PO26-642 Revenue Enhancement Emergency Purchase Statement~1.pdf

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EMERGENCY PURCHASE STATEMENT

State of Illinois Chief Procurement Office for General Services Emergency Purchase Statement V.26.1 Page of

EMERGENCY PURCHASE STATEMENT

Page of State of Illinois Chief Procurement Office for General Services Emergency Purchase Statement v.26.1 Emergency Purchases are conducted pursuant to 30 ILCS 500/20-30 and 44 Ill. Adm. Code 1.2030.

Emergency Purchase Details Emergency Condition (select the appropriate option from the drop-down menu below):

Provide a description and reasons for needing this emergency purchase:

Provide the conditions and circumstances that led to the need for this emergency purchase:

Reason for selection of this particular vendor:

Description of supplies or services to be provided:

Emergency procurements shall be made with as much competition as is practicable under the circumstances, and agencies shall utilize best efforts to include contractors certified under the Business Enterprise Program in its emergency procurement process. 30 ILCS 500/20-30(a).

Describe the actions taken by the agency to make the emergency purchase with as much competition as is practicable under the circumstances:

List the actions taken by the agency that constitute its best efforts to include contractors certified under the Business Enterprise Program in this emergency purchase:

Is there an active State contract available for the required supplies or services?

If Yes is checked above, explain why the existing contract does not meet the need:

This emergency contract was awarded on the earliest of these dates: (choose one) *Pursuant to 44 Ill. Admin. 1.2030 (f)(5), if Estimated is indicated, an Emergency Final Cost form will be submitted by the State agency and published by the State Purchasing Officer no later than the tenth day of the succeeding month. If Actual is chosen and the total cost differs from the amount on this statement, an Emergency Final Cost form must be submitted and published within the same timeframe.

Select the type of funding to be used:

Signature This emergency purchase was made with as much competition as is practicable under the circumstances. Best efforts were utilized to include contractors certified under the Business Enterprise Program in the process.

I am authorized to make this emergency purchase, and I know and understand the contents of this statement and all statements herein are true and correct to the best of my knowledge.

11.0.0.20130303.1.892433.887364

DCFS is actively working to complete a competitive RFP for these services and will continue to advance that procurement during this emergency period. This emergency is intended solely as a bridge to maintain continuity of critical services while the competitive procurement is completed.

TextField4: December 1, 2015 – November 30, 2025 Revenue Enhancement services were provided under a competitively procured contract originally awarded via RFP to Sequoia Consulting Group (Contract 287340-9010). The contract was novated to Diversified Services Network (DSN) in 2019. Services included federal claiming, IT system support, audit assistance, and eligibility review across Title IV-E, TANF, Medicaid, and related programs.

Prior to April 2025 DCFS initiated procurement planning for a replacement contract. A draft solicitation was developed using an Invitation for Bid (IFB) procurement method and submitted to the SPO for review.

April 2025 Following review of the complexity and technical evaluation requirements of the services, DCFS determined that an IFB was not the appropriate procurement vehicle. Selection based solely on lowest price would not allow for adequate assessment of vendor qualifications, technical approach, staffing capability, and adaptability — all of which are essential given the scope and federal compliance implications of these services. DCFS transitioned the procurement to a Request for Proposal (RFP).

May – June 2025 RFP development continued incorporating SPO feedback. The draft RFP was substantively developed, including scope of work, mandatory requirements, technical evaluation criteria, and proposal structure. The last documented update to the draft RFP occurred June 10, 2025.

July 2025 Recognizing that the existing contract was expiring November 30, 2025, and that the competitive RFP could not be completed and awarded before that date, DCFS initiated a sole economically feasible source (SEFS) procurement as a bridge vehicle to maintain service continuity while the competitive RFP was finalized (BidBuy 26-418DCFS-PROCU-B-50548). The SEFS justification was submitted to the SPO for review July 30, 2025.

August – November 2025 The SEFS justification underwent multiple rounds of SPO review and revision. The SPO identified substantive issues across several sections of the justification requiring additional development, including more detailed explanation of the basis for the SEFS method, quantifiable vendor qualifications, market research, and pricing justification. DCFS submitted revised versions in response to SPO comments on August 13, October 6, October 27, November 4, and November 7, 2025. DCFS followed up again on November 18, 2025. As of the contract expiration date of November 30, 2025, the SSJF had not been approved and no further SPO response had been received.

November 28, 2025 The original contract (Contract 287340-9010) expired with the SSJF still under SPO review. DCFS declared Emergency Procurement #1 (BidBuy 26-418DCFS-PROCU-B-50089) to prevent disruption to critical federal claiming operations supporting hundreds of millions in annual federal revenue.

November 2025 – January 2026 DCFS continued efforts to advance the SEFS procurement while operating under Emergency #1. SPO review continued with additional rounds of comments in January 2026. A sole source public hearing was scheduled for January 16, 2026 (BidBuy 26-418DCFS-PROCU-B-50548).

January – February 2026 Following continued SPO review, it became clear that the SEFS procurement could not be completed before the February 25, 2026 expiration of Emergency #1. DCFS determined that returning full focus to the competitive RFP was the appropriate path forward.

February 10, 2026 Updated RFP transmitted to program area for technical requirements review and finalization.

February 25, 2026 Emergency Procurement #1 expired. An extension had been prepared but was not executed within the required timeframe.

February 26, 2026 Emergency Procurement #2 declared (BidBuy 26-418DCFS-PROCU-P-92921) to maintain continuity of critical services while the competitive RFP was finalized.

February – March 2026 Technical requirements development and refinement completed. Evaluation criteria, mandatory qualifications, and solicitation structure finalized through coordination across program, fiscal, legal, and IT stakeholders.

April 2026 RFP submitted to SPO for review.

April 28, 2026 RFP returned by Senior SPO with comments requiring additional revision, including template compliance, desirable elements, and point assignments. DCFS is actively working to address those comments.

May 4, 2026 The Department's request to extend Emergency Procurement #2 was not approved by the SPO. Emergency Procurement #2 expires May 25, 2026. DCFS is declaring Emergency Procurement #3 to maintain continuity of critical services while the competitive RFP revisions are completed and the solicitation is published.

ExplanationForSelectingVendor: DSN has developed deep institutional knowledge of DCFS's federal claiming systems, data structures, and operational requirements over the course of a long-term contractual relationship with the Department. This familiarity is essential to maintaining uninterrupted service delivery and minimizing risk to federal reimbursement during the transition to a competitively procured contract.

DSN staff are responsible for preparing the actual federal quarterly Title IV-E claims for Foster Care, Adoption Assistance, Guardianship Assistance, and Prevention Services Grant Program. The SFY 2026 projection for this claiming is $399.8 million. In addition, DSN prepares the quarterly TANF claim which brings in $68.8 million annually to DCFS. The specialized knowledge required to prepare and submit these claims accurately — including familiarity with Illinois DCFS data systems, historical claiming patterns, and applicable federal regulations — cannot be transferred to a new vendor without significant preparation and transition planning. In addition to the quarterly claims, DSN assists in the calendar year-end claim reports for Title IV-B Subpart 1 and Subpart 2, Chafee Independent Living, and Chafee Education and Training vouchers (approximately $30 million reported on).

DSN reviews all Adoption Assistance and Guardianship Assistance subsidy agreements prior to the finalization of the adoption or guardianship in Court. DSN has consistently detected error rates of 25% or higher that would render subsidy cases ineligible for the duration of the subsidy period (approximately 15 years). DSN ensures those errors are corrected prior to court finalization, at which point no changes can be made. This function preserves tens of millions of dollars in Adoption and Guardianship Title IV-E subsidy claims annually.

DSN provides audit liaison services for both Federal Title IV-E Foster Care Eligibility Audits and the Annual Statewide Single Audit conducted by KPMG. For both audits, DSN staff pull all case files and review for accuracy and completeness. Where case files are missing information, DSN seeks alternative documentation sources such as court orders or court transcripts. For the KPMG Single Audit, DSN responds to all claiming questions, routing responses through the DCFS Audit Liaison.

The price negotiated for this emergency procurement has been determined to be fair and reasonable based on a comparison to the rates established under the prior competitively procured contract, adjusted for current service levels. DCFS is procuring these services on a limited emergency basis with no guarantee of continuation, and the negotiated rate reflects that constraint. A competitive RFP is being actively developed to establish a long-term contract through a full competitive process.

ExplanationSuppliesServices: DCFS requires continuation of professional services supporting federal program eligibility determination, revenue enhancement, IT system maintenance, and audit compliance. These services are operationally critical and directly support the collection of substantial federal revenues through Title IV-E, TANF, Medicaid, and related federal programs. The following describes the scope of services to be provided under this emergency procurement:

Federal Claiming and Revenue Enhancement

The vendor shall prepare, maintain, and improve DCFS's quarterly Title IV-E reimbursement claims, identifying allowable but previously unclaimed costs and capturing all potential sources of federal revenue. The vendor shall continue efforts to maintain Emergency Assistance claiming as part of the State's Maintenance of Effort and shall assist DCFS in compliance with Title IV-E claiming and the overall area of administrative claiming. The vendor shall keep the Public Assistance Cost Allocation Plan (PACAP) current, updating as required for legislative changes, changes in policy, procedures, or operational needs.

IT System Maintenance and Support

The vendor shall maintain and develop complex application system software and databases supporting federal program eligibility and claiming. The vendor shall provide ongoing support of integrated IT application systems in both web-based and mainframe environments. The vendor shall be prepared to adapt existing federal claiming programs as the Department transitions to new systems.

The vendor shall provide technical support for the following federal claiming-related IT application systems: Federal Financial Participation (MARS FFP) Applications; Emergency Assistance Claiming Systems; Medical Assistance System; Managed Care and associated interagency coordination; Child Support Interface; Home of Relative System and Certified Homes; Trust Accounting System; Subsidy Tracking System; CWCA Packet Tracking System; Clearance Tracking System; Court Tracking System; and the Title IV-E and Title IV-B Claim Development System (CARS). These application systems are highly complex and require a vendor with strong programming skills and a thorough understanding of the policy requirements governing each system.

Adoption and Guardianship Subsidy Review

The vendor shall perform first-level federal financial participation (FFP) review on all Adoption Assistance and Subsidized Guardianship cases moving toward finalization, focusing on compliance with DCFS policy and Federal Title IV-E regulations. This population is approximately 2,000 adoption files and 400 guardianship cases per fiscal year. The vendor shall maintain the Subsidy Tracking System including the CWCA Tracking System. The vendor shall provide technical assistance for ongoing Adoption and Subsidized Guardianship cases requiring advanced review of State and federal laws and policies.

Audit Support

The vendor shall provide support in preparing, reviewing, and analyzing case and supportive documentation for federal and State audits pertaining to Foster Care, Adoption, and Guardianship, including on-site assistance during actual audits. The vendor shall prepare materials for review by auditors, identify areas at risk, and assist DCFS in developing defensible positions, including interpretation of State policies and practices. The vendor shall assist DCFS in preparation for federal on-site reviews and participate as support staff and reviewers during those reviews.

Permanency Monitoring

The vendor shall work with DCFS to monitor and report on the timeliness of permanency.

Interagency and Cross-Divisional Assistance

The vendor shall provide ongoing technical and programmatic assistance to DCFS program units, IT partners, fiscal staff, legal staff, and interagency partners as it relates to federal program eligibility and claiming. This includes ongoing assistance to CAPU, EDU, Technical Support Unit, Child Support, Licensing and Background Check Unit, Contract Analysis for Claiming, APME, Subsidy Support Unit, joint development with DCFS OITS/DoIT MARS/CYCIS IT staff, Youthcare, HFS and DHS staff, DCFS Legal Staff, Budget and Finance Staff, and Operations.

TextField3: Due to the urgent and time-sensitive nature of this emergency procurement, it was not practicable to conduct a competitive solicitation process prior to award. The services require immediate continuity without interruption to active federal claiming cycles, ongoing audit obligations, and critical IT systems that operate on overlapping quarterly schedules. Any gap in service coverage risks disruption to federal claiming activities supporting hundreds of millions in annual federal revenue to the State.

The Department has been actively pursuing a competitive procurement to replace these services and will continue to advance that process during this emergency period. A competitive Request for Proposal is currently under development and SPO review, with publication targeted as soon as the solicitation is finalized and approved. This emergency procurement is intended solely as a bridge to maintain continuity of critical services until a competitively awarded contract can be executed and the selected vendor is operationally capable of assuming responsibility for the services.