27-BHR ASO Services Sole Source

The State of Illinois Department of Human Services, Division of Behavioral Health and Recovery, is issuing a notice of intent to award a sole source contract for Community Health Administrative Services Organization (ASO) services to support the statewide community mental health system. This procurement encompasses administrative activities including tracking and monitoring mental health service delivery, managing utilization and expenditure activities for community-based provider contracts, implementing quality enhancement and recovery initiatives, and maintaining an integrated data system for registration and authorization. The contract requires a dedicated Illinois IT lead as part of the staffing arrangement and mandates compliance with comprehensive IT terms and conditions, including cloud hosting security requirements that specify Advanced Encryption Standard (AES) 256-bit encryption, FIPS 140 compliance, annual SOC 2 Type 2 audit reports, multifactor authentication for privileged accounts, and comprehensive security event logging. The contract is estimated to run from July 1, 2026, through June 30, 2027, with no renewal options specified. The public hearing regarding this sole source justification is scheduled for May 27, 2026, at 2:00 PM via WebEx, but will be cancelled unless written comments or a formal hearing request is submitted by 4:00 PM on May 22, 2026. Questions or requests for a public hearing should be directed to Dianne Richman at the Chief Procurement Office for General Services at Dianne.Richman@illinois.gov or 217-622-1857.

This procurement is designated as a sole economically feasible source award to Carelon Behavioral Health, the incumbent vendor that has provided similar services continuously since September 2017 and has received five consecutive sole source contracts since 2022. The justification for sole source procurement is based on compatibility with existing systems and the substantial risk of losing approximately $29 million in federal grant funds if continuity is disrupted, as the contract is funded through SAMHSA Block Grant federal resources. The estimated contract value is $3,225,270, which represents a decrease from prior year amounts due to the removal of Warm Line services from the scope; this includes $2,490,750 for maintenance of the integrated data system and $734,520 for reporting requirements and deliverables. The State Purchasing Officer approved the contract on May 12, 2026, and the Central Procurement Office has authorized DHS/DBHR to proceed without modifications. The State is concurrently evaluating alternative solutions with DHS Department of Innovation and Technology and the Department of Healthcare and Family Services, with a potential competitive solicitation to follow if in-house or alternative options prove infeasible.