FY27 Netsmart 20170410 Sole Source Justification Form9.16.26.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 ellen.h.daley@illinois.gov

IVRS NX supports the registration and processing of birth, death, and fetal death records; amendment processing; issuance of certified copies; accounting functions; and the Adverse Pregnancy Outcomes Reporting System case management functions. The system also contains integrations and customized functionality developed specifically for Illinois, including interoperability, identity and access management, payment processing, geocoding, record linking, and other interfaces necessary to support State operations. These capabilities were developed and incorporated into the production environment through the original competitively awarded contract and subsequent amendments.

The system supports more than 6,000 users throughout Illinois, including hospitals, physicians, funeral directors, coroners, medical examiners, local registrars, county clerks, and State personnel. Continued operation of IVRS NX is necessary for these users to perform vital records functions and for IDPH to maintain the statewide vital records environment.

The requested services are necessary to maintain the existing IVRS NX production environment and include continued software licensing, system maintenance, technical support, security updates, correction of software issues, and maintenance and enhancement of existing system functionality. The requested procurement is for continued operation and maintenance of the existing production system and is not for the acquisition or implementation of a replacement vital records system.

Q2Answer: The required services must provide continued licensing, maintenance, technical support, security updates, software corrections, and maintenance and enhancement of the existing Illinois Vital Records System, IVRS NX, production environment. The services must maintain the current system functionality, configurations, integrations, data, and established business processes necessary for statewide vital records operations.

Required services and system capabilities include:

Continued software licensing and maintenance necessary to operate the existing IVRS NX production environment.

Maintenance and technical support for the core IVRS NX application framework and the Birth, Death, and Fetal Death registration modules.

Maintenance and technical support for the Adverse Pregnancy Outcomes Reporting System case management functionality.

Continued support for amendment processing, certified copy issuance, accounting functions, and other existing vital records processing functions.

Maintenance of the existing production database and functionality necessary to access, process, maintain, and protect Illinois vital records.

Maintenance and support of existing Illinois specific system configurations, customizations, interfaces, and integrations developed and implemented under the original contract and subsequent amendments, including FHIR interoperability, identity and access management, State payment processing integration, geocoding, automated record linking, APORS, and Universal Newborn Screening related functionality.

Technical support necessary to identify, troubleshoot, and correct software issues affecting the production environment and existing system functionality.

Software maintenance, corrections, patches, releases, and security updates necessary to maintain system availability, reliability, security, and continued operation.

Maintenance and support of the existing workflows and configurations used by hospitals, physicians, funeral directors, coroners, medical examiners, local registrars, county clerks, and State personnel utilizing IVRS NX. The existing environment supports more than 6,000 users statewide.

Maintenance and enhancement of existing IVRS NX functionality necessary to address changes affecting the current production environment, including applicable State and federal requirements and continued interoperability with existing State systems and interfaces.

Services must maintain continuity of the existing IVRS NX production environment without requiring replacement of the current vital records system, migration to a different vital records platform, or redevelopment of the existing Illinois specific production environment.

Q3Answer: The Illinois Department of Public Health is requesting continued licensing, maintenance, technical support, security updates, software corrections, and maintenance and enhancement services for the State’s existing Illinois Vital Records System, IVRS NX. The Agency is not seeking to acquire or implement a new vital records system.

IVRS NX is the State’s current production vital records environment and was originally selected through a competitive Request for Proposals. The State subsequently invested more than $5.1 million through the original contract and approved amendments to implement, configure, integrate, and enhance the system for Illinois specific requirements. These investments include FHIR interoperability, identity and access management, State payment processing integration, geocoding, automated record linking, Birth, Death and Fetal Death functionality, Adverse Pregnancy Outcomes Reporting System case management, Universal Newborn Screening related functionality, and other Illinois specific configurations and integrations.

Netsmart Technologies, Inc. owns and controls the IVRS NX software and associated proprietary technology. IDPH previously documented that Netsmart holds the software license and that another company cannot independently access and modify the IVRS NX software to perform the required work.

IDPH conducted market research to determine whether another source could provide the required licensing and maintenance services for the existing IVRS NX production environment. The research identified vendors that offer alternative vital records systems; however, IDPH did not identify another vendor capable of providing the proprietary IVRS NX software licensing, maintenance, technical support, security updates, software corrections, and maintenance and enhancement services required to continue operation of the State’s existing IVRS NX environment.

The existence of other vendors capable of providing alternative vital records systems does not satisfy the Agency’s current requirement. Procuring an alternative system would constitute replacement of IVRS NX and would require a new implementation and transition rather than maintenance of the existing production environment. The present procurement does not include acquisition, implementation, or migration to a replacement vital records system.

Accordingly, Netsmart Technologies, Inc. is the only source identified through the Agency’s market research that can provide the proprietary licensing and maintenance services required for continued operation of the existing IVRS NX production environment.

Q4Answer: The unique feature of the requested services is the ability to provide licensing, maintenance, technical support, security updates, software corrections, and maintenance and enhancement services directly to the State’s existing IVRS NX production environment. IDPH market research did not identify another vendor capable of providing these services for the existing IVRS NX system.

Specific factors include:

IVRS NX is proprietary software owned and controlled by Netsmart Technologies, Inc. Netsmart controls the software licensing and proprietary technology required to maintain, modify, correct, update, and support the existing production system. IDPH previously documented that another company cannot independently access and modify IVRS NX to perform this work.

The State has invested $5,141,846 under the competitively awarded IVRS NX contract to acquire, implement, configure, integrate, customize, and enhance the current production environment. This includes the original $3,985,794 contract and subsequent amendments totaling $1,156,052.

The existing production environment contains Illinois specific configurations, customizations, and integrations developed under the original contract and subsequent amendments. These include FHIR interoperability, identity and access management, State payment processing integration, geocoding, automated record linking, Birth, Death and Fetal Death functionality, APORS case management, Universal Newborn Screening related functionality, and other Illinois specific configurations.

IVRS NX supports more than 6,000 users throughout Illinois, including hospitals, physicians, funeral directors, coroners, medical examiners, local registrars, county clerks, and State personnel. The requested services maintain the existing production environment and established workflows used by these users.

IDPH market research identified vendors capable of offering alternative vital records systems but did not identify another vendor capable of providing the proprietary IVRS NX licensing and maintenance services required for the existing production environment. An alternative vendor would therefore be providing a replacement system rather than maintaining the system currently operated by the State.

Prior to expiration of the competitively awarded contract, the State had established a three year Renewal No. 1 amount of $1,800,351.17 for continued IVRS NX services. The current one year requirement is $600,116.39. The proposed one year amount is therefore consistent with the annualized pricing established for continued operation of the existing system under the competitively awarded contract

The State competitively awarded IVRS NX and has invested $5,141,846 in its acquisition, implementation, configuration, integration, customization, and enhancement. The system currently supports more than 6,000 users and contains Illinois specific configurations, integrations, data, workflows, and functionality developed through the original contract and subsequent amendments.

Evaluating alternative vital records systems would evaluate replacement of the existing IVRS NX environment rather than an alternative means of satisfying the current maintenance requirement. Replacement would require the State to undertake a new system acquisition and implementation, including configuration and customization, data migration and validation, redevelopment or replacement of existing integrations, testing, security review, user acceptance testing, development and implementation of revised business processes and procedures, training of State personnel and external users, and transition to a new production environment.

IDPH therefore did not evaluate replacement systems as alternatives to the requested services because replacement of a functioning production system is outside the scope of the Agency's current requirement and would require substantial additional State investment to replace capabilities and infrastructure already acquired and implemented.

The original competitively awarded contract included renewal provisions and established pricing for continued operation and maintenance of IVRS NX. Immediately prior to expiration of the contract, IDPH was processing Renewal No. 1 for a three year period at a total cost of $1,800,351.17. The renewal amount incorporated the additional functionality and services added through approved amendments during implementation of IVRS NX.

The three year renewal amount of $1,800,351.17 equates to approximately $600,117.06 per year. The current proposed one year price is $600,116.39, which is $0.67 less than the annualized amount established under the competitively awarded contract.

The proposed pricing is also consistent with the immediately preceding emergency procurement. The 90 day emergency agreement for continued IVRS NX licensing, maintenance, and support was $150,029.10. Annualizing that amount results in approximately $600,116.40 based on four 90 day periods. The current proposed annual price of $600,116.39 is therefore consistent with the pricing paid immediately preceding this procurement.

Based on comparison with both the competitively established renewal pricing and the pricing paid under the immediately preceding emergency procurement for the same existing production environment, IDPH determined that the proposed $600,116.39 price is fair and reasonable

IVRS NX supports the State’s ongoing vital records operations, including Birth, Death, and Fetal Death registration, amendment processing, certified copy issuance, accounting functions, Adverse Pregnancy Outcomes Reporting System case management, and other integrated public health functions. The system currently supports more than 6,000 users throughout Illinois.

The current request is limited to a one year term and does not obligate the State beyond that period. Prior to expiration of the requested term, IDPH will evaluate the continued operational need, system performance, available procurement options, and the economic feasibility of continuing the existing IVRS NX environment.

Q9Answer: If the requested sole source is not approved and IDPH is required to conduct a competitive procurement, the State would either be competing proprietary licensing and maintenance services that the Agency’s market research has not identified another vendor capable of providing for the existing IVRS NX environment, or the State would have to expand the procurement to include replacement of the existing production vital records system.

Replacement of IVRS NX would create significant additional financial and operational costs to the State. IVRS NX was originally awarded through a competitive Request for Proposals, and the State has subsequently invested $5,141,846 in acquisition, implementation, configuration, integration, customization, and enhancement of the current production environment. The investment includes Illinois specific functionality and integrations developed through the original contract and subsequent amendments.

A competitive procurement for a replacement system would require the State to incur costs beyond the price of the replacement software. The State would need to fund implementation and configuration of a new environment, redevelopment or replacement of existing Illinois specific functionality and integrations, data migration and validation, system and security testing, user acceptance testing, development and implementation of revised business processes and procedures, training, and transition from the existing production environment.

IVRS NX currently supports more than 6,000 users throughout Illinois, including hospitals, physicians, funeral directors, coroners, medical examiners, local registrars, county clerks, and State personnel. Replacement of the production system would therefore require training and transition activities extending beyond IDPH personnel and would require changes to established workflows and processes used by external stakeholders statewide.

The State would also incur costs associated with maintaining continuity of vital records operations during implementation and transition. The existing IVRS NX environment would need to remain operational until a replacement system was implemented, tested, validated, and placed into production. As a result, the State could incur costs for continued operation of IVRS NX while simultaneously incurring acquisition and implementation costs for a replacement environment.

The Agency’s current requirement does not result from a need to replace IVRS NX. The existing system is the State’s production vital records environment, and the requested $600,116.39 is for one year of continued licensing, maintenance, technical support, security updates, software corrections, and maintenance and enhancement of that existing environment. The proposed price is consistent with the annualized pricing previously established under the competitively awarded contract.

Accordingly, requiring IDPH to procure a replacement vital records system to obtain competition would require substantial additional State expenditures to replace an existing production environment in which the State has already made a significant investment, while also creating implementation, transition, training, business process, and operational continuity costs that are not required to satisfy the Agency’s current need.

Q10Answer: The Agency recognizes that the Emergency Purchase Statement executed following expiration of the prior contract stated that a competitive procurement would be conducted. That statement was not intended to indicate that IDPH had determined that IVRS NX should be replaced or that the Agency intended to acquire and implement a new vital records system.

Immediately prior to the emergency, IDPH was actively processing Renewal No. 1 under the competitively awarded IVRS NX contract for continued licensing, maintenance, and support of the existing production system. The renewal was not completed before the contract expired on May 18, 2026. Following expiration, the Agency requested a 90 day emergency agreement from Netsmart for the same services that would have been provided under the renewal.

The competitive procurement contemplated following the Emergency Purchase Statement was for the continued licensing, maintenance, and support requirement associated with the existing IVRS NX production environment. The Agency had not identified a need to acquire or implement a replacement vital records system.

In determining the appropriate procurement method following the emergency, IDPH reviewed the existing system requirements and conducted market research regarding availability of the required services. The Agency identified vendors offering alternative vital records systems but did not identify another source capable of providing the proprietary licensing, maintenance, technical support, security updates, software corrections, and maintenance and enhancement services required for the existing IVRS NX production environment.

IDPH recognizes that alternative vital records systems exist and that a future decision to replace IVRS NX could be competitively procured. However, the existence of alternative systems does not create competition for maintenance of the existing IVRS NX environment. A procurement for an alternative system would constitute a system replacement and would require a new implementation, data migration, integration, testing, training, business process transition, and other expenditures beyond the Agency's current requirement.

The requested sole source is limited to one year and does not commit the State to continued use of IVRS NX beyond the requested term. The request allows the State to continue operating and maintaining its existing production vital records environment while preserving the State's ability to evaluate future requirements and procurement options.