REQ-10700-00189548_AMD-1_Workday_Approved.pdf

SP_REQ-10700-00189548 (90965)_AMD-1_Workday Page 1 of 7

REQUEST FOR SPECIAL PROCUREMENT (SP) No. REQ-10700-00189548 (Original #REQ-10700-00090965), Amendment No. 1

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: April 7, 2026 3. Agency Number: 10700

4. Agency Contact Name: Rachel Smith 5. Phone: 971-707-0263

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

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

8. Total Estimated Cost for Amendment Time Period: $2,500,000

Note: With approval of this SP Amendment No.1, the cumulative maximum not-to-exceed (NTE) compensation will be increased to $5,227,500.

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

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

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

a. Amendment Request:

DAS SPS, on behalf of the WD Oregon Team, requests approval of SP No. REQ-10700- 00189548 (Original #REQ-10700-00090965), Amendment No. 1 (SP AMD-1) to amend the Professional Services Agreement (PSA) No. 00407659.0 that was issued to Workday, Inc., on December 22, 2023 as follows:

o increase the maximum NTE by $2,500,000 to a new NTE of $5,227,500;

o allow ongoing enterprise readiness advisory and support services; and o project support services, maintenance and support.

b. Background:

On December 22, 2023, DAS contracted with Workday, Inc. under Master Subscription Agreement No. 7712 and PSA No. 00407659.0 for professional services. The initial PSA scope of work included focus on consultation and development solutions. This PSA was amended in December 2024 to increase the maximum NTE to $2,727,500; extend the PSA until December 31, 2030; allowing repair, redevelopment, and additional configuration of existing Workday modules; and address the state’s security needs.

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Under this amended PSA, the DAS Workday Oregon Team has worked with Workday, Inc. to review, stabilize and optimize the state’s configuration of the Workday system and initiate activities for the Statewide Payroll Transformation Project. Statements of work under this PSA include:

o Agreement #489065, $350,338, State of Oregon 2025 Support (Ad Hoc Professional Services): Under this statement of work, Workday, Inc. has provided ad hoc consulting, configuration, and development services to support ongoing Workday stabilization.

Consulting activities include:

o Research assigned issues including leading discovery sessions.

o Make written recommendations for proposed solutions to address issues.

o Review proposed solutions, including estimated effort, with the state.

o Configure and develop proposed solutions.

o Provide insight/guidance on testing strategy for solutions.

o Provide migration instructions or guidance for solutions.

o Provide knowledge transfer on solutions.

o Agreement #494607, $95,000, State of Oregon HCM and Security Review: Under this statement of work, Workday, Inc. conducted a review of the state’s Core Human Capital Management (HCM), Compensation, Benefits, and Security configurations in preparation for the Statewide Payroll Transformation Project. This work was executed April through June 2025.

o Agreement #499591, $541,000, State of Oregon Phase 0 Transformation Project:

Under this statement of work, Workday, Inc. and the state jointly performed a Phase 0 engagement to refine the estimated scope, budget, and timeline for the subsequent Statewide Payroll Transformation Project. The purpose of this effort was to collaboratively work together on early knowledge transfer and to achieve a clearer understanding of the technical requirements and impacts that will influence and shape payroll transformation. This work was executed August through December 2025.

o Agreement #540146, $1,741,162, State of Oregon Payroll Transformation Project:

Under this statement of work, Workday, Inc. will provide professional services for the Statewide Payroll Transformation Project. Services under this statement of work began March 2, 2026.

DAS chartered the Statewide Payroll Transformation Project in December 2025. The project is in response to formal agreements (resulting from a class action lawsuit filed in January 2023 and labor grievances) to implement structural changes to the Workday Payroll system. DAS has identified a set of recommended changes that reflect modern payroll practices to improve the accuracy, transparency, and predictability of employee pay. These include eliminating the use of forecasted hours, transitioning to a biweekly pay frequency, and changing how overtime-eligible salaried employees are paid by moving to an hourly rate. These changes are

SP_REQ-10700-00189548 (90965)_AMD-1_Workday Page 3 of 7 intended to be implemented no later than July 1, 2027, in alignment with DAS’ obligations under the settlement and labor agreements.

For additional historical and background information see Attachment No. 1, Original SP

#REQ-10700-00090965

c. Current Need:

Continuing services with Workday, Inc. is necessary to maintain and advance the state’s configuration of the Workday system and related processes. Workday, Inc. has proprietary knowledge and direct access to the system architecture, tools, system development and feature releases, making them uniquely qualified to perform these services. Their involvement is critical to avoid further delays, additional errors, increased costs and compliance risks.

Extending DAS’ engagement with Workday Inc., will provide:

o Implementation services and post-production support for the Statewide Payroll Transformation Project. This project involves significant changes to the state’s Workday configuration. Workday, Inc.’s continued involvement and expertise is essential to implement these changes accurately and in compliance with requirements. Any interruption would jeopardize timelines, increase costs, and disrupt statewide payroll. Implementation services include, but is not limited to, hands-on support and close collaboration throughout the project phases to address issues immediately, validate configurations, ensure seamless integration, and limited advisory and support services for enterprise readiness.

o Ongoing operational optimizations leveraging proprietary knowledge and direct access to experts to Workday system architecture, tools, and updates. Workday, Inc. is the sole provider with the necessary expertise and system access to perform these tasks.

These optimizations are critical to maintaining compliance, improving efficiency, and ensuring system integrity.

o Risk mitigation for compliance and continuity. Without Workday. Inc’s continued services, the state risks compromising payroll and HR accuracy, efficiency, and compliance could result in further legal, financial, and operational challenges.

The partnership with Workday, Inc. is essential to protect the state’s interests during these critical transitions and ensure the success of statewide payroll and HR operations.

Executed Agreements Projected Cost

Spend

Ad hoc (agreement #489065) $350,338 $197,650.75

(as of 3/31/2026) Phase 0 (agreement #499591) $541,000 $541,000 HCM and security review (agreement #494607) $95,000 $95,000 Payroll Transformation Project (agreement #540146) $1,741,162 Total Executed Agreements $2,727,500 $833,650.75

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(as of 4/17/2026)

Estimated Agreements Payroll Transformation Project – enterprise readiness advisory and support services $750,000

Ad hoc and Project support services $1,750,000 Total NTE Increase $2,500,000

d. Proposed Contracting Procedure:

1. 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 AMD-1.

2. 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 the PSA as outlined in Section 10.(a) above and will include a provision that any Affected Person(s) may protest the approval of the SP AMD-1.

3. If no protests to the SP AMD-1 are received or sustained, DAS SPS will proceed with the PSA amendment to increase the NTE.

4. During the third year of the extension from this SP AMD-1, DAS will perform market research to assist in determining any future procurement actions to continue the Services.

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

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

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

With the approval of the Original SP (Attachment No. 1) and execution of the corresponding PSA, the PSA became subject to the terms of the SP. Any further amendment of the PSA terms or increase in the total estimated cost(s) can only be requested and approved through a Special Procurement Amendment Request to the State Chief Procurement Officer.

The state is facing critical and time-sensitive challenges to implement legally required structural pay practice changes by July 1, 2027. These changes were agreed to as part of a class action settlement and collective bargaining agreements. 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 July 2027.

Workday, Inc. possesses deep expertise in not only the system, but also Oregon’s configuration of the system. Prior engagements (noted above) with Workday, Inc. have been instrumental in DAS’ and the Workday Oregon Team’s progress. Continued involvement with Workday, Inc. is essential

SP_REQ-10700-00189548 (90965)_AMD-1_Workday Page 5 of 7 to ensure accuracy, minimize disruption, and maintain compliance. Given the complexity and urgency of these needs, amending the special procurement to increase the NTE 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 that amending the PSA does not diminish competition or create an environment of favoritism, DAS will implement a structured and transparent approach to assessing market capability over the life of the agreement. At approximately the three-year mark of the PSA, DAS will conduct formal market research in the form of a Request for Information (RFI) distributed to the vendor community. The purpose of the RFI is to objectively determine whether other qualified firms exist that can demonstrate the depth of expertise, capacity, and state-specific knowledge required to perform the Services at the level necessary to support accurate and uninterrupted payroll and HR operations without service degradation or risk to continuity.

The complexity of the operational environment requires the State to maintain uninterrupted payroll and HR functionality while simultaneously advancing configuration, feature adoption, and system enhancements. This "dual system" workload, supporting current operations while building and validating new functionality, creates a no-fail environment where errors can have significant, legal, financial and operational consequences. Any vendor must therefore demonstrate deep technical capability, platform specific knowledge and proven familiarity with Oregon's historical environment.

This RFI process will serve as evidence of whether meaningful competition is available. If the RFI responses indicate that multiple vendors can meet the required level of technical expertise, operational, and legal-compliance needs without introducing risk or damaging disruption to the State’s pay practices, DAS will initiate and develop a competitive Request for Proposals (RFP) to ensure fair and open competition. Conversely, if the market research confirms that no alternative providers can meet the State’s requirements at the needed level of reliability, continuity, and platform-specific knowledge, that evidence will demonstrate that a future extension the PSA does not diminish competition because competition does not meaningfully exist for these specialized Services.

Workday remains uniquely positioned due to its role as the creator, maintainer, and sole proprietor of the Software as a Service (SaaS) platform on which Oregon’s payroll and HR operations depend. The Services being procured relate directly to Workday’s proprietary understanding of system architecture, embedded configuration logic, and product-embedded functionality. Workday is the only provider with both access to the platform’s underlying design, future product and feature releases, and the ability to apply state-specific historical knowledge gained through ongoing support. This combination of proprietary expertise and experience

SP_REQ-10700-00189548 (90965)_AMD-1_Workday Page 6 of 7 provides risk mitigating continuity, accuracy, and compliance in managing both current and future-state operations.

Because the justification is based on the platform owner's unique technical qualifications, not preference or convenience, and because DAS will conduct open market research to test the availability of competition, the approach avoids favoritism and ensures that the PSA amendment is objectively supported by evidence demonstrating the marketplace’s actual capacity. If competition emerges, DAS will compete the work. If it does not, the evidence will support continuation with the only qualified provider capable of delivering the required level of stability and expertise.

The same justification statements and findings of facts set out in SP Attachment No. 1 still apply.

and

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

or

_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 the Workday SaaS 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 human resources and payroll operations during this pivotal period.

The same justification statements and findings of facts set out in SP Attachment No. 1 still apply.

13. Signature: The actual signature of the Agency Head or designee (e.g., Designated Procurement Officer) is not required on the Request submitted through OregonBuys®. Agency may elect to attach a signed Request as a pdf file through OregonBuys® or submit a signed hard copy Request.

Signature: e.g. Electronically in OregonBuys® _________________ Name/Title: Date:

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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(s) 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 execution, if any.

APPROVED:

Kathryn Jones, State Chief Procurement Officer Date:

Department of Administrative Services, State Procurement Services

5/6/26