HCM ERP System Replacement - Phase 1

The Commonwealth of Kentucky, Finance and Administration Cabinet on behalf of the Personnel Cabinet, is requesting proposals for a Benefits Administration and Billing Software Solution and implementation services for Phase 1 of the HCM ERP System Replacement, with proposals due September 11, 2026, at 3:30 p.m. ET. This is a mandatory partnership procurement: Software Service Providers (SSPs) must partner with a single Systems Integrator (SI) or provide implementation services directly, and joint proposals must be owned by the SSP with each party partnering exclusively with one counterpart.

The scope addresses benefits administration and premium billing for the Kentucky Employees' Health Plan (KEHP), which serves approximately 192,000 members and 300,000+ covered lives across 700+ public sector employers with over $2 billion in annual contributions. The solution must be a commercial off-the-shelf (COTS) offering with minimal customization, supporting eligibility and open enrollment management, ACA administration, COBRA administration, data conversion from existing KHRIS systems, business analytics and reporting, and mobility capabilities. Integration with approximately 35 inbound and outbound integrations is required, including Tyler Technologies' Transaction Payment Engine, SAP HCM, CGI Finance, ADP, PeopleSoft, and Munis. Cloud-hosted solutions must comply with FedRAMP or HITRUST/HIPAA requirements. All software must include single sign-on (OAuth 2.0 or OpenID Connect) and configuration changes without incremental cost. Systems Integrators must commit to at least 25% on-site delivery and provide fixed-fee pricing for implementation and deployment with a Statement of Work to be finalized post-award.

Evaluation criteria include technical merit (maximum 8,070 points) and cost (maximum 1,345 points), with proposals scoring below 65% of maximum technical points deemed non-responsive. The cost structure includes deliverable-based payments with 15% retainage held until final system acceptance across fiscal years FY2027 through FY2046. Vendors must comply with Commonwealth Office of Technology AI Policy (CIO-126), requiring AI usage approval; NIST Special Publication 800-53 controls at moderate level; IRS Publication 1075 safeguarding for Federal Tax Information; and cooperate fully with an independent verification and validation (IV&V) vendor. A vendors' conference was held August 4, 2026. The Commonwealth may award multiple contracts.