OUI-1630DC-18-N-00018
The U.S. Department of Labor, Employment and Training Administration (DOL/ETA) is seeking qualified contractors that can provide actuarial support for the Office of Unemployment Insurance (OUI) in the areas of state unemployment insurance (UI) trust fund forecasting and benefit cost estimating, technical assistance to states in managing profiling models, budget and legislative estimating, budget formulation, data analysis related to UI program performance, and in the production of statistical reports. The North American Industry Classification System (NAICS) code is 541611, Administrative Management and General Management Consulting Services. SMALL BUSINESSES ARE ENCOURAGED TO RESPOND. Include whether or not you are a small business; HUBZone small business; service-disabled, veteran-owned small business; 8(a) small business; woman-owned small business; or small disadvantaged business in order to assist the Government in determining the appropriate acquisition method, including whether a set-aside is possible.
The objective of this project is to provide the OUI needed support in carrying out its responsibilities. The contractor for this project would assist the OUI in two major areas.
The first major area is technical assistance to State Workforce Agencies (SWAs). A large part of this technical assistance is in the area of benefit financing. Since the 1970s, trust fund solvency has been an ongoing concern in the UI system. In theory, UI tax systems are designed to build up reserves in good economic times in order to pay benefits when unemployment is high. In practice, many states do not maintain adequate reserves and some are forced to borrow from the Federal loan fund, even in relatively mild recessions, to pay UI benefits. During the most recent recession and its aftermath, thirty-six states were forced to borrow. Two states still have outstanding Title XII advances from the Federal Unemployment Account, while four additional states have outstanding bonds issued on the private market as of November 2017. At the end of FY 2017, it was estimated that 55% of states remained below the federally recommended minimum solvency level, while 23% remained below half of that minimum solvency level.
The ongoing solvency concerns of the UI system make it important for the DFAS to be active in this area. A key activity is to make available to the SWAs a trust fund simulation model called the Benefit Financing Model (BFM). This model is maintained and supported in the National Office by the DFAS and is currently used by about one-third of the states. Currently, DFAS is developing a more user friendly Excel-based version of the model to make it easier to operate, maintain, and implement in new states. The DFAS also works closely with states that request assistance in modifying or designing new tax structures, either with or without use of the BFM. Another aspect of benefit financing technical assistance to states is the presentation of periodic Benefit Financing Seminars to introduce state actuarial staff to benefit financing concepts and trust fund forecasting techniques.
A second type of technical assistance is to assist states in the development and maintenance of profiling models. All states are required to profile their UI claimants in order to identify potential UI exhaustees and provide them reemployment services early in their UI spells through the Reemployment Services and Eligibility Assessments (RESEA) program. This is most often accomplished through the use of a statistical model, which uses various claimant characteristics to predict the probability of benefit exhaustion. When requested, DFAS works closely with states to develop and/or update these models through guidance, one-on-one training and, when requested, direct modeling.
A third type of technical assistance is the provision of training seminars in quantitative methods and profiling methods for state staff. The quantitative methods training gives state staff information, instruction and hands-on experience in basic regression and forecasting techniques that are applicable to UI trust fund forecasting and analysis. Similarly, the profiling methods training gives state staff information and experience in the specific statistical procedures used in developing profiling models while also providing them with the basic resources necessary to develop their own state models.
The second major area in which the contractor will assist the OUI is in its role at the national level. This role includes making estimates and doing analyses for budget and legislative purposes, monitoring state and Federal trust fund account activity and solvency, providing data analysis in support of DOL performance goals and in support of OUI initiatives, forecasting state workloads to allocate administrative funds, compiling and analyzing various UI indicators, and disseminating data to the public.
At least twice a year, the DFAS is responsible for updating all estimates and projections of UI benefit outlays, revenues, workloads, and administrative outlays in conjunction with the Federal budget process. The DFAS is also responsible for making estimates of the cost and revenue impact of proposed law changes being considered by the Congress or the Administration. To make these estimates and projections, the DFAS employs a number of computer models and spreadsheets, ranging from simple to complex. These models require continual monitoring, maintenance, and enhancements.
Another area of work involves compiling and publishing data and doing data analysis related to various UI indicators, including solvency measures, recipiency rates and wage replacement rates that may be used to establish performance measures and goals. The DFAS is responsible for developing, calculating and analyzing measures of trust fund adequacy such as the Average High Cost Multiple. The DFAS is also responsible for estimating the amount of Federal UI tax collections (as authorized by the Federal Unemployment Tax Act (FUTA)) by state and compiling, publishing and analyzing comparisons of collections to amounts returned to states.
Additionally the DFAS is responsible for producing and documenting various estimates and projections to be used in the annual and quarterly Department of Labor Financial Statements. These include estimating disbursements, estimating accrued benefit payments, and simulating the impact of various recession scenarios on balances in the Unemployment Trust Fund (UTF).
The DPM is responsible for additional data analysis and the development of implementation plans for a number of national strategies for state programs, which were designed to address major root causes of UI improper payments. These strategies involve the review, use, and possible modification of the Benefit Accuracy Measurement (BAM) statistical survey program used to determine the accuracy of paid and denied claims in the three major UI program areas: State UI, Unemployment Compensation for Federal Employees (UCFE), and Unemployment Compensation for Ex-Servicemembers (UCX).
PROJECT TASKS
Budget and Legislative Analysis
1. The contractor shall maintain, monitor and improve computer models used to make Federal budget and legislative estimates. The contractor will have responsibility for the revenue and state loan model, which makes state-by-state projections of tax rates, fund balances, loans, etc. The contractor will also have responsibility for the STUBEN regular benefits model and the Extended Benefits (EB) model. The contractor shall use these models to make budget and legislative estimates as required. Model equations must be reviewed and updated annually. The contractor shall review and assess alternative techniques, methodologies, and model platforms for modeling and projecting key UI program variables. All model changes must be documented. For all models, standard operating procedures (SOPs) will be created and maintained.
2. The contractor shall produce actuarial calculations on a monthly and quarterly basis for the DOL financial statements. These include estimated UTF disbursements for all programs, due and payable accruals for all programs, and existing claims accruals for Federal UI programs. The contractor shall also produce information annually for the Required Supplemental Information attachment to the financial statements, including 10-year projections of UTF balances under various economic scenarios and an assessment of state trust fund solvency. The contractor shall develop and maintain SOPs to existing methodologies and projection procedures as required, and ensure full documentation of all revisions.
Profiling Model Technical Assistance
3. The contractor shall assist DFAS in providing technical assistance and support to states and Regional Offices in developing, implementing, maintaining, updating and reviewing statistical models or characteristic screening systems for identifying claimants likely to exhaust benefits. Technical assistance will be performed either via telephone, email, or on-site, as determined by the COR. Technical assistance will include: providing general guidance to state staff, identifying and analyzing state data sources and elements, determining model specifications and estimating model coefficients. All model development materials and final documentation shall be provided to both the state and Federal staff for future reference. These tasks will be done either in coordination with state staff, for integrating the econometric model into existing UI software systems, or with Regional Office staff in reviewing and assessing state profiling systems. Additionally, the contractor shall work with DFAS staff to develop modeling and training materials such as stock modeling scripts and training videos, to provide directly to state staff.
Trust Fund Forecasting Technical Assistance
4. As needed, the contractor shall work with DFAS staff to provide support to SWAs in the task of forecasting UI trust fund balances using the BFM. This task entails developing and maintaining various UI-related regression equations used in the simulation models, modeling new state UI laws, collecting and setting up numerous input data files, running simulations under various economic scenarios, and providing technical support to state users.
5. The contractor shall assist in the continued development and maintenance of a new Excel version of the BFM. The contractor shall work with DFAS staff to further develop this model by implementing state projection equations, and producing user interface screens, all within the existing Visual Basic for Applications (VBA) framework. The contractor shall develop and maintain SOP's for updating procedures and full model documentation including user instructions and model operation.
In-Person Training Seminars - Technical Assistance
6. The contractor may produce either a single one-week Benefit Financing Seminar or a single one-week Profiling Methods Seminar per year, as determined by the COR, during the project period, for approximately thirty participants from SWAs. For each seminar, the contractor shall provide all training materials and supplies and will coordinate logistics. Contract staff shall prepare presentations jointly with Federal staff. The COR will determine seminar dates and specific course content. Topics for each seminar will include the following:
a. Benefit Financing Seminar: UI cost and revenue forecasting, UI tax structures, experience rating, measuring trust fund solvency, Title XII loans, and basic statistical methods. Hands-on use of the BFM will be emphasized.
b. Profiling Methods Seminar: overview of RESEA and worker profiling guidelines, overview of potential model types and statistical methods, and hands-on overview of the modeling process including data prep, analysis, transformations, model development and interpretation, and model validation. Hands-on instruction will be provided using a standard statistical package as determined by the COR.
Reports
7. The contractor shall prepare a quarterly publication, the UI Data Summary, which provides a detailed comparison of the status of states with respect to unemployment rates, benefit payment activities, revenues, and trust fund reserves. The publication shall be made available both in hard copy and on the OUI website. The contractor shall maintain and document routines used to extract data, manipulate data, and produce the report. The contractor shall respond to requests for data related to this report or other UI data from researchers, Congressional staff, etc.
8. The contractor shall publish official five-year UI projections and Federal and state trust fund account status in the UI Outlook. These projections are updated twice a year in conjunction with the Federal budget process. The publication shall be made available both via email and on the OUI website. Routines and spreadsheets must be documented by SOPs.
9. The contractor shall produce annual estimates of the amounts of FUTA taxes paid by employers in each state and compile data on the amounts returned to the states for administration and benefits. The contractor shall publish these data on the OUI website. Estimating procedures will be documented with SOPs which are to be kept current.
10. The contractor shall compute annually, or more frequently as required, state fund adequacy measures such as the Average High Cost Multiple and perform analyses of these measures as required. The contractor shall publish these data in a form determined by the COR.
Performance Management
11. Conduct data analysis that may be necessary for the implementation of strategies in the comprehensive strategic plan.
12. Assist in determining which recommendations from the BAM Methodology Evaluation study can be implemented and identify any limitations discovered as part of the data analysis.
13. After the review of the recommendations, develop plans and business requirements for the implementation.
14. Develop regression models for implementing new integrity-related performance measures.
15. Assist with the development of methodologies to determine appropriate targets for performance measures.
16. Develop presentation material on plans for implementation of recommendations.
17. Review the current Program Performance and determine if the current system should be enhanced based on current processes. This data analysis should look at all facets of the BAM program and determine which processes need to be improved.
18. Review all reporting mechanisms, forms and the tools used to determine if any corrections or changes need to be made.
All interested parties are invited to submit a capabilities statement, to Jeffrey Brown, by March 1, 2018 by 2 p.m. EST. Electronic copies of capability statements are preferred and may be emailed to brown.jeffrey@dol.gov with OUI-1630DC-18-N-00018 in the Subject Line. The response must be specific to each of the tasks listed above to demonstrate that the respondent is capable. The submittals shall not exceed 20 pages, TOTAL. A determination by the Government to proceed with the acquisition as a set-aside is within the discretion of the Government. Please be advised that telephone inquiries Will Not be accepted. PLEASE NOTE THAT THIS IS NOT A REQUEST FOR PROPOSAL.
Jeffrey Brown, Phone 2026933159, Email brown.jeffrey@dol.gov
