B-48724 BEAD Krasan Sole Source Justification Form SPO Signed.pdf

Sole Source Justification Form

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Bulletin Reference Number B-48724

Requesting Agency/University DCEO

Sole Source Justification Form - Part I Section I - General Information

Department/Bureau/Section: DCEO - Illinois Office of Broadband (IOB)

Need Identified Date: May 30, 2025 Supply/Service Need By Date: Aug 11, 2025

Project Title: Broadband Technical Assistance and Consulting

Vendor: Krasan Consulting Services

Provide a description of the supplies or services required:

Technical assistance in support of the administration of the Broadband Equity, Access, and Deployment (BEAD) Program. Provide technical expertise and advisory services in broadband deployment, including conducting financial modeling, evaluating business plans of proposed broadband deployments, and evaluating the qualifications of entities looking to deploy broadband service in Illinois. Such support is required to meet Federal requirements and the Office of Broadband does not have this expertise in-house.

Value: Estimated Value of Initial Term, this Change Order or Amendment: 547,820

Will this Sole Source amend a Professional or Artistic Services contract? Yes No

*Sole Source may not be used for amendments for Professional or Artistic Services if the amendment would increase the value by more than 5% of the initial award or extend the term by more than 60 days.

Type: New Sole Economically Feasible Source

Section II - Proposed Term

One-Time Purchase Term Contract

Estimated Contract Begin Date: Aug 11, 2025

Estimated Contract End Date: Jul 31, 2026

Number of Potential Renewals: 0

Length of Each Renewal in Months: 0

Total Value of All Renewals: 0

If a Term Contract, does the term, including renewals, exceed 12 months? Yes No

Section III - Funding Source Select the type of funding to be used (Check all that apply): State Appropriate Funds Federal Funds Other (Explain):

Section IV - Sole Source Justification

This purchase is economically only available from a single source primarily because it is: (If "Other" explain in one sentence)

Legislation changes occurred neccesitating a new contract to replace the existing small purchase which is currently being provided by th

Are there secondary justification(s) for this sole source? Yes No

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Bulletin Reference Number B-48724

Requesting Agency/University DCEO

Section V - Purchase History

Has the Agency or University Purchased these supplies or services in the past? Yes No

Term Term From Term To Value Description Contract Number Type

1 09/20/2024 06/31/2026 100,000 Broadband Assistance BEAD Deployment 25-420DCEO-STRTC-P Small Purchase

2 11/25/2020 06/30/2025 341,000 Broadband Consultant 21-420DCEO-STRTC-P RFP

If more than 10, or if other comments, explain:

Section VI - Business Rationale

1. Provide a detailed explanation of the need for the supplies or services:

Illinois is carrying out the federal Broadband Equity, Access, and Deployment (BEAD) Program, which requires running a competitive sub-grantee selection process to identify internet service providers who can connect approximately 175,000 households using quality and affordable broadband technology for efficient costs. This process requires close budget due diligence, evaluating the economic efficiency of projects, and conducting direct negotiations with preliminary awardees. The Office of Broadband, since its inception, has relied on external subject matter expertise for this purpose. The BEAD Program is similar to past Connect Illinois initiatives (Rounds 1-3- P-22143), but has a budget that i approximately triple the Connect Illinois initiative budget, which reaches $1Billion, and an obligation to connect more than 4 times the the number of locations, totaling 175,00 compared to the previous 42.000. DCEO is now in the process of executing a federal $1B program (Connect Illinois Round 4, funded through the BEAD Program), which means DCEO will require a greater number of hours from the vendor than available in the current small purchase contract (P-71565) to conduct merit review, including budget and pro forma due diligence, technical review of network designs, and budget negotiations based on industry knowledge. Please note that the contract on the current small purchase with sole source conditions (P-71565) does not expire until June 30, 2026, however, there is only enough funding to last a few more months given the increase of duties in Round 4. Round 4 also has a new set of rules and added requirements that we must review for, based on the federal funding source. The federal government made structural changes to the BEAD program on June 6, 2025 that require a significantly higher volume of work in a short period of time. Thus, the Office of Broadband requires regular technical assistance from individuals with experience conducting financial and technical review of Illinois-based broadband deployment proposals through the Connect Illinois Program with the Office of Broadband.

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Bulletin Reference Number B-48724

Requesting Agency/University DCEO

2. Provide a list and describe in detail the specifications required to satisfy the need:

Activities include:

- Reviewing entity and project qualifications across hundreds of applications (238 applications received in our initial application wave requesting more than $7 Billion, and we expect this to double in our second application wave) o Conducting re-reviews following application revisions mid-wave

- Associated training and practice reviews to ensure consistency

- Committee meetings with we discuss feedback, questions, and concerns

- Drafting applicant-facing due diligence materials

- Conducting financial analysis

- Creating a standard process for budget due diligence

- Participating in negotiation meetings with applicants

- Attending office hours to advise applicants on technical elements of their applications

3. Provide detail explaining the justification selected in Section IV to explain why the requested supplies or services are the only ones available that can satisfy the agency or university requirements?

Krasan Consulting is the current Vendor providing services through Rounds 1-4 of this Federally funded program. No other vendor currently has experience providing financial and technical review of Illinois-based broadband deployment proposals through the Connect Illinois Program with the Office of Broadband for at least 4 years. Krasan is the only Vendor that currently has Illinois-specific experience from currently providing the services and knowledge of the local landscape and provider is an essential component of executing a cost-effective BEAD Program. Any other Vendor who would be able to provide the work would need the assess and review the current program, how it is working and the requirements before they can begin work.

4. What are the unique features of the supplies or services that are not available in any other product or by any other vendor? Provide specific quantifiable factors/qualifications:

Krasan is the current Vendor providing the services requested and has 4 years of experience conducting financial and technical review of Illinois-based broadband deployment proposals through the Connect Illinois Program with the Office of Broadband. The Vendor has facilitated more than $280M in awards to Connect Illinois Round 3 awards to Illinois internet service providers through direct negotiations and budget analysis based on the Federal requirements DCEO must follow. The Vendor currently has the working knowledge of executing this program.

5. Has the Agency or University considered alternative supplies or services to satisfy their need? Yes No

5a. If no, why weren't alternatives evaluated?

Krasan is the current Vendor and has the knowledge specific to Connect Illinois and now BEAD that we could not attain elsewhere without a significant learning curve for a new vendor. The Federal funds which DCEO is utilizing and administering as part of this program has established timelines to align with federally approved plans. A new Vendor would not be able to come in and assess the current program and needs and then begin providing the services required and meet the timeline provided in the Federal funding.

6. Are there resellers or distributors?

Yes No N/A

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7. What efforts were made to get the best possible price (i.e. did the agency/university negotiate) and how did you determine the price for this purchase is considered fair and reasonable?

Price was initially set based on industry standard rate for comparable work. Since the initial work with this vendor in 2020, there have been modest increases to account for inflation. The budget for this request was developed using the Vendor's current hourly rate and the estimated # of hours that the DECO will need from the Vendor. The significant increase from the small purchase and this need is based on the changes in Round 4 of this program. Round 4 is a federal $1B program which means DCEO will require a greater number of hours from the vendor than available in the current small purchase contract (P-71565) to conduct merit review, including budget and pro forma due diligence, technical review of network designs, and budget negotiations based on industry knowledge. The Rates were based on the following Factors: $195.65 Hourly rate ; 28 Weekly Hours; 50 Weeks per Year; 2 consultants These factors are based on the initial Krasan contract which was developed when the Office of Broadband was reviewing broadband applications for a $100M program (Connect Illinois Rounds 1-2). DCEO is now in the process of executing a federal $1B program (Connect Illinois Round 4, funded through the BEAD Program), which means we require a greater number of hours from the consultants on this contract to conduct merit review, including budget and pro forma due diligence, technical review of network designs, and budget negotiations based on industry knowledge. Round 4 also has a new set of rules and added requirements that we must review for, based on the federal funding source and the consultants will be reviewing in a tight time period qualifications and technical materials across an expected 350+ applications

8. Will this purchase obligate the State to this vendor for future purchases such as maintenance, licensing or continuing need?

Yes No

9. What will be the financial or other impact to the State if this sole source is not approved and a competitive bid is required?

Without this technical and financial support, Illinois will not be able to meet its federal deadlines through the Broadband Equity, Access and Deployment (BEAD) Program due to a lack of staff capacity and technical abilities on the team. The BEAD sub-grantee selection process and budget negotiations are happening in June-November, so any delays in securing this vendor will lead to larger project delays. This will then lead to corrective actions from the National Telecommunications and Information Administration, causing harm to DCEO's standing with the federal government and ability to comply with its federal grant agreement. Additionally, this vendor will enable an estimated $5-10 Million in savings across preliminarily awarded broadband projects based on the vendor's skills in economic efficiency analysis and negotiation. Without this support, the Office of Broadband risks over paying grantees, missing out on $5-10 Million in savings, and risking responsible stewardship of taxpayer dollars.

10. Is there any additional information you would like to add to justify this sole source?

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Bulletin Reference Number B-48724

Requesting Agency/University DCEO

Section VII

Requesting Department Representative

Requesting Department Signature Required

I know and understand the contents of this Sole Source Justification and attest that all statements are true and correct and the fairness and reasonableness of the price was adequately confirmed.

Date 7-23-25

Printed Name Rick Rogers E-mail Address Rick.e.rogers@illinois.gov

Phone Number 217-524-8148

State Agency Bureau/Division Head or University Purchasing Director Approval and Signature Required

I know and understand the contents of this Sole Source Justification and attest that all statements are true and correct and the fairness and reasonableness of the price was adequately confirmed. (All prior form fields will lock once this e-signature is completed)

E-mail Address Brandy.evans@illinois.gov

Phone Number (217) 685-1669 Date 7-23-25

Printed Name Kristin A. Richards by Brandy Evans; Director by Ch

Agency Bureau/Division Head or University Purchasing Director and Not a Designee

SPO Approval and Signature Required

I have reviewed and understand the contents of this Sole Source Justification and agree with the State Agency or University determination.

I have reviewed and understand the contents of this Sole Source Justification and do not agree with the State Agency or University determination. As a result, the State Agency or University must explore other sourcing methods to satisfy their need.

State Purchasing Officer Signature Phone Number 217-836-3618 Date Jul 23, 2025

Printed Name Alyson Moore E-mail Address alyson.r.moore@illinois.gov

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Bulletin Reference Number B-48724

Requesting Agency/University DCEO

Sole Source Justification Form - Part II Section I - General Information

Project Title

Vendor

Initial Date of Procurement Bulletin Posting

Was a Sole Source hearing held per 30 ILCS 500/20-25?

Yes - Complete Section II and III below (Section II will only be visible when this option is selected)

No - Section II not required, go to Section III below Section III - CPO Approval and Signature Required

Based on my review, I authorize the Agency/University to proceed in accordance with the published Notice referenced above.

Based upon my review, I authorize the Agency/University to proceed with the following Changes.

Based on my review, the Agency/University is not authorized to proceed with this sole source as presented and my recommendation is that it be cancelled.

Other

CPO Signature CPO Phone

Printed Name Date

CPO E-mail

Version 7.01 Page of Sole Source Justification Form - Part I Section I - General Information Will this Sole Source amend a Professional or Artistic Services contract?

If yes, what was the original contract value?

*Sole Source may not be used for amendments for Professional or Artistic Services if the amendment would increase the value by more than 5% of the initial award or extend the term by more than 60 days.

Section II - Proposed Term If a Term Contract, does the term, including renewals, exceed 12 months?

If yes, provide a detailed justification including any economic benefit received for agreeing to a multi-year term:

Section III - Funding Source Select the type of funding to be used (Check all that apply):

Section IV - Sole Source Justification Are there secondary justification(s) for this sole source?

Section V - Purchase History Has the Agency or University Purchased these supplies or services in the past?

Term Term From Term To Value Description Contract Number Type Section VI - Business Rationale

1. Provide a detailed explanation of the need for the supplies or services:

2. Provide a list and describe in detail the specifications required to satisfy the need:

3. Provide detail explaining the justification selected in Section IV to explain why the requested supplies or services are the only ones available that can satisfy the agency or university requirements?

4. What are the unique features of the supplies or services that are not available in any other product or by any other vendor? Provide specific quantifiable factors/qualifications:

5. Has the Agency or University considered alternative supplies or services to satisfy their need?

5a. If yes, name the alternative vendors whose supplies or services were evaluated:

5b. If yes, what were the alternatives for each vendor and why were they unacceptable? Be specific with regard to features, characteristics, requirements, capabilities and compatibility:

5c. Explain how the market evaluation was conducted?

*This evaluation is to determine available options within a market. If the evaluation is to determine quality or best suited option, this is not the appropriate source selection. Under no circumstances shall the evaluation consist of testing alternative options. These activities must be conducted in a competitive transparent environment (i.e. IFB or RFP).

5a. If no, why weren't alternatives evaluated?

6. Are there resellers or distributors?

7. What efforts were made to get the best possible price (i.e. did the agency/university negotiate) and how did you determine the price for this purchase is considered fair and reasonable?

8. Will this purchase obligate the State to this vendor for future purchases such as maintenance, licensing or continuing need?

8a. If yes, please provide details regarding future obligations and/or needs:

9. What will be the financial or other impact to the State if this sole source is not approved and a competitive bid is required?

10. Is there any additional information you would like to add to justify this sole source?

Section VII Requesting Department Signature Required I know and understand the contents of this Sole Source Justification and attest that all statements are true and correct and the fairness and reasonableness of the price was adequately confirmed.

State Agency Bureau/Division Head or University Purchasing Director Approval and Signature Required I know and understand the contents of this Sole Source Justification and attest that all statements are true and correct and the fairness and reasonableness of the price was adequately confirmed. (All prior form fields will lock once this e-signature is completed) SPO Approval and Signature Required Sole Source Justification Form - Part II Section I - General Information Was a Sole Source hearing held per 30 ILCS 500/20-25?

Section II - Sole Source Hearing Details The State posted to the Illinois Procurement Bulletin a description of the State's need, the justification for the sole source decision, and information regarding the opportunity to submit comments and testify at a public hearing. Notice of the hearing was also posted outside of the hearing room 48 hours prior to the hearing.

The public hearing was conducted for the purpose of receiving testimony regarding the sole source determination. The Hearing Officer recommends the following:

The following relevant documents are attached:

Section III - CPO Approval and Signature Required 9.0.0.2.20101008.1.734229

- Reviewing entity and project qualifications across hundreds of applications (238 applications received in our initial application wave requesting more than $7 Billion, and we expect this to double in our second application wave) o Conducting re-reviews following application revisions mid-wave

- Associated training and practice reviews to ensure consistency

- Committee meetings with we discuss feedback, questions, and concerns

- Drafting applicant-facing due diligence materials

- Conducting financial analysis

- Creating a standard process for budget due diligence

- Participating in negotiation meetings with applicants

- Attending office hours to advise applicants on technical elements of their applications