SP_DASOBO-110083_Amd-2_PEBB BMS Svcs_Approved.pdf

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REQUEST FOR SPECIAL PROCUREMENT

No. REQ-DASOBO-00110083, Amendment No. 2

(Initial: SP-1126-29; SP Amd-1: DASOBO-15591)

PART A.

1. Requesting Agency Name: The Department of Administrative Services (“DAS”), State Procurement Services (“SPS”) on behalf of Oregon Health Authority (“OHA”) and its Public Employees Benefit Board

(“PEBB”).

2. Date of Request: January 14, 2025 3. Agency Number: 10700

4. Agency Contact Name: Julie Curry 5. Phone: (971) 446-8169

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

7. Amendment Time Period Requested: From: July 1, 2025 To: June 30, 2027

8. Total Estimated Cost for Amendment Time Period: $4,778,939

Note: With approval of this SP_Amd-2, the cumulative Total Estimated Cost approved under the SP will be $19,133,026.

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

PEBB Benefit Management System (“BMS”) and the following related services (collectively “Services”):

• Maintenance and Operational (“M+O”) Support

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

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

a. Amendment Request:

SPS, on behalf of OHA and its PEBB, seeks approval of this Special Procurement (“SP”) No.

DASOBO-110083, Amendment No. 2 Request (“SP_Amd-2”) to amend Contract No. DASPS-1531- 19, OHA internal Contract No. 147360 (the “Contract”) issued to Peraton (formerly Perspecta State and Local, Inc.) (“Contractor”) to:

1. extend the Term up to two (2) additional years through June 30, 2027.

2. increase the Maximum Not-to-Exceed Compensation (the “NTE”) up to $4,778,939 for the

Services listed in section 9 above.

b. Background:

The PEBB BMS remains essential to OHA’s mission of providing critical benefits to approximately 143,000 Oregon PEBB members, including active and retired employees and their dependents. The system is used year-round by PEBB and its members to select and update benefit plans, enroll dependents, and make changes due to qualifying events.

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PEBB BMS History

• The PEBB BMS was built in 2002 and has been enhanced, supported and maintained through various procurement methods since its inception. Most recently, procurement activities have included:

o 2019: SPS—on behalf of OHA—submitted Special Procurement No. SP-1126-19 (“Initial SP”)—attached hereto as ‘SP_Attachment-1’—seeking approval to amend the Contract Term to extend the Services for an additional three years (through June 30, 2022) and to proportionately increase the NTE for those Services. The additional 3-year period was intended to support a cooperative procurement for a unified BMS serving both PEBB and OEBB.

The State Chief Procurement Officer approved the Initial SP on June 12, 2019.

o 2021: Two significant procurement activities took place in 2021.

Request for Proposal No. DASPS-1633-20 (the “RFP”) seeking an ‘OHA BMS

Replacement’ was issued February 22, 2021, on the Oregon Procurement Information Network (“ORPIN”). With the State’s transition from ORPIN to the OregonBuys® eProcurement system, the RFP was renumbered to S- DASOBO-00000207 and closed on July 28, 2021.

Given that large enterprise information technology (“IT”) systems often require 36 months or more to fully implement, SPS—on behalf of OHA—submitted Special Procurement DASOBO-15591, Amendment #1 (“SP_Amd-1”)— attached hereto as ‘SP_Attachment-2’—requesting approval to amend the Contract Term an additional three years (through June 30, 2025) and proportionately increase the NTE for continued PEBB BMS Services. The extension of time and funding was intended to support the ongoing unified BMS procurement process.

The State Chief Procurement Officer approved SP_Amd-1 on

September 21, 2021.

o 2022: Morneau Shepell, which rebranded to ‘LifeWorks’ on May 14, 2021, prevailed with an award under the RFP and was issued contract PO-DASOBO-00006457 with an Effective Date of April 20, 2022.

For additional historical and background information, see SP_Attachments 1 & 2.

c. Current Need:

Transitioning and integrating both PEBB and OEBB systems into a single, unified BMS system using a multi-phase implementation approach has introduced several delays. The project was initially scheduled to go-live in April 2024; however, as the project progressed the go-live date was revised to March 2025. The project team recently conducted a comprehensive reset, resulting in revised milestones and an updated timeline. Among the key changes are the following:

• January – February 2026: Go live readiness

• March – June 2026: Go live (pending Executive Steering Committee approval)

• June – September 2026: Post-implementation stabilization period

The PEBB BMS is a critical system for OHA, PEBB, and its users. It is essential to maintain and support this system until the new Ariel EAS Solution is fully implemented, stabilized, and operational.

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Table 10.C.1 below presents the estimated maximum annual costs for ongoing PEBB Services over the two-year term (through June 30, 2027) requested in this SP_Amd-2. The estimated costs for the 2026 and 2027 renewal terms include a 2.5% markup to account for potential increases. The table also includes contingency funds to support any necessary system enhancements during the two-year term.

TABLE 10.C.1

PEBB BMS Annual Services

Description Estimated Cost Annual Term

7/1/2025 - 12/31/2025

Estimated Cost Annual Term

1/1/2026 - 12/31/2026

Estimated Cost Annual Term

1/1/2027 - 6/30/2027

Estimated Total

Annual Services (M&O) $921,552 $1,889,181 $968,205 $3,778,939

Optional System Enhancements

Work Order(s)

TBD TBD TBD $1,000,000

Estimated Total $4,778,939

Table 10.C.2 below presents the estimated hourly rates for Contractor resources assigned to Work Orders for system enhancements that are authorized by OHA or its PEBB. Contractor rates for the period of July 1, 2025 - June 30, 2027, are expected to increase once (effective July 1, 2025) at a flat rate of 3%.

TABLE 10.C.2

Contractor Resources Rates

Resource Role

Current Hourly Rate

Estimated Hourly Rate Effective July 1, 2025

(reflecting 3% increase)

Junior 116.62 $120.11

Intermediate $150.53 $155.04

Senior $232.50 $239.47

d. Proposed Contracting Procedure:

1. As required by Oregon Administrative Rule (“OAR”) 125-247-0287, SPS will issue a public notice (the “Notice”) of the approved SP_Amd-2 on OregonBuys® for a period of seven (7) calendar days.

2. The Notice will include provisions that any affected party may protest the approval of this SP_Amd-2 Request.

3. DAS will respond to and resolve protests of this SP_Amd-2, if any.

4. If no protests to this SP_Amd-2 are received and sustained, SPS, on behalf of OHA, will proceed with amending the existing Contract as set out in Section 10.a above.

5. SPS—on behalf of OHA—will work with DAS Enterprise Information Services (“EIS”) and obtain its endorsement prior to executing the Contract amendment(s), if required.

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6. Pursuant to OAR 137-045-0015 and Oregon Revised Statute (“ORS”) 291.049, SPS—on behalf of OHA—will work with Oregon Department of Justice (“DOJ”) and obtain its legal sufficiency approval prior to executing the Contract amendment(s), if required.

11. Justification for use of Special Procurement:

• With approval of the Initial SP (SP_Attachment-1) and execution of the related Contract amendment(s), the Contract became subject to the terms of the SP, as amended. Therefore, the Contract cannot be amended for additional time, Services, and related costs unless the SP is first amended for the same.

• PEBB currently provides benefits to nearly 143,000 members, both active and retired state employees, and their dependents who live and work in every county in the state. Managing these benefits manually is not feasible. PEBB offers members a centralized platform to enroll in benefits, make changes during open enrollment, update personal information, and access various resources.

• The project schedule for the new Ariel EAS Solution implementation includes a Go-live in Q2

2026, followed by a stabilization period in Q3 2026. The PEBB BMS must continue to be maintained and supported under the current Contract until the new unified BMS is fully operational.

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

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

SPS—on behalf of OHA—completed a competitive solicitation, in accordance with Oregon’s Public Contracting Code, for a unified BMS that will serve both PEBB and OEBB.

• The RFP was advertised on ORPIN—the State’s previous eProcurement system—for 82 days, providing ample time to attract maximum competition.

• The RFP was conducted in accordance with ORS 279B.060, Competitive Sealed Proposals, and related OAR 125-247-0260.

• The RFP was drafted to encourage competition to the extent available. Five (5) responsive proposals were received and evaluated.

• LifeWorks prevailed with an award and will design, build, and implement the new Ariel EAS Solution under contract PO-DASOBO-00006457.

• Go-live for the new BMS is anticipated in Q2 2026.

The PEBB BMS must continue to be maintained and supported under the current Contract until the new Ariel EAS Solution is fully operational. The extension of Services requested in this SP_Amd-2 will ensure continuity during the system transition process and does not promote favoritism or reduce competition.

and

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

or

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XX (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 RFP (DASPS-1633-20 – renumbered to S-DASOBO-00000207) was conducted in accordance with ORS 279B.060 and will establish a unified benefits management system for both PEBB and OEBB. The new BMS is expected to go live in Q2 2026. It is essential to maintain and support the PEBB BMS until the new Ariel EAS Solution is fully implemented and operational to ensure continued:

• compliance with legislative mandates.

• fulfillment of collective bargaining requirements.

• timely implementation of Board decisions.

• delivery of services to both active and retired state employees and their families.

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. 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 reporting requirements 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 contract amendment execution, if any.

APPROVED:

Jay Jackson, Procurement Policy Officer Date Department of Administrative Services

5/14/2025