Greater_than_25_ADES_AZCARES_7.31.2024_SPO.Approved_7-31-24.pdf

SPO 108 Standard Work

Page 1 of 2 SPO 108 Standard Work (rev 04-22)

Owner State Procurement Office, Compliance Unit

Form Number SPO 108 - Greater than 25% Increase Version rev 04-22

Process Standard Work/Instructions for completion and submittal of the SPO 108 form. The form is available on the SPO website: For Agencies > Resources > Standard Forms and Documents. If the contract in question includes construction services, please contact the ADOA General Services Division and do not use this form.

No. Action Action Detail/Key Points

Sections I through III to be completed by the requesting Agency/Division:

SECTION I - Agency Request

1 State Governmental Unit Name of the requesting State Governmental Unit (SGU; agency, board, or commission)

2 Requestor Name of the requestor 3 Email Email of the requestor 4 Title Job title of the requestor 5 Telephone Telephone number of the requestor

SECTION II - Background 6 Service(s)/Material(s) Description of service(s)/material(s) or Contract title (eProcurement Label) 7 Contractor(s) Name of Contractor(s) 8 Contract Number eProcurement contract number (if available)

9 Contract Type

Select applicable option:

- Participating Addendum

- Mandatory Statewide

- Single/Limited-Use Agency

10 Current Estimated Spend Current expected spend for the project or contract 11 Estimated Cost of Increase Forecasted expenditures for the cost increase

SECTION III - Justification

12 Rationale Select applicable option in accordance with A.A.C R2-7-604(B):

Proposed change exceeds 25% of the original contract amount Amendment exceeds 25% of the original contract amount

Provide details of the increased cost to the contracts. Include an additional table if needed.

Provide the line item/milestone/project/change order descriptions, current pricing, and proposed "New" pricing. The field for "percentage of change" will auto-calculate based upon the entered costs. Attach an additonal table using this format if you require more than the provided 14 lines.

The formula used to calculate "percentage of change" is =(New Cost-Current Cost)/Current Cost

Describe the justification for the increase and the determination that the price is fair and reasonable. What are the reasons for the increase and what measures will be in place to prevent future increases? Detail what the next steps are in this contract with regard to contract extension and potential solicitations (i.e. renewals, resolicitation, etc.).

Detail the reasons for the incrase and provide justification and documentation to support the change. Include what the next steps will be regarding this contract reguarding future renewals or resolicitation. Also detail any measures put in place to prevent future increases.

SPO 108 Standard Work

Page 2 of 2 SPO 108 Standard Work (rev 04-22)

I have attached relevant supporting documentation to support the increase, if needed.

Attach any supporting documentation or additional tables to support Steps 13 and 14.

I have conducted research and determined that pricing is fair and reasonable and in the best interest to the State.

Check the box confirming research was conducted and detailed in Step 14.

17 Signature Signature of the authorized requestor 18 Date of Request Specify date of the request from the drop down calendar.

Section IV to be completed by the Procurement Authority:

SECTION IV - Approval

19 Determination

Select applicable option in accordance with A.A.C. R2-7-604(B):

- Request Authorized Pursuant to R2-7-604(B)

- Request Authorized with Conditions/Restrictions R2-7-604(B)

- Request Returned for Additional Information

- Request Denied

20 Comments, conditions, or restrictions (as applicable) Complete as needed

21 Print Name Printed name of the approver 22 Title Job title of the approver 23 Signature Signature of the approving authority 24 Date of Approval Specify the date of approval from the drop-down calendar

25 Use section as necessary Section may be used by any party in case the fields within the form were insufficient

AGENCY NOTICE: This is an official written determination in response to a procurement authorization request.

A copy of the form shall be maintained by the Agency and the State Procurement Office.

Contract Owner shall upload the signed approval version of this form and any supporting documentation in the eProcurement system.

Page 1 of 4 SPO 108 - Greater than 25% Increase (rev 04-22)

Procurement Determination:

Greater than 25% Increase

A.A.C. R2-7-604(B)

SECTIONS I THROUGH III MUST BE COMPLETED BY THE REQUESTOR

USE ADDITIONAL PAGE AS NECESSARY

SECTION I - Agency Request

1. State Governmental Unit

2. Requestor 3. Email

4. Title 5. Telephone

SECTION II - Background

6. Service(s)/Material(s)

7. Contractor(s)

8. Contract Number 9. Contract Type

10. Current Estimated Spend

11. Estimated Cost of Increase

Arizona Department of Economic Security, Division of Child Support Services

Julie Tolby

Sr. Procurement Specialist

Jtolby@azdes.gov

480-973-1820

$41,683,069

$7,822,539

-Single/Limited-Use Agency

AZCARES, formerly DCSS ATLAS System, handles the complexity of debt calculations to prevent delays in additional child support collections, improving the ability to issue and track income withholding orders to ensure that wage deductions are received promptly.

Deloitte Consulting LLP.

CTR052815

SECTION III – JUSTIFICATION

12. Rational

13. Provide details of the increased cost to the contracts. Include an additional table if needed.

Description Current Cost New Cost Percentage of Change

A1: Federal provision update

$38,539,646.00

0.00%

A2: Status report invoicing timeline update

A3: Interfaces architecture updates

$39,346,046.00

2.09%

A4: Contract extension

A5: Project schedule and design updates

$41,048,844.00

4.33%

A6: User training approach

$41,048,844.00

$41,670,844.00

1.52%

A7: Interfaces requirements and descoping

$41,670,844.00

$41,460,844.00

-0.50%

A8: Navajo Nation forms

$41,460,844.00

$41,656,844.00

0.47%

A9: Conversion mapping

$41,656,844.00

$41,683,069.00

0.06%

A10: IRS 1075 publication/contract extension

A11: Implementation additional requirements

$49,505,608.00

18.77%

Amendments 1 – 11. Total Cost Increase

$49,505,608.00

28.45%

Proposed change exceeds 25% of the original contract amount

Page 3 of 4 SPO 108 - Greater than 25% Increase (rev 04-22)

14. Describe the justification for the increase and the determination that the price is fair and reasonable. What are the reasons for the increase and what measures will be in place to prevent future increases? Detail what the next steps are in this contract with regard to contract extension and potential solicitations (i.e. renewals, resolicitation, etc.).

15. I have attached relevant supporting documentation to support the increase, if needed.

16. I have conducted research and determined that pricing is fair and reasonable and in the best interest to the State.

17. Signature 18. Date of Request

AGENCY NOTICE: Upon completion, Requestor shall forward the signed form to the Procurement Authority for review and approval.

If anticipated expenditure is above or outside of the Agency's delegation, forward document to SPOCompliance@azdoa.gov.

7/26/2024

Chief Procurement Officer

The ATLAS Replacement project was approved for procurement in December 2020 by ADOA ASET/ITAC after the completion of a feasibility study and cost benefit analysis in 2017 supported and approved by the program’s federal partner. Replacing the legacy ATLAS system alleviated critical deficiencies including technical platform and system security, usability and efficiency/inflexibility, data reliability and reporting, and customer access providing customer benefit service enhancement, increased efficiency, problem avoidance, increased collections, and modernized system. The Design, Development, and Implementation (DDI) kicked off in January 2021.

Throughout the DDI of the project, change requests were identified and incorporated to update the design, development, and extend the timeline of the project and impacting budget. Thus far, 10 amendments have been processed and Amendment 11 is pending this approval. In Amendment 11, the Division has identified necessary modifications and or additions not included in the approved Design Deliverable 5.3 deemed necessary in the completion of the AZCARES solution. All contract amendments, including the pending 11th amendment, have received federal and ADOA ASET/ITAC approval.

The summation of all the amendments combined increases the project cost to 28.45% over the original contracted amount. The Division does not anticipate any further amendments, however, as additional internal users and external partners become active in the AZCARES system, further additional enhancements and upgrades may be needed to accommodate user requirements. To mitigate any unessential change orders, the Department has refined the scope to limit any future modifications to those approved in writing by the Department, Federal Partners, and the CCB.

To ensure the best interest of the State; the Supplier's proposed change order requests have undergone extensive negotiations and the initial proposed cost of Amendment 11 was significantly reduced from of $11,054,068. to $7,822,539.

As the project costs will exceed 25% of the original contract price, the Department is seeking approval from ADOA to move forward as the identified modifications have been determined to be necessary, fair and reasonable, and in the best interest of the State.

Page 4 of 4 SPO 108 - Greater than 25% Increase (rev 04-22)

TO BE COMPLETED BY PROCUREMENT AUTHORITY

SECTION IV - Approval

19. Determination

20. Comments, conditions, or restrictions (as applicable)

21. Print Name 22. Title

23. Signature 24. Date of Approval

AGENCY NOTICE: This is an official written determination in response to a procurement authorization request.

A copy of the form shall be maintained by the Agency and the State Procurement Office.

Contract Owner shall upload the signed approval version of this form and any supporting documentation in the eProcurement system.

25. Use section as necessary

David Steuber (Jul 31, 2024 16:21 PDT) 7/31/2024

David Steuber State Procurement Administrator

-Request Authorized Pursuant to R2-7-604(B) https://na1.documents.adobe.com/verifier?tx=CBJCHBCAABAAjhoLYkSTbUcAQTTkIlNPgpTnIcBXOqdm