SP_Attachment-1_SP-1126-19_PEBB BMS_Final.pdf

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REQUEST FOR SPECIAL PROCUREMENT No. SP-1126-19

PART A.

1. Requesting Agency Name: Department of Administrative Services/Procurement Services (DAS PS) on behalf of the Public Employees’ Benefit Board (PEBB)

2. Date of Request: April 24, 2019 3. Agency Number: 10700

4. Agency Contact Name: Sandy Clavet 5. Phone: (503) 378-4645

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

7. Time Period Requested: From: June 30, 2019 To: June 30, 2022

8. Total Estimated Cost: $7,524,335

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

Public Employees’ Benefit Board Benefit Management System (BMS): Maintenance and Operational

Support and System Enhancements for legislatively mandated updates, Board decisions, collective bargaining mandates and adding new groups (state and local governments).

10. Request, Background and Proposed Contracting Procedure:

a. Request:

DAS PS, on behalf of PEBB, requests approval of this Special Procurement to extend Contract DASPS-

1531-19 with Perspecta State and Local, Inc. (formerly ESSL) for an additional three (3) years from the

Contract Amendment effective date and to increase the not-to-exceed (NTE) of $11,585,046 by

$7,524,335 to a new NTE of $19,109,381 for Maintenance and Operational Support and System

Enhancements, and to allow sufficient time to complete the market analysis, business case development, system and business requirements, and a formal competitive solicitation for a potential replacement solution and implementation services.

b. Background:

The Oregon Educators Benefit Board (OEBB) and the Public Employees’ Benefit Board (PEBB) are the divisions of the Oregon Health Authority (OHA) charged with providing certain employee benefits to educators, state and local government employees (ORS 243.866, and ORS 243.135) respectively. Over

283,000 Oregonians annually use the OEBB and PEBB Benefit Management Systems (BMS) to access benefit selections and enroll spouses, domestic partners and dependents in benefits during their respective open enrollment periods. Members also access the BMS’ throughout the year to select benefit plans and coverage levels upon hire, or update selections in response to qualifying events. Additionally, OEBB and

PEBB Members use the systems during the year to update certain benefit information.

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PEBB’s BMS was built in 2002. After the initial build, PEBB’s Contract was amended multiple times via various Special Procurements for Maintenance and Operations (M+O maintenance and system enhancements).

PEBB entered into its last Special Procurement under OHA procurement authority on 07/01/2015, for a maximum of six (6) years at an additional maximum NTE of $4,920,000. The cumulative total contract value at that time was $11,585,046. Approval of the 2015 Special Procurement was predicated on meeting three (3) specific Office of the State Chief Information Officer (OSCIO) requirements:

Independent IT security audit;

Disaster Recovery Testing and Business Continuity Plan; and

Development of an IT Transition Plan.

The above requirements were met in 2018. Additionally, approval of the Special Procurement was contingent upon OEBB and PEBB working together jointly on a competitive RFP process to replace their legacy systems. Towards that end, both OEBB and PEBB have a Policy Option Package in the

Governor’s approved 2019-2021 budget for staff to begin writing business requirements and to coordinate the development of the RFP and associated OSCIO Stage Gate process.

The current 2017 budget for PEBB’s Contract Amendment No. 2, ending 06/30/2021, was developed around continuation of basic M+O functions, and historically low Work Order requests for enhanced or additional functionality resulting from the following:

State Legislation-changes required by state law and subsequent legislative sessions;

Federal Legislation and Regulations-changes to HIPAA, ACA ERISA, etc.;

Collective Bargaining-changes mandated as a result of collective bargaining agreements;

Board Decisions-benefit and plan design changes made by OEBB and PEBB’s respective Board of

Directors; and

Adding state, local government and special district groups.

The current 2019 Legislative Session has more health care related bills that affect PEBB than in recent history. PEBB did not anticipate this increased level of system functionality when the budget for the current OHA Special Procurement was approved in 2015. Additionally, PEBB is currently under DAS

Procurement Authority for IT, whereas it was under OHA Procurement Authority when the 2015 Special

Procurement was approved.

In order to amend the current Contract and be able to implement system changes allowing PEBB to comply with existing and proposed legislative mandates, PEBB is requesting a new Special Procurement of three (3) years and for additional M+O and System Enhancement funding through the end of the

06/30/2022 Special Procurement period. This extension will allow OEBB and PEBB to jointly complete the competitive RFP Process for system replacement (pending legislative approval of funding).

c. Proposed Contracting Procedure:

Step 1.

PEBB proposes using a direct award to its current Contractor, Perspecta State and Local Inc., to provide the above services. Perspecta has been working on the PEBB BMS since its inception.

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Perspecta is familiar with the legacy code upon which the system was built in 2002. Perspecta is also intimately familiar with PEBB’s business needs and is the most logical vendor to provide services in the most efficient and economic manner possible through the end of the requested

Special Procurement period.

DAS PS will issue a public notice on ORPIN regarding approval of this Special Procurement (SP) that includes a process by which an affected person may protest. If no protests to this SP are received and sustained, DAS PS, on behalf of OHA PEBB, will negotiate an amendment and extension to the Perspecta Contract as described above.

Step 2.

The Contract extension will serve as a bridge while OEBB and PEBB work together on a business case and requirements and with OSCIO to determine the Stage Gate process for a system replacement.

Step 3.

DAS PS to prepare a Request for Proposal and conduct a competitive solicitation if approval of funding is received from the legislature to replace the legacy systems.

11. Justification for use of Special Procurement:

PEBB was under OHA Procurement Authority in 2015 when the current Special Procurement was approved and executed.

PEBB must amend the current Special Procurement Contract amendment for additional System

Enhancement funding in order to comply with legislative mandates.

PEBB is choosing to amend the current Special Procurement Contract Amendment for time in order to fulfill the original intent of the 2015 Special Procurement: system replacement, pending funding approval.

PEBB needs to conduct a new Special Procurement as the agency is now under DAS Procurement

Authority for this procurement.

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:

Pending approval of the proposed 2019-2021 POP, PEBB will use the contract term extension to develop a joint competitive solicitation with OEBB for a system replacement. This short-term extension will allow

PEBB to continue services while undertaking a competitive procurement.

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:

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A special procurement is the applicable sourcing method to amend the Perspecta Contract for the ongoing M+O services described in this request. If DHS/OHA were to do a competitive solicitation

Perspecta would likely be the most competitive. It would also save DHS/OHA and the vending community time and resources as it is unlikely that other vendors in the market would propose due to the intricacies and knowledge required to maintain the legacy system.

PEBB BMS is a legacy system based on antiquated code. The current programmers and developers are trained in use of this code, and no additional training time or money to train a new vendor would be needed. Contracting with a new vendor would cost substantially more, and the Transition Plan would need to be invoked via a Work Order Amendment for additional money.

Time is of the essence to implement legislative, collective bargaining, Board mandated changes and system updates. The current vendor is intimately familiar with PEBB’s business processes and Open

Enrollment timelines. The current vendor is substantially agile in meeting rigorous mandated timelines.

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 ORPIN. Agency may elect to attach a signed Request.

Signature: Electronically in ORPIN ____________________

Date