Sole Source Justification Form

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Bulletin Reference Number 26-478HFS-PERSA-B-52192

Requesting Agency/University Healthcare and Family Services

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

Department/Bureau/Section: HFS/Bureau of Administrative Services/Procurement Management

Need Identified Date: 3/27/2026 Supply/Service Need By Date: 07/01/2026

Project Title: Pitney Bowes Postage Sole Economically Feasible Source

Vendor: Pitney Bowes, Inc.

Provide a description of the supplies or services required:

The Department of Healthcare and Family Services (HFS) intends to award a contract to Pitney Bowes for the purchase of postage to be used on mail pieces sent via the United States Postal Service (USPS). The postage must be downloaded to HFS owned or leased Pitney Bowes postage meters. HFS requests postage, in arrears, at a volume which averages $670,000/month, that Pitney Bowes will provide through its Power Purchase program. The cost is comprised of postage that is used for mass mailings at approximately $600,000/month plus approximately $70,000/month for postage utilized by local or regional offices. Due to the potential for volume fluctuations, the estimated projection will be $700,000/month to avoid the need for a future amendment and to ensure uninterrupted service.

Value: Estimated Value of Initial Term, this Change Order or Amendment: 8,400,000

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: 07/01/2026

Estimated Contract End Date: 06/30/2027

Number of Potential Renewals:

Length of Each Renewal in Months:

Total Value of All Renewals:

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)

Compatibility of Equipment, Accessories, Replacement Parts or Service

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

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Bulletin Reference Number 26-478HFS-PERSA-B-52192

Requesting Agency/University Healthcare and Family Services

Another justification that this purchase is only available from a sole source is because it is:

Potential loss of Federal Funds if required mailed service is not provided

Another justification that this purchase is only available from a sole source is because it is:

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 07/01/2025 06/30/2026 8,400,000 Pitney Bowes Sole Source for Postage 2026-11-002 Sole Source

2 07/01/2025 06/30/2028 223,120.44 Pitney Bowes Mail Machines NASPO Order Against Master 2026-11-001 RFP

3 04/01/2025 06/30/2025 1,800,000 Pitney Bowes Amendment for Postage 2025-11-001-02 Amendment

4 07/01/2024 06/30/2025 6,000,000 Pitney Bowes Sole Source for Postage 2025-11-001 Sole Source

5 07/01/2023 06/30/2024 6,000,000 Pitney Bowes Sole Source for Postage 2024-11-001 Sole Source

6 07/01/2022 06/30/2023 6,000,000 Pitney Bowes Sole Source for Postage 2023-11-001 Sole Source

7 07/01/2022 06/30/2025 211,031.64 Pitney Bowes Mail Machines NASPO Order Against Master 2023-11-002 RFP

8 07/01/2021 06/30/2022 6,000,000 Pitney Bowes Sole Source for Postage 2022-11-002 Sole Source

9 07/01/2020 06/30/2021 6,000,000 Pitney Bowes Sole Source for Postage 2021-11-001 Sole Source

10 07/01/2019 06/30/2022 196,505.28 Pitney Bowes Mail Machines NASPO Order Against Master 2020-11-004 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:

HFS requires meters that are automated to ensure that mail is processed quickly. HFS requires invoicing for postage once the exact amount due is determined. The postage meters must be compliant with all USPS requirements to ensure that HFS does not apply more postage than necessary. HFS sends numerous pieces of mail annually. Most of the mail HFS processes is time-sensitive, and failure to meet time constraints will result in the loss of Federal funding and expose the State to potential lawsuits for failure to provide services as directed. The majority of the mail processed contains client information, much of which is mandated by both State and Federal statutes. In order to meet the demand, postage meters are used for the application of postage. The postage for each piece of mail varies, and is determined after the mailing is sorted. Various factors affect the price of postage including size, pre-sort service, volume and the number of pieces addressed to individual zip codes.

Through the Intergovernmental Agreement, DHS is the primary source of mailings for HFS. As part of the Intergovernmental Agreement, DHS applies postage and HFS is billed monthly for the actual postage costs. HFS is responsible for paying the monthly postage billed by DHS directly to Pitney Bowes. Because DHS is unable to project the cost in any given month, the postage is billed in arrears once the final determination of cost is made with no additional rates, fees or interest charges.

The mailings are extremely time-sensitive, and failure to meet time constraints will result in the loss of Federal funding and expose the State to potential lawsuits for failure to provide services as directed. If this purchase is not approved, mail services may cease and cause undue harm to the citizens of Illinois.

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Bulletin Reference Number 26-478HFS-PERSA-B-52192

Requesting Agency/University Healthcare and Family Services

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

The majority of the mail processed contains client information, much of which is mandated by both State and Federal statues. HFS owns or leases meters from Pitney Bowes, and Pitney Bowes will only download postage onto Pitney Bowes meters due to proprietary issues. In addition to the postage utilized through the Intergovernmental Agreement, Pitney Bowes virtually loads postage onto the mail meter machines located in HFS offices and invoices HFS in arrears for the actual postage at cost with no additional rates, fees or interest charges.

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?

Through participation in the Pitney Bowes Power Purchase program, Pitney Bowes bills the Agency for the exact amount of postage used for the month. Due to the variable nature of the pricing structure created by the USPS, the quantity of mail pieces and the fluctuating daily postage required, HFS must purchase monthly postage from a vendor able to bill in arrears and with equipment compatible with the meters owned or leased by HFS. The Pitney Bowes meters are compatible with HFS owned or leased equipment.

The meters in large scale mailing operations are made by or leased from Pitney Bowes, and Pitney Bowes will only download onto Pitney Bowes meters at the rate determined by USPS. Pitney Bowes invoices the Agency for postage at cost with no additional rates, fees or interest charges. By way of an Intergovernmental Agreement, DHS is the primary source for mailings, and sends a monthly invoice to HFS for the Agency's postage used.

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:

Pitney Bowes meters are compatible with the equipment currently used in the HFS mail rooms and Pitney Bowes will only load postage onto a Pitney Bowes meter. Pitney Bowes is the only company which offers the postage draw balance, automatic postage load and billing in arrears for postage in an amount sufficient to meet HFS needs.

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?

Pitney Bowes is the only company that can download postage onto Pitney Bowes meters.

6. Are there resellers or distributors?

Yes No N/A

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?

Pitney Bowes bills for only the postage used in the previous billing cycle. HFS does not incur any additional charges for the use of this service. Postage prices are set by the USPS.

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?

The mailings are extremely time-sensitive, and failure to meet time constraints will result in the loss of Federal funding and expose the State to potential lawsuits for failure to provide services as directed. If this purchase is not approved, mail services may cease and cause undue harm to the citizens of Illinois.

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

No.

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Bulletin Reference Number 26-478HFS-PERSA-B-52192

Requesting Agency/University Healthcare and Family Services

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 Apr 24, 2026

Printed Name Steve Dorchinecz E-mail Address steve.dorchinecz@illinois.gov

Phone Number 217-785-9507

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 Monique.N.Wantland@illinois.gov

Phone Number 217-557-5777 Date Apr 24, 2026

Printed Name Monique Wantland

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 217.993.1719 Date Apr 27, 2026

Printed Name Jennifer Klein E-mail Address jennifer.klein@illinois.gov

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Bulletin Reference Number 26-478HFS-PERSA-B-52192

Requesting Agency/University Healthcare and Family Services

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

Project Title Pitney Bowes Postage Sole Economically Feasible Source

Vendor Pitney Bowes, Inc.

Initial Date of Procurement Bulletin Posting Apr 29, 2026

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 217-622-187

Printed Name Ellen H. Daley Date May 13, 2026

CPO E-mail Ellen.H.Daley@illinois.gov

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

Through the Intergovernmental Agreement, DHS is the primary source of mailings for HFS. As part of the Intergovernmental Agreement, DHS applies postage and HFS is billed monthly for the actual postage costs. HFS is responsible for paying the monthly postage billed by DHS directly to Pitney Bowes. Because DHS is unable to project the cost in any given month, the postage is billed in arrears once the final determination of cost is made with no additional rates, fees or interest charges.

The mailings are extremely time-sensitive, and failure to meet time constraints will result in the loss of Federal funding and expose the State to potential lawsuits for failure to provide services as directed. If this purchase is not approved, mail services may cease and cause undue harm to the citizens of Illinois.

Pitney Bowes invoices for only the postage cost.