REQ-10700-00090965_Workday_Approved~1.pdf

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REQUEST FOR SPECIAL PROCUREMENT No. REQ-10700-00090965

PART A. Requesting Agency must complete Items 1 through 13.

1. Requesting Agency Name: The Department of Administrative Services, State Procurement Services (DAS SPS) on behalf the DAS Workday Oregon Team (WD Oregon Team)

2. Date of Request: December 18, 2024 3. Agency Number: 10700

4. Agency Contact Name: Ashley Wenger 5. Phone: 971-719-0322

6. Type of Request: Class Special Procurement X Contract-specific Special Procurement

7. Time Period Requested: From: January 1, 2025 To: December 31, 2030

8. Total Estimated Cost: $ 2,500,000

Note: With approval of this Special Procurement (SP) No. REQ-10700-00090965, the cumulative maximum not-to-exceed (NTE) compensation will be $2,727,500.

9. Title: Supplies and/or Services to be Acquired:

Professional services involving expert support for configuring and updating the state’s payroll and HR systems within the Workday solution to ensure accurate, timely updates during critical transitions, preventing significant legal, financial, and operational risks (Services).

10. Request, Background, Current Need, and Proposed Contracting Procedure:

a. Request:

DAS SPS, on behalf of the DAS WD Oregon Team, requests approval of SP No. REQ-10700-00090965 to amend the current Professional Services Agreement (PSA) No. 00407659.0 that was issued to Workday, Inc., on December 22, 2023 as part of an Emergency Procurement as follows:

• Move the PSA out from under the Emergency Procurement that expires December 30, 2024.

• Amend the PSA for the following reasons:

o increase the maximum NTE to $2,727,500;

o extend the PSA until December 31, 2030;

o allow repair, redevelopment, and additional configuration of existing Workday modules; and o address the state’s security needs.

b. Background:

The Department of Administrative Services (DAS), as the central administrative department of the Oregon state government, collaborates with state agencies to serve Oregonians, providing enterprise systems that support these agencies, enabling them to focus on their core services and fulfill their missions.

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In December 2022, DAS rolled out the Workday solution module for enterprise Payroll and Time Tracking (PTT), integrating it with the existing Workday Human Capital Management (HCM) solution. This phase of modernizing legacy systems replaced the outdated Oregon State Payroll Application (OSPA) with a modern software-as-a-service (SaaS) solution. The Workday solution is essential for all state agencies, including the legislative and judicial branches.

A centralized WD Oregon team within DAS provides technical support configuring and maintaining the system to ensure a smooth operation of business processes for Human Resource Management, Recruiting, Learning, Benefits, Compensation, Payroll, Absence, and Time Tracking across state agencies, boards and commissions. The WD Oregon Team tests updates and new features biannually, assesses customer impact, and trains agencies on new functionalities. Additionally, the WD Oregon Team manages integrations with other statewide systems, including Public Employee Benefit Board (PEBB), Public Employees Retirement System (PERS), and statewide financial systems.

DAS and the WD Oregon Team strive to provide excellent and efficient service. During the launch of the PTT phase, errors were noted immediately following the processing of payroll for the first pay period following go-live. Subsequent pay periods saw a reduction in issues; however, additional issues arose causing incorrect pay beyond the initial go-live period. The state received numerous litigations and union grievances as a result. DAS established stabilization efforts to guide system changes and contracted with other entities to provide assessment services in support of the post-implementation efforts through an Emergency Procurement.

On December 22, 2023, DAS contracted with Workday, Inc., under Professional Services Agreement (PSA) #00407659.0 using an emergency procurement method for professional services. The initial PSA scope of work included focus on consultation and development solutions. Throughout the PSA period, Workday, Inc., has provided solution advice and development recommendations on some of the most complex configuration and validation of DAS’ Workday solution architecture foundations. In addition, Workday, Inc., has provided hands-on support, guidance, best practices, and mentoring for state staff assigned to this work. State staff assigned have participated with on-site and on-line training opportunities and use the online Workday Community resources partnering with other users of the Workday Community to learn and address issues. Workday, Inc., has provided invaluable real-time issue and problem resolution, positively impacted users and resolving future issues, while teaching staff the intricacies of the solution through one-to-one mentoring.

c. Current Need:

Continuing professional support services for another five years is crucial to maintaining and enhancing DAS’ progress in configuring the system and supporting processes correctly. By aligning with best practices and leveraging the expertise of those who deeply understand the system and its intended use, DAS can ensure the momentum built within the Workday solution is sustained. Any disruption in DAS’ partnership with Workday, Inc., experts could jeopardize this progress, leading to potential setbacks and inefficiencies, and increased costs due to errors or delays. Consistent collaboration with Workday, Inc., is paramount for driving long-term success, optimizing system performance, and mitigating risks associated with knowledge gaps or transition delays.

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Extending DAS’ work with Workday Inc., professional and technical services will provide readiness for the following anticipated impacts:

• The state is currently in bargaining with unions, and due to ongoing litigation and grievances, DAS expects to be directed to make system modifications and act promptly within agreed-upon timelines. These changes could have significant economic impacts on state employees and agencies, making accuracy essential to prevent unnecessary hardships such as improper pay.

Workday, Inc.’s continued involvement will be crucial to implementing these changes accurately and on time.

• The state is currently reviewing all pay practices, many of which are outdated and require modernization to align with a contemporary system supported by updated policies. This review will likely necessitate critical system changes, making it imperative to have expert resources readily available. Workday, Inc.’s expertise will ensure a seamless transition, minimizing disruption and maintaining compliance, efficiency, and the system’s ability to meet the State workforce’s evolving needs without delay.

• Core calculations and configurations are undergoing an assessment and functional review for all systems areas within the Workday solution. This includes, but not limited to, evaluating the absence module, tenant configurations, and the core human capital management structure as needed. Anticipated changes or updates will require immediate action, and having Workday, Inc., available to support any changes will ensure DAS and the WD Oregon Team can respond promptly to any emerging needs during these crucial updates reducing the risk of operational disruption or delays.

Without Workday, Inc.’s continued professional and technical services, the state risks compromising the accuracy, efficiency, and compliance of its payroll and HR processes, which could result in significant legal, financial, and operational challenges. The ongoing DAS and Workday, Inc., partnership is not just beneficial, but essential to safeguarding the state’s interest during these critical transitions.

d. Proposed Contracting Procedure:

• DAS SPS will issue a public notice (Notice) on OregonBuys, as required by Oregon Administrative Rule (OAR 125-247-0287), for a period of seven calendar days, regarding approval of this SP.

• Advertisement of the SP will serve as notification to the supplier community that DAS SPS, on behalf of DAS and the WD Oregon Team, intends to amend and extend the PSA as outlined in Section 10.(a) above and will include a provision that any affected person may protest the approval of the SP.

• If no protests to the SP are received or sustained, DAS SPS will proceed with the PSA amendment to increase the NTE and extend for five years through December 31, 2030.

• During the third year of the extension from this SP, DAS will perform market research to assist in determining any future procurement actions to continue the Services.

• DAS SPS will work with Enterprise Information Services (EIS) and obtain its endorsement prior to executing the PSA amendment, if required.

• DAS SPS will work with the Oregon Department of Justice (DOJ) and obtain its legal sufficiency approval before executing the PSA Amendment, if required.

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11. Justification for use of Special Procurement: Describe the circumstances that justify the use of a Special Procurement. Attach relevant documentation.

The Emergency Procurement issued on December 22, 2023, allowing for use of the Services is set to expire on December 30, 2024. The only procurement method available to maintain the Services required by DAS and the WD Oregon Team is by the Special Procurement sourcing method.

The current timeframe does not allow sufficient time to develop and release a Request for Proposals (RFP), evaluate and implement a new contract prior to the expiration date of the current contract:

December 30, 2024.

The state is facing critical and time-sensitive challenges, including union bargaining, both current and potential litigation, and a comprehensive review of outdated pay practices that will likely necessitate urgent system modifications. Core areas within the Workday solution, such as payroll and time tracking, are also under assessment, with expected changes requiring immediate and expert implementation to avoid significant operational, financial, and legal risks. The continued involvement of Workday, Inc., who possesses deep expertise in the system and has been instrumental in DAS’ and the WD Oregon Team’s progress, is essential to ensure accuracy, minimize disruption, and maintain compliance. Given the complexity and urgency of these needs, the use of the special procurement method is justified to secure Workday, Inc.’s Services without interruption, safeguarding the state’s interests during this pivotal period.

12. Findings to Satisfy the Required Standards: This proposed special procurement:

___x___ (a) will be unlikely to encourage favoritism in the awarding of public contracts or to substantially diminish competition for public contracts because:

To ensure it considers any potential competitive opportunity, DAS will perform market research in the form of a Request for Information (RFI) of the vendor community at the three-year mark of the PSA, to determine whether or not there are sufficient competitors available who are able to provide the level of Services required. Should that RFI prove multiple vendors capable of performing the required level of Services, without disrupting accurate pay practices, DAS will pursue the initiation and development of an RFP. Workday is uniquely qualified to provide the specialized expertise needed for the required Services, given this is their own SaaS solution, history of providing these Services, and the familiarity of the state’s current needs. Workday, Inc., is likely the only company who possesses the state-specific experience and knowledge base the state requires.

and

______ (b)(i) will result in substantial cost savings to the contracting agency or to the public because:

or

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___x___ (b)(ii) will otherwise substantially promote the public interest in a manner that could not practicably be realized by complying with the requirements of ORS 279B.055, 279B.060, 279B.065, or 279B.070, or any rules adopted thereunder because:

The state is currently undergoing critical transitions that require precise and timely updates to its payroll and HR systems. These include union negotiations, a review of outdated pay practices, and comprehensive assessments of core system configurations within the Workday solution. Workday, Inc.’s expertise is vital to ensuring these changes are implemented accurately and efficiently, safeguarding the state from significant legal, financial, and operational risks. Disrupting the needed Services would jeopardize the state's ability to meet its obligations, making the continuation of this PSA essential to protecting the public’s interest and maintaining the integrity of state operations during this pivotal period.

13. Signature: The actual signature of the Agency Head or designee (e.g., Designated Procurement Officer) is not required on the Request if it is submitted through OregonBuys. Agency may elect to attach a signed Request.

Signature: e.g. Electronically in OregonBuys _________________ Type Name: Date:

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PART B. The Department of Administrative Services completes Part B.

STATUTORY AND RULE AUTHORITY:

ORS 279B.085(2) states the Director of the Department of Administrative Services may approve a special procurement if the Director finds that a written request submitted under ORS 279B.085(4) demonstrates that the use of a special procurement as described in the request, or an alternative procedure prescribed by the Director will:

(a) Be unlikely to encourage favoritism in the awarding of public contracts or to substantially diminish competition for public contracts; and (b)(A) Result in substantial cost savings to the contracting agency or to the public; or

(B) Otherwise substantially promote the public interest in a manner that could not practicably be realized by complying with requirements that are applicable under ORS 279B.055, 279B.060, 279B.065 or 279B.070 or under any rules adopted thereunder.

OAR 125-246-0170 delegates the authority of the Director of the Department of Administrative Services to approve special procurements to the State Chief Procurement Officer. OAR 125-247-0285 through 125-247-0288 implement ORS 279B.085.

OAR 125-247-0700(2) Protests and Judicial Review of Special Procurements designates the State Chief Procurement Officer as the Contract Review Authority.

FINDINGS: The findings are accepted, adopted, and incorporated by reference herein.

CONDITIONS OF APPROVAL:

1. Notice Period. The Authorized Agency shall post the Public Notice on OregonBuys. The Special Procurement may not be used until after the completion of the seven (7) day notice period required pursuant to OAR 125-247-0287(4), and either:

a. No Written protests are received by the Contract Review Authority, State Chief Procurement Officer, from an Affected Person in response to the notice, or

b. If any protest is received during the notice period, then not until:

i. the State Chief Procurement Officer or delegate issues a written disposition of the protest in accordance with ORS 279B.400 and OAR 125-247-0700 and OAR 137-047-0700, and

ii. confirms in writing the first possible date of use of the Special Procurement.

2. ORS 279A.165 Requirements. Authorized Agency shall comply with the requirements of ORS 279A.165 and OAR 125-247-0287(12) regarding a report about this Special Procurement. Agency shall use a form and follow the instructions provided by the State Chief Procurement Officer or delegate.

3. Authorized Agency shall comply with all Enterprise Information Services (EIS) conditions and requirements prior to PSA amendment execution, if any.

APPROVED

Jay Jackson, Procurement Policy Officer Date:

Department of Administrative Services, State Procurement Services

12/20/2024