SOLE SOURCE Third Party Liability System

The State of Illinois, through the Department of Healthcare and Family Services (HFS), awarded a sole source contract to Kunz, Leigh & Associates, Inc. for maintenance and operations support of the Third-Party Liability Electronic Database (TED) system. The four-year contract, valued at $21.6 million, commenced June 7, 2026, and concludes June 6, 2030. The contract encompasses replacement and modernization of HFS' legacy systems supporting Recovery Programs, including Third Party Liability, Liens and Estate, Workers' Compensation, and Personal Injury recovery functions, along with comprehensive maintenance and operations services.

The service delivery includes system maintenance and operations ($12.4 million), hosting infrastructure ($4.5 million), optional public-facing portal hosting ($2.3 million), and enhancements and change requests ($2.4 million). HFS justified the sole source procurement based on the proprietary and non-transferable nature of the TED system software, critical timing requirements related to Centers for Medicare and Medicaid Services federal certification, and substantial prior capital investment in system development. The TED system generates approximately $75 million in annual cash collections and $1.64 billion in cost avoidance collections for Medicaid recovery activities. The contract was approved by the State Purchasing Officer and Chief Procurement Officer in March and April 2026, respectively, and funding derives from both state appropriated and federal sources.