Hearing Officer Sole Source Determination 25-691ISAC-COLAC-B-46002~1.pdf

TO: Ellen H. Daley, Chief Procurement Officer for General Services

FROM: Ellen C. Morris, Sole Source Hearing Officer

DATE: January 27, 2025

SUBJECT: January 15, 2025 Sole Source Hearing Recommendation

On January 15, 2025, I presided as hearing officer over a hearing to consider comments regarding the following agency determination to contract on a sole economically feasible source basis:

Agency: Illinois Student Assistance Commission (“ISAC”)

Vendor: Parchment, an Instructure Company (“Parchment”)

Brief Description: Comprehensive electronic transcript exchange platform

Procurement Bulletin Reference: 25-691ISAC-COLAC-B-46002

Value: $572,250.00

Factual Background:

On December 24, 2024, ISAC published a Sole Source Justification Form (“SSJF”) seeking approval for a contract with Parchment to provide a comprehensive electronic transcript exchange platform that allows high schools to electronically submit student transcripts to colleges, universities, and other organizations across the United States as part of the students’ college application and enrollment process. SSJF at 1.

ISAC has had contracts for the comprehensive electronic transcript exchange platform since 2011, all with the vendor Parchment. Six (6) of the prior contracts were done through sole source procurements, and two (2) were procured through the Midwestern Higher Education Compact. The current contract with Parchment began February 1, 2024, ends January 31, 2025, and is a sole source procurement. The contract subject to the instant sole source hearing is estimated to begin February 1, 2025, and end

January 31, 2026.

ISAC states in the SSJF that Parchment currently provides services to over 400 Illinois high schools with over 220,000 e-transcript requests from Illinois students on an annual basis. ISAC states that Parchment services can be used by any high school regardless of existing student systems being used and can provide electronic records in a format accepted by any postsecondary institution. SSJF at 3.

ISAC states in the SSJF that Parchment is the only vendor that provides a system process that brings multiple credential record types into one platform and facilitates the transfer of student high school information in a consistent and secure national standard format of data. ISAC further states Parchment is the only electronic transcript provider who has received the Postsecondary Electronic Standards Council Seal of Approval for its use of the High School Transcript XML (Extendable Markup Language) standard.

Parchment includes services for Illinois K-12 schools and districts to provide student transcripts and supporting documents either electronically, as a PDF or machine-readable data, or via secure print and mail. Illinois schools are currently set up to use Parchment and continuing with this vendor will prevent any disruption of services to their students. SSJF at 4.

ISAC further states in the SSJF that in its research of other vendors, it found that Need My Transcripts and Scribbles services are now owned by Parchment. ISAC found that vendor National Student Clearinghouse has traditionally been focused on no data exchanges for colleges and universities and only sends data to postsecondary institutions in the United States. SSJF at 5.

ISAC further states in the SSJF that disruption of this service would result in the inability to provide continuity of services starting February 1, 2025. ISAC states that this would result in delays in student record data being provided to postsecondary institutions and other stakeholders, such as scholarship providers. SSJF at 5.

Manda Koss requested a hearing on this proposed sole economically sourced contract on behalf of Verif-y, Inc. (“Verif-y”). Verif-y also submitted an attachment with its hearing request, which outlines its products and services. In its request for hearing, Verif-y states that it is less expensive than Parchment, it uses advanced technology for ID verification to ensure FERPA compliance, and that it provides a comprehensive support team and visibility to know with confidence their transcript is being handled securely.

Summary of Hearing:

The hearing was held via Webex on January 15, 2025. The notice of intent to contract on a sole economically feasible source basis as well as the justification form for this procurement were incorporated into the record. The following summary incorporates and paraphrases the pertinent testimony as follows:

Manda Koss and Ed Zabar primarily commented on behalf of Verif-y. Verif-y commented that Verif-y offers lower cost and better customer service. Verif-y commented that it worked with entities who previously used the current vendor, and Verif-y is able to provide the service to the students and is also able to provide answers to questions. Verif-y commented that it prioritizes security and compliance, it provides a lower price, and provides the best services and support around. Verif-y commented that Verif-y can provide the service ISAC is seeking and probably can provide it better than it is currently provided but given the condensed timeline and the potential for disruption, could not do so within two weeks. If an RFP were to occur, Verif-y would be interested in pursuing it.

Lisa Murphy-Coveny, Sam Nelson, and Bianca Morales primarily commented on behalf of ISAC. ISAC commented that a big issue is transition costs. ISAC commented that Parchment is already set up, that the contract expires in February, and any disruption of service would be a huge cost to the State and the students. ISAC commented that students would not be able to send their transcript timely in the transition period. ISAC commented that it is not looking for data sharing agreements or retention of data, rather, it is seeking a transfer or a copy of the transcript from the school to the institution of the student’s choice.

ISAC commented it has no involvement in the rollout or advertising, and the vendor currently handles that. ISAC commented that there is no system to integrate with. ISAC commented that for many years ISAC has had a transcript exchange that provides high schoolers in Illinois the ability to have their transcripts electronically sent to an institution at no cost to the student or institution. ISAC commented that for ISAC is looking into pursuing an RFP next year.

Applicable Statutes and Rules

Sole-source procurements must be scrutinized because they tend to contravene the core purpose of the Illinois Procurement Code (“Code”), namely, “that the principles of competitive bidding and economical procurement practices shall be applicable to all purchases and contracts by or for any State agency.” 30 ILCS 500/1-5. The Code requires heightened transparency for sole source awards because they lack competition and can be abused relatively easily. See, generally, 30 ILCS 500/20-25.

The Code states that “contracts may be awarded without use of the specified method of source selection when there is only one economically feasible source for the item.” 30 ILCS 500/20-25(a). Additionally, the Code states that a “contract may be awarded as a sole source contract unless an interested party submits a written request for a public hearing at which the chief procurement officer and purchasing agency present written justification for the procurement method.” Id. Additionally, the Code states that “[a] sole source contract where a hearing was requested by an interested party may be awarded after the hearing is conducted with the approval of the chief procurement officer.” Id.

The Illinois Administrative Code further outlines the following:

A sole source procurement is permissible when a requirement is available from only a single supplier. A sole economically feasible source is permissible when only one supplier is deemed economically feasible. A requirement for a particular proprietary item does not justify a sole source procurement if there is more than one vendor is authorized to provide that item.

44 ILL. ADMIN. CODE 1.2025(b).

Further, Section 1.2025(c) provides that “[p]rior to authorizing the State agency to enter into a contract based on the . . . sole economically feasible source request, the CPO-GS shall offer a public hearing to be held and make a final determination as required by Section 20-25(a) of the Code.” 44 ILL. ADMIN. CODE

1.2025(c).

Analysis and Recommendation

The issue here is whether any vendor other than Parchment can provide the necessary services to meet ISAC’s need for a comprehensive electronic transcript exchange platform, and whether any other vendor can do so in an economically feasible manner.

Based on the testimony presented at the hearing, it does appear that Verif-y can provide the services to meet ISAC’s needs. However, ISAC requires a fully operational electronic transcript exchange platform to be in place by February 1, 2025. Verif-y stated at the hearing that it cannot provide the required services by that date. ISAC demonstrated that any lapse of this electronic transcript exchange platform would be detrimental to the State and that Parchment is the only available vendor that can provide the necessary services by February 1, 2025. Accordingly, ISAC’s request to execute a sole economically feasible source contract with Parchment is in the best interest of the State and should be granted.

I note that ISAC stated at the hearing that ISAC intends to move forward with a competitive procurement in the future, and that Verif-y stated it may be interested in submitting a response to a competitive procurement.

Based on the foregoing, I find the justification for this sole economically feasible source to be sufficient, and I recommend the procurement be approved.

Ellen C. Morris