DHS - B-18679 - Fluence Automation - SSJF - 11.24.20 SPO signed.pdf

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Sole Source Justification Form 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

The need for this upgrade stems from the approaching end of serviceable life for 11 Infinity Meters currently used to apply postage on the back end of the inserting process within the Mail Processing Unit (MPU). The Infinity Meters are proprietary equipment owned by Pitney Bowes - United States Postal regulations do not allow private ownership of these meters, so IDHS leases the Infinity Meters from Pitney and also has an annual repair and maintenance agreement. The lease costs for the meters total $9,240.00 annually and the R&M agreement costs an additional $18,570.00 each year. In addition, the MPU has to purchase supplies for the meters - print heads and ink. Because these meters are now at end of life, manufacturing of the supplies has all but stopped, and costs have quadrupled. The print heads and ink used to cost just over $200 per meter - costs are now over $900 per meter and there is only one supplier that still maintains any inventory. This inventory is finite, and in the near future the Infinity Meters will be completely obsolete. When these meters are retired, the MPU will have no redundant ability to apply postage to pre-inserted letters. If the existing Criterion Sorter is out of service for any reason, letters generated in the MPU would either have to be sent to a third-party vendor for processing at an additional cost, or sit in queue until the sorter is placed back into service, causing delays in delivery and resulting in mandated deadlines being missed. This could result in benefit delays to agency customers, fines, loss of Federal funding, and lawsuits.

The procurement of a new Apex MLOCR Front end, Postjet printer and 32 2-tier X-class pockets (bins) for the Criterion Sorter will allow expansion of our current pre-sort capabilities, and provide the redundant ability to apply postage to pre-inserted letters.

Not sure who the others are

Vendors did not have ability to provide 10,000 units

Fluence Automation has entered into an agreement with the NASPO buying cooperative, ValuePoint. DHS reached out to Fluence to explore using that contract and determine what the potential cost savings would be to the State. Fluence responded that the ValuePoint contract was primarily for equipment purchases and that the sort of maintenance services we were seeking were not entirely included in the ValuePoint agreement. Fluence also stated there would be no cost savings to the State using the ValuePoint contract. For these reasons, DHS is satisfied the best pricing available has been achieved without going through ValuePoint.

When these meters are retired, the MPU will have no redundant ability to apply postage to pre-inserted letters. If the existing Criterion Sorter is out of service for any reason, letters generated in the MPU would either have to be sent to a third-party vendor for processing at an additional cost, or sit in queue until the sorter is placed back into service, causing delays in delivery and resulting in mandated deadlines being missed. This could result in benefit delays to agency customers, fines, loss of Federal funding, and lawsuits.