Attachment B_Business Case_Final.docx

Attachment B to OregonBuys Bid #S-73000-00007868

Business Case for DL/ID System Replacement

(DISR)

Oregon Department of Transportation (ODOT) Driver and Motor Vehicle Services

(DMV)

Owner: Patrick Marcinko Edit Date: 4/3/26 Version: 3.4

Table of Contents

1) Executive Summary The purpose of this project is to procure and implement a new Digital Photo Licensing (DPL) solution to provide continuity of the mission critical process for taking customer photos, performing biometric identity checks, and applying data to AAMVA-compliant driver licenses and identification (DL/ID) cards. Services will also include the production and distribution of DL/ID cards from a centralized location.

The legacy DPL contract is set to expire December 31, 2027. The legacy contract includes an option for up to a three-year extension. A new DPL solution will allow DMV to continue fulfilling state-level legislative mandates to provide Oregon DL/ID cards. A DPL solution also DMV to fulfill federal REAL ID mandates and conform to the American Association of Motor Vehicle Administrators (AAMVA) guidelines regarding DL/ID card features and fraud prevention.

Similar to previous DPL projects, the intent is to maintain legacy DL/ID card issuance functionality and workflows to minimize organization impacts. The new requirements regarding multiple camera stations in DMV Field Offices will improve services and help alleviate office congestion by eliminating the need for customers to move from one queue to another to complete their transaction or to wait in a service queue during unusually busy times at large offices. “Office congestion” includes both the number of customers in a confined space and the need for those customers to travel from one location to another.

The total forecasted project duration, with Independent Quality Management Services (IQMS), is forty-two [42] months. The project budget is projected to be $2,292,548. Ongoing costs for ODOT Personnel is estimated average of $36,300 and customers $2,592,000 per year for 5 years. Costs may vary depending on the card options selected and market value when negotiations are underway.

The project is constrained by a mandatory completion date that is no later than March 2030 which reflects the end date of the legacy contract and the available contract extension. DMV business and ODOT IS technical resources are utilized across all division projects. The project will be assigned resources according to the project-priority assigned by DMV User Council.

ODOT has chosen the option to acquire a DPL solution as described in sections 2, 3, and 4 of this document. This is the only option that will meet minimum legislative requirements and has the opportunity to provide benefits beyond what the legacy system provides. In-house development is not viable due to the complexity, required specializations, and large number of solution elements of a full DPL solution. Additionally, a DPL solution requires specialized equipment, facilities, and software. The proprietary technologies that allow DPL vendors to meet AAMVA, Federal, and regional requirements, represent research and development beyond the resources available for this project.

2) Overview and Background

1) Business incentives and organizational drivers A DPL solution allows DMV to fulfill state-level legislative mandates to capture personal information and photo to provide an Oregon DL/ID card for individuals that participate in this process to receive an Oregon DL/ID card. A DPL solution also fulfills federal REAL ID mandates and conforms to the American Association of Motor Vehicle Administrators (AAMVA) guidelines regarding DL/ID card features and fraud prevention. The legacy DPL contract is set to expire December 31, 2027. The legacy contract includes an option for up to a three-year extension to maintain continuity of service for this mission critical service. Without a new contract to updating/replacing the existing system, and after the existing contract has expired the DMV will not be able to provide the mission critical service of issuing driver licenses or identification cards to Oregonians as directed by statute. ODOT will not comply with state and federal mandates and revenue collection will be interrupted.

2) Current System state and any known system and business process replacements or integrations In 2024, the legacy DPL solution supported the issuance of approximately 925,000 DL/ID, resulting in a revenue exceeding $63 million. The ongoing cost of the DPL solution is charged to DMV using a cost-per-unit business model at $2.88 per DL/ID - as of the edit date of this document.

DMV systems are comprised of Windows-based applications with SQL Server databases hosted in Salem by the Department of Administrative Services Enterprise Information Services (EIS) Division. There are 59 field office locations throughout Oregon with several customer-service workstations at most locations. One digital Photo License (DPL) workstation is located in each Oregon DMV Field Office. DMV headquarters (HQ) also has DPL workstations for testing purposes. Field office and HQ employee workstations consist of personal computers running MS Windows.

The legacy DPL solution is a mixture of client-server and browser-based systems. Servers are hosted and maintained in the AWS cloud by the vendor. DPL software is also located on HQ and field office PC workstations that allows for initiating transactions and looking up customer photo history. The current in-office issuance system includes a personal computer (PC), fingerprint reader (for DMV staff access), camera, signature capture device, and interim card printer. There is one DPL station per field office.

3) Scope and future state The scope of this project is to replace the existing ageing system with a solution that continues to provide basic critical end-to-end functionality for capturing information and photographic images of a customer required to produce a driver license or Identification card and delivery of the card.

This system replacement will affect DMV offices and staff due to the changes in the software and hardware. If the vendor selected for “image capture” provides camera equipment for each workstation, office congestion is expected to reduce. Additional camera equipment, at each workstation, may also require the reconfiguration of the DMV office to optimize the ability to take a photographic image at each workstation. The current vendor agreement is all inclusive of hardware, software and services and not broken out into multiple line items.

Training will also be part of the scope of this project. The DMV office staff will need to be trained in the new system and how to operate not only the software but how to take photographs at each workstation. Training will also need to be provided to ODOTs DMV technical support team so they can help DMV staff at the offices across the state, when there are questions or issues encountered during hours of operation. Additionally, IT resources training will be required to troubleshoot any issues that occur between the DMV offices and the vendor system and the OLIVR system.

Security is also a component of this scope of this project and will require any chosen vendor to address state statutes regarding all data with a Personally Identifiable Information (PII) classification. This will include the vendor providing encryption for data in motion (transmitted) and rest (stored). Additionally, procedures for accessing workstations will be reviewed to meet state cybersecurity standards and state statutes for accessing workstations and backend data. Disaster recovery will also be reviewed to ensure data is not lost and can be recovered in a timely manner. Additionally, as part of the solicitation process it will need to be determined how this solution will be hosted since private personal information is required to produce a driver’s license or identification card.

Any modifications may also change how staff support daily operations for their customers and will require communication as this project moves forward by identifying changes that are coming in the future.

4) Investment adherence to ODOT strategies The DPL solution supports the ODOT Strategic Plan by contributing to the effort to save lives. DL/ID cards provide law enforcement with tangible proof that an authorized driver was informed about driving laws and is deemed able to pass driver skills tests. Additionally, it is anticipated the new solution will have the potential to increase customer service by increasing the number of DPL stations to perform “start to finish” (for driver license and Identification card issuance or renewal) transactions at a single station with the potential of reducing congestion in the DMV Field Office. Additionally, this project will also pursue the acquisition of multiple portable photo capture devices, currently being engaged in by DMV with the current DPL vendor. Acquiring the portable DPL equipment will facilitate photo capture at correctional facilities, as mandated in an email to ODOT leadership from Governor Kotek, dated 6/25/2024. This project aligns with the Oregon Department of Transportation Strategic Action Plan with respect to “Excellent Customer Service” (Section 3) https://www.oregon.gov/odot/SAPDocs/Strategic-Action-Plan.pdf

5) Business Case development methodology and high-level solicitation planning The project follows the governance processes and ODOT methodology standards used to determine and approve the business case necessary to launch a project. DMV uses a Project Proposal deliverable to develop and approve the business case before project launch. The Request for Proposal (RFP) will be drafted so that up to three vendors could be contracted with to provide one or more of the three DPL solution aspects: 1) image capture and identity verification biometric checks; 2) biometric checks (duplicate record identification) comparing a new photo against all photos stored in DMV records; and 3) card production and distribution. The total forecasted project duration, with independent quality management services (IQMS), is forty-two [42] months.

6) Market Research In July 2024, DMV posted a Request for Information (RFI) in OregonBuys inviting suppliers of driver licenses and identification cards (DL/ID) to describe their services for production and central issuance of DL/ID, including facial recognition. The RFI informed suppliers that the information gained could be used to develop a Request for Proposal to procure a new third-party vendor system and replace the legacy Agency Digital Photo License System. The legacy 12-year contract (B33825) expires December 30, 2027. Procuring and negotiating a new contract is expected to take several years. Seven suppliers responded to the RFI. The responses were reviewed by a cross-section of DMV and ODOT Information Systems employees who regularly interact with the DL/ID system. Six suppliers were invited to provide a virtual demonstration of their services, and to answer a set of questions specific to each supplier. Virtual demonstrations were held in September and October and attended by a cross-section of DMV and ODOT Information Systems employees. Suppliers shared their company’s background, jurisdictions currently under contract, their service level standards, disaster recovery procedures, their implementation strategies and timelines, and gave high-level demonstrations of their services. From the demonstrations, DMV learned that some suppliers offer only data and photo capture services. If selected, there would be a separate contract for production services. Suppliers offering production services are introducing higher security features, such as polycarbonate materials and mobile driver licenses that allow credentials to display on a smart phone. Suppliers demonstrated mobile issuance services that would allow DMV personnel to meet customers outside of a DMV office, such as in a correctional facility. Suppliers demonstrated how DMV could incorporate camera stations at each DMV workstation with virtual backdrops. One supplier demonstrated a service tablet that allows customers to answer questions and review data collected during a transaction on a customer-facing tablet, negating the need for employees to turn their screen toward the customer to complete these steps. All suppliers stated they meet AAMVA and FMCSA standards for card production.

Oregon DMV has many years of experience in issuing DL/ID cards. This acquisition of a DL/ID issuance system is another iteration in a series of solutions implemented since the early days of Oregon DMV. The most recent legacy solution was implemented in 2019. Due to the specializations required and the complexity of a DL/ID issuance solution, a critical success factor is the selection of a vendor that has a history of successfully implementing DL/ID issuance solutions. The vendor(s) must be responsive and adhere to the timelines necessary for implementation prior to the end of the legacy contract.

3) Measurable Business Benefits

4) Assumptions & Constraints

1) Assumptions The project team is proceeding under the following assumptions.

· The solicitation and implementation of the new solution will take place prior to the expiration of the existing DPL contract.

· The new system must integrate with existing DMV systems.

· The existing photos, in the DMV DL/ID database, will need to be migrated to the new solution to create the baseline for the facial recognition processes.

· The selected solution could be Software as a Services (SaaS) or cloud-based solution instead of being hosted in the State Data Center (SDC).

· The workstations may not need to be in the current production network domain.

· The Request for Proposal (RFP) will be drafted so that up to three vendors can be contracted to provide one or more of the following three DPL solution project components: 1) image capture and identity verification biometric checks; 2) biometric checks comparing a new photo against all photos stored in DMV records; and 3) card production and distribution.

2) Constraints There is a project resource constraint in that DMV business and IS technical resources are utilized across all division projects.

· The project will be assigned resources according to the project priority assigned by the DMV User Council.

· The legacy contract has an expiration date of December 31, 2027. If ODOT leverages the full three-year extension option, the DPL solution must still be replaced by March 2028 to ensure continuity of service for issuing driver licenses and identification cards.

5) Alternatives

1) Option: Do nothing The option of doing nothing is a failure to act. A core ODOT/DMV business function of issuing DL/ID cards, will no longer be provided to the public and ODOT/DMV will be out of compliance with federal and state mandates. Costs would include the ongoing business costs for the legacy solution through the expiration of the contract.

2) Option: Extend the legacy contract for three years and then do nothing The legacy contract has the option of being extended for up to three years. The option of extending the legacy contract for the three available years will just delay the inevitable impacts of doing nothing. A core ODOT/DMV business function of issuing DL/ID cards, will no longer be provided to the public and ODOT/DMV will be out of compliance with state and federal mandates. Costs would include the negotiations for a contract extension and the ongoing business costs through the end of the contract extension. Note that the project team has identified that the available three-year extension will likely be leveraged to implement a replacement DPL solution (option 4 below).

3) Option: In-house solution development The option of developing a DL/ID organic solution in-house by ODOT resources was rejected due to constraints such as limited expertise in the DL/ID product space, lack of necessary skills and knowledge, and the need for AAMVA-compliant physical card production capabilities. While image capture solutions are within the range of the ODOT Information Systems division, the addition of biometric checks produced from customer images would require extensive and specialized development or the licensing/leasing of proprietary technology. DL/ID card production is also a specialized industry and AAMVA standards are difficult to meet and existing card security features in the industry are proprietary. Expert opinion is that the necessary research and development alone would exceed the project budget and timeline. Even if the Oregon Legislature were to approve the funding, the required resources and skillsets acquired for such a development process would only be leveraged every fifteen to twenty years and would not be an efficient use of constituent-paid DL/ID issuance fees. This option was determined as not viable enough to warrant cost estimates.

4) Option: Solicit and contract for DL/ID issuance solution and services The option to acquire an image capture and DL/ID issuance solution is described in sections 2, 3, and 4 of this document. This is the only option that will meet minimum state and federal mandates and the only option that has the opportunity to provide benefits beyond what the legacy DPL system provides.

Project costs are projected based on estimated resource usage and comparisons to previous similar project efforts. Ongoing costs ($2,592,000/year) are estimated and based upon the cost per card ($2.88) produced issued each year (approximately 900,000 cards).

Estimated cost summary for acquiring a new DPL solution:

IQMS

Total

Total Project Estimates

$2,292,548

*Note State Data Center (SDC) consulting external connectivity costs are based on the current hosting model and may change

Estimated 5-year operational costs (Does not include cost outside ODOT Personnel)

6) Organizational Change Management (OCM)

Implementation of a new DPL solution is expected to be implemented like previous solutions and not result in any substantial changes to the current processes, position descriptions, resource consumption, or culture. This project is another system replacement in a long series of replacements of the DPL solution. This project replaces an existing system and external outreach will be dependent on any changes to DL/ID cards and/or any new customer service advantages.

Experience and research verify that the most competitive DPL solutions use very similar workflows or can be configured to mimic DMV’s current workflows. DMV’s Change and Engagement Team (CET) will complete a change management plan and implement any outreach necessary. The Change Engagement Team will be leveraged to communicate upcoming project events and impacts.

Until the project team is able to review vendor project proposals, details will not be available for any substantive discussions regarding any potential modification to the DPL workflows or how DMV staff will use a new DPL system. The CET will be engaged as part of the project team as this project is initiated and keep stakeholders with progress and any potential modifications how the DPL process currently works..

Aside from the end users and management for front line staff, the technical teams are already aware of this project and are briefed on the status monthly. This will continue throughout the duration of the project coordinating with the Business Relationship Manager to ensure the support staff are up to date and aware of coordination during the development, testing and production phases of this project.

7) Conclusions

1) Selected Solution Option ODOT has chosen the option to acquire a DPL solution as described in sections 2, 3, and 4 of this document. Contracting with a DPL service provider is the only option that will meet minimum state and federal requirements and the only option that has the opportunity to provide benefits beyond what the legacy system provides.

2) Anticipated project management methodology The solicitation phase will use the deliverable development and procurement processes utilized by DAS/OPO. For developing the FAST/OLIVR system integration elements, ODOT IS project management will utilize a combination of a legacy methodology (archived in March 2022) and new project deliverable templates developed by ODOT IS.

3) Next Steps and Implementation Strategy The next steps include procuring the services of a DL/ID card issuance solution, developing project plans, designing products, developing integration elements, setting solution configurations, testing the solution in test region, training employees to utilize the solution, implementing the solution, and then migrating the solution to production region for ongoing business use. Project Governance will be under the control of the DMV User Council.

4) Diversity and accessibility standards Implementing this solution is culture neutral. All customers will use the same process, be subject to the same requirements, and receive the same products regardless of diversity and inclusivity use cases – as mandated by all legislation that ODOT/DMV administers. At a minimum, the new solution will maintain the accessibility standards used by the legacy solution – which comply with American Disability Act (ADA) guidelines for accessibility to services.

ODOT, DL/ID System Replacement (DISR) Business Case Page 9 of 10 image1.png