part I and part II DHS B-36095ehd.pdf

Sole Source Justification Form

Version 7.01 Page 1 of 6

Bulletin Reference Number 24-444DHS-BUSSE-B-36095

Requesting Agency/University Illinois Department of Human Services

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

Department/Bureau/Section: Office of Business Services

Need Identified Date: March 20, 2023 Supply/Service Need By Date: July 1, 2023

Project Title: Repair and Maintenance Services for Mail Processing Units

Vendor: BlueCrest

Provide a description of the supplies or services required:

The State of Illinois Department of Human Services (DHS) is seeking to secure repair and maintenance services for BlueCrest sorting equipment located at 5020A Industrial Drive in Springfield, Illinois. This agreement will cover all required repairs, software installations, and monthly preventative maintenance (PMs) performed on both Apex Sorters using qualified and authorized technicians. The cost of all required parts, as well as any shipping and handling charges that may be required, will strictly be the responsibility of BlueCrest.

Value: Actual Value of Initial Term, this Change Order or Amendment: 180,791.28

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 Source

Section II - Proposed Term

One-Time Purchase Term Contract

Estimated Contract Begin Date: 7/1/2023

Estimated Contract End Date: 6/30/2024

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)

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

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:

Compatibility of Equipment, Accessories, Replacement Parts or Service

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Bulletin Reference Number 24-444DHS-BUSSE-B-36095

Requesting Agency/University Illinois Department of Human Services

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

Software License/Upgrade/Maintenance

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 Oct 13, 2009 Jun 30, 2010 183,963.04 Software License/Repair & Maintenance Sole Source

2 Jul 1, 2011 Jun 30, 2012 251,391.84 Software License/Repair & Maintenance Sole Source

3 Jul 1, 2012 Jun 30, 2013 276,442 Software License/Repair & Maintenance Sole Source

4 Jul 1, 2013 Jun 30, 2014 276,442 Software License/Repair & Maintenance Sole Source

5 Nov 1, 2013 Jun 30, 2015 69,840 Software License/Repair & Maintenance Amendment

6 Jul 1, 2015 Aug 15, 2015 46,000 Software License/Repair & Maintenance Emergency Extension

7 Aug 16, 2015 Sep 30, 2015 49,500 Software License/Repair & Maintenance Emergency Extension

8 Oct 1, 2015 Sep 30, 2017 769,302.8 Software License/Repair & Maintenance Sole Source

9 Oct 1, 2017 Nov 30, 2017 64,108.56 Software License/Repair & Maintenance Emergency Extension

10 Dec 1, 2017 Jun 30, 2021 1,419,645 Software License/Repair & Maintenance Sole Source

If more than 10, or if other comments, explain:

7/1/21 - 6/30/22 $165,325.12 Software License/Repair & Maintenance Sole Source 6/1/22 - 7/30/23 $176,897.28 Software License/Repair & Maintenance Sole Source

Section VI - Business Rationale

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Bulletin Reference Number 24-444DHS-BUSSE-B-36095

Requesting Agency/University Illinois Department of Human Services

1. Provide a detailed explanation of the need for the supplies or services:

The Department of Human Services is seeking to secure repair and maintenance services in the amount of $180,791.28 for BlueCrest sorting equipment located at 5020A Industrial Drive in Springfield, Illinois. Similar repair and maintenance services were purchased from BlueCrest in an agreement that is still in effect. The current agreement covers both Apex Sorters, along with the required software.

We are seeking a new repair and maintenance agreement that covers all required repairs, software installations, and monthly preventative maintenance (PMs) performed on both Apex Sorters, using qualified/authorized technicians. The cost of all required parts, as well as any shipping and handling charges that may be required, will strictly be the responsibility of BlueCrest. Since both pieces of equipment are proprietary to BlueCrest, no unauthorized entity can service this equipment, nor would they have the training and expertise to provide those services.

If this purchase is not approved, the Apex Sorters will be left without any break/fix or repair/maintenance support. Any breakdown would severely impact the ability of the Mail Processing Unit (MPU) to complete mandated mailings timely, and at lower costs. A long-term breakdown would require a 3rd party vendor be employed to help manage the pre-sort. With the sorters out of service, DHS would see a significant increase of postage costs and a per-piece fee paid to the vendor for each letter processed.

The MPU would also see an increase in paying full-rate for many of the letters mailed, resulting in a significant postage expenditure increase per letter. The pre-sort savings realized by the MPU are in excess of $2M annually - losing the ability to pre-sort the majority of these mailings would eliminate this savings unnecessarily. As previously stated, BlueCrest is the proprietary owner of the Apex sorting equipment and technology. Given the critical need for this equipment in the MPU, it is imperative this procurement be approved to preserve operational viability.

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

BlueCrest will provide the following:

1. A designated technician assigned as a "Priority Resident Technician" for the Apex Sorters housed at 5020A Industrial Ave in Springfield, IL;

2. This technician will perform all Preventive Maintenance (monthly) and Remedial Maintenance (break-fix) as necessary to ensure operational readiness;

3. All parts, excluding consumables, will be replaced at no additional charge as necessary;

4. All software installations, updates, or upgrades will be covered under this agreement;

5. In the event the "Priority Resident Technician" is unavailable, BlueCrest will ensure a replacement technician is dispatched to 5020A Industrial Ave, in order to provide coverage during the period of time in question.

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?

Both pieces of equipment are proprietary to BlueCrest. No unauthorized entity can service this equipment, nor would they have the training and expertise to provide those services. BlueCrest provided a sole source letter stating the following:

The purpose of our letter is to confirm that the Apex Sorters, Serial Numbers 01023 and 01170, are BlueCrest sole source products (each, a "Sole Source Product").

BlueCrest is the only company in North America that is authorized to license and to provide maintenance services to the State of Illinois Department of Human Services for the Sole Source Products and the only party authorized to access the source code of the Sole Source Products.

A copy of this letter is provided (see Attachment A).

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Bulletin Reference Number 24-444DHS-BUSSE-B-36095

Requesting Agency/University Illinois Department of Human Services

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:

BlueCrest is the proprietary owner of the Criterion IV Sorter and Apex Sorter equipment and technology. Because BlueCrest is the original equipment manufacturer, no other company or provider can offer the parts, software subscriptions or upgrades for this equipment. Given the critical need for this equipment in the MPU, it is imperative this procurement be approved to preserve operational viability.

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?

Because BlueCrest is the proprietary owner of this equipment, operational compatibility and proprietary rights were the determining factors that led to this sole source approach.

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?

BlueCrest is the proprietary owner of the Criterion IV Sorter and Apex Sorter equipment and technology. Because BlueCrest is the original equipment manufacturer, no other company or provider can offer the parts, software subscriptions or upgrades for this equipment. The postage savings realized because of the ability of the MPU to perform the pre-sorting of mail pieces is a far more significant than the cost of the annual maintenance agreement.

8. Will this purchase obligate the State to this vendor for future purchases such as maintenance, licensing or continuing need?

Yes No

8a. If yes, please provide details regarding future obligations and/or needs:

Ongoing repair and maintenance, in addition to software updates/upgrades will be required, as long as this equipment is in service.

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 this purchase is not approved, the Apex Sorters will be left without any break/fix or repair/maintenance support. Any breakdown would severely impact the ability of the MPU to complete mandated mailings timely, and at lower costs. A long-term breakdown would require a 3rd party vendor be employed to help manage the pre-sort. If the Apex Sorters are out of service, it would result in an increase of postage costs and a per-piece fee paid to the vendor for each letter processed.

Due to the fact that no other company or vendor can provide the services needed because BlueCrest is the proprietary owner of the Apex sorting equipment and technology, we risk not only seeing increases in mailing costs if this equipment is off-line, we also risk permanent damage to critical pieces of equipment.

Competitive bid is not a viable option, given the proprietary ownership of the Apex Sorters.

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

Sole Source is the best option to procure this equipment at this time. The Apex Sorters are proprietary to BlueCrest. We need a repair and maintenance agreement that covers all required repairs, software installations, and monthly preventative maintenance (PMs) performed on both Apex Sorters, using qualified/authorized technicians. The cost of all required parts, as well as any shipping and handling charges that may be required, will strictly be the responsibility of BlueCrest. Since both pieces of equipment are proprietary to BlueCrest, no unauthorized entity can service this equipment, nor would they have the training and expertise to provide those services.

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Bulletin Reference Number 24-444DHS-BUSSE-B-36095

Requesting Agency/University Illinois Department of Human 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

Printed Name Paul Hartman E-mail Address Paul.Hartman@illinois.gov

Phone Number 217-786-6218

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 Jean.Sandstrom@illinois.gov

Phone Number 217-557-9298 Date Apr 20, 2023

Printed Name Jean Sandstrom

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 217-720-6771 Date Apr 20, 2023

Printed Name Kylie D. Carter E-mail Address Kylie.Carter@Illinois.gov

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Bulletin Reference Number 24-444DHS-BUSSE-B-36095

Requesting Agency/University Illinois Department of Human Services

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

Project Title Repair and Maintenance Services for Mail Processing Units

Vendor BlueCrest

Initial Date of Procurement Bulletin Posting Apr 21, 2023

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 217-558-2231

Printed Name Ellen H. Daley Date

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

6/1/22 - 7/30/23 $176,897.28 Software License/Repair & Maintenance Sole Source Q1Answer: The Department of Human Services is seeking to secure repair and maintenance services in the amount of $180,791.28 for BlueCrest sorting equipment located at 5020A Industrial Drive in Springfield, Illinois. Similar repair and maintenance services were purchased from BlueCrest in an agreement that is still in effect. The current agreement covers both Apex Sorters, along with the required software.

We are seeking a new repair and maintenance agreement that covers all required repairs, software installations, and monthly preventative maintenance (PMs) performed on both Apex Sorters, using qualified/authorized technicians. The cost of all required parts, as well as any shipping and handling charges that may be required, will strictly be the responsibility of BlueCrest. Since both pieces of equipment are proprietary to BlueCrest, no unauthorized entity can service this equipment, nor would they have the training and expertise to provide those services.

If this purchase is not approved, the Apex Sorters will be left without any break/fix or repair/maintenance support. Any breakdown would severely impact the ability of the Mail Processing Unit (MPU) to complete mandated mailings timely, and at lower costs. A long-term breakdown would require a 3rd party vendor be employed to help manage the pre-sort. With the sorters out of service, DHS would see a significant increase of postage costs and a per-piece fee paid to the vendor for each letter processed.

The MPU would also see an increase in paying full-rate for many of the letters mailed, resulting in a significant postage expenditure increase per letter. The pre-sort savings realized by the MPU are in excess of $2M annually - losing the ability to pre-sort the majority of these mailings would eliminate this savings unnecessarily. As previously stated, BlueCrest is the proprietary owner of the Apex sorting equipment and technology. Given the critical need for this equipment in the MPU, it is imperative this procurement be approved to preserve operational viability.

Q2Answer: BlueCrest will provide the following:

1. A designated technician assigned as a "Priority Resident Technician" for the Apex Sorters housed at 5020A Industrial Ave in Springfield, IL;

2. This technician will perform all Preventive Maintenance (monthly) and Remedial Maintenance (break-fix) as necessary to ensure operational readiness;

3. All parts, excluding consumables, will be replaced at no additional charge as necessary;

4. All software installations, updates, or upgrades will be covered under this agreement;

5. In the event the "Priority Resident Technician" is unavailable, BlueCrest will ensure a replacement technician is dispatched to 5020A Industrial Ave, in order to provide coverage during the period of time in question.

Q3Answer: Both pieces of equipment are proprietary to BlueCrest. No unauthorized entity can service this equipment, nor would they have the training and expertise to provide those services. BlueCrest provided a sole source letter stating the following:

The purpose of our letter is to confirm that the Apex Sorters, Serial Numbers 01023 and 01170, are BlueCrest sole source products (each, a "Sole Source Product").

BlueCrest is the only company in North America that is authorized to license and to provide maintenance services to the State of Illinois Department of Human Services for the Sole Source Products and the only party authorized to access the source code of the Sole Source Products.

A copy of this letter is provided (see Attachment A).

Due to the fact that no other company or vendor can provide the services needed because BlueCrest is the proprietary owner of the Apex sorting equipment and technology, we risk not only seeing increases in mailing costs if this equipment is off-line, we also risk permanent damage to critical pieces of equipment.

Competitive bid is not a viable option, given the proprietary ownership of the Apex Sorters.