San Joaquin Hills Transportation Corridor Agency Recommendation:
Authorize the chief executive officer (CEO) to execute contract No. K000961 with Chase Paymentech for payment processing services for a three-year period beginning July 1, 2015, with options to extend for up to three additional one-year periods, to be exercised with Board approval, at the agencies’ discretion. Amounts payable under the contract are based on actual transaction fees, estimated in Fiscal Year 2016 (FY16) to total $2,009,700.
Foothill/Eastern Transportation Corridor Agency Recommendation:
Authorize the chief executive officer (CEO) to execute contract No. K000961 with Chase Paymentech for payment processing services for a three-year period beginning July 1, 2015, with options to extend for up to three additional one-year periods, to be exercised with Board approval, at the agencies’ discretion. Amounts payable under the contract are based on actual transaction fees, estimated in FY16 to total $4,290,300.
BACKGROUND:
FasTrak® accounts and prepaid ExpressAccounts® are routinely replenished with funds to be used for tolls and other charges. Replenishments are made by cash, check, credit card or electronic check/automated clearing house (ACH) payments. More than 99% of all payments by FasTrak and ExpressAccount patrons are made by credit card or ACH. In addition, almost all One-Time-Toll® payments and about 72% of payments for violation penalties are made with credit cards or ACH.
On a daily basis, the agencies’ customer service center system identifies all FasTrak accounts and prepaid ExpressAccounts in need of replenishment. For these and the other types of transactions identified above, the credit card and ACH processor authorizes and settles the payment amounts into the agencies’ bank accounts. For credit card transactions, the processor charges the agencies for interchange
fees as a pass-through charge from the credit card companies and for transaction fees to the processor for obtaining authorization and settling of each transaction. The agencies also pay transaction fees for the processing of ACH transactions. Currently, the agencies contract with Chase Paymentech for Visa, MasterCard, and Discover credit card and ACH processing services. The agencies process American Express credit card transactions directly through American Express. On an annualized basis, Chase Paymentech currently processes approximately 6 million transactions for the agencies, related to almost $200 million of revenue.
The credit card and ACH processing services were last competitively bid in 2008, and a contract with Chase Paymentech for a three-year initial term and three successive options to extend for one year was authorized by the Boards. In April 2011, the Boards authorized execution of a three-year contract extension with Chase Paymentech, with an additional one-year option to be exercised with board approval at the agencies’ discretion, for both credit card and ACH processing. The three-year extension was designed as an alternative to the three successive one-year options, as it allowed for negotiation of more favorable pricing terms. The one-year contract extension authorized in June 2014 will expire on June 30, 2015.
DISCUSSION:
On January 8, 2015, the agencies issued Request for Proposals (RFP) No. K000961 for Credit Card and
Automated Clearing House Processing. A total of 29 firms were notified. Of the 29 firms that were
interested, 7 firms submitted proposals in response to our RFP. The responding firms were:
• Chase Paymentech
• City National Bank and Elavon, Inc. (affiliated with US Bank)
• Wells Fargo Merchant Services, LLC
• Bank of America Merchant Services, LLC
• Ignite Payments/First Data Merchant Services Corporation
• Vantiv, LLC (affiliated with Fifth Third Bank)
• Braintree (affiliated with PayPal)
A selection committee comprised of several of the agencies’ internal staff members was formed to evaluate the proposals based upon the following criteria:
• Technical capability to process large volumes of transactions and experience with similar
organizations
• Understanding of the agencies’ toll road system and payment types
• In-house capability and capacity to provide technical support
• Reliability and continuity
• Total transaction costs
• Set-up costs
Based upon their evaluation, the selection committee interviewed two firms and concluded that Chase Paymentech would be able to provide these services to the agencies at the best overall value.
May 14, 2015 Page 3
FUNDING
Funding for the credit card and ACH processing services contemplated will be included in each agency’s proposed FY16 budget and budgets for the ensuing years. The amounts paid to Chase Paymentech will be based upon specified fees applied to the number of transactions initiated by the agencies and submitted to Chase Paymentech, along with pass-through interchange fees. These payment processing costs will be paid from toll and violation revenues. The actual amounts payable in each year will depend upon the volume of transactions processed. Assuming transaction volume remains stable, the combined total fees for the two agencies will be approximately $6.3 million in FY17 and in FY18.
CONCLUSION:
The proposed contract K000961 allows continued processing of Visa, MasterCard, and Discover credit card and ACH processing services. Total fees, including interchange fees, associated with this contract
are estimated to be $2,009,700for SJHTCA and $4,290,300 for F/ETCA in FY16.
PROCUREMENT SUMMARY REPORT
File No. 2015J-008
Contract #: K000961
Title: Credit Card and ACH Processing Services Recommend Award To: Chase Paymentech
Procurement Process
Type: Request for Proposal Award Criteria: Best Value
Negotiated Price: Estimated: $6,300,000 (FY16)
Vendor Sourcing: The agencies’ Contract Department posted RFP K000961 on the agencies’ website. A total of 29 firms were notified. Of the 29 firms that were interested, 7 firms submitted proposals in response to our RFP.
Proposal Results:
CONSULTANT NAME RANK SCORE
(max = 300) PRICE:
Chase Paymentech 1 270 $6,300,000
City National Bank/Elavon 2 244 $6,400,000
Wells Fargo 3 223 $7,300,000
Vantiv 4 218 $7,200,000
Bank of America 5 217 $7,200,000
Ignite/First Data 6 213 $6,400,000
Braintree 7 152 $7,400,000
EVALUATION CRITERIA MAX
POINTS Chase CNB/ Elavon Ignite/ First Data Wells
Fargo BOA Vantiv Braintree
Proposer’s technical capability of processing large
volumes of transactions and related experience with similar type organizations.
60 55 51 45 48 53 51 27
Demonstrated understanding of the Agency’s toll road system and all payment types
including but not limited to its FasTrak® and ExpressAccount® (prepaid,
charge, and invoice).
provide technical support. Reliability and continuity of
the proposer. 30 26 24 20 24 25 26 15
Total transaction costs (sum of transaction fees, interchange assessments and
any other fees).
105 95 96 77 74 65 62 45
Set-up costs that would be incurred by the Agency to ensure system compatibility
30 25 17 22 18 11 21 23
Total: 300 270 244 213 223 217 218 152
Interview Results:
CONSULTANT NAME RANK SCORE
(max = 300) PRICE:
Chase Paymentech 1 286 $6,300,000
City National Bank/Elavon 2 254 $6,400,000
EVALUATION CRITERIA MAX
POINTS Chase CNB/Elavon
Proposer’s technical capability of processing large volumes of transactions and related experience
with similar type organizations.
60 59 59
Demonstrated understanding of the Agency’s toll road system and all payment types including but not limited
to its FasTrak® and ExpressAccount® (prepaid, charge, and invoice).
15 15 13
Proposer’s in-house capability and
capacity to provide technical support. 60 59 50
Reliability and continuity of the
proposer. 30 30 27
Total transaction costs (sum of transaction fees, interchange
assessments and any other fees).
105 95 85
Set-up costs that would be incurred by the Agency to ensure system
compatibility
30 28 20
Total: 300 286 254
Contract Notes: