HCM ERP System Replacement - Phase 1

The Commonwealth of Kentucky, Personnel Cabinet, is soliciting proposals for an HCM ERP System Replacement Phase 1 Benefits Administration & Billing Software Solution and implementation services under RFP 758 2700000012, with proposals due September 11, 2026 at 15:30 ET. The procurement mandates a partnership model: Software Solution Providers must partner with exactly one Systems Integrator, with joint proposals owned by the SSP; each SI partners with only one SSP; proposals offering software or services alone are non-responsive.

The scope includes a commercial off-the-shelf benefits administration and billing platform to replace the incumbent SAP system, which reaches end-of-mainstream maintenance December 31, 2027. The solution must serve the Kentucky Employee Health Plan (KEHP), currently serving approximately 191,353–192,000 participants across 649+ billed customers from 650+ employers (state agencies, school districts, quasi-governmental organizations) with contributions exceeding $2 billion annually. Implementation must complete during 2028 with a go-live date to be determined by the selected vendor's recommended project timeline. The vendor must provide 25% on-site staffing at the cumulative project level during planning, implementation, testing, training, go-live readiness, and post-go-live hypercare phases. Post-implementation support includes a minimum of four months on-site or remote support following each production go-live, with contract payment retainage of 15% held until final system acceptance within 60 days of production deployment.

The contract term is ten years (FY 2027–FY 2046) with pricing adjustable for changes in covered lives, user counts, or purchased modules. Vendors must submit firm fixed-price proposals with no time-and-materials or not-to-exceed arrangements; travel expenses are not reimbursed. The solution must integrate with existing systems (SAP HCM, KHRIS, Tyler Technologies Transaction Payment Engine, 35 current integrations across carriers and administrative systems) and support optional services including call center support, dependent verification, and COBRA administration replacement. Mandatory security and compliance requirements include FedRAMP or HITRUST/HIPAA certification for cloud solutions, NIST 800-53 moderate controls, IRS Publication 1075 safeguards, Kentucky information security standards, no transfer of Commonwealth data outside the U.S. without written permission, and no services performed outside the U.S. without prior written consent. The incumbent is SAP. Funding has been approved; specific contract value is not disclosed. Technical proposals must score at least 65% of maximum technical points (8,070 points possible) to advance; cost evaluation carries up to 1,345 points. Vendors' conference was held August 4, 2026; written questions were due August 3, 2026 and responses provided August 6–17, 2026. Contact: Jennifer Taylor, 502-564-6522.