Mail Fulfillment FY23 - SEFS.pdf

Sole Source Justification Form

Version 7.01 Page 1 of 7

Bulletin Reference Number 23-427DES-ADMIN-B-30326

Requesting Agency/University Illinois Department of Employment Security

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

Department/Bureau/Section: General Services Division

Need Identified Date: 8/3/2021 Supply/Service Need By Date: 7/1/2022

Project Title: Mail Fulfillment Center

Vendor: Pitney Bowes

Provide a description of the supplies or services required: Printing, folding, inserting, and mailing IDES correspondence

Value: Not to Exceed Value of Initial Term, this Change Order or Amendment: 3,000,000

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: 7/1/2022

Estimated Contract End Date: 6/30/2023

Number of Potential Renewals: 0

Length of Each Renewal in Months: 0

Total Value of All Renewals: 0

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

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

Items are Copyrighted or Patented and the Items are Only Available from the Holder

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

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Bulletin Reference Number 23-427DES-ADMIN-B-30326

Requesting Agency/University Illinois Department of Employment Security

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 4/1/2022 6/30/2022 750,000 Mail Fulfillment Center Services and postage 4100149945 Sole Source

2 7/1/2020 1/31/2022 13,000,000 Mail Fulfillment Center Services and postage 4100129369 Exemption

3 4/9/2020 6/30/2020 2,250,000 Mail Fulfillment Center Services and postage 4100127318 Exemption

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:

The Illinois Department of Employment Security (IDES) must continue to procure service from an external source for printing, folding, inserting and mailing claimant and employer correspondence. IDES originally contracted with Pitney Bowes for Mail and Print Services via the Mail Fulfillment Center Contract which was a Covid-19 Exempt contract under the Governor's 3/8/2020 Emergency Proclamation. This contract included Postage which has now been procured under the Master Contract. Continuing the services of the Mail Fulfillment center will allow IDES to continue to manage the printing and mailing of time sensitive documents that need to be sent to claimants and employers.

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

The capacity to handle over 100,000 envelopes per week.

The ability to send out all mail through the United States Postal Service (USPS).

PlanetPress software which provides IDES with the ability to transfer files directly to the vendor without having to manually print and deliver files for envelope inserting and mailing Secure file transmission Printing, assembly, postage, and delivery to the USPS of the mail items generated from the correspondence files.

Address verification services to ensure deliverability of each mail item generated from the correspondence files.

Tracking and reporting on return and undelivered mail items.

Provision of paper, envelopes, postage, ink supplies, and all other mailing and printing materials required Provision of mail inserters, mailing machines, high-speed printers, scanners, and all other mailing and printing equipment Provision of a nonexclusive license to use the Enrichment Editor software Access to the Vendor's Mailstream on Demand (MOD) system which allows IDES to view and download item level tracking and status reporting of each mail item.

Maintenance of all licensed software and solutions needed

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Bulletin Reference Number 23-427DES-ADMIN-B-30326

Requesting Agency/University Illinois Department of Employment Security

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?

IDES began leasing mail inserters with Pitney Bowes on December 7, 2020 for the Central Office mail room. Along with leasing four (4) mailing machines IDES purchased a file based processing software, PlanetPress, that would upgrade the mail room. This software ensures that all mailings include a 2-D bar code so that all documents are collated properly to cut down on pages being inserted into the incorrect envelopes. It should be noted that PlanetPress software is utilized in the Pitney Bowes' Mail Fulfillment Center . This software is exclusive to Pitney Bowes. No other vendor is able to print, fold and insert these documents without creating a new software. Having a new vendor create a new software that is compatible with Planet Press would take several months and require more money and employee hours than using this vendor to fulfill our needs.

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:

The unique features of the Pitney Bowes software and supplies are the provision of a nonexclusive license to use the Enrichment Editor software; Access to the Vendor's Mailstream on Demand (MOD) system which allows IDES to view and download item level tracking and status reporting of each mail item and PlanetPress software which ensures that all documents are 2-D bar coded, collated, and sent directly to the Central Office mail room. The software is compatible with our Pitney Bowes Mail Inserter, has the capacity to handle over 100,000 envelopes per week, is capable of sending out all mail through the USPS and allows IDES to transfer files directly to Pitney Bowes without having to manually print and deliver files for envelope inserting and mailing. Any other vendor we use would not use the same PlanetPress software and sending documents to them manually to insert into envelopes would require more time and labor.

5. Has the Agency or University considered alternative supplies or services to satisfy their need? Yes No

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Bulletin Reference Number 23-427DES-ADMIN-B-30326

Requesting Agency/University Illinois Department of Employment Security

5a. If yes, name the alternative vendors whose supplies or services were evaluated:

Before looking for an external mail fulfillment center to aid DES in the demand created by the pandemic, IDES attempted to partner with the Illinois Department of Human Services and Central Management Services for use of their mail room services. This partnership would’ve supplemented DES mailroom services during the Pandemic. In order for the partnership to work successfully, DHS & CMS needs equipment/services that are compatible with the equipment currently being utilized in the DES central mail room. Pitney Bowes' software is proprietary and DHS and CMS did not offer this compatibility. The current Pitney Bowes setup in the DES central mailroom allows for direct accessibility when DES needs to send additional orders to the external mail fulfillment center for additional processing.

Total costs for the Mail Fulfillment Center is $3,000,000.00 Pricing is as follows:

1 - Pitney Bowes-First Page Processing Fee- which includes 8.5 x 11 color form with perforation; Inbound/outbound envelope;

processing, printing, inserting and mailing; Duplex variable printing; CASS Address Cleansing; USPS NCOA link processing- $0.188 2 - Continuation Pages (per 8.5 x 11 duplex page)- $0.066 3 - Programming Change Fees- $200.00.

IDES found Neopost, now known as Quadient, uses it Quadient Impress software. In order to utilize Quadient's services would require IDES to lease Neoposts software, which would not be cost-effective since IDES already owns a Pitney Bowes' mail inserter which is not compatible with Quadient's software or machines.

IDES considered Pitney Bowes' costs to be fair and reasonable, when we compared the price for copies on 12/15/2021, Staples currently charges 0.17 cents per page for copies and Office Depot/Office Max charges 0.11 cents per page for copies.

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:

Unfortunately, neither DHS or CMS uses Pitney Bowes' PlanetPress software which collates documents and inserts them into envelopes.

Because the two agencies do not use the PlanetPress software, IDES would have to manually email or print documents to the other agency for them to sort and mail. That option would have been more time and labor intensive for a process that is already time sensitive. In addition, as mentioned in 5a above, Neopost now known as Quadient, uses it's Quadient Impress software. Since IDES already owns a Pitney Bowes' large capacity mail inserter along with leasing two desktop mail inserters, PlanetPress software and postage machines leasing a second software system would not be cost efficient.

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).

IDES mail room was overwhelmed by the high volume of Unemployment Insurance Claims that resulted from the Pandemic with an immediate response required. In addition, because IDES had leased mail machines from Pitney Bowes which included software installation before the Pandemic, the agency needed equipment and services that were compatible with the equipment it already has under a lease agreement. IDES considers Pitney Bowes' costs to be fair and reasonable as when we evaluated and compared the price for copies on 12/15/2021, and found Staples currently charges 0.17 cents per page for copies and Office Depot/Office Max charges 0.11 cents per page for copies.

6. Are there resellers or distributors?

Yes No N/A

Version 7.01 Page 5 of 7

Bulletin Reference Number 23-427DES-ADMIN-B-30326

Requesting Agency/University Illinois Department of Employment Security

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?

IDES has estimated that the amount needed for a full year of the Pitney Bowes' Mail Fulfillment Center is $3,000,000.00.

In the DES central office mailroom, there is one large capacity mail inserter the agency owns that is manufactured by Pitney Bowes and there are two desktop mail inserters that the agency leases from Pitney Bowes. The agency leases Pitney Bowes software in the central office mail room and the use of their software allows the agency to easily send the documents that exceed IDES' mailroom capacity for processing to the external mail fulfillment center as needed.

Another company’s software could not be easily integrated with the current Pitney Bowes setup and could result in additional funds and more internal training, which would not be cost effective to the State.

Pitney Bowes' pricing is as follows:

1 - First Page Processing Fee- which includes 8.5 x 11 color form with perforation; Inbound/outbound envelope; processing, printing, inserting and mailing; Duplex variable printing; CASS Address Cleansing; USPS NCOA link processing- $0.188 2 - Continuation Pages (per 8.5 x 11 duplex page)- $0.066 3 - Programming Change Fees- $200.00

Due to the considerable fluctuation in the amount of mail that would need to be processed from day to day, as well as, the uncertainty in the length of time the contract would need to be in place, the agency was only able to use the vendor's quoted price for these services. However, IDES considered the costs to be fair and reasonable as when we compared the price for copies on 12/15/2021, Staples currently charges 0.17 cents per page for copies and Office Depot/Office Max charges 0.11 cents per page for copies.

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?

If the Sole Economically Feasible Source for the Mail Fulfillment Center is not approved IDES will be unable to send federally mandated time sensitive mailings to claimants and employers. This will result in claimants not receiving notifications regarding their benefits and employers not receiving notifications regarding their UI taxes thus creating an undue burden on the citizens and businesses across the state. IDES and the State of Illinois will suffer economic losses because due to claimants and employers failure to receive timely notice the agency continued to pay claims that should no longer be active and IDES' employees workloads will increase due to having to reverse incorrect adjudication decisions. The agency's reputation will suffer because it failed to provide the required mandated correspondence. And the agency could lose funding as a result of being out of compliance with federal regulations.

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

IDES has already contracted with Pitney Bowes for the equipment and software that will be used for the Mail Fulfillment Center so the installation of the equipment and software have already been paid. The postage that was on the Covid-19 exempt contract has been procured under a release off master contract. The continued need for the services of the Mail Fulfillment Center is due to the continued high volume of mail that the agency must send out.

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Bulletin Reference Number 23-427DES-ADMIN-B-30326

Requesting Agency/University Illinois Department of Employment Security

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 06/13/2022

Printed Name Stacy Howlett E-mail Address stacy.howlett@illinois.gov

Phone Number 312-550-0013

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 Dorthea.Lovelace@illinois.gov

Phone Number 312-793-4055 Date Jun 15, 2022

Printed Name Dorthea Lovelace

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 217-720-6643 Date Jun 15, 2022

Printed Name David Papp E-mail Address David.Papp@Illinois.gov

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Bulletin Reference Number 23-427DES-ADMIN-B-30326

Requesting Agency/University Illinois Department of Employment Security

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

Project Title

Vendor

Initial Date of Procurement Bulletin Posting

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

Printed Name Date

CPO E-mail

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 ability to send out all mail through the United States Postal Service (USPS).

PlanetPress software which provides IDES with the ability to transfer files directly to the vendor without having to manually print and deliver files for envelope inserting and mailing Secure file transmission Printing, assembly, postage, and delivery to the USPS of the mail items generated from the correspondence files.

Address verification services to ensure deliverability of each mail item generated from the correspondence files.

Tracking and reporting on return and undelivered mail items.

Provision of paper, envelopes, postage, ink supplies, and all other mailing and printing materials required Provision of mail inserters, mailing machines, high-speed printers, scanners, and all other mailing and printing equipment Provision of a nonexclusive license to use the Enrichment Editor software Access to the Vendor's Mailstream on Demand (MOD) system which allows IDES to view and download item level tracking and status reporting of each mail item.

Maintenance of all licensed software and solutions needed

Total costs for the Mail Fulfillment Center is $3,000,000.00 Pricing is as follows:

1 - Pitney Bowes-First Page Processing Fee- which includes 8.5 x 11 color form with perforation; Inbound/outbound envelope; processing, printing, inserting and mailing; Duplex variable printing; CASS Address Cleansing; USPS NCOA link processing- $0.188 2 - Continuation Pages (per 8.5 x 11 duplex page)- $0.066 3 - Programming Change Fees- $200.00.

IDES found Neopost, now known as Quadient, uses it Quadient Impress software. In order to utilize Quadient's services would require IDES to lease Neoposts software, which would not be cost-effective since IDES already owns a Pitney Bowes' mail inserter which is not compatible with Quadient's software or machines.

IDES considered Pitney Bowes' costs to be fair and reasonable, when we compared the price for copies on 12/15/2021, Staples currently charges 0.17 cents per page for copies and Office Depot/Office Max charges 0.11 cents per page for copies.

In the DES central office mailroom, there is one large capacity mail inserter the agency owns that is manufactured by Pitney Bowes and there are two desktop mail inserters that the agency leases from Pitney Bowes. The agency leases Pitney Bowes software in the central office mail room and the use of their software allows the agency to easily send the documents that exceed IDES' mailroom capacity for processing to the external mail fulfillment center as needed.

Another company’s software could not be easily integrated with the current Pitney Bowes setup and could result in additional funds and more internal training, which would not be cost effective to the State.

Pitney Bowes' pricing is as follows:

1 - First Page Processing Fee- which includes 8.5 x 11 color form with perforation; Inbound/outbound envelope; processing, printing, inserting and mailing; Duplex variable printing; CASS Address Cleansing; USPS NCOA link processing- $0.188 2 - Continuation Pages (per 8.5 x 11 duplex page)- $0.066 3 - Programming Change Fees- $200.00

Due to the considerable fluctuation in the amount of mail that would need to be processed from day to day, as well as, the uncertainty in the length of time the contract would need to be in place, the agency was only able to use the vendor's quoted price for these services. However, IDES considered the costs to be fair and reasonable as when we compared the price for copies on 12/15/2021, Staples currently charges 0.17 cents per page for copies and Office Depot/Office Max charges 0.11 cents per page for copies.