; and The projected number of successful outcomes. The costs of service delivery should include the costs of all services to be provided to the target population, including Medi-Cal-funded services. Any anticipated revenues that will offset the total cost of the program (e.g., Medi-Cal federal reimbursements and local match, portions of SSI payments from participants, etc.) should also be included. For the purpose of constructing a budget for the overall project, please assume that: The project must create access to 90 units to provide housing to chronically homeless individuals over a six-year service delivery period; The annualized cost per program participant, excluding Medi-Cal reimbursements and local match or other offsets (e.g., a portion of participants SSI payments, tenant-paid rent, etc.), should be no more than $20,000. In addition to the proposed budget, please provide a budget narrative that describes the nature of expenses included in each category, as well as an explanation of how the cost associated with each category was derived. This explanation should describe the basis for the cost estimates (e.g., costs previous incurred in the provision of the same or similar services, studies estimating the costs of provision of the same or similar services, etc.). If the Bidder has identified any revenue streams that will offset overall program costs (e.g., client s SSI benefits, etc.), it must explain how the amount of revenue attributed to each of these sources was derived. The Bidder s overall budget projections should account for the anticipated percentage of clients qualifying for Medi-Cal and/or other benefits, and how those figures were derived. Optional alternative budget(s): Bidders may also submit one or more alternative six-year pro forma budgets, which can incorporate o a different suggested metric or definition of a successful outcome and/or o a higher or lower average cost per client per year and number clients served, that would still allow the County to make no more than $2 million per year budget for success payments. NOTE: As discussed above, to ensure that success payments can generate the reasonable rate of return necessary to obtain third party financing and account for the rate of non-success, the 4/21/2014 5:51 PM p

28 Santa Clara County Mental Health Department RFP-MHS-FY : Chronic Homelessness Pay for Success Project total annualized budget for service provision under the contract in any alternative budget should not exceed $1.8 million in light of the County s anticipated budget of $2 million in annual success payments. For any alternative budget, the Bidder should include a description and justification for its alternative in the budget narrative. E. FINANCIAL STABILITY/BIDDER FINANCIAL INFORMATION 1. Bidder shall provide documentation that the organization has sufficient reserves to maintain the program. Documentation may include cash and/or credit reserves. In addition, the Bidder shall provide the following information for the last two (2) fiscal years: 1.1. Audited financial statements with the applicable notes; 1.2. Independent Auditor s Report on Compliance and Internal Control over Financial Reporting based on an Audit of the Financial Statements in Accordance with Government Accounting Standards; 1.3. Independent Auditor s Statement of Findings and Questioned costs. 2. Bidder shall submit documentation that it meets solvency standards and shall state its intention to meet those standards throughout the contract period. 4/21/2014 5:51 PM p

29 Santa Clara County Mental Health Department RFP-MHS-FY : Chronic Homelessness Pay for Success Project SECTION VI EVALUATION A. FACTORS The Evaluation Criteria listed below will be utilized in the evaluation of the Bidder s written proposals and, if interviews are conducted, responses to interview questions. The proposal should give clear, concise information in sufficient detail to allow an evaluation based on the criteria below. To receive the award, a Bidder s proposal must be deemed acceptable under each of the criteria below. The contract will be awarded to the Bidder whose proposal provides the best value to the County. Bidders who do not score a minimum of 70 points shall not move forward in the selection process. 1. Organization Overview Maximum 25 Points 2. Program Description & Scope of Services Maximum 45 Points 3. Budget and Cost Response Maximum 25 Points 4. Local Preference Maximum 5 Points B. LOCAL BUSINESS PREFERENCE In accordance with applicable sections of Board Policy, Section , in the formal solicitation of goods or services, the County of Santa Clara shall give responsive and responsible Local Businesses the preference described below. Local Business means a lawful business with a physical address and meaningful production capability located within the boundary of the County of Santa Clara. The term production capability means sales, marketing, manufacturing, servicing, or research and development capability that substantially and directly enhances the firm s or bidder s ability to perform the proposed contract. Post Office box numbers and/or residential addresses may not be used as the sole bases for establishing status as a Local Business. In the procurement of goods or services in which best value is the determining basis for award of the contract, five percent (5%) of the total points awardable will be added to the Local Business score. When a contract for goods or services, as defined in this policy, is presented to the Board of Supervisors for approval, the accompanying transmittal letter shall include a statement as to whether the proposed Offeror is a Local Business, and whether the application of the local preference policy was a decisive factor in the award of the proposed contract. This Local Business preference shall not apply to the following: a. Public works contracts, b. Where such a preference is precluded by local, state or federal law or regulation, 4/21/2014 5:51 PM p

30 Santa Clara County Mental Health Department RFP-MHS-FY : Chronic Homelessness Pay for Success Project c. Contracts funded in whole or in part by a donation or gift to the County where the special conditions attached to the donation or gift prohibits or conflicts with this preference policy. The donation or gift must be approved or accepted by the Board of Supervisors in accordance with County policy, or d. Contracts exempt from solicitation requirements under an emergency condition in accordance with board policy, state law and/or the County of Santa Clara Ordinance Code (Section A34-82). In order to be considered for Local Preference, proposer must complete and submit Declaration of Local Business with its RFP response. 4/21/2014 5:51 PM p

31 Santa Clara County Mental Health Department RFP-MHS-FY : Chronic Homelessness Pay for Success Project Appendix A COVER SHEET Agency or Name: Mailing Address: City, State, and Zip Code: Telephone Number: Name & Title of Contact Person: Telephone Number: Address: Fax Number: Fax Number: 1. Do you wish to claim LOCAL PREFERENCE status? YES ( ) NO ( ) If yes, please refer to Appendix I, County Local Preference Policy and provide a copy of the Declaration of Local Business. If you fail to submit the proper information with your proposal, you will be denied consideration for local preference. The information cannot be submitted at a later date. 2. Enter dollar amount being proposed and initial on the line provided. Amount Proposed: $ Initials: Offeror understands, agrees, and warrants: A. That Offeror has carefully read and fully understands the information that was provided by the County to serve as the basis for submission of this proposal; B. That Offeror has the capability to successfully undertake and complete the responsibilities and obligations of the proposal being submitted; C. That all information contained in the proposal is true and correct to the best of Offeror s knowledge; D. That Offeror signed a non-collusion affidavit herewith attached with the proposal; E. That Offeror did not receive unauthorized information from any County staff or consultant during the proposal period except as provided for in the RFP packet, addenda thereto, or the pre-proposal conference; F. That by submission of this proposal, the Offeror acknowledges that the County has the right to make any inquiry it deems appropriate to substantiate or supplement information supplied by the Offeror, and Offeror hereby grants the County permission to make said inquiries, and to provide any and all requested documentation in a timely manner; and G. That Offeror proposes and agrees to furnish the goods and services specified in the proposal. 4/21/2014 5:51 PM p. 31

32 Santa Clara County Mental Health Department RFP-MHS-FY : Chronic Homelessness Pay for Success Project No proposal shall be accepted which has not been signed in ink in the appropriate space below. I hereby certify that I am an authorized representative of the above agency and to the best of my knowledge and belief that: The data in this response is true and accurate; the agency has investigated all aspects of the RFP; the agency is aware of the applicable facts pertaining to the RFP process, procedures, and requirements; the Agency has read and understands the RFP; the agency has the capability to successfully undertake and complete the responsibilities and obligations of their response being submitted; the agency will be able to meet all of the minimum proposal requirements as specified in this RFP; and, the agency will comply with the necessary certifications and assurances if a contract is awarded. This shall constitute a warranty, the falsity of which entitles the County to pursue any remedy authorized by law, at the option of the County, the right of declaring any contract made as a result thereof to be void. By signing below, the submission of a proposal shall be deemed a representation and certification by the Offeror that it has investigated all aspects of the RFP; that it is aware of the applicable facts pertaining to the RFP process, its procedures and requirements; and that it has read and understands the RFP. No request for modification of the proposal shall be considered after its submission on the grounds that the Offeror was not fully informed as to any fact or condition. 1. If Offeror is an INDIVIDUAL, sign here (include a notarized affidavit attesting to the authenticity of said signature): Date Offeror s Signature Offeror 's Typed Name and Title 2. If Offeror is a CORPORATION, the duly authorized officer(s) shall sign here: The undersigned certify that they are respectively: and Title Title of the corporation named below; that they are designated to sign this proposal cost form by resolution (attach a certified copy, with corporate seal, if applicable, notarized as to its authenticity or Secretary's certificate of authorization) for and on behalf of the below named CORPORATION, and that they are authorized to execute same for and on behalf of said CORPORATION. Corporation Name (type or print) By: Date: Title: By: Date: Title: 4/21/2014 5:51 PM p. 32

33 SANTA CLARA COUNTY RFP-MHS-FY : Chronic Homelessness Pay for Success Project Cost Response Budget Worksheets and Narrative Requirements The Cost Response should include a narrative and a proposed budget for implementation and execution of the PFS project. Please note that the proposed budgets are not binding, but should be thoughtful and thorough. Written responses should be limited to three pages with 1.5 spacing, with 12-point font and one-inch margins. Budget proposals will not count against the overall page limit. Phase I - Deal Construction. Propose a budget of costs the Bidder expects to incur during the deal construction process, prior to the execution of the PFS contract (e.g., staff costs during deal construction, expanding the Bidder s current capacity to fulfill the requirements as a lead agency, etc.). This budget should be completed using the spreadsheet provided as Appendix B and should be accompanied by a narrative, which explains and describes the Bidder s projected costs. Note: As set forth in Section I.L of the RFP, the County may or may not provide funding or reimbursement for expenses incurred by the Lead Agency during the deal construction process. Furthermore, the County is not liable for any costs incurred by vendors in the preparation and presentation of response proposals submitted in response to this RFP. Phase II Service Provision. Bidders should submit a pro forma PFS budget for a six-year service delivery period by completing the spreadsheet provided as Attachment X. The first worksheet of Appendix B provides specific guidance on completing the Phase II pro forma budget, which should include: - The costs of service delivery, rental subsidies, and any applicable revenues; - The number of individuals to be served; and - The projected number of successful outcomes. The costs of service delivery should include the costs of all services to be provided to the target population, including Medi-Cal-funded services. Any anticipated revenues that will offset the total cost of the program (e.g., Medi-Cal reimbursements and local match, portions of SSI payments from participants, tenant-paid rent, etc.) should also be included. For the purpose of constructing a budget for the overall project, please assume that: - The project must create access to 90 units to provide housing to chronically homeless individuals over a six-year service delivery period; - The annualized cost per program participant, excluding Medi-Cal reimbursements and local match or other offsets (e.g., a portion of participants SSI payments, tenant-paid rents, etc.), should be no more than $20,000. In addition to the proposed budget, please provide a budget narrative that describes the nature of expenses included in each category, as well as an explanation of how the cost associated with each category was derived. This explanation should describe the basis for the cost estimates (e.g., costs previous incurred in the provision of the same or similar services, studies estimating the costs of provision of the same or similar services, etc.). If the Bidder has identified any revenue streams that will offset overall program costs (e.g., client s SSI benefits, tenant-paid rent,etc.), it must explain how the amount of revenue attributed to each of these sources was derived. The Bidder s overall budget projections should account for the anticipated percentage of clients qualifying for Medi-Cal and/or other benefits, and how those figures were derived. Optional alternative budget(s): Bidders may also submit one or more alternative six-year pro forma budgets, which can incorporate - a different suggested metric or definition of a successful outcome and/or - a different proposed cost range and success payment, either greater than or less than the County's current proposed success payment range. For any alternative budget, the Bidder should include a description and justification for its alternative in the budget narrative.] Additional Explanations and Notes: Deal Construction Cost Budget Explanations and Notes: Staffing (Salary & Benefits): Enter the number of FTEs for each job classification proposed and the total cost per FTE (salary and benefits). In the budget narrative, indicate the anticipated amount of total staffing cost that reflects salaries and the amount that is for benefits. For purposes of this cost response, do not include any staffing related to providing health services in this section. Other Operating Expenses: Include any recurring expenses not related to personnel expenses. Startup Expenses: Include all one-time costs related to the initiation of this project. Service Provision Cost Budget Explanations and Notes: The Bidder may edit and revise the worksheet to best fit the Bidder's proposed program. Note that as described in the RFP, the annualized cost per participant ("net operating cost per unit"), excluding services eligible for Medi-Cal reimbursements or local match or other offsets (e.g., a portion of participants SSI payments, tenant-paid rents, etc.), should be no more than $20,000. Lead Agency Costs Staffing (Salary & Benefits): Enter the number of FTEs for each job classification proposed, the total annual cost per FTE (salary and benefits), and total costs for staffing each year. In the budget narrative, indicate the anticipated amount of total staffing cost for salaries and the amount that is for benefits. For purposes of this cost response, do not include any staffing related to providing health services in this section. Medi-Cal Eligible Health Services Operating Expenses: Include any gross expenses reimbursable from Medi-Cal (reimbursement or local match) not related to personnel which are associated with providing medical and support services to the target population. If there are Medi-Cal reimbursements or local match, include these revenues in the Medi-Cal Eligible Services Revenues section. Non-Medi-Cal Eligible Health Services Operating Expenses: Include any additional costs from using services not eligible for Medi-Cal reimbursements or local match. Rental Housing Operating Expenses: Include all ongoing costs related to the provision and maintenance of housing to the target population. This should not be net of any offsets (e.g., SSI, tenant-paid rents, etc.). If there are offsets or additional revenues, include these in the Other Revenues section and specify what the revenues are. Include these revenues in the "Net Operating Cost per Unit," as applicable. Flexible Funding Operating Expenses: Include any costs incurred on an ongoing basis related to providing services for the program. Other Operating Expenses: Include any other general operating expenses not captured in the other categories above related to the project. Startup Expenses: Include all one-time costs related to the initiation of this project. Service Provider(s) Costs To the extent possible and as applicable, include estimated costs the Bidder expects to incur through subcontracting or service provision relationships with other entities, providing a separate budget for each provider. Use the explanations and notes from the Lead Agency costs as guidance. In the budget narrative, briefly describe the services the Bidder expects from each service provider, describe the types of expenses included in each category and explain how the amount of funding assigned to each category was derived (e.g., costs previous incurred in the provision of the same or similar services, studies estimating the costs of provision of the same or similar services, etc.). Revenues Medi-Cal Eligible Services Revenues: Based on the expected provision of services, enter the amount of anticipated Medi-Cal revenue that is expected to be received for each entity, as applicable. If a local match is anticipated, split the federal and local match revenues as shown in the template. Other Revenues: Based on the expected provision of services, include any additional revenue streams that will offset overall program costs (e.g., SSI benefits, etc.). Include these revenues in the "Net Operating Cost per Unit," as applicable. Programmatic Information Total Individuals Served: Provide the anticipated total number of individuals to be served in each year, given the constraint of 90 available units. Total Projected Successful Outcomes: Based on the anticipated success rate, indicate the number of total successful outcomes to be achieved in each year. 4/21/2014 5:51 PM p. 33

34 4/21/2014 5:51 PM p. 34

35 SANTA CLARA COUNTY RFP-MHS-FY : CHRONIC HOMELESSNESS PAY FOR SUCCESS PROJECT LEAD AGENCY PFS COST RESPONSE DEAL CONSTRUCTION COST BUDGET BIDDER NAME: TBD Bidders are only required to fill in cells with blue values LEAD AGENCY COSTS Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Total OPERATING EXPENSES Staffing (Salary & Benefits) FTE Classification $/FTE 0.00 Job Class 1 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $ Job Class 2 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $ Job Class 3 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Subtotal Staffing (Salary & Benefits) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Other Operating Expenses Administrative & Overhead Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Non-Staffing Operating Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Other (Specify) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Subtotal Other Operating Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 STARTUP EXPENSES Training $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Facility Set-up $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Other (Specify) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Subtotal Startup Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Lead Agency Costs $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 4/21/2014 5:51 PM p. 35

36 SANTA CLARA COUNTY RFP-MHS-FY : CHRONIC HOMELESSNESS PAY FOR SUCCESS PROJECT LEAD AGENCY PFS COST RESPONSE SERVICE PROVISION COST BUDGET BIDDER NAME: TBD Bidders are only required to fill in cells with blue values TOTAL PROGRAM COSTS LEAD AGENCY COSTS Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Total OPERATING EXPENSES Staffing (Salary & Benefits) FTE Classification $/FTE 0.00 Job Class 1 $0 $0 $0 $0 $0 $0 $0 $ Job Class 2 $0 $0 $0 $0 $0 $0 $0 $ Job Class 3 $0 $0 $0 $0 $0 $0 $0 $0 Subtotal Staffing (Salary & Benefits) $0 $0 $0 $0 $0 $0 $0 Medi-Cal Eligible Health Services Operating Expenses Mental Health Services $0 $0 $0 $0 $0 $0 $0 Drug & Alcohol Services $0 $0 $0 $0 $0 $0 $0 Primary Care Services $0 $0 $0 $0 $0 $0 $0 Other (Specify) $0 $0 $0 $0 $0 $0 $0 Subtotal Medi-Cal Eligible Health Services Operating Expenses $0 $0 $0 $0 $0 $0 $0 Non-Medi-Cal Eligible Health Services Operating Expenses Mental Health Services $0 $0 $0 $0 $0 $0 $0 Drug & Alcohol Services $0 $0 $0 $0 $0 $0 $0 Primary Care Services $0 $0 $0 $0 $0 $0 $0 Other (Specify) $0 $0 $0 $0 $0 $0 $0 Subtotal Non-Medi-Cal Eligible Health Services Operating Expenses $0 $0 $0 $0 $0 $0 $0 Rental Housing Operating Expenses Rental Subsidy $0 $0 $0 $0 $0 $0 $0 Rental Administrative Costs $0 $0 $0 $0 $0 $0 $0 Rental Housing Security Deposit (if applicable) $0 $0 $0 $0 $0 $0 $0 Other (Specify) $0 $0 $0 $0 $0 $0 $0 Subtotal Rental Housing Operating Expenses $0 $0 $0 $0 $0 $0 $0 Flexible Funding Operating Expenses Transportation $0 $0 $0 $0 $0 $0 $0 Clothing $0 $0 $0 $0 $0 $0 $0 Job Training $0 $0 $0 $0 $0 $0 $0 Furniture $0 $0 $0 $0 $0 $0 $0 Other (Specify) $0 $0 $0 $0 $0 $0 $0 Subtotal Flexible Funding Operating Expenses $0 $0 $0 $0 $0 $0 $0 Other Operating Expenses Administrative & Overhead Expenses $0 $0 $0 $0 $0 $0 $0 Other (Specify) $0 $0 $0 $0 $0 $0 $0 Subtotal Other Operating Expenses $0 $0 $0 $0 $0 $0 $0 STARTUP EXPENSES Training $0 $0 $0 $0 $0 $0 $0 Facility Setup $0 $0 $0 $0 $0 $0 $0 Other (Specify) $0 $0 $0 $0 $0 $0 $0 Subtotal Startup Expenses $0 $0 $0 $0 $0 $0 $0 Total Lead Agency Startup Costs $0 $0 $0 $0 $0 $0 $0 Total Lead Agency Medi-Cal Eligible Services Costs $0 $0 $0 $0 $0 $0 $0 Total Lead Agency Operating Costs (Excluding Medi-Cal Eligible Services) $0 $0 $0 $0 $0 $0 $0 Total Lead Agency Costs $0 $0 $0 $0 $0 $0 $0 SERVICE PROVIDER 1 COSTS Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Total OPERATING EXPENSES Staffing (Salary & Benefits) FTE Classification $/FTE 0.00 Job Class 1 $0 $0 $0 $0 $0 $0 $0 $ Job Class 2 $0 $0 $0 $0 $0 $0 $0 $ Job Class 3 $0 $0 $0 $0 $0 $0 $0 $0 Subtotal Staffing (Salary & Benefits) $0 $0 $0 $0 $0 $0 $0 Medi-Cal Eligible Health Services Operating Expense Mental Health Services $0 $0 $0 $0 $0 $0 $0 Drug & Alcohol Services $0 $0 $0 $0 $0 $0 $0 Primary Care Services $0 $0 $0 $0 $0 $0 $0 Other (Specify) $0 $0 $0 $0 $0 $0 $0 Subtotal Medi-Cal Eligible Health Services Operating Expenses $0 $0 $0 $0 $0 $0 $0 Non-Medi-Cal Eligible Health Services Operating Expenses Mental Health Services $0 $0 $0 $0 $0 $0 $0 Drug & Alcohol Services $0 $0 $0 $0 $0 $0 $0 Primary Care Services $0 $0 $0 $0 $0 $0 $0 Other (Specify) $0 $0 $0 $0 $0 $0 $0 Subtotal Non-Medi-Cal Eligible Health Services Operating Expenses $0 $0 $0 $0 $0 $0 $0 Flexible Funding Operating Expenses Transportation $0 $0 $0 $0 $0 $0 $0 Clothing $0 $0 $0 $0 $0 $0 $0 Job Training $0 $0 $0 $0 $0 $0 $0 Other (Specify) $0 $0 $0 $0 $0 $0 $0 Subtotal Flexible Funding Operating Expenses $0 $0 $0 $0 $0 $0 $0 Other Operating Expenses 4/21/2014 5:51 PM p. 36

37 Administrative & Overhead Expenses $0 $0 $0 $0 $0 $0 $0 Other (Specify) $0 $0 $0 $0 $0 $0 $0 Subtotal Other Operating Expenses $0 $0 $0 $0 $0 $0 $0 STARTUP EXPENSES Training $0 $0 $0 $0 $0 $0 $0 Equipment $0 $0 $0 $0 $0 $0 $0 Facility Setup $0 $0 $0 $0 $0 $0 $0 Other (Specify) $0 $0 $0 $0 $0 $0 $0 Subtotal Startup Expenses $0 $0 $0 $0 $0 $0 $0 Total Service Provider 1 Startup Costs $0 $0 $0 $0 $0 $0 $0 Total Service Provider 1 Medi-Cal Eligible Services Costs $0 $0 $0 $0 $0 $0 $0 Total Service Provider 1 Operating Costs (Excluding Medi-Cal Eligible Services) $0 $0 $0 $0 $0 $0 $0 Total Service Provider 1 Costs $0 $0 $0 $0 $0 $0 $0 SERVICE PROVIDER 2 COSTS Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Total OPERATING EXPENSES Staffing (Salary & Benefits) FTE Classification $/FTE 0.00 Job Class 1 $0 $0 $0 $0 $0 $0 $0 $ Job Class 2 $0 $0 $0 $0 $0 $0 $0 $ Job Class 3 $0 $0 $0 $0 $0 $0 $0 $0 Subtotal Staffing (Salary & Benefits) $0 $0 $0 $0 $0 $0 $0 Medi-Cal Eligible Health Services Operating Expenses Mental Health Services $0 $0 $0 $0 $0 $0 $0 Drug & Alcohol Services $0 $0 $0 $0 $0 $0 $0 Primary Care Services $0 $0 $0 $0 $0 $0 $0 Other (Specify) $0 $0 $0 $0 $0 $0 $0 Subtotal Medi-Cal Eligible Health Services Operating Expenses $0 $0 $0 $0 $0 $0 $0 Non-Medi-Cal Eligible Health Services Operating Expenses Mental Health Services $0 $0 $0 $0 $0 $0 $0 Drug & Alcohol Services $0 $0 $0 $0 $0 $0 $0 Primary Care Services $0 $0 $0 $0 $0 $0 $0 Other (Specify) $0 $0 $0 $0 $0 $0 $0 Subtotal Non-Medi-Cal Eligible Health Services Operating Expenses $0 $0 $0 $0 $0 $0 $0 Flexible Funding Operating Expenses Transportation $0 $0 $0 $0 $0 $0 $0 Clothing $0 $0 $0 $0 $0 $0 $0 Job Training $0 $0 $0 $0 $0 $0 $0 Other (Specify) $0 $0 $0 $0 $0 $0 $0 Subtotal Flexible Funding Operating Expenses $0 $0 $0 $0 $0 $0 $0 Other Operating Expenses Administrative & Overhead Expenses $0 $0 $0 $0 $0 $0 $0 Other (Specify) $0 $0 $0 $0 $0 $0 $0 Subtotal Other Operating Expenses $0 $0 $0 $0 $0 $0 $0 STARTUP EXPENSES Training $0 $0 $0 $0 $0 $0 $0 Equipment $0 $0 $0 $0 $0 $0 $0 Facility Setup $0 $0 $0 $0 $0 $0 $0 Other (Specify) $0 $0 $0 $0 $0 $0 $0 Subtotal Startup Expenses $0 $0 $0 $0 $0 $0 $0 Total Service Provider 2 Startup Costs $0 $0 $0 $0 $0 $0 $0 Total Service Provider 2 Medi-Cal Eligible Services Costs $0 $0 $0 $0 $0 $0 $0 Total Service Provider 2 Operating Costs (Excluding Medi-Cal Eligible Services) $0 $0 $0 $0 $0 $0 $0 Total Service Provider 2 Costs $0 $0 $0 $0 $0 $0 $0 TOTAL PROGRAM STARTUP COSTS $0 $0 $0 $0 $0 $0 $0 TOTAL PROGRAM MEDI-CAL ELIGIBLE SERVICES COSTS $0 $0 $0 $0 $0 $0 $0 TOTAL PROGRAM OPERATING COSTS (EXCLUDING MEDI-CAL ELIGIBLE SERVICES) $0 $0 $0 $0 $0 $0 $0 TOTAL PROGRAM COSTS $0 $0 $0 $0 $0 $0 $0 TOTAL PROGRAM REVENUES Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Total Medi-Cal Eligible Services Revenues Lead Agency Medi-Cal Federal Funds (if applicable) $0 $0 $0 $0 $0 $0 $0 Lead Agency Medi-Cal Local Match (if applicable) $0 $0 $0 $0 $0 $0 $0 Service Provider 1 Federal Funds (if applicable) $0 $0 $0 $0 $0 $0 $0 Service Provider 1 Local Match (if applicable) $0 $0 $0 $0 $0 $0 $0 Service Provider 2 Federal Funds (if applicable) $0 $0 $0 $0 $0 $0 $0 Service Provider 2 Local Match (if applicable) $0 $0 $0 $0 $0 $0 $0 Subtotal Medi-Cal Eligible Services Revenues $0 $0 $0 $0 $0 $0 $0 Other Revenues (Specify) Lead Agency (if applicable) $0 $0 $0 $0 $0 $0 $0 Service Provider 1 (if applicable) $0 $0 $0 $0 $0 $0 $0 Service Provider 2 (if applicable) $0 $0 $0 $0 $0 $0 $0 Subtotal Other Revenues (Specify) $0 $0 $0 $0 $0 $0 $0 TOTAL PROGRAM MEDI-CAL ELIGIBLE SERVICES REVENUES $0 $0 $0 $0 $0 $0 $0 TOTAL PROGRAM OTHER REVENUES (EXCLUDING MEDI-CAL ELIGIBLE SERVICES) $0 $0 $0 $0 $0 $0 $0 TOTAL PROGRAM REVENUES $0 $0 $0 $0 $0 $0 $0 Units Available NET OPERATING COST PER UNIT $0 $0 $0 $0 $0 $0 $0 PROGRAMMATIC INFORMATION Total Individuals Served Total Projected Successful Outcomes /21/2014 5:51 PM p. 37

38 Santa Clara County Mental Health Department RFP-MHS-FY : Chronic Homelessness Pay for Success Project Appendix C IDENTIFICATION OF SUBCONTRACTORS Vendor shall completely fill in the form below for each subcontract. A subcontractor is defined as one whom is not directly employed by the vendor: 1) Performs work or labor 2) Provides a service to the vendor Work shall be done in compliance with California Public Contract Code sections and any amendment thereof. Vendor shall assume full responsibilities for the actions, omissions and errors of subcontractors listed below. No change in subcontractor shall be permitted, after award, without prior written approval from the Director of Mental Health or his/her designee. Changes in subcontractors without prior written consent from the Director of Mental Health or his/her designee can result in the cancellation of the purchase order or contract. NAME OF COMPLETE ADDRESS SUBCONTRACTOR AND TELEPHONE NO SPECIALTY AUTHORIZED SIGNATURE: PRINT OR TYPE NAME: DATE: COMPANY NAME: TELEPHONE NUMBER: ( ) ADDRESS: 4/21/2014 5:51 PM p. 38

39 Santa Clara County Mental Health Department RFP-MHS-FY : Chronic Homelessness Pay for Success Project Appendix D CUSTOMER REFERENCES With your proposal, provide three customer references similar in organization for which you have furnished the proposed services. 1. COMPANY/ORGANIZATION NAME: ADDRESS: CONTACT PERSON: TELEPHONE NUMBER: ADDRESS Brief statement of the person s or organization s relationship to the Offeror, the period of the relationship and how the services provided relate to the services described in the RFP. 2. COMPANY/ORGANIZATION NAME: ADDRESS: CONTACT PERSON: TELEPHONE NUMBER: ADDRESS Brief statement of the person s or organization s relationship to the Offeror, the period of the relationship and how the services provided relate to the services described in the RFP. 3. COMPANY/ORGANIZATION NAME: ADDRESS: CONTACT PERSON: TELEPHONE NUMBER: ADDRESS Brief statement of the person s or organization s relationship to the Offeror, the period of the relationship and how the services provided relate to the services described in the RFP. 4/21/2014 5:51 PM p. 39

40 Santa Clara County Mental Health Department RFP-MHS-FY : Chronic Homelessness Pay for Success Project Appendix E VENDOR S QUESTIONNAIRE All information requested in the Questionnaire shall be furnished by the vendor, and shall be submitted with the proposal. Statements shall be complete and accurate and in the form requested. Omission, inaccuracy or misstatement may be cause for the rejection of a proposal. 1. Name of vendor exactly as it is to appear on a service agreement and address which vendor would designate under the notice provision of the agreement: 2. Vendor, if selected, intends to carry on the business as Individual ( ), Corporation ( ), or Other ( ): If "Other" attach explanation. 3. If a corporation, answer the following: A. When incorporated? B. In what state? C. Authorized to do business in California? If so, what date? D. Name, address, years in the corporation, and percentage of stock held by the following officers: President: Years: Stock %: Vice President: Years: Stock %: Secretary: Years: Stock %: Treasurer: Years: Stock %: Other: Years: Stock %: E. Name, address and percentage of stock held by each Member of the Board of Directors: Chairman: Stock %: Member: Stock %: Member: Stock %: Member: Stock %: 4/21/2014 5:51 PM p. 40

41 F. Name, address and shares of stock held by other principal stockholders: (A Principal Stockholder is defined as a stockholder who holds 10% or more of standing stock of the corporation). Total capitalization: $ Amount of capital stock subscribed: $ Amount paid in: $ 5. Has vendor ever had a bond or surety denied, canceled, or forfeited? YES ( ) NO ( ) If yes, state name of bonding company, date, amount of bond and reason for such cancellation or forfeiture in an attached statement. 6. Have vendor ever declared bankruptcy or been declared bankrupt? YES ( ) NO ( ) If yes, state date, court jurisdiction, docket number, amount of liabilities and amount of assets. 7. Have any agreements held by vendor for the services similar to those listed in this RFP ever been canceled? YES ( ) NO ( ) If yes, please explain the cause, outcome, and indicate which organization/individual/ entity cancelled the agreement(s). 8. Has vendor ever been sued for issues pertaining to fee payment, performance, or any other issues relating to the services listed in the RFP? YES ( ) NO ( ) If yes, give details. 9. Is vendor currently engaged in merger or acquisition negotiations, or does vendor anticipate entering into merger or acquisition negotiations within the anticipated term of the contract resulting from this RFP? YES ( ) NO ( ) If yes, give details and attach a copy of any relevant agreement(s). 10. Is vendor currently engaged or has been engaged in any litigation which will or could affect its ability to pay fees or perform the services required by a service agreement resulting from this RFP? YES ( ) NO ( ) If yes, give details. 11. List any law suits filed against vendor, vendor s subsidiaries, parent, other corporate affiliates, or subcontractors in the past five (5) years and the outcomes of those lawsuits. Identify the parties involved and circumstances. Also, describe any civil or criminal litigation or investigations pending. Page 2 of 3 4/21/2014 5:51 PM p. 41

42 12. Submit at least two persons, firms and/or governmental bodies with which vendor has had agreements with that have since concluded (e.g., organizations that are no longer active customers of your firm). Provide a contact person s name and phone number for each organization. 13. State the number of persons employed by you who are engaged in providing the services listed in this RFP. Indicate what percentages of these employees are employed locally and what percentage of those employees would directly service an account resulting from this RFP. Of the employees indicated, what percentage is management and what percentage are operational? 14. Please list and describe any audits and investigations that vendor was invovled in or presently undergoing. The undersigned hereby declares under penalty of perjury that all statements, answers and representations made in this questionnaire are true and accurate, including all supplementary statements hereto attached. In the case of a corporate vendor, the signature of one duly authorized representative is sufficient. Signature (Please print or type name) Title Signature (Please Print or Type Name) Title Page 3 of 3 4/21/2014 5:51 PM p. 42

43 Santa Clara County Mental Health Department RFP-MHS-FY : Chronic Homelessness Pay for Success Project Appendix F NON-COLLUSION DECLARATION I,, am the (name) of, (Position Title) (Company) the party making the foregoing proposal that the proposal is not made in the interest of, or on behalf of, any undisclosed person, partnership, company, association, organization, or corporation; that the proposal is genuine and not collusive or sham; that the proposal has not directly or indirectly induced or solicited any other vendor to put in a false or sham proposal; and has not directly or indirectly colluded, conspired, connived, or agreed with any vendor of anyone else to put in a sham proposal, or that anyone shall refrain from proposing; that the vendor has not in any manner directly or indirectly, sought by agreement, communication, or conference with anyone to fix the proposal price of the vendor or any other vendor, or to fix any overhead, profit, or cost element of the proposal price, or of that of any other vendor, or to secure any advantage against the public body awarding the contract of anyone interested in the proposed contract; that all statements contained in the bid are true; and, further, that the vendor has not, directly or indirectly, submitted his or her proposal price or any breakdown thereof, or the contents thereof, or divulged information or data relative thereto, or paid, and will not pay, any fee to any corporation, partnership, company association, organization, bid depository, or to any member or agent thereof to effectuate a collusive or sham proposal. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct: (Date) (Signature) 4/21/2014 5:51 PM p. 43

44 Santa Clara County Mental Health Department RFP-MHS-FY : Chronic Homelessness Pay for Success Project Appendix G CONFIDENTIAL INFORMATION PUBLIC RECORDS ACT 1. If requesting that section(s) of their proposal be kept confidential, vendor must list the specific page number(s) and section(s) below. 2. Listing the information below, does not guarantee it will remain confidential. Vendor must have a legal basis for requesting an exemption(s) under the California Public Records Act (PRA) (Government Code Section 6254). 3. If the explanation/reason does not fall under one of the exemptions permitted by the PRA, the information will be disclosed by the County in accordance with the law. 4. Marking your entire proposal as confidential or proprietary is unacceptable. You must identify the specific page number(s) and section(s) and have a legal basis stated in the explanation/reason column below. 5. If vendor is not requesting any exemption(s), please check box: Item # Page # Section/sub-section # Explanation/Reason Print or Type Name: Authorized Signature: Company Name: Date: 4/21/2014 5:51 PM p. 44

45 Santa Clara County Mental Health Department RFP-MHS-FY : Chronic Homelessness Pay for Success Project Appendix H Agency Name: Program Category: CULTURAL COMPETENCE FORM Identify the Agency s ability to provide language, gender, and culturally specific to the RFP services by checking all that apply and/or provide the name of Agency that you have an arrangement with to respond to these referrals. A B C Language, Gender and Culturally Competence Spanish (Language) Vietnamese (Language) Other Language: G.L.B.T Staff African American Staff Latino Staff Native American Staff Asian American Staff Pacific Islander Staff Others: Have staff on board 1 2 Included in staffing work plan Not included in staffing work plan. Explain below Name of Agency that you have an arrangement with to respond to these referrals 4/21/2014 5:51 PM p. 45

46 Santa Clara County Mental Health Department RFP-MHS-FY : Chronic Homelessness Pay for Success Project Appendix I DECLARATION OF LOCAL BUSINESS Santa Clara County gives local businesses a preference in formal solicitations of goods and services as set forth in the Board Policy, Section A bidder or proposer has the option of qualifying for the preference by self-declaring its qualification as a local business. By signing below, the bidder or proposer is certifying its qualification as a local business for purposes of application of Santa Clara County s policy and is deemed to be applying for the local preference. All information submitted is subject to investigation, as well as to disclosure to third parties under the California Public Records Act. Incomplete, unclear, or incomprehensible responses to the following will result in the bid or proposal not being considered for application of Santa Clara County s local preference policy. False or dishonest responses will result in rejection of the bid or proposal and curtail the firm or individual s ability to conduct business with the County in the future. It may also result in legal action. Provide the complete physical address of your business with meaningful production capability located within the boundary of the County of Santa Clara. The term production capability means sales, marketing, manufacturing, servicing, or research and development capability that substantially and directly enhances the firm s/bidder s/proposer s ability to perform the proposed contract. Post Office box numbers and/or residential addresses may not be used as the sole bases for establishing status as a Local Business. If you have more than one physical address in Santa Clara County, please provide an attachment with all of the addresses in the form specified below. Business Name: Street: City/State: Zip: Please Indicate Business Organization (Check One) Individual Proprietorship Partnership Corporation Other By filling this form, bidder/proposer declares its qualification as a local business as defined in County of Santa Clara Board Policy, Section The undersigned declares that he or she is an official/agent of responding firm or individual and 1 of 2 4/21/2014 5:51 PM p. 46

47 Santa Clara County Mental Health Department RFP-MHS-FY : Chronic Homelessness Pay for Success Project is empowered to represent, bind, and execute contracts on behalf of the firm or individual. The undersigned declares under penalty of perjury, under the laws of the State of California, that all statements in this Exhibit and response are true and correct, with full knowledge that all statements are subject to investigation and that any incomplete, unclear, false or dishonest response may be grounds for denial or revocation of the accompanying bid or proposal and may result in being barred from doing business with Santa Clara County as well as additional legal consequences. Signature Name Title Date Business License Number (if applicable) Declaration of Local Business Jan 05, of 2 4/21/2014 5:51 PM p. 47

48 Attachment A Contracting Principles All entities that contract with the County to provide services where the contract value is $100,000 or more per budget unit per fiscal year and/or as otherwise directed by the Board, must be fiscally responsible entities and must treat their employees fairly. To ensure compliance with these contracting principles, all contractors must: (1) comply with all applicable federal, state and local rules, regulations and laws; (2) maintain financial records, and make those records available upon request; (3) provide to the County copies of any financial audits that have been completed during the term of the contract; (4) upon the County s request, provide the County reasonable access, through representatives of the Contractor, to facilities, financial and employee records that are related to the purpose of the contract, except where prohibited by federal or state laws, regulations or rules. 4/21/2014 5:51 PM p. 48

49 Attachment B County of Santa Clara COUNTY OF SANTA CLARA SERVICE AGREEMENT SECTION I: GENERAL INFORMATION Contractor Name: Purchase Order Number: Agency/Department Name: MENTAL HEALTH DEPARTMENT Department No: 0412 Brief Description of Services: The maximum amount payable to this contractor under this agreement shall not exceed: Start Date: (When left blank, start date will be the date executed by Authorized County Representative) Line 1 Line 2 Line 3 Account Assignment Plant Number Maximum Financial Obligation General Ledger (Expense Code) H Select... Select... Term of Agreement For County Use Only Cost Center (Dept Code) Amount $ End Date: 06/30/2014 WBS (Capital Project Code) SAMPLE Internal Order ( PCA code optional) Line 4 Select... Line 5 Select... 4/21/2014 Form Effective 5:51 PMas of October 2012 Page 1 of 12 p. 49

50 Attachment B County of Santa Clara COUNTY OF SANTA CLARA SERVICE AGREEMENT SECTION II: PARTIES TO AGREEMENT Legal notices and invoices pertaining to this Agreement shall be sent to the appropriate contact person listed below. Notices shall be in writing and served either by personal delivery or sent by certified or registered mail, postage prepaid, addressed as follows. Notice shall be deemed effective on the date that the notice is personally delivered or, if mailed, three (3) days after deposit in the mail. Either party may designate a different person and/or address for the receipt of notices by sending written notice to the other party, which shall not require an amendment to this Agreement. Business Name Contact Person Street Address * City, State, Zip * Telephone number * Address * SCC Vendor Number (SAP) Contractor * To be completed for Independent Contractors Only DO NOT COMPLETE FOR DEPENDENT CONTRACTORS Agency / Department Program Manager or Contract Monitor Name Street Address City, State, Zip Telephone number Fiscal Contact (Accounts Payable Contact) Contract Preparer County of Santa Clara MENTAL HEALTH DEPARTMENT SAMPLE 828 S. Bascom Ave, Suite 200 San Jose, CA /21/2014 Form Effective 5:51 PMas of October 2012 Page 2 of 12 p. 50

51 Attachment B County of Santa Clara COUNTY OF SANTA CLARA SERVICE AGREEMENT SECTION III: CONTRACT AUTHORIZATION It is agreed between County and Contractor that Contractor will, for the compensation described in this Agreement, perform the work described in Section V in accordance with all terms and conditions of this Agreement including all exhibits and attachments. In addition, County and Contractor certify that the tax withholding status and benefit documentation (Section IV) accurately reflect the anticipated working relationship between County and Contractor. Further, contractor certifies that the insurance waiver information (Section VIII, Part B) of this form is true and correct. For independent contractors, a certificate demonstrating appropriate insurance is required before work may begin. SIGNATURES Contract is not valid until signed by Contractor and County s authorized representative. Signatures of the County Counsel and Office of the County Executive are required for contracts executed by a delegation of authority. Contractor: County Authorized Representative: (Procurement Department, Board of Supervisors, or Delegated Authority) Agency/Department Manager: Agency/Department Fiscal Officer: County Counsel: (Signature required when the Standard Provisions language (Section VI) is changed, or for IT Services pursuant to Board Policy , or when contract was approved by a delegation of authority from the Board) Office of the County Executive: (Signature required when Board approved contract by a delegation of authority) Attest Clerk of the Board: (Signature required when Board approved contract) Date: Date: Date: Date: Date: Date: SAMPLE Date: 4/21/2014 Form Effective 5:51 PMas of October 2012 Page 3 of 12 p. 51

52 Attachment B County of Santa Clara COUNTY OF SANTA CLARA SERVICE AGREEMENT SECTION IV: DETERMINATION OF RELATIONSHIP STATUS Dependent/Independent status is an important relationship distinction. It determines the contractor s eligibility for Medicare and Social Security, Public Employees Retirement System benefits, and other benefits and affects how the contractor files tax returns and the contractor s responsibility for various federal and state taxes. Questionnaire to be Completed by Contracting Department to Determine Relationship Status of Contractor Supervision: Will the County have the right to tell the contractor how to do the work, when to arrive or leave work, or when to take breaks? Do you have other employees performing similar work with a similar degree of supervision? If the answer to any of these questions is YES, select YES from the dropdown. Training: Will the County instruct the contractor on how to do the job or pay for external training? Incomplete Work: Will the Contractor be able to resign or terminate the contract without being held either financially or legally liable for unfinished work? Place of Work/Tools: Will the County provide the Contactor with a place to work at a County location and tools to do the job, i.e. computers, telephones, etc? Length of Relationship: When the Contractor is hired to complete ongoing departmental duties or functions answer YES. When the contractor is hired to complete a specific project that was not the regular tasks performed by County employees before. Other Customers: Does the County prevent the Contractor from performing similar services for other customers, either due to the amount of work (full-time), or by contractual provision? Designation as Business Entity: If the Contractor has a business license or business certificate, or is a corporation, nonprofit organization, or school district, select No from the dropdown. (This does not pertain to professional licenses or certificates such as a license for a physician or architect.) Enter below the business license number and the city/entity where issued. Bus Lic. # Issued by: Payment Schedule: Will payments be made either as an hourly wage or as weekly/monthly salary? If payment is by commission or based on project milestones or deliverables, answer NO to this question. Be sure this answer matches the contract payment schedule in Section V. Support Services: Will County employees or other independent contractors provide assistance to this Contractor? Assistance is defined as clerical, technical or professional support. SAMPLE If at least 5 of the above questions were answered NO, Contractor is an Independent Contractor. If 5 or more of the above questions were answered YES, Contractor is a Dependent Contractor, where the relationship resembles that of employer/employee. Tax withholding is required and benefits are provided. Complete and attach the following forms: Employee s Withholding Allowance Certificate Federal Form W-4, State Withholding, Form DE-4, Determining PERS Eligibility and PERS Member Action Request. Visit for more information regarding Dependent Contractors. County insurance requirements do not apply to Dependent Contractors. Select... Select... Select... Select... Select... Select... Select... Select... Select... Contractor understands and agrees that the tax withholding and benefit status checked above is correct. Any changes to the contractor s tax withholding and benefit status require a new contract. Contractor is responsible for any penalties and liabilities assessed by any taxing authority, based on a change of tax withholding and benefit status. Contractor s Initials: Reviewed by Dept. Fiscal Officer 4/21/2014 Form Effective 5:51 PMas of October 2012 Page 4 of 12 p. 52

53 Attachment B County of Santa Clara COUNTY OF SANTA CLARA SERVICE AGREEMENT SECTION V: CONTRACT SPECIFICS A. SERVICE DESCRIPTION AND EXPECTED OUTCOME (SCOPE OF SERVICE) Or See Attachment incorporated by this reference B. DELIVERABLES, MILESTONES, TIMELINE FOR PERFORMANCE SAMPLE Or See Attachment incorporated by this reference 4/21/2014 Form Effective 5:51 PMas of October 2012 Page 5 of 12 p. 53

54 Attachment B County of Santa Clara COUNTY OF SANTA CLARA SERVICE AGREEMENT C. PERFORMANCE STANDARDS Or See Attachment incorporated by this reference D. PAYMENT SCHEDULE SAMPLE Note: All reimbursements for travel shall comply with the current County Travel Policy Dependent contractors are not permitted to work in excess of 40 hours per week Or See Attachment incorporated by this reference 4/21/2014 Form Effective 5:51 PMas of October 2012 Page 6 of 12 p. 54

55 Attachment B County of Santa Clara COUNTY OF SANTA CLARA SERVICE AGREEMENT SECTION VI: STANDARD PROVISIONS Changes to the terms and conditions in this section require approval of County Counsel A. ENTIRE AGREEMENT This document represents the entire Agreement between the parties. All prior negotiations and written and/or oral agreements between the parties with respect to the subject matter of the agreement are merged into this Agreement. B. AMENDMENTS This agreement may only be amended by a written instrument signed by the Parties. C. CONFLICTS OF INTEREST Contractor shall comply, and require its subcontractors to comply, with all applicable (i) requirements governing avoidance of impermissible client conflicts; and (ii) federal, state and local conflict of interest laws and regulations including, without limitation, California Government Code section 1090 et. seq., the California Political Reform Act (California Government Code section et. seq.) and the regulations of the Fair Political Practices Commission concerning disclosure and disqualification (2 California Code of Regulations section et. seq.). Failure to do so constitutes a material breach of this Agreement and is grounds for immediate termination of this Agreement by the County. In accepting this Agreement, Contractor covenants that it presently has no interest, and will not acquire any interest, direct or indirect, financial or otherwise, which would conflict in any manner or degree with the performance of this Agreement. Contractor further covenants that, in the performance of this Agreement, it will not employ any contractor or person having such an interest. Contractor, including but not limited to contractor s employees and subcontractors, may be subject to the disclosure and disqualification provisions of the California Political Reform Act of 1974 (the Act ), that (1) requires such persons to disclose economic interests that may foreseeably be materially affected by the work performed under this Agreement, and (2) prohibits such persons from making or participating in making decisions that will foreseeably financially affect such interests. If the disclosure provisions of the Political Reform Act are applicable to any individual providing service under this Agreement, Contractor shall, upon execution of this Agreement, provide the County with the names, description of individual duties to be performed, and addresses of all individuals, including but not limited to Contractor s employees, agents and subcontractors, that could be substantively involved in making a governmental decision or serving in a staff capacity and in that capacity participating in making governmental decisions or performing duties that would be performed by an individual in a designated position, (2 CCR 18701(a)(2)), as part of Contractor s service to the County under this Agreement. Contractor shall immediately notify the County of the names and addresses of any additional individuals later assigned to provide such service to the County under this Agreement in such a capacity. Contractor shall immediately notify the County of the names of individuals working in such a capacity who, during the course of the Agreement, end their service to the County. If the disclosure provisions of the Political Reform Act are applicable to any individual providing service under this Agreement, Contractor shall ensure that all such individuals identified pursuant to this section understand that they are subject to the Act and shall conform to all requirements of the Act and other laws and regulations listed in subsection (A) including, as required, filing of Statements of Economic Interests within 30 days of commencing service pursuant to this Agreement, annually by April 1, and within 30 days of their termination of service pursuant to this Agreement. SAMPLE D. GOVERNING LAW, VENUE This Agreement has been executed and delivered in, and shall be construed and enforced in accordance with, the laws of the State of California. Proper venue for legal action regarding this Agreement shall be in the County of Santa Clara. E. ASSIGNMENT No assignment of this Agreement or of the rights and obligations hereunder shall be valid without the prior written consent of the other party. F. ASSIGNMENT OF CLAYTON ACT, CARTWRIGHT ACT CLAIMS Contractor assigns to the County all rights, title, and interest in and to all causes of action it may have under Section 4 of the Clayton Act (15 U.S.C. Sec. 15) or under the Cartwright Act (Chapter 2 (commencing with Section 16700) of Part 2 of Division 7 of the Business and Professions Code), arising from purchases of goods, materials, or services by the Contractor for sale to the County pursuant to this Agreement. G. WAIVER No delay or failure to require performance of any provision of this Agreement shall constitute a waiver of that provision as to that or any other instance. Any waiver granted by a party shall be in writing and shall apply to the specific instance expressly stated. 4/21/2014 Form Effective 5:51 PMas of October 2012 Page 7 of 12 p. 55

56 Attachment B County of Santa Clara COUNTY OF SANTA CLARA SERVICE AGREEMENT H. NON-DISCRIMINATION Standard Non-Discrimination Language Contractor shall comply with all applicable Federal, State, and local laws and regulations including Santa Clara County s policies concerning nondiscrimination and equal opportunity in contracting. Such laws include but are not limited to the following: Title VII of the Civil Rights Act of 1964 as amended; Americans with Disabilities Act of 1990; The Rehabilitation Act of 1973 (Sections 503 and 504); California Fair Employment and Housing Act (Government Code sections et seq.); and California Labor Code sections 1101 and Contractor shall not discriminate against any subcontractor, employee, or applicant for employment because of age, race, color, national origin, ancestry, religion, sex/gender, sexual orientation, mental disability, physical disability, medical condition, political beliefs, organizational affiliations, or marital status in the recruitment, selection for training including apprenticeship, hiring, employment, utilization, promotion, layoff, rates of pay or other forms of compensation. Nor shall Contractor discriminate in provision of services provided under this contract because of age, race, color, national origin, ancestry, religion, sex/gender, sexual orientation, mental disability, physical disability, medical condition, political beliefs, organizational affiliations, or marital status. OR Alternate Non-Discrimination Language Attached As Exhibit (Requires County Counsel Approval) I. TERMINATION Standard Termination Language, incorporated by this reference. The County may, by written notice to Contractor, terminate all or part of this Agreement at any time for the convenience of the County. The notice shall specify the effective date and the scope of the termination. In the event of termination, Contractor shall deliver to County all documents prepared pursuant to the Agreement, whether complete or incomplete. Contractor may retain a copy for its records. Upon receipt of the documents, Contractor shall be compensated based on the completion of services provided, as solely and reasonably determined by County. Alternate Termination Language Attached As Exhibit (Requires County Counsel Approval). OR, incorporated by this reference J. BUDGET CONTINGENCY This Agreement is contingent upon the appropriation of sufficient funding by the County for the services covered by this Agreement. If funding is reduced or deleted by the County for the services covered by this Agreement, the County has the option to either terminate this Agreement with no liability occurring to the County or to offer an amendment to this Agreement indicating the reduced amount. SAMPLE K. COUNTY NO-SMOKING POLICY Contractor and its employees, agents and subcontractors, shall comply with the County s No-Smoking Policy, as set forth in the Board of Supervisors Policy Manual section 3.47 (as amended from time to time), which prohibits smoking: (1) at the Santa Clara Valley Medical Center Campus and all County-owned and operated health facilities, (2) within 30 feet surrounding County-owned buildings and leased buildings where the County is the sole occupant, and (3) in all County vehicles. 4/21/2014 Form Effective 5:51 PMas of October 2012 Page 8 of 12 p. 56

57 Attachment B County of Santa Clara COUNTY OF SANTA CLARA SERVICE AGREEMENT L. FOOD AND BEVERAGE STANDARDS Except in the event of an emergency or medical necessity, the following nutritional standards shall apply to any foods and/or beverages purchased by Contractor with County funds for County-sponsored meetings or events. If food is to be provided, healthier food options shall be offered. Healthier food options include (1) fruits, vegetables, whole grains, and low fat and low calorie foods; (2) minimally processed foods without added sugar and with low sodium; (3) foods prepared using healthy cooking techniques; and (4) foods with less than 0.5 grams of trans fat per serving. Whenever possible, Contractor shall (1) offer seasonal and local produce; (2) serve fruit instead of sugary, high calorie desserts; (3) attempt to accommodate special, dietary and cultural needs; and (4) post nutritional information and/or a list of ingredients for items served. If meals are to be provided, a vegetarian option shall be provided, and the Contractor should consider providing a vegan option. If pre-packaged snack foods are provided, the items shall contain: (1) no more than 35% of calories from fat, unless the snack food items consist solely of nuts or seeds; (2) no more than 10% of calories from saturated fat; (3) zero trans fat; (4) no more than 35% of total weight from sugar and caloric sweeteners, except for fruits and vegetables with no added sweeteners or fats; and (5) no more than 360 mg of sodium per serving. If beverages are to be provided, beverages that meet the County s nutritional criteria are (1) water with no caloric sweeteners; (2) unsweetened coffee or tea, provided that sugar and sugar substitutes may be provided as condiments; (3) unsweetened, unflavored, reduced fat (either nonfat or 1% low fat) dairy milk; (4) plant-derived milk (e.g., soy milk, rice milk, and almond milk) with no more than 130 calories per 8 ounce serving; (5) 100% fruit or vegetable juice (limited to a maximum of 8 ounces per container); and (6) other low-calorie beverages (including tea and/or diet soda) that do not exceed 40 calories per 8 ounce serving. Sugar-sweetened beverages shall not be provided. M. CONTRACTING PRINCIPLES All entities that contract with the County to provide services where the contract value is $100,000 or more per budget unit per fiscal year and/or as otherwise directed by the Board, shall be fiscally responsible entities and shall treat their employees fairly. To ensure compliance with these contracting principles, all contractors shall: (1) comply with all applicable federal, state and local rules, regulations and laws; (2) maintain financial records, and make those records available upon request; (3) provide to the County copies of any financial audits that have been completed during the term of the contract; (4) upon the County s request, provide the County reasonable access, through representatives of the Contractor, to facilities, financial and employee records that are related to the purpose of the contract, except where prohibited by federal or state laws, regulations or rules. N. CALIFORNIA PUBLIC RECORDS ACT The County is a public agency subject to the disclosure requirements of the California Public Records Act ( CPRA ). If Contractor s proprietary information is contained in documents submitted to County, and Contractor claims that such information falls within one or more CPRA exemptions, Contractor shall clearly mark such information CONFIDENTIAL AND PROPRIETARY, and identify the specific lines containing the information. In the event of a request for such information, the County will use its best efforts to provide notice to Contractor prior to such disclosure. If Contractor contends that any documents are exempt from the CPRA and wishes to prevent disclosure, it is required to obtain a protective order, injunctive relief or other appropriate remedy from a court of law in Santa Clara County before the County s deadline for responding to the CPRA request. If Contractor fails to obtain such remedy within County s deadline for responding to the CPRA request, County may disclose the requested information. Contractor shall defend, indemnify and hold the County harmless against any claim, action or litigation (including but not limited to all judgments, costs, fees, and reasonable attorney s fees) that may result from denial, withholding or redaction of a CPRA request for information arising from any representation, or any action (or inaction), by the Contractor. SAMPLE O. THIRD PARTY BENEFICIARIES This agreement does not, and is not intended to, confer any rights or remedies upon any person or entity other than the parties. P. INTELLECTUAL PROPERTY RIGHTS: Ownership: County shall own all right, title and interest in and to the Deliverables. For purposes of this Agreement, the term Deliverables shall mean any documentation and deliverables created by Contractor during the performance of services that are identified in this Agreement. Contractor hereby assigns to the County all rights, title and interest in and to any and all intellectual property whether or not patentable or registrable under patent, copyright, trademark or similar statutes, made or conceived or reduced to practice or learned by Contractor, either alone or jointly with others, during the period of Contractor s agreement with the County or result from the use of premises leased, owned or contracted for by the County. Contractor acknowledges that all original works of authorship which are made by Contractor (either solely or jointly with others) within the scope of this Agreement and which are protectable by copyright are works made for hire, as that term is defined in the United States Copyright Act (17 U.S.C. Section 101), and shall belong solely to County. Contractor agrees that the County will be the copyright owner in all copyrightable works of every kind and description created or delivered by Contractor, either solely or jointly with others, in connection with any agreement with the County. 4/21/2014 Form Effective 5:51 PMas of October 2012 Page 9 of 12 p. 57

58 Attachment B County of Santa Clara COUNTY OF SANTA CLARA SERVICE AGREEMENT Q. INTELLECTUAL PROPERTY INDEMNITY Contractor represents and warrants for the benefit of the County and its users that, to its knowledge, as of the effective date of this Agreement, Contractor is the exclusive owner of all rights, title and interest in the Deliverables and/or services provided pursuant to this Agreement. Contractor shall defend, indemnify and hold the County harmless against any claim, action or litigation (including but not limited to all judgments, costs, fees, and reasonable attorney s fees) by a third party alleging the Deliverables and/or services provided pursuant to this Agreement infringe upon any intellectual property rights of third parties. This indemnity and duty to defend is in addition to and does not supersede the requirements stated in VII of this agreement. R. OWNERSHIP RIGHTS TO MATERIALS / RESTRICTIONS ON USE All materials obtained, developed or prepared by Contractor in the course of performing services hereunder, including but not limited to videotapes, audio recordings, still photographs, ads or brochures, and the derivative works, patent, copyright, trademark, trade secret or other proprietary rights associated therewith (collectively Deliverables ), shall be the sole and exclusive property of the County. To the extent Contractor owns or claims ownership rights to said Deliverables, Contractor hereby expressly assigns all said rights, title, and interest in and to the Deliverables to the County pursuant to the terms and conditions of this Agreement and at no additional cost. The County has the exclusive royalty-free irrevocable right to duplicate, publish or otherwise use for any purpose, all materials prepared under this Agreement. If Contractor wishes to use the materials prepared hereunder for any purpose including but not limited to promotional, educational or commercial purposes, the Contractor shall obtain prior written authorization from the County, which consent may be withheld by the County in its sole discretion. Contractor acknowledges that all original works of authorship which are made by Contractor (solely or jointly with others) within the scope of this Agreement and which are protectable by copyright are works made for hire, as that term is defined in the United States Copyright Act (17 U.S.C., Section 101), and shall belong solely to County. Contractor agrees that the County will be the copyright owner in all copyrightable works of every kind and description created or developed by Contractor, solely or jointly with others, in connection with any agreement with the County. If requested to, and at no further expense to the County, Contractor will execute in writing any acknowledgments or assignments of copyright ownership of such copyrightable works as may be appropriate for preservation of the worldwide ownership in the County and its nominees of such copyrights. This section shall apply to the extent not otherwise provided under this agreement. S. COUNTY DATA County Data shall mean data and information received by Contractor from County. As between Contractor and County, all County Data shall remain the property of the County. Contractor shall not acquire any ownership interest in the County Data. Contractor shall not, without County s written permission consent, use or disclose the County Data other than in the performance of its obligations under this Agreement. Contractor shall be responsible for establishing and maintaining an information security program that is designed to ensure the security and confidentiality of County Data, protect against any anticipated threats or hazards to the security or integrity of County Data, protect against unauthorized access to or use of County Data that could result in substantial harm or inconvenience to County or any end users; and ensure the proper disposal of County data upon termination of this Agreement. Contractor shall take appropriate action to address any incident of unauthorized access to County Data, including addressing and/or remedying the issue that resulted in such unauthorized access, notifying County as soon as possible of any incident of unauthorized access to County Data, or any other breach in Contractor s security that materially affects County or end users; and be responsible for ensuring compliance by its officers, employees, agents, and subcontractors with the confidentiality provisions hereof. Should confidential and/or legally protected County Data be divulged to unauthorized third parties, Contractor shall comply with all applicable federal and state laws and regulations, including but not limited to California Civil Code Sections and at Contractor s sole expense (if applicable). Contractor shall not charge the County for any expenses associated with Contractor s compliance with the obligations set forth in this section. SAMPLE 4/21/2014 Form Effective 5:51 PMas of October 2012 Page 10 of 12 p. 58

59 Attachment B County of Santa Clara COUNTY OF SANTA CLARA SERVICE AGREEMENT SECTION VII: INSURANCE / INDEMNIFICATION Independent Contractors shall comply with the County s insurance and indemnification requirements as indicated below. These requirements do not apply to Dependent Contractors. A. TYPE OF INSURANCE LANGUAGE The following standard insurance and indemnification language is attached and incorporated into this agreement: Select... Modification or Waiver Attached if Appropriate B. DETERMINATION OF INSURANCE REQUIREMENTS AND WAIVER DECLARATION Workers Compensation: Does the contractor have employees? If YES, then, WORKER S COMPENSATION/EMPLOYER'S LIABILITY INSURANCE IS REQUIRED. Owned Auto Insurance: Will the contractor use any owned autos in the provision of direct services, such as transporting clients in autos or operating autos in performance of the work itself? If YES, then INSURANCE FOR OWNED AUTOS IS REQUIRED. Hired Auto Insurance: Will the contractor use any hired autos in the provision of direct services, such as transporting clients in autos or operating autos in performance of the work itself? If YES, then INSURANCE FOR HIRED AUTOS IS REQUIRED. Non-owned Auto Insurance: Will the contractor be using any non-owned autos in the provision of direct services, such as transporting clients in non-owned autos or operating non-owned autos in performance of the work itself? If YES then, INSURANCE FOR NON-OWNED AUTOS IS REQUIRED. When NO is checked, this declaration will serve as a waiver for the specified type of insurance. SAMPLE Select... Select... Select... Select... 4/21/2014 Form Effective 5:51 PMas of October 2012 Page 11 of 12 p. 59

60 Attachment B County of Santa Clara COUNTY OF SANTA CLARA SERVICE AGREEMENT SECTION VIII: FEDERAL/STATE REQUIRED PROVISIONS (Examples include Drug-free Workplace Activity, Health Insurance Portability and Accountability Act (HIPAA), Business Associate Language, etc) A. Federal Required Language Attached (optional) Only add special language if services included in the contract require language different from or in addition to that in Section VI. B. State Required Language Attached (optional) Only add special language if services included in the contract require language different from or in addition to that in Section VI. SECTION IX: ADDITIONAL ATTACHED EXHIBIT(S) (optional) If exhibits are added to this Service Agreement, the contract will require review, approval and signature of County Counsel, with the exception of attachments that further explain the Contract Specifics as outlined in Section V, and insurance exhibits. Examples of attachments that require County Counsel approval are: 1) Contractor s terms and conditions that are different than, or add to the standard provisions language, 2) Any changes to the language in Section VI Standard Provisions. Exhibit Name(s) The Exhibits named above are attached and incorporated by this reference SAMPLE 4/21/2014 Form Effective 5:51 PMas of October 2012 Page 12 of 12 p. 60

61 Attachment C County of Santa Clara EXHIBIT B-3 (revised) INSURANCE REQUIREMENTS FOR PROFESSIONAL SERVICES CONTRACTS (e.g. Medical, Legal, Financial services, etc.) Indemnity The Contractor shall indemnify, defend, and hold harmless the County of Santa Clara (hereinafter "County"), its officers, agents and employees from any claim, liability, loss, injury or damage arising out of, or in connection with, performance of this Agreement by Contractor and/or its agents, employees or sub-contractors, excepting only loss, injury or damage caused by the sole negligence or willful misconduct of personnel employed by the County. It is the intent of the parties to this Agreement to provide the broadest possible coverage for the County. The Contractor shall reimburse the County for all costs, attorneys' fees, expenses and liabilities incurred with respect to any litigation in which the Contractor is obligated to indemnify, defend and hold harmless the County under this Agreement. Insurance Without limiting the Contractor's indemnification of the County, the Contractor shall provide and maintain at its own expense, during the term of this Agreement, or as may be further required herein, the following insurance coverages and provisions: A. Evidence of Coverage Prior to commencement of this Agreement, the Contractor shall provide a Certificate of Insurance certifying that coverage as required herein has been obtained. Individual endorsements executed by the insurance carrier shall accompany the certificate. In addition, a certified copy of the policy or policies shall be provided by the Contractor upon request. This verification of coverage shall be sent to the requesting County department, unless otherwise directed. The Contractor shall not receive a Notice to Proceed with the work under the Agreement until it has obtained all insurance required and such insurance has been approved by the County. This approval of insurance shall neither relieve nor decrease the liability of the Contractor. B. Qualifying Insurers All coverages, except surety, shall be issued by companies which hold a current policy holder's alphabetic and financial size category rating of not less than A- V, according to the current Best's Key Rating Guide or a company of equal financial stability that is approved by the County's Insurance Manager. Rev. 4/ /21/2014 5:51 PM p. 61

62 Attachment C County of Santa Clara EXHIBIT B-3 (revised) C. Notice of Cancellation All coverage as required herein shall not be canceled or changed so as to no longer meet the specified County insurance requirements without 30 days' prior written notice of such cancellation or change being delivered to the County of Santa Clara or their designated agent. D. Insurance Required 1. Commercial General Liability Insurance - for bodily injury (including death) and property damage which provides limits as follows: a. Each occurrence - $1,000,000 b. General aggregate - $2,000,000 c. Personal Injury - $1,000, General liability coverage shall include: a. Premises and Operations b. Personal Injury liability c. Severability of interest 3. General liability coverage shall include the following endorsement, a copy of which shall be provided to the County: Additional Insured Endorsement, which shall read: County of Santa Clara, and members of the Board of Supervisors of the County of Santa Clara, and the officers, agents, and employees of the County of Santa Clara, individually and collectively, as additional insureds. Insurance afforded by the additional insured endorsement shall apply as primary insurance, and other insurance maintained by the County of Santa Clara, its officers, agents, and employees shall be excess only and not contributing with insurance provided under this policy. Public Entities may also be added to the additional insured endorsement as applicable and the contractor shall be notified by the contracting department of these requirements. Rev. 4/ /21/2014 5:51 PM p. 62

63 Attachment C County of Santa Clara EXHIBIT B-3 (revised) 4. Automobile Liability Insurance For bodily injury (including death) and property damage which provides total limits of not less than one million dollars ($1,000,000) combined single limit per occurrence applicable to owned, non-owned and hired vehicles. 4a. Aircraft/Watercraft Liability Insurance (Required if Contractor or any of its agents or subcontractors will operate aircraft or watercraft in the scope of the Agreement) For bodily injury (including death) and property damage which provides total limits of not less than one million dollars ($1,000,000) combined single limit per occurrence applicable to all owned non-owned and hired aircraft/watercraft. 5. Workers' Compensation and Employer's Liability Insurance a. Statutory California Workers' Compensation coverage including broad form all-states coverage. b. Employer's Liability coverage for not less than one million dollars ($1,000,000) per occurrence. 6. Professional Errors and Omissions Liability Insurance a. Coverage shall be in an amount of not less than one million dollars ($1,000,000) per occurrence/aggregate. b. If coverage contains a deductible or self-retention, it shall not be greater than fifty thousand dollars ($50,000) per occurrence/event. c. Coverage as required herein shall be maintained for a minimum of two years following termination or completion of this Agreement. 7. Claims Made Coverage If coverage is written on a claims made basis, the Certificate of Insurance shall clearly state so. In addition to coverage requirements above, such policy shall provide that: a. Policy retroactive date coincides with or precedes the Consultant's start of work (including subsequent policies purchased as renewals or replacements). b. Policy allows for reporting of circumstances or incidents that might give rise to future claims. Rev. 4/ /21/2014 5:51 PM p. 63

64 Attachment C County of Santa Clara EXHIBIT B-3 (revised) E. Special Provisions The following provisions shall apply to this Agreement: 1. The foregoing requirements as to the types and limits of insurance coverage to be maintained by the Contractor and any approval of said insurance by the County or its insurance consultant(s) are not intended to and shall not in any manner limit or qualify the liabilities and obligations otherwise assumed by the Contractor pursuant to this Agreement, including but not limited to the provisions concerning indemnification. 2. The County acknowledges that some insurance requirements contained in this Agreement may be fulfilled by self-insurance on the part of the Contractor. However, this shall not in any way limit liabilities assumed by the Contractor under this Agreement. Any self-insurance shall be approved in writing by the County upon satisfactory evidence of financial capacity. Contractors obligation hereunder may be satisfied in whole or in part by adequately funded self-insurance programs or self-insurance retentions. 3. Should any of the work under this Agreement be sublet, the Contractor shall require each of its subcontractors of any tier to carry the aforementioned coverages, or Contractor may insure subcontractors under its own policies. 4. The County reserves the right to withhold payments to the Contractor in the event of material noncompliance with the insurance requirements outlined above. F. Fidelity Bonds (Required only if contractor will be receiving advanced funds or payments) Before receiving compensation under this Agreement, Contractor will furnish County with evidence that all officials, employees, and agents handling or having access to funds received or disbursed under this Agreement, or authorized to sign or countersign checks, are covered by a BLANKET FIDELITY BOND in an amount of AT LEAST fifteen percent (15%) of the maximum financial obligation of the County cited herein. If such bond is canceled or reduced, Contractor will notify County immediately, and County may withhold further payment to Contractor until proper coverage has been obtained. Failure to give such notice may be cause for termination of this Agreement, at the option of County. Rev. 4/ /21/2014 5:51 PM p. 64

65 Attachment D County of Santa Clara Fact Sheet: Social Impact Bonds A Brief Introduction to a New Financing Tool for Social Programs Jitinder Kohli, Douglas J. Besharov and Kristina Costa April 2012 What is a Social Impact Bond? Social Impact Bonds turn government funding structures on their head. Normally, government agencies fund tightly proscribed activities. In a Social Impact Bond, however, a government agency defines an outcome. The agency contracts with an external organization that promises to achieve that outcome and only pays the organization if it is successful. Who are the key players? Required: A government agency that defines the outcome An external organization that promises to deliver the outcome A beneficiary population who receives services Optional: Investors who fund the needed interventions upfront Service providers who perform the interventions What are the advantages of Social Impact Bonds? Where s the bond? There isn t one. When the external organization needs outside investors to fund service providers, bond can describe the relationship between the external organization and the investors. But the arrangement is not very bond-like. In fact, it s much more risky than a normal bond arrangement. And in cases where there aren t any outside investors, it s very difficult to identify any bond at all. It s easiest to think of a Social Impact Bond instead as a relationship between government and an external organization. 1. Social Impact Bonds transfer risk away from government and taxpayers. Government isn t on the hook for the payment if the outside organization fails to achieve the outcome. In a normal financing arrangement, if the initiative fails the money is already spent. 2. Social Impact Bonds can fund preventive services that will save government money down the road. 3. Social Impact Bonds can overcome the silo problem in government where agencies find it difficult to pool resources or direct money toward effective programs. 4. Social Impact Bonds can help to scale up effective interventions from one city or state to other areas of the country. 4/21/2014 5:51 PM p. 65

66 Attachment D County of Santa Clara The first Social Impact Bond: Peterborough prison It s easiest to understand Social Impact Bonds with an example. In the United Kingdom, the British government has promised to pay an external organization called Social Finance if it reduces the re-offending rate of prisoners leaving Peterborough prison. The government will pay Social Finance so long as there is a 7.5 percent measured reduction in recidivism relative to a group of similar prisoners discharged from other prisons. Social Finance needs funds to pay for interventions in advance of any payment from the government, so it has raised money from investors. In exchange for paying the upfront costs, these investors receive an agreedupon return if the outcome is achieved. FIGURE 1 The Peterborough-style social impact bond First such program focuses on reducing re-offending rates of prisoners Government agency The British government calculated how much it is willing to pay for the outcome by looking at the savings likely to accrue to government agencies over time as a result of reductions in re-offending. These include future savings in incarceration costs as well as in court and police time. Investors fund external organization Investor 1 Investor 2 External organization promises to achieve outcome External organization* Government makes payment if outcome achieved Where will Social Impact Bonds be useful? Social Impact Bonds are still in their infancy, and there remains a great deal to learn. But some areas that governments in the United States are exploring for Social Impact Bonds include: Investor 3 External organization promises return to investors if successful Provider 1 External organization manages and funds providers Provider 2 Provider 3 Reducing recidivism Reducing homelessness Preventive health services Workforce development Early childhood education Helping unemployed persons re-enter the workforce Beneficiary population Providers work with beneficiary population and report progress to external organization *There are several appropriate variations on the Peterborough-style Social Impact Bond. The external organization may raise funds from its own balance sheet rather than from outside investors. The external organization also may choose to be one of the service providers, or the sole provider, for the intervention. Early applications of Social Impact Bonds will most likely be in areas where a few criteria hold true. First, government agencies may reasonably believe they will save money from the outcome. Outcomes will likely be observable and measurable within three to eight years. Outcomes will be targeted in areas with known social interventions that have proven effective at achieving the outcome. Finally, Social Impact Bonds should not be used to provide core government services, so there are few negative consequences if the external organization cannot achieve the outcome and discontinues services. But Social Impact Bonds have much wider implications for all government programs and may encourage agencies to focus more on outcomes rather than activities. The Center for American Progress s work on Social Impact Bonds is supported by the Rockefeller Foundation. 4/21/2014 5:51 PM p. 66

67 Attachment E County of Santa Clara Third Sector FACT SHEET: The Massachusetts Juvenile Justice Pay for Success Initiative The Commonwealth of Massachusetts, Roca, Inc., and Third Sector Capital Partners, working with lenders Goldman Sachs, through its Social Impact Fund, The Kresge Foundation, and Living Cities and philanthropic grantors Laura and John Arnold Foundation, New Profit Inc., and The Boston Foundation, are launching a Pay for Success (PFS) initiative to reduce recidivism and improve employment outcomes for young men at high risk of re-offending in the Boston, Chelsea, and Springfield, Massachusetts areas. The initiative will allow Roca to provide its high-impact intervention to 929 at-risk young men aged 17 to 23 who are in the probation system or exiting the juvenile justice system. Roca s programming aims to reduce recidivism and increase employment through intensive street outreach and targeted life skills, education, and employment programming. The Roca intervention is delivered over an intensive two-year period followed by two years of follow-up engagement. Massachusetts will make up to $27 million in success payments for this seven-year project, which is the largest investment in a PFS initiative in the U.S. to date. PFS contracts, also called Social Impact Bonds, combine nonprofit expertise, private sector funding, and rigorous evaluation to transform the way government and society respond to chronic social problems. In a PFS initiative, funders assume up front financial risk, and taxpayers pay for a program only if a thirdparty evaluator determines that the initiative has achieved specific outcomes that create benefits to society and generate savings for government. Funding for the Massachusetts initiative includes commercial and philanthropic funding as well as risk sharing, in the form of deferred service fees, from the service provider (Roca) and project intermediary (Third Sector Capital Partners). The funders assume project risk by financing services up front with the promise of repayment from government sources only in the event of success. Massachusetts will repay funders only if Roca s services are proven to produce positive societal outcomes and savings for the Commonwealth. These success payments will come from the Commonwealth and the U.S. Department of Labor, which awarded the Commonwealth a first-of-its-kind PFS grant of $11.7 million. The additional funding for success payments from the Department of Labor grant will enable the Commonwealth to extend the project, should it prove successful, to an additional 391 young men, thereby serving a total of up to 1,320 young men over nine years. In 2012, the Massachusetts Legislature authorized the Secretary of Administration and Finance to enter into PFS contracts, with up to $50 million in success payments backed by the full faith and credit of the Commonwealth. This legislative act created the Social Innovation Financing Trust Fund. Service Provider Roca is a nonprofit that has delivered an evidence-based high impact intervention to young people in the Chelsea and Springfield, Massachusetts areas for 25 years. Roca s model is based on proven behavioral change theories and trains high-risk young men in job readiness, educational readiness, and life skills. The program has a proven track record of reducing incarceration rates among the highest risk individuals. In this PFS project, Roca is deferring $3.26 million (15%) of its service fees; it will only be paid that portion of its fees if results are achieved. The Roca intervention establishes transformative relationships and uses targeted life skills, education, and employment programming to support young men in developing the skills necessary to reduce violence and create positive behavioral changes. The four-year model which consists of two years of intensive engagement and two years of follow-up includes four basic elements: relentless outreach to young men by Roca staff; intensive case management; life skills, educational, prevocational, and employment 4/21/2014 5:51 PM p. 67

68 Attachment E County of Santa Clara programming; and work opportunities with community partners. Roca helps young men change their behaviors while learning how to go to work, beginning with subsidized employment opportunities and transitioning into full-time positions with employer partners. The Commonwealth of Massachusetts The Commonwealth makes payments for success if the independent third-party evaluator and validator determine that Roca s program has reduced the number of days that participating young men spend in prison, has improved their job readiness, and has increased their employment. The project intermediary will then distribute any success payments from the Commonwealth to funders. At higher levels of success the funders can receive a small percentage return on their funding in return for assuming the up front financial risk. Project Intermediary Third Sector Capital Partners is a nonprofit advisory firm that works with government, service providers, and funders to develop and launch PFS projects. As project intermediary for this initiative, Third Sector arranged project funding and is responsible for overseeing project implementation, distributing funding to Roca and managing repayment to funders. * New Profit Inc., a national venture philanthropy fund and social innovation organization, will provide additional management support. Third Sector is deferring $50,000 (15%) of its management fees; it will only be paid that portion of its fees if results are achieved. Funders Goldman Sachs will provide $9 million in senior loan financing through its Social Impact Fund. The Kresge Foundation and Living Cities together will provide $3 million ($1.5 million each) in junior loan financing. Laura and John Arnold Foundation, New Profit, and The Boston Foundation together will provide $6 million in grants ($3.7 million from Laura and John Arnold Foundation, $2 million from New Profit, and $300,000 from The Boston Foundation). Other Project Participants Sibalytics LLC is an independent evaluation firm led by Dr. Lisa Sanbonmatsu and is responsible for implementing a statistical evaluation to measure the impact of the Roca intervention. The project will use a Randomized Control Trial, the gold standard of rigorous evaluation. Public Consulting Group (PCG) is the independent validator and will be responsible for assessing the proposed evaluation methodology and verifying whether outcome targets are met. PCG was selected by Massachusetts through a formal procurement. The Harvard Kennedy School Social Impact Bond Technical Assistance Lab (SIB Lab) provides pro bono technical assistance to state and local governments implementing PFS contracts using Social Impact Bonds. The SIB Lab assisted Massachusetts in developing the procurement and designing the data analysis strategy for this project. Determining Success Payments Success payments will be made between the second and seventh years of this initiative based on decreases in incarceration, increases in job readiness, and increases in employment attained by the young men participating in the Roca program: Payments for decreases in incarceration represent the majority of the success payments and are based on a graduated payment schedule where the Commonwealth pays increasing * Third Sector has formed a subsidiary supporting organization, Youth Services, Inc. (YSI), to serve as the legal entity for managing the project. John Grossman, Partner & General Counsel for Third Sector, will lead YSI. The junior loans are from institutions with philanthropic missions. This funding is similar to typical subordinate loans in that it will be repaid only after the senior loan and, thus, will be riskier. It will differ from the norm in that the junior loans will receive lower returns than the senior loan, despite taking on more risk. 4/21/2014 5:51 PM p. 68

69 Attachment E County of Santa Clara amounts for each day that participants avoid incarceration as compared to similar young men who are not in the program. The payment rates are based on associated savings to the Commonwealth as shown below. The minimum reduction in incarceration necessary for payments to be made is 5.2%. Decrease in Days of Incarceration Incarceration-Based Payment Terms Incarceration-Based Success Payments Gross Savings for Commonwealth 70.0% $ 27 million $ 45 million 55.0% $ 26 million $ 33 million 40.0% $ 22 million $ 22 million 25.0% $ 11 million $ 11 million 10.0% $ 2 million $ 2 million 5.0% $ 0 $ 0.9 million Payments for increases in job readiness are $789 for each participant in each quarter that a Roca participant engages with a Roca youth worker nine or more times, with each engagement helping young men address barriers to employment and move toward economic independence Payments for increases in employment are $750 for each participant in each quarter that a Roca participant is employed as compared to similar young men who are not in the program. The project s target impact is a 40% decrease in days of incarceration. At this level of impact, the project would generate budgetary savings to the Commonwealth equal to the cost of delivering services. If the project achieves its target impact, funders will be repaid using success payments from the Commonwealth s Social Innovation Financing Trust Fund as follows: The Goldman Sachs Social Impact Fund will be repaid its principal funding and a base annual interest rate of 5.0%; The Kresge Foundation and Living Cities will be repaid their principal funding and a base annual interest rate of 2.0%; Roca and Third Sector will be paid their deferred service fees; In addition, at higher levels of impact, project and funders will receive the following fees: Roca: Up to $1 million Goldman Sachs: Up to approximately $1 million The Kresge Foundation and Living Cities: Up to $600,000 ($300,000 each) Any remaining PFS payments, which could be up to $6 million depending on the level of impact achieved, will be used to recycle philanthropic funding. Laura and John Arnold Foundation will use recycled funding to support future PFS initiatives. New Profit and The Boston Foundation will use recycled funding to support scaling of Roca. Throughout the establishment, structuring and negotiation of the PFS initiative, Roca received pro bono legal assistance from Goulston & Storrs, P.C., the Commonwealth received pro bono legal assistance from Nixon Peabody LLP, New Profit received pro bono legal assistance from Goodwin Procter LLP, and Third Sector and Youth Services, Inc. received pro bono legal assistance from Ropes & Gray LLP. 4/21/2014 5:51 PM p. 69

70 Attachment F County of Santa Clara From Idea to Action: Pay for Success In Santa Clara County A case study funded by The Health Trust, and prepared by Third Sector Capital Partners. 4/21/2014 5:51 PM p. 70

71 Attachment F Table of Contents County of Santa Clara 1 Letter from The Health Trust CEO 2 Purpose and Scope 3 Pay for Success and Social Innovation Financing 4 Background: An Idea Takes Root 7 Lesson Learned: Government Participation is Vital 9 Lesson Learned: Transparency Builds a Necessary Foundation of Trust 10 Lesson Learned: Innovation Forces Familiar Players into New Roles 12 Lesson Learned: Capitalize on Existing Momentum 14 What s Next in Santa Clara County 4/21/2014 5:51 PM p. 71

72 Attachment F A Letter from the CEO The Health Trust County of Santa Clara Dear Reader, I had the opportunity to hear Dr. Clay Christensen from the Harvard Business School a few years ago discussing his upcoming book The Innovator s Prescription. The book describes Christensen s theory of Disruptive Innovation as it applies to health care. As communities across the country are faced with ongoing government funding reductions, increased social needs, and the long-term effects of the recession, it is clear we need to develop new solutions to ongoing challenges. That is why two years ago The Health Trust brought Dr. Christiansen from Harvard to Silicon Valley to speak about the application of Disruptive Innovation (DI) theory to the nonprofit sector. It is also why we followed that event by funding DI projects in the health equity field. One of the resulting grants was made to Catholic Charities to explore Pay for Success (PFS) and Social Innovation Financing (SIF) in Santa Clara County. Third Sector Capital Partners, which prepared the case study that follows, was engaged for consulting support to work with the County government and the local nonprofit community to identify potential areas where these concepts could be applied. We have been very pleased with the receptivity of the County to this project and the progress to date, thanks in no small part to the strong support from the Board of Supervisors and the dynamic leadership of COO Gary Graves from the County Executive s office. This report is intended to describe our process and progress-to-date. We want to support continued growth in this field, and I believe that reflecting on our lessons learned is essential to the successful completion of this project, and can inform other efforts underway across the nation. Interest and buy-in from philanthropic and commercial funders is essential to a Pay for Success initiative, so we at The Health Trust invited a group of experts to speak to potential investors about the Santa Clara County project and the growth of PFS and SIF. Kimberlee Cornett, Director of Social Investment Practice at the Kresge Foundation, is our keynote speaker, and Gary Graves from the County, George Overholser from Third Sector, Greg Avis from Summit Partners and Ian Galloway from the Federal Reserve Bank of San Francisco will all share their unique perspectives and experiences. We are grateful to the several foundations in the Silicon Valley that have already supported this innovative project, in particular the Sobrato Family Foundation and the Silicon Valley Community Foundation. We also recognize the dedicated leadership to the issue that Catholic Charities of Santa Clara County and their Step Up Silicon Valley initiative has provided. I look forward to the day when we solve challenging issues facing vulnerable communities in Silicon Valley and across the country through the use of innovative approaches and outcomes-based accountability. I hope this case study can provide some context and lessons learned on one such effort here in Santa Clara County. Kind regards, Frederick J. Ferrer, M.S. CEO, The Health Trust 4/21/2014 5:51 PM p. 72 1

73 Attachment F Purpose and Scope County of Santa Clara This case study documents Santa Clara County s exploration of a Pay for Success (PFS) initiative from its origins in community conversations through the County Board of Supervisors vote on August 27, 2013, to fund the construction of one or more PFS projects. In this case study, we identify and document critical factors that advanced the project and key lessons learned by stakeholders. Our hope is that these findings will inform government officials and funders who are interested in pursuing PFS initiatives, and others who are tracking the development of this growing field of work. The content of this document is drawn from interviews with many of the players who participated in the origination and development of the Santa Clara County PFS exploration, including individuals from the public, nonprofit, and philanthropic sectors. This primary source content was supplemented by background information provided by Third Sector Capital Partners staff members, who led a collaborative effort to assess the viability of a PFS effort in Santa Clara. 4/21/2014 5:51 PM p. 73 2

74 Attachment F County of Santa Clara Pay for Success and Social Innovation Financing Pay for Success (PFS) describes a form of contracting between government entities and providers of social services, where the government only makes payments if the contracted service providers achieve an agreed-upon level of social outcomes. PFS contracts are often suited to social challenges where the provision of a preventive social service is more cost-effective than treating on a remedial basis. This arrangement differs from traditional cost reimbursement or throughput contracts, where governments typically pay social service providers without regard to the ultimate outcomes they bring about. Key Criteria for a Pay for Success Project Proven Interven ons Pay For Success PFS Performance-based contracting with the social sector where government pays only if results are achieved Social Innovation Financing (SIF) enhances PFS contracting by providing service providers with the working capital needed to bridge timing gaps between the provision of services and future government payments. Social Impact Bonds (SIBs) are a form of Social Innovation Financing where philanthropic and/or commercial investors provide the initial funds required for the provision of services. In return, if the service provider achieves its target outcomes, the investors receive a portion of the resulting savings accrued by the government partner. Social Innovation Finance SIF Financing that bridges timing gap between government payments and upfront capital needed to run PFS Programs. Social Impact Bond is a type of SIF There are a variety of conditions that need to be satisfied in order for a Pay for Success effort to have the highest possible likelihood of reaching the execution stage and fully achieving its desired outcomes. First, the PFS project must present significant value to a government partner, either in the form of producing fiscal savings or addressing a high-priority social challenge. A promising project must also be able to identify a specific target population, with clearly defined needs. To improve outcomes for this group, a PFS project requires a proven intervention that has the ability to scale in order to reach a sizable target population. To measure the effectiveness of an intervention, there must be reliable and available data that can be used to capture outcomes as the intervention is delivered. Finally, a successful PFS project requires safeguards for the target population to ensure that there is no unwarranted denial of service or other adverse consequences. 4/21/2014 5:51 PM p. 74 3

75 Attachment F County of Santa Clara Background: An Idea Takes Root The PFS concept was initially introduced to the Santa Clara County community thanks to the enthusiasm and advocacy of Greg Kepferle, CEO of Catholic Charities of Santa Clara County, a community organization dedicated to helping low income Santa Clara County residents rise out of poverty. In 2011, Kepferle, who had already been involved in several efforts to advance federal anti-poverty legislation, committed to promoting innovative policy reform efforts at the local government level. As a first step, he convened a group of local government, philanthropic, and private leaders to form Step Up Silicon Valley 1. Step Up s Outcomes Leadership Council, which included County Supervisor David Cortese, was tasked with identifying and pursuing anti-poverty strategies based on a set of principles derived from NOCRA 2, including a commitment to the use of rigorous and measurable outcomes and an exploration of market driven-strategies that might engage private sector partners and funds. Supervisor Cortese, who would become a major advocate for the project, realized that this kind of merit-based contracting could be a powerful tool for moving a large group of people out of poverty. Kepferle invited Steve Rothschild, an author and proponent of Human Capital Bonds 3, to speak at a gathering hosted by the Silicon Valley Community Foundation. Kepferle first met Rothschild through a program sponsored by Catholic Charities USA and was intrigued by his vision for how PFS might introduce accountability for social services. Rothschild s presentation coincided with a new grant competition funded by The Health Trust, which seeks to improve wellness and health in Silicon Valley. In February of 2012, The Health Trust hosted a Disruptive Innovation Summit with Harvard Business School Professor Clay Christensen. Christensen is widely credited with introducing the idea of disruptive innovation to describe new business approaches that introduce simplicity, convenience, accessibility, reliability, and affordability to replace previous products or services that have grown complicated, expensive, and inaccessible. The Health Trust followed the Summit with a disruptive innovation Request for Proposals that sought out initiatives that had the power to catalyze entrepreneurial thinking and implement creative solutions to existing health and social issues impacting the Silicon Valley. Kepferle, CEO of Catholic Charities, and Almaz Negash, the Managing Director of Step Up, prepared a response to examine the feasibility of pursuing social impact bonds with the Santa Clara County government. Step Up had previously received seed funding from the City of San Jose to investigate Pay for Success and was excited to continue its exploration. As Negash recalled, Step Up sought new and innovative ways to reduce poverty in the region. She explained, We want to make sure that organizations are measuring outcomes rather than outputs, and believe that a PFS model can help create an infrastructure that our community can use for years to come. Step Up s grant application for $100,000 was successful, and the organization elected to engage Third Sector, a national nonprofit expert on PFS contracting, to conduct a feasibility analysis. 1 Step Up Silicon Valley is the movement to cut poverty in Santa Clara County, founded and supported by Catholic Charities of SCC. The movement focuses on three strategic areas convening, advocacy for policy changes, and systems change incubation. 2 NOCRA, the National Opportunity for Community Renewal Act, was a proposed anti-poverty bill that failed to pass congress in 2010 and It was conceived and championed by a coalition that included Catholic Charities USA. After failing to earn federal support, NOCRA s advocates committed to proving its principles locally, according to Greg Kepferle. 3 Human Capital Bonds, which Rothschild has promoted nationally and written about for several years, are a form of Pay for Success contracting in which a government entity issues a traditional bond to generate the funds for making success payments to selected social service providers. 4/21/2014 5:51 PM p. 75 4

76 Attachment F County of Santa Clara Case Study: Pay for Success in Santa Clara County We want to make sure that organizations are measuring outcomes rather than outputs, and believe that a PFS model can help create an infrastructure that our community can use for years to come. -Almaz Negash Managing Director Step Up Silicon Valley Key Players in the Santa Clara County PFS Exploration Organization Mission/Purpose Role People Catholic Charities of Silicon Valley Step Up Silicon Valley The Health Trust Santa Clara County Third Sector Capital Partners To help people of all cultures and beliefs rise up out of poverty and overcome the barriers to self-sufficiency An initiative of Catholic Charities of Santa Clara County to reduce poverty in the region. To lead Silicon Valley community to advance wellness To plan for the needs of a dynamic community, provide quality services, and promote a healthy, safe and prosperous community for all To accelerate America s transition to a performance-driven social sector Introduced Pay for Success in Santa Clara County and applied for Health Trust Disruptive Innovation Grant. Received Health Trust Disruptive Innovation Grant to explore Pay for Success and led community engagement and education efforts. Funded Step Up and Catholic Charities through Disruptive Innovation Competition to lead exploration of Social Impact Bonds Worked with Third Sector and Step Up to assess feasibility and potential value of Pay for Success projects. Co-funded Third Sector to lead deal construction efforts. Led feasibility analysis to identify suitable Pay for Success target populations and interventions, and quantify potential costs and savings. Greg Kepferle Chief Executive Officer Almaz Negash Managing Director Fred Ferrer Chief Executive Officer Todd Hansen Chief Operating Officer Gary Graves Chief Operating Officer Caroline Whistler Co-Founder & Partner Caleb Jonas Associate, Advisory Services Silicon Valley Community Foundation Advances innovative philanthropic solutions to challenging problems, engaging donors to make our region and world a better place for all To build a strong and vibrant Silicon Valley Community by investing exclusively in nonprofits serving those most in need Joined County in funding Third Sector to lead deal construction efforts. Eleanor Clement Glass Chief Giving Officer Sobrato Foundation Joined County in funding Third Sector to lead deal construction efforts John Sobrato Board Chairman Rick Williams Chief Executive Officer 4/21/2014 5:51 PM p. 76 5

77 Attachment F Case Study: Pay for Success in Santa Clara County County of Santa Clara PFS Exploration and Implementation Phases Third Sector took a multi-phase approach to conducting the Pay for Success feasibility study in Santa Clara County, with clear decision points for the County and partners at the conclusion of each phase. Below is a project overview that describes the key phases of work, their duration, and the key activities in advancing the feasibility analysis. This progression captures one County s path from idea to action in exploring a Pay for Success project. Community Advocacy and Planning March Dec Catholic Chari es and Step Up Silicon Valley host educa onal gathering (w/ Silicon Valley Community Founda on), advocate for PFS, and receive disrup ve innova on grant from The Health Trust. County Budget and Social Needs Analysis Jan March 2013 Step Up Silicon Valley engages with Third Sector Capital Partners to explore PFS feasibility. Third Sector works with Step Up to iden fy underserved vulnerable popula ons. Third Sector assesses the County's preparedness to engage in and benefit from PFS. Landscape Analysis April 2013 July 2013 Step Up Silicon Valley and Third Sector provide educa on to community providers and funders. Third Sector conducts a landscape analysis of poten al interven ons that may be a fit for PFS. Project Selec on and Deal Construc on Aug June 2014 Third Sector receives approval and funding from the County Board of Supervisors, Silicon Valley Community Founda on and Sobrato Founda on to begin deal construc on. Third Sector begins work to iden fy service providers, funders, and nego ate contract terms for selected PFS areas. Planned Project Launch July 2014 Begin service delivery and evalua on. 4/21/2014 5:51 PM p. 77 6

78 Attachment F County of Santa Clara Lesson Learned: Government Participation is Vital One of the essential components of any PFS contracting effort is a government entity or another payer s willingness to fund a social intervention, so long as it achieves agreed upon outcomes. In an early setback to Step Up s desire to advance one or more such pilot projects, Gary Graves, Santa Clara County s Chief Operating Officer, was initially skeptical of social impact bonds. As Todd Hansen, Chief Operating Officer of The Health Trust reflected, We had to get Gary on board. He s the guy who makes things happen. When Graves encountered social impact bonds, he had a number of concerns about its implications for the County and its partners. First, Graves was skeptical about the County s capacity to issue new debt and reported, I had real questions about whether or not we could generate cashable savings. Specifically, Graves worried that for these kinds of social issues or areas where we struggle to meet our community s needs, even if we could address them, we probably wouldn t generate real cash savings. As a result, Graves said, I was very reticent to make any commitment that the County would have to come up with money to pay back an investor. Graves s reluctance was due, in part, to his disinclination towards issuing any bonds to fund social programs. Fortunately for the project s advocates, Graves s perspective on PFS began to shift after the County Board of Supervisors approved a referral by Supervisor David Cortese, who was excited to apply PFS s rigorous attention to outcomes to the government s efforts to reduce poverty. Cortese remarked that he was excited to put Santa Clara on the cutting edge of considering new tools that will encourage the County to innovate, improve its efficiency, and leverage its capital. Graves later explained that the language of the referral, and subsequent meetings with Third Sector, helped him to understand that PFS contracting had the power to quantify the impact of governmentfunded social services. Furthermore, Graves learned that the phrase social impact bond is a misnomer, and that a shift to PFS procurement practices would in fact ensure that County funds were used only to pay for successful interventions. As Graves said, I started to look at it from the perspective that if there was an opportunity to measurably improve social outcomes, this might be worth exploring. Graves s interest in PFS was strengthened when the Board of Supervisors made clear in a subsequent meeting that it was open to pursuing the use of PFS contracting to address high-priority social problems, even if they might not necessarily result in near-term fiscal savings to the County. He noted, The approach that we ve taken in this County is that we need to be open-minded to innovation and new ideas, and I became convinced that there might be a way that we could see this as a source of accessing new resources to tackle some of the most difficult social problems that we face. A Dual-Track Approach I became excited when the Board approved a dual track that would allow us to explore two potential PFS applications: - terventions that might save the County money; To improve accountability and outcomes for high-priority social problems. -Gary Graves Santa Clara County 4/21/2014 5:51 PM p. 78 7

79 Attachment F Case Study: Pay for Success in Santa Clara County County of Santa Clara Graves s support allowed Third Sector to begin its initial phase of feasibility work by meeting with County department and agency executives. Caroline Whistler, Co-Founder and Partner of Third Sector, remarked, Gary s engagement opened the door for us to have valuable meetings with the County staff who best understood the needs of the County s most vulnerable populations. Third Sector found All the stakeholders interviewed for this case study identified government support as a critical success factor in Santa Clara s PFS exploration. As the ultimate contingent success payer in any PFS project, the Santa Clara County Government had to be convinced that exploring this shift in procurement would be worth its time and effort. Earning the trust and backing of government representatives proved slow, All of the stakeholders interviewed for this case study identified government support as a critical success factor in Santa Clara s PFS exploration. that these County leaders were largely receptive to the Pay for Success concept and eager to share their ideas about what areas might be best served by a pilot project. The success of these conversations strengthened Graves s willingness to advance the PFS exploration process. As Graves reflected, I really needed to know that this idea seemed worthwhile to my senior staff at the social service departments and agencies, since they are the experts in their fields. The support of the Board of Supervisors, the County s Chief Operating Officer, and various department heads also signaled to community partners that the County s commitment to exploring PFS was real and deep, in the words of Eleanor Clement Glass, Chief Giving Officer at the Silicon Valley Community Foundation. She elaborated, Seeing the County s commitment at multiple levels and Gary s leadership addressed a threshold question that permitted us to consider supporting this project. especially because the PFS project s success relied on earning the support of County officials and staff at multiple levels and in different areas. Ultimately, however, a two-pronged strategy proved effective in convincing the County to engage in a Pay for Success exploration. First, the commitment by Catholic Charities, Step Up, and The Health Trust to fund and lead an exploration of this concept demonstrated that respected community institutions were willing to provide tangible support to help the County better understand and consider this concept. Second, Third Sector s commitment to leading a rigorous feasibility process helped to convince stakeholders that PFS pilots could measurably benefit vulnerable populations, while also potentially saving the County funds. In concert, these two assurances helped earn the County s critical commitment to fully exploring PFS. 4/21/2014 5:51 PM p. 79 8

80 Attachment F County of Santa Clara Lesson Learned: Transparency Builds a Necessary Foundation of Trust PFS can t just be something that is pushed by government alone. It requires an interest from the community, and an investment in building partnerships. -Gary Graves Chief Operating Officer Santa Clara County A number of non-governmental advocates and stakeholders noted that the feasibility assessment phase of work took longer than they might have anticipated, due in some part to the execution of an exploration process that was deliberate, transparent, and collaborative. As Todd Hansen of The Health Trust noted, PFS is still largely new and unknown, which means that it requires a lot of discussion at every step of the way. As a result, this process is going to take longer than one expects. Kepferle and Negash of Catholic Charities and Step Up, the project s initial advocates, both emphasized the importance of treating the County s PFS exploration as an opportunity to align the broader community with the vision of ending poverty. This desire to earn community support and promote local ownership for local solutions strengthened Third Sector s commitment to broaden community engagement during feasibility assessment work. To encourage community participation and feedback in the PFS exploration process, Third Sector hosted an open meeting to brief local service providers on PFS and the County s process. More than 70 organizations were represented at this meeting. Third Sector also continued to hold individual follow-up conversations with more than 20 interested organizations. Stakeholders reported that the thorough community outreach process, which took several months, was an important step in establishing that the County was open to feedback and guidance in its exploration of PFS. This effort to engage and learn from community partners was an important indicator to Eleanor Clement Glass and others of the project s viability. As she said, We had to be convinced that nonprofits were engaged and able to give input and feedback. Similarly, Gary Graves said, This can t just be something that is pushed by government alone. This requires an interest from the community, and an investment in building partnerships. For many of the project stakeholders, engaging in a deliberate and transparent process was critical to advancing the Pay for Success project. Caroline Whistler noted, Building on enthusiasm about PFS conceptually to arriving at an actual deal requires patience and planning. Third Sector s approach in Santa Clara County has been to identify a series of go / no go points where stakeholders can choose whether or not to proceed. Caleb Jonas of Third Sector added, Pay for Success projects can only succeed with the participation of engaged and enthusiastic funders, service providers, and government leaders. We have been deliberate in building and strengthening partnerships as a core part of this exploration. Almaz Negash observed that Pay for Success requires us to think hard about what is not working in our communities, and how we can do better. Those questions should not be fast or easy to address. 4/21/2014 5:51 PM p. 80 9

81 Attachment F County of Santa Clara Lesson Learned: Innovation Forces Familiar Players into New Roles Each of the stakeholders involved in developing Santa Clara County s PFS initiative agreed that this exploration prompted them to work with largely familiar partners but in nontraditional ways. The strength and depth of these preexisting relationships proved valuable, as did the willingness of stakeholders and collaborators to explore different ways of supporting a shared vision. At the philanthropic organizations that supported the project, staff members found themselves engaged in unexpected and unusual ways. Todd Hansen of The Health Trust said, I am far more hands-on and engaged in this effort than I am with any of our other grants. Based on his background as an attorney with experience working in corporate finance, Hansen also thought that The Health Trust could use its credibility and strong community and government relationships to advance the project. To help boost the project, Hansen took an active role attending meetings, engaging potential investors, and providing strategic support to Step Up and Third Sector. about and to track its progress in our community. In explaining her path from observation to participation, Eleanor said, I was trying to watch this process unfold, see if it had legs, assess where the Foundation could provide the best support, and where the opportunity was for us to add value. Over time, she decided that by supporting the work of constructing and finalizing an actual PFS contract, Our small investment now could open the door to a much larger pool of dollars down the road. Clement Glass became a careful observer of Third Sector Capital Partner s feasibility assessment efforts and eventually made the decision to offer the Silicon Valley Community Foundation s financial support for project deal construction, so long as the County was also willing to contribute funds. Our small investment now could open the door to a much larger pool of dollars down the road. -Eleanor Clement Glass Chief Giving Officer Silicon Valley Community Foundation Eleanor Clement Glass, Chief Giving Officer at the Silicon Valley Community Foundation, took a different tack. She made a conscious decision to approach the PFS effort in what she referred to as learning mode. She explained that her Foundation is not currently at the stage where we are looking for good impact investing opportunities, but that the PFS concept was something that we were eager to learn more For Graves, whose day-to-day responsibilities are, as he says, to make sure the County is running well internally, the PFS project was unique as it required him to spend time talking with community-based social service providers and potential project funders. In April of 2012, The Silicon Valley Community Foundation hosted an informational session on the Santa Clara County exploration for local philanthropists and impact investors. The session gave Gary Graves an opportunity to speak directly to potential PFS investors about the County s interest in Pay for Success. Eleanor Clement Glass noted that this 4/21/2014 5:51 PM p

82 Attachment F County of Santa Clara Case Study: Pay for Success in Santa Clara County session was especially valuable because it also allowed attendees to directly engage with Gary about their questions and concerns. While presentations of this sort fell outside his usual scope of work, Graves recognized that his presence at these public events would indicate that the County was serious in its investigation of this initiative. As he reflected, It is valuable to me to take the opportunity to face outward on occasion to understand what is happening with our partners in the community and to directly communicate with them. and to keep it moving forward. Similarly, Caroline Whistler of Third Sector said, We see ourselves as able to bring our expertise on PFS as a tool to address the unique challenges facing individual communities. In Santa Clara, she went on, We led a rigorous and methodical approach to help the stakeholders understand if and how a PFS project might benefit Santa Clara County. A Pay for Success project requires all of its stakeholders to think and plan differently, even before the implementation procurement is issued or a contract It is valuable to me to take the opportunity to face outward on occasion to understand what is happening with our partners in the community and to directly communicate with them. -Gary Graves Chief Operating Officer Santa Clara County Step Up and Third Sector saw themselves as able to contribute to advancing the PFS project in ways that were more aligned with their past activities and expertise. To Almaz Negash, Step Up s Managing Director, the PFS project was a perfect fit for Step Up s mission. We believe in creating change and cutting poverty by engaging experts, community leaders, and the broader community around innovative solutions, she explained. That is what we were able to do to get this Pay for Success project off the ground is signed. As the Santa Clara County experience demonstrates, initial funders may have to become advocates and conveners, government administrators may need to interact broadly with the public, and project advocates may need to engage and inform other stakeholders who they want to take a more active role in the future. In Santa Clara County, the willingness of established and respected community organizations to take on atypical roles was a critical factor in advancing the Pay for Success initiative. 4/21/2014 5:51 PM p

83 Attachment F County of Santa Clara Lesson Learned: Capitalize on Existing Momentum As Third Sector progressed through its government readiness assessment work and provider landscape analysis, the team observed two areas where community leaders and stakeholders throughout Santa Clara County had coalesced around innovative and ambitious efforts to address pressing social challenges. These two existing initiatives demonstrated different ways that a Pay for Success might be able to benefit from previous innovations. In the arena of homelessness, a public-private partnership called Destination: Home, a member of the Step Up network, was exploring creative tools to progress towards its goal of permanently housing 1,000 homeless individuals in Santa Clara County. Meanwhile, the County s Mental Health Department was using a Full Service Partnership 4 model to address the needs of clients in its acute psychiatric facilities by providing flexible funding to social service providers. Destination: Home Destination: Home was among the earliest interested parties in pursuing PFS contracting in the county. Their investigation of how the mechanism might help advance their mission intrigued a number of influential community leaders and provided a tangible illustration of how PFS might be a valuable tool in Santa Clara County. Months prior to Santa Clara County s Pay for Success efforts, Destination: Home had engaged the Economic Roundtable, a nonprofit research organization, to quantify the scope and cost of social services consumed by the neediest members of Santa Clara s homeless population. Santa Clara County supported this data collection effort, which drew from multiple County databases that had previously existed in silos. This data project was designed to create both a historical analysis of the highest users of County services, and a tool to identify those at risk of suffering most from the challenges of chronic homelessness. This initiative s progress led a number of stakeholders to quickly identify chronic homelessness as a highly attractive candidate for Pay for Success contracting. PFS contracting relies on exactly this kind of data sharing in order to quantify government savings and evaluate outcomes. Destination: Home provided evidence that it was possible to aggregate and analyze County data across different human service databases. Their success in this effort represented progress that could accelerate a future PFS effort s analysis of the benefit to the County from a reduction in chronic homelessness. Gary Graves, who sits on the Board of Destination: Home, helped present the County s interest in a PFS initiative to that group, which led to a thorough discussion of how PFS might help reduce homelessness. The group s previous work in quantifying the human and fiscal costs of homelessness allowed it to explore the implications of how such an initiative might be constructed in some detail. Eleanor Clement Glass, who also sits on the Board of Directors of Destination: Home, was present at the meetings where the concept was introduced. She found that Gary Graves s presentation to Destination: Home Board demonstrated his passion and promise and that the subsequent discussion piqued my interest in the PFS effort. John Sobrato, also a Destination: Home Board Destination: Home s existing data collection effort led stakeholders to quickly identify chronic homelessness as a highly attractive candidate for PFS contracting. 4 In California, Full Service Partnerships (FSPs) are innovative and flexible contracts between local governments and community social service providers. They are designed to benefit individuals suffering from the most severe mental health challenges by providing them with a broad spectrum of services to aid in their recovery. FSP activities are funded through State s Mental Health Services Act of /21/2014 5:51 PM p

84 Attachment F County of Santa Clara Case Study: Pay for Success in Santa Clara County Watching the Pay for Success project unfold in Santa Clara County provided a useful reminder that it is often easier to jump to the front of an existing parade than to start a new one. -Caroline Whistler Co-Founder & Partner Third Sector Capital Partners member, whose family foundation later joined the Silicon Valley Community Foundation and County in funding the construction of a PFS initiative, also traced his interest in the PFS initiative to a second presentation to that group. The County s Full Service Partnership (FSP) contracts allowed community-based social service agencies to provide customized services based on individual client needs. The County s use of FSP to support a whatever it takes approach to improving outcomes proved to be a useful template to help its leaders understand Pay for Success. As Caroline Whistler of Third Sector explained, the Pay for Success approach asks a government to shift from funding a prescribed set of activities to paying for a successful outcome. Full Service Partnerships have allowed the Santa Clara County to start moving in that direction. According to Gary Graves, the Mental Health Department s experience thinking creatively about contracting was a contributing factor to the Board of Supervisor s decision to identify acute psychiatric care as an area of interest for Pay for Success. For Caroline Whistler of Third Sector, watching the Pay for Success project unfold in Santa Clara County provided a useful reminder that it is often easier to jump to the front of an existing parade than to start a new one. As Third Sector began to understand the broad commitment and innovative planning already underway in Santa Clara County, Third Sector identified homelessness as a leading social need that might be addressed with Pay for Success. Almaz Negash concurred, saying that Destination: Home s momentum showed that stable housing can be the beginning of someone s journey out of poverty, and it makes sense for Pay for Success to capitalize on that. Gary Graves agreed saying, Looking at Pay for Success as a solution to homelessness, with all the work we are already doing there, helped me understand how this tool could actually be applied. 4/21/2014 5:51 PM p

85 Attachment F What s Next in Santa Clara County County of Santa Clara At a time when public sector organizations are stretched thin in terms of resources, I think it is our responsibility as a community to fully evaluate new ideas and concepts to see whether or not they can help us to meet the needs of vulnerable populations. -Gary Graves Chief Operating Officer Santa Clara County On August 27th 2013, the Santa Clara County Board of Supervisors voted to allocate $75,000 for the construction of two Pay for Success projects. The County expressed a specific desire to address the challenges of acute psychiatric illness and chronic homelessness. The Sobrato Family Foundation and Silicon Valley Community Foundation matched the County s financial support to underwrite this phase of work. As of October, Third Sector continued to work closely with County leadership to complete a project specification process that would identify the exact target population for each Pay for Success initiative and a preferred outcome measure. Once this process is complete, Third Sector will support the County to select service providers, develop an evaluation design, draft a Pay for Success contract, and assist in structuring Social Innovation Financing arrangements. The Pay for Success experience in Santa Clara County demonstrates that developing an effective PFS arrangement requires careful planning and preparation. Trusted partners who are willing to take on unfamiliar roles and think creatively can prove immensely valuable in advancing the project and earning the support of government officials and administrators. Their participation is critical in exploring and enacting a Pay for Success project. A PFS investigation may move slowly, but partners in Santa Clara agreed that a methodical approach greatly increased the project s likelihood of success. As Negash reflected, We are doing this because, at the end of the day, we need to improve the status quo for people in poverty. Gary Graves explained, At a time when public sector organizations are stretched thin in terms of resources, I think it is our responsibility as a community to fully evaluate new ideas and concepts to see whether or not they can help us to meet the needs of vulnerable populations. 4/21/2014 5:51 PM p

86 Attachment F County of Santa Clara DISCLAIMER ANY LOANS OR GRANTS REFERRED TO IN THIS DOCUMENT ARE NOT SECURITIES AND THE PROVISION OF THIS DOCUMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SECURITIES. NO REPRESENTATIONS OR WARRANTIES OF ANY KIND ARE INTENDED OR SHOULD BE INFERRED WITH RESPECT TO THE ECONOMIC RETURN OR THE TAX CONSEQUENCES FROM THE LOANS OR GRANTS. NO ASSURANCE CAN BE GIVEN THAT THE FINANCIAL OR SOCIAL OBJECTIVE WILL BE ACHIEVED. PROSPECTIVE FUNDERS ARE NOT TO CONSTRUE THIS DOCUMENT AS LEGAL OR TAX ADVICE. EACH PROSPECTIVE FUNDER SHOULD CONSULT ITS OWN COUNSEL, ACCOUNTANT AND OTHER ADVISERS FOR ADVICE CONCERNING THE VARIOUS LEGAL, TAX AND ECONOMIC CONSIDERATIONS RELATING TO ITS LOAN OR GRANT. THE INFORMATION IN THIS DOCUMENT IS SUBJECT TO CHANGE BY THIRD SECTOR. Third Sector Capital Partners Inc., All Rights Reserved. 15 4/21/2014 5:51 PM p. 86

87 Attachment G 4/21/2014 5:51 PM p. 87