February 25, 2019




Kentucky League of Cities, Inc., (KLC), as administrator for Kentucky League of Cities Insurance Services Association (KLCIS), is soliciting proposals from qualified firms (Contractor) to provide Worker’s Compensation Payroll Audit services. The selected Contractor will provide services as an independent contractor. All responses must address the services, requirements, terms and conditions as set forth in this Request for Proposal. It is KLC’s intent to implement the proposed services and retain the successful Contractor for a one year term beginning July 1, 2019, with an option to renew the contract annually for up to five (5) additional years.


The Kentucky League of Cities, Inc., is a membership association of more than 380 Kentucky cities. Its purpose is to provide legislative, financial, insurance, and legal assistance to its members. This is primarily accomplished through lobbying, publications and training seminars.

The Kentucky League of Cities Insurance Services Association is an insurance pool formed by Kentucky municipalities and related entities as a self-insured group pursuant to Kentucky statutes. KLC administers the KLC Workers’ Compensation Trust (the Trust). Approximately 229 members will require an audit in the upcoming year. Audits should include employee concentration data (number of employees at each described location) as well as number of employees per class code.

Workers’ compensation coverage is issued initially at each renewal based on estimated payrolls, with final payrolls for most members being determined after the end of the coverage period through field audits.

KLC and the Trust have a strong customer service relationship with their members. Contractors that deal with members are expected to provide excellent customer service.


The Contractor selected to provide payroll audit services for the Trust shall agree to perform the payroll audits pursuant to industry standards and Kentucky workers’ compensation statutes and requirements. In addition, the Contractor must provide the services pursuant to the following:

Assignments must be completed within 120 days of being assigned.

Audit reports must be transmitted to KLC within 48 business hours after the audit is completed.

Audits must be transmitted electronically.


A. References. Please provide the name, address, telephone number and contact person for at least three organizations for which the firm is now providing services similar to those sought by the Trust. Please provide the name, address, telephone number and contact person for at least three organizations for which the Contractor did provide services similar to those sought by the Trust, but to which they no longer provide service. By submitting a proposal, permission is granted for KLC to contact the organizations listed as references.

B. Employee Qualification and Experience. A resume should be submitted for each individual in management and supervisory positions and all auditors that will be involved in providing services to the Trust. A list of all employees to be involved in providing services to the Trust should be included with the proposal. This list should identify each employee, the position of each employee, number of years the employee has worked in that position with the Contractor, number of years the employee has worked in the area of Kentucky workers’ compensation payroll audits, and any degrees earned from an accredited college or university along with any professional designations earned by each employee. All employees must meet the appropriate state licensing requirements for the work being performed, if applicable.

C. Contractor Insurance Requirements. Before performing any services on behalf of the Trust, Contractor will be required to obtain, and maintain in force, professional liability (errors and omissions) insurance with a minimum of $250,000 per claim limit and employee dishonesty insurance with a minimum limit of $250,000. KLC, KLCIS and the Trust must be named as additional insures on the professional liability coverage. Both the professional liability coverage and the employee dishonesty coverage must be underwritten by insurers acceptable to KLC. Failure to furnish the required insurance or to maintain same shall be considered grounds for rejecting a proposal or terminating a contract.

D. Designated Liaison. To assure quality service and compliance with KLCIS service and management philosophies, the Contractor must identify an assigned account liaison to work with KLCIS.

E. Service Implementation Plan. The Contractor must describe in detail the plan to be utilized in providing the services requested herein. The proposed organizational structure and staffing level for each service office should be described in detail.

F. Additional Questions. Please respond to the following questions and submit them in the order in which they appear as a separate attachment in your Proposal:
1. Form of Organization (Corporation, Partnership, etc).
2. Name of all affiliated companies (if any).
3. Names and titles of principal officers of the company.
4. Please give a brief history of the company (date established, number of employees, annual volume of claims (general liability, work comp, etc).
5. List of all your offices that will support KLCIS payroll auditing services.
6. What is the annual volume of audits handled by the Contractor and what is the annual volume handled by offices that will support KLCIS audits?
7. What types and amounts of professional liability insurance and bonding are maintained? Please provide Certificates of Insurance.
8. Does your firm subcontract for any of the services requested? If yes, please answer the following questions:
a. What services are subcontracted?
b. How do you ensure the overall satisfaction of the Trust members in the services provided by subcontractors?
c. Will the Trust be held harmless for the acts of subcontractors? Please provide a Hold Harmless agreement signed by the subcontractor.
d. Will the Trust have prior written approval of the hiring and use of subcontractors?


A proposed fee schedule must be submitted as part of the response to this RFQ.


Submitted proposals will be reviewed by an internal selection committee and the successful Contractor will be selected by the KLCIS board of trustees. Upon receipt of the proposals, KLC will review the proposals and select potential Contractors to schedule telephone or in-person interviews, if necessary. Only after KLC has determined that a potential Contractor can provide the quality of service desired will a contract be awarded.


A. Proposal Format

Proposals submitted in response to these specifications should be submitted in the following format.

Identify and describe the service being proposed.

1. Confirm that the service being proposed complies with the specification.
2. Identify and describe in detail any exceptions to the specifications.
3. Describe firm qualifications and list references.
4. Describe service implementation plan.
5. Provide cost proposals as set forth in the specifications.

B. Proposal Quality and Evaluation

Each proposal submitted in response to these specifications must “speak for itself.” Proposals should respond to the specifications and describe clearly the services to be offered. Proposals will be evaluated by a team of evaluators. Telephone calls and other marketing efforts to KLC staff members will have no effect on proposal evaluations. Not every potential Contractor will necessarily be contacted for proposal clarification or an interview. Those potential Contractors contacted by KLC for additional discussion concerning their proposals will be selected based upon the evaluation of their proposals. A potential Contractor that believes it can provide the type and quality of service sought by KLC and the Trust should strive to communicate that belief within its proposal.

C. Proposal Due Date

Proposals must be received by 5:00pm E.D.T. on April 25, 2019.

D. Questions

Questions about this RFP should be directed to Jeri McCullough, Procurement & Project Support Manager via our contact form.

E. Copies

Please submit five (5) copies of your proposal to:
Kentucky League of Cities, Inc.
ATTN: Jeri McCullough
100 East Vine Street, Suite 800
Lexington, KY 40507
Facsimile: 859-977-3703
Phone: 1-800-876-4552 (toll free) or 859-977-3780 (direct)

KLC reserves the option of withdrawing or modifying this RFP and to waive any defect or any irregularity in any proposal. It may also reject any or all proposals or portions thereof at any time.

Pursuant to KRS 65.312, KLC is a “public entity”. Any submissions in response to this RFP may be subject to Kentucky Open Records Act (ORA) laws. Any specific information which the proposer considers confidential and proprietary and possibly subject to exemption in accordance with ORA statutes, Kentucky Attorney General opinions and Kentucky case law, must be clearly designated as such. Please note that information designated as “confidential and proprietary” does not guarantee that it will be exempted from release, but will aid KLC in determining if any ORA exemptions apply. Please consult the ORA and/or your legal counsel regarding what information submitted, if any, may be exempted under the ORA.