PCS_REF_Guide-Sole Source Justification_202605.docx

Sole Source Justification Guidance

SOLE SOURCE JUSTIFICATION GUIDANCE

SOLE SOURCE JUSTIFICATION FORM:

This completed form is to be submitted to PCU via cdphe_pcs@state.co.us as the first step in the Sole Source Process.

Important! Consult the document “Sole Source Justification Guidance” for additional instructions.

TYPE OR CLEARLY PRINT ALL INFORMATION

Project Name: WIC Mobile Food App Vendor name: JPMA, Inc.

Vendor Address:

3858 Walnut St., Suite 238 Denver, Colorado 80205

Select one: ☐Original X Modification CORE Vendor ID: VS50000000020693 PO or Contract Number (if this is a modification): Original: CT 2022*3268 Modification: 2026*3111

Describe the products and/or services to be procured and how they meet your needs. This contract supports the CDPHE Women, Infants and Children (WIC) Program through the maintenance and administration of a mobile shopper application that improves access to healthy foods for WIC participants by simplifying the WIC shopping experience. This application is current tied to the existing WIC MIS system.

WIC recently released an RFP and selected a vendor for a new Management Information system. This new system has a mobile shopping app incorporated with its product. However, it will take us until December 31, 2027 to fully implement the new system, and a couple of months beyond that to fully transition to the new mobile app component.

The JPMA Mobile food app is paired with our current MIS system and EBT system. It is would not make sense to attempt to transition to a separate app for one year as the set up would be take time and resources that would be wasted since we have to switch to the new product with the new MIS system.

We are seeking an extension of one year to our current contract through 02/29/2028 to facilitate this change. The cost of this change would be approximately $50,064

List dates, agreement numbers and dollar amounts for any previously procured products or services from this vendor related to this project:

Current Contract Initial Term 03/01/2022-02/28/2023: $48,600.00 Extension Terms 03/01/2023-02/28/2024: $48,600.00 03/01/2024-02/29/2025: $48,600.00 03/01/2025-02/28/2026: $48,600.00 03/01/2026-02/28/2027: $48,600.00 Total for All Years: $243,000.00

Term of agreement:

(If multi-year, indicate the full term up to 5 years) Start Date

amount $50,064

Increased

Total $293,064

If a modification, state the reason(s):

A. Criteria: Answer both 1 and 2.

If “NO” to either 1 or 2, answer 3 and 4, below.

3. The compatibility of equipment, software, accessories, or replacement parts is the paramount consideration and the items are only available from one vendor.

a. Is this a software package or other IT system and the existing system now requires only ongoing maintenance and support?

If “NO” to 1-4, above, this is not a sole source.

STOP

A formal solicitation is required. Complete a Purchasing Determination Form.

Submit all required documents via the PCU Request Site.

B. Explain in terms of 1 through 4, above, the basis for your identifying this as a sole source? A sole source is justified in the instance that this is the only vendor - not what the program may determine to be the best vendor. Is this the only vendor? Explain (See form instructions)…

The JPMA WIC Mobile Shoppers App is the only application that is perfectly matched to our current MIS and EBT systems. It is highly specific to Colorado WIC information for participants

C. What makes this good or service unique to meeting your needs?

This application provides Colorado specific allowable food list items…..it is programmed to scan UPC codes to indicate for participants if an item meets WIC standards and can be purchased with funds.

E. What type of required, specific and exclusive experience, certifications, licenses etc. are possessed by this vendor that directly relate to the good or service to be procured?

This is a proprietary phone application. It was built and adjusted to meet Colorado specific needs, to help participants with their shopping experience at the store. WIC requires only allowable foods to be purchased. This can prove to be a complex process for participants as there are hundreds of allowable UPC codes associated with approved foods.

F. What research has the program conducted to justify this sole source?

Mobile app systems are generally aligned with WIC MIS systems. This app is aligned with our current MIS and EBT system. When we move to a new MIS system, they have their own MIS system which is a component of our RFP procurement. We are requesting an extension of one year to allow us the time to implement the new MIS system within the Colorado WIC program. This MIS will allow us to certify participants, issue benefits and allow participants to track their benefits on the app as they shop at the store.

During our last procurement, this was the only vendor that applied.

If Yes: Please Explain. (This space is limited – please provide additional documentation if applicable.)

H. This Section is Required – You must answer “Yes” to at least one.

If No to #3 above:

Demonstrate how you determined fair and reasonable prices/rates: Attach additional pages if required.

The price of one additional year of service would be $50,064 which represents only a 3% increase from our current annual price years for this app.

We have already procured another option for the future along with our MIS system. Unfortunately, the timing of the transition does not line up exactly with this contract end date. We are seeking one additional year to maintain consistent service and support to our WIC participants throughout the transition.

Division: Prevention Services Division Program: Nutrition Services – Women, Infants and Children (WIC) Program Contact Name: Kathryn V. Gasowski Phone: 720-281-5441 Program Manager: Heidi Hoffman

**An aggrieved party may file a protest concerning a material issue(s), at any phase of solicitation.

Reference §24-109-102, C.R.S., as amended, and Procurement Rule R-24-109-102-01, et seq.

-------------------------- Procurement Use Only:------------------ Comments:

Approved: __________________________________________________________________________ Agency Procurement Director or Authorized Representative Signature Date Posted on VSS? Yes ☐ No ☐ If posted, original Intent to Sole Source VSS# __________________________________________

If not posted or modified, Approved CDPHE Request #: _______________________________________

SOLE SOURCE SUMMARY

Sole Source Procurements are allowed by the Procurement Code when:

• There is only one Good or Service that will meet the need of the State AND There is only one Vendor that can supply that Good or Service.

If a proprietary item is required, a sole source circumstance may exist where:

• The compatibility of equipment, accessories, or replacement parts in the paramount consideration and the items are only available from one vendor

• A sole supplier’s item is needed for trial use or testing

1. A program wishing to purchase proprietary goods in excess of $10,000 or proprietary services in excess of $25,000 must complete the Sole Source Justification Form and submit to the Procurement Director for approval prior to negotiating a contract or purchase order. (Not required for interagency or governmental agencies). Please note: Insufficient time for solicitation of Bids is not an allowable reason to proceed with the “Sole Source” procurement.

2. If the Procurement Director approves the Sole Source Justification Form, the request on the PCU site will be approved and the final documents attached. Once the program has received the approval they can move forward with the next step of contract or purchase order development.

3. The Procurement Director may require the project to be posted as an Intent to Sole Source, or may not agree the Vendor is the sole source, and require competition be solicited. The Procurement Director will indicate the next steps to be taken for the appropriate solicitation method at this time.

INTENT TO SOLE SOURCE

Competition must be solicited if doubt exists whether a Sole Source Procurement is appropriate. In this event, PCU will post a “Notice of Intent to Sole Source (NPSS1) on Vendor Self Service (VSS) to assist in the determination. The request will be posted as “Notice of Intent to Sole Source” to the VSS system for a minimum of 3 business days. The Procurement Director reserves the right to post the notice for a longer period if determined necessary.

After a posting on VSS, if no respondents expressed valid interest in the work, Purchasing will notify the program to proceed with a sole source. The Program will include the completed and approved Sole Source Justification Form and the approved request number in their contract or purchase order packet.

If there are respondents to the “Notice of Intent to Sole Source” that expressed valid interest in the work, Purchasing will notify the program of this interest and discuss a possible need to proceed with the competitive solicitation process.

COST AND PRICE ANALYSIS--AN EXPLANATION

(Parts excerpted from the Florida State University Office of Research Contracts and Grants guidance) Both sole source and emergency procurements require a written determination by the head of a purchasing agency, or a designee, of the basis for the approval. This form is designed for approval of a “sole source,” not an emergency procurement. Consult with your procurement official regarding requirements for emergency procurements.

Normally, price analysis is not done in competitive solicitations where “adequate competition” exists, because the competitive process takes care of the “fairness and reasonableness” of prices. However, in a sole source situation where no price competition exists, some analysis must be done to insure that the requirements of the controller’s statute (Part 2, Title 24, Article 30, C.R.S.) are met, i.e., that prices or rates are “fair and reasonable.”

Some form of price or cost analysis should be performed in connection with every procurement action, regardless of whether the organization is a vendor or a subrecipient. The form and degree of analysis, however, are dependent on the particular subcontract or purchase, and the pricing situation. Determination of price reasonableness through price or cost analysis is required even though the procurement is source-directed by the contracting officer of the sponsoring agency.

In some purchases, price analysis alone will be sufficient; in others, price analysis will be used to corroborate the conclusions arrived at through cost analysis. The form and degree of analysis are dependent on facts surrounding a particular subcontracting or purchasing situation. The scope of price analysis performed and the particular techniques used will depend on whether or not cost analysis is done, as well as on such factors as type of product or service, dollar value, purchase method, and extent of competition. (The words “vendor” and “subrecipient” used herein are interchangeable.)

It is important to remember that the information requested herein is based on Federal and State requirements. Please call PCU if you have questions about this information.

PRICE ANALYSIS

Price Analysis is the process of deciding if the asking price for a product or service is fair and reasonable, without examining the specific cost and profit calculations the vendor used in arriving at the price. It is basically a process of comparing the price with known indicators of reasonableness.

When adequate price competition does not exist, some other form of analysis is required.

Some reasons that could affect adequate price competition are: specifications are not definitive, tolerances are restrictive, or production capacity limits those eligible to bid.

In either case, even though neither historical nor market prices involve the identical service, some analysis can often be done which evaluates the differences in the types of services or goods, and concludes that the nature of the differences warrant the differences in pricing. In other cases, judgments must be made that proprietary aspects of the service or commodity warrant expenditure of the prices or rates in excess of what is customary.

Common methods of price/cost analysis include:

a. Comparison of prices and rates to established catalog prices or market prices. In a sole source situation, there commonly are similar prices or rates, e.g., those on price agreements that can serve as a guide to fairness or prices or rates proposed by a sole source provider. In some cases, e.g., some utilities, prices and rates are set by law or regulation (utility tariff rates).

b. Historical prices or rates for similar items or services procured in the past also serve as a guide to fair and reasonable prices.

Examples of other forms of price analysis information include:

• Analysis of previous prices paid

• Comparison of vendor’s price with the in-house estimate

• Comparison of quotations or published price lists from multiple vendors • Comparisons with official published federal government prices In cases where neither historical nor catalog prices exist, cost analysis must be used.

COST ANALYSIS

Cost analysis is the element-by-element examination of the estimated or actual cost of contract performance to determine the probable cost to the vendor. The goal is to form an opinion on whether the proposed costs are in line with what reasonably economical and efficient performance should cost.

Cost or pricing data, which should be provided by the contractor, are the means for conducting cost analysis. Such data provide factual information about the costs that the contractor says may be incurred in performing the contract. Cost analysis should be performed in those situations where price analysis does not yield a fair and reasonable price.

Cost analysis techniques are used to break down a contractor’s cost or pricing data so as to verify and evaluate each component. Some of the cost elements examined for necessity and reasonableness are materials costs, labor costs, equipment and overhead. These costs can be compared with actual costs previously incurred for similar work, the cost or pricing data received from other vendors, and independent cost estimate breakdowns.

Vendors may be asked to provide summary level detail of materials and labor costs, as well as markups and other indirect cost rates included in the price. Technical judgments concerning labor hours can be applied to labor hour rates to evaluate the reasonableness of the overall price. Reasonable profit, of course, is another element of price. Per 24-103-403 C.R.S., for noncompetitive acquisitions where neither historical nor catalog prices exist, vendors are required to submit cost or pricing data for purposes of conducting a cost analysis.

1 Version A 05.2026