Contract 196340 amendment 4 extension and funds increase request

The State of Utah Department of Government Operations, Division of Purchasing and General Services, on behalf of the Department of Human Services Division of Integrated Healthcare, is seeking to extend and increase funds for Contract 196340 through a non-competitive procurement process. The procurement involves the continuation of an integrated pharmacy point-of-sale claims processing system, prior authorization tool, and drug rebate management system currently provided by Change Healthcare. The contract extension is necessary to ensure continuity of critical pharmacy services for Medicaid members during the transition to a new point-of-sale system scheduled for implementation on October 1, 2026. The current contract end date of April 1, 2026 will be extended through October 1, 2026 (a six-month extension), providing uninterrupted access to pharmacy claims processing and related services. The services include core functionality of the existing point-of-sale system and completed and potential future change requests necessary for system operations. The justification for awarding without competitive bidding is based on the determination that interruption to pharmacy claims processing would prevent Medicaid members from accessing critical medications, creating serious health consequences including hospitalization and death. The posting deadline for challenges to this non-competitive award determination is February 11, 2026. Vendors wishing to challenge the sole source determination must submit documentation demonstrating that other qualified vendors exist who can provide comparable or equivalent products or services meeting the stated specifications, along with supporting documentation of alternative sources and cost comparisons.

This non-competitive award is authorized under Utah's procurement regulations for circumstances where standard procurement processes are determined to be impractical and not in the best interest of the state. Change Healthcare is the incumbent vendor under the original solicitation number RS19018SS, which was previously awarded as a sole source procurement. All contractors must comply with Utah Code 63G-27 et seq. regarding anti-boycott certifications, certifying non-engagement in economic boycotts and boycotts of the State of Israel and agreeing to maintain such certification throughout the contract term. The original contract total was $7,897,644.99, with the current contract total standing at $12,727,257.69, and the proposed contract total reaching $14,128,628.69, representing a 178.9 percent increase from the original contract value. The extension requires an additional $1,400,000 in funding, consisting of $1,100,000 to cover core functionality of the current point-of-sale system and $300,000 for change requests. Vendors or interested parties may file business confidentiality claims to protect trade secrets and commercial financial information from public disclosure under the Utah Government Records Management Act.