Solicitation Number: 6HQOIG-15-A-0009
Agency: United States Postal Service
Office: Supplies and Services Purchasing
Posted Date: November 4, 2014
The United States Postal Service Office of Inspector General (OIG) is awarding a contract to a Supplier who possesses specific subject matter expertise in consumer financial services, including products, regulation, market dynamics, operations, costs, and pricing. The purpose of this solicitation is to seek a Supplier to help assess the efficacy and financial viability of various approaches the U.S. Postal Service could consider for expanding its financial services offerings.
The tentative contract type is Firm Fixed Price.
The OIG is an independent federal law enforcement agency within the U.S. Postal Service. Its mission is to conduct and supervise objective and independent audits, reviews, and investigations relating to Postal Service programs and operations; to promote economy, efficiency, and effectiveness within the Postal Service; and to keep the Postal Service Governors, Postal Service management, and Congress informed of problems, deficiencies, and corresponding corrective actions.
RARC is a group within the OIG that analyzes issues and opportunities facing the Postal Service. On January 27, 2014, the OIG released a white paper titled Providing Non-Bank Financial Services for the Underserved (https://www.uspsoig.gov/sites/default/files/document-libraryfiles/2014/rarc-wp-14-007.pdf). That concept paper explored the possibility of the Postal Service expanding its financial services offerings to meet the needs of the 68 million unbanked and underbanked adults who rely on alternative financial services such as check cashing and payday loans. Globally, most posts have robust financial offerings. In industrialized countries, an average of 14.5 percent of postal revenue comes from financial services.
The OIG is now conducting follow up research that will look more closely at how the Postal Service could implement financial services. Specifically, the paper will assess a series of approaches (likely four to six) for a financial services expansion. Each approach should include a discussion of the types of products, partnerships, and delivery channels involved, as well as analysis of its viability and efficacy. The approaches will not necessarily be mutually exclusive, and the products involved will include alternative financial services like check cashing, money transfers, money orders, bill pay, prepaid cards, and mobile payment solutions. In laying out potential plans of action and analyzing the pros and cons of each one, the OIG aims to inform the Postal Service and other stakeholders as they consider how to move forward.
The primary scope, tasks, deliverables, milestones, due dates, and status report requirements are described below. The resulting product(s) will become the property of the OIG, and the OIG reserves the right to report the information under its own name. The OIG will guide and assist work efforts and will aid in gathering internal postal information, as necessary. OIG staff will also provide input during the research and writing of the results (see “Deliverables” below).
3. Scope of Work
The Supplier will help the OIG develop and fine tune the approaches. This will be an iterative process. In consultation with the Supplier, the details of each approach will be modified as necessary to maximize viability and efficacy. The approaches may include but will not be limited to the following:
• A partnership with a single financial institution.
• Partnerships with multiple financial institutions based on region or product.
• An expansion of currently allowable services, such as money transfers, check cashing, money orders, and prepaid cards. Ancillary services could be added gradually.
• Creation of a secure platform that would allow the existing and potential customers of participating financial institutions to open accounts, purchase products, sign paperwork, and make deposits and loan payments at post offices.
The supplier will then analyze each approach, using metrics that will include, but not be limited to the following:
• Revenue – What is the potential revenue opportunity?
• Costs – What are the key costs, including startup costs, capital requirements, administrative, personnel, compliance, etc.? Some of this may be qualitative.
• Operational complexity – How difficult would this be to execute? This should include a discussion of regulatory implications.
• Market size – What is the size of the market(s) in question? What is the trajectory of its growth or decline?
• Pricing options – To what degree would the Postal Service be able to offer products at prices that would both cover costs (at minimum) and save money for financially underserved Americans?
• Risks – What are the key risks and their magnitudes? How could they be managed?
• Timeframe – Approximately how quickly could the products and services be up and running? How long to maturity?
• Benefits to partners – How would the Postal Service’s partner(s) likely benefit? This should be both quantitative and qualitative.
• Benefits to the underserved – How would each approach meet the needs of financially underserved Americans? How much time and/or money could they save?