SPO_Approval_to_Request_to_Enter_Co-op_and_Contract_Beyond_5_years_-_WSEA_EBT_7..pdf

Douglas A. Ducey Governor

Michael Wisehart Director

1789 W. Jefferson, Mail Drop 1541, Phoenix, AZ 85007 P.O. Box 6123, Phoenix, AZ 85005 Telephone (602) 364-0170 Fax (602) 542-5339 https://des.az.gov/

July 6, 2022

Mr. Edward Jimenez State Procurement Office Department of Administration 100 N. 15th Avenue, Suite 201 Phoenix, AZ 85007

Subject: ADES Request for Approval to Enter into Cooperative Agreement and Contract Extending Beyond 5 years for EBT Services

Dear Mr. Jimenez, The Arizona Department of Economic Security (ADES), Division of Benefits and Medical Eligibility (DBME), is requesting authorization under A.R.S. § 41-2546 and 41-2632 to enter into a Cooperative Purchasing Agreement with the Western States EBT Alliance (WSEA) for the procurement of EBT (Electronic Benefit Transfer) Services for an extended contract term.

EBT Services directly assist Arizonans by providing nutrition and cash assistance to citizens who are eligible for the TANF and SNAP programs. To achieve economies of scale and common system functionality, nine (9) western states and the Territory of Guam joined the Western States EBT Alliance (WSEA) for the procurement of EBT Services in 2015. The State of Colorado, on behalf of WSEA, awarded the contract for EBT Services to Fidelity Information Services, LLC (FIS) and ADES executed a Participating Addendum for EBT services for a term of 5 years with an option to extend up to a maximum of seven (7) years.

On July 8, 2021, the State of Colorado, on behalf of WSEA, issued a new RFP for the competitive solicitation for EBT services. ADES/DBME was an active participant in drafting of the RFP and evaluating proposals. In 2022, the new cooperative contract for EBT Services was again awarded to FIS.

ADES/DBME is requesting approval from the State Procurement Office to execute a Participating Addendum for use of the new WSEA Cooperative Agreement for five years with the option of two one-year extensions, up to a maximum term of seven (7) years. The following information is provided to justify our request.

1. The cooperative purchasing of EBT Services combines ADES’ purchasing power with the States and Territory participating in WSEA by allowing more competitive vendor pricing and negating the need for ADES to manage the RFP process independently.

2. The cooperative contract keeps participating States and Territory on a consistent term, which is also consistent with the term approved and executed in the current contract

(ADES17-159044).

3. Federal FNS approval is needed before Arizona may execute a Participating Addendum with FIS for the use of EBT Services. Since approvals cannot be requested before a

1789 W. Jefferson, Mail Drop 1111, Phoenix, AZ 85007 P.O. Box 6123, Phoenix, AZ 85005 Telephone (602) 542-5757 Fax (602) 542-5339 https://des.az.gov/ contract is executed and may require an additional six-months for the review and approval process, a five-year contract with the option for an additional two one-year extensions, up to a maximum term of seven (7) years, will provide WSEA and Arizona with sufficient time to coordinate a solicitation for future services and obtain all required approvals.

4. If the solicitation for future EBT Services results in the selection of a new contractor, the hand-off process for the transition of services will be a significant endeavor to include the notification of merchants, distribution of new EBT machines, issuance of new EBT cards, publication of new brochures, and the provision of training for merchants and benefit recipients. As previously stated, the option for two one-year extensions will provide the time needed for a smooth and complete transition of services.

Thank you for your consideration of this request to approve the option for a cooperative contract with a five-year term plus the option of two supplemental one-year periods, up to a maximum term of seven (7) years. With SPO’s approval, ADES/DBME will proceed with executing a Participating Addendum for the use of FIS services as contracted by the State of Colorado on behalf of WSEA.

Regards, Chief Procurement Officer Arizona Department of Economic Security

Enc: Sources Referenced

Cc: Stephen Brennan, DBME Deputy Business Administrator Jonelle Benally-Clytus, DBME Contracts Manager

Jul 7, 2022