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Intent Issued for Texas Eligibility Support Services

The Texas Health and Human Services Commission (HHSC) issued an intent to award the Eligibility Support Services contract to Maximus, Inc., on June 24, 2009. The Request for Proposal (RFP) was released back in July 2008 and proposals had been under evaluation since October. HHSC is hoping to use this procurement to optimize eligibility determination for its health and human services programs. HHSC currently determines eligibility through two distinct automated systems and two business processes. This contract will implement an eligibility process that offers multiple access channels to support client inquiries and maintain effective call center operations. HHSC is looking to join the current trend of social service programs using one statewide eligibility system to deliver services for all health and human services benefit programs, instead of siloed systems with inadequate integration components for each individual program.

GovWin is monitoring the Eligibility Support Services solicitation under Opportunity ID #41073. The intent to award that was issued to Maximus is not a final contract award and is contingent upon successful negotiation.

New OMB Stimulus Guidance Spells Trouble for States

On Monday, OMB released new guidance for the reporting of stimulus-related projects. After reading the document, I walked away with two thoughts - "State governments will be buried under the weight of this," and "The job calculation situation is a nightmare waiting to happen." While we knew that states would be required to report on their own activity as well as the local entities that receive money, this new guidance adds a new layer of complexity. Starting in October, states (e.g. "prime recipients) must track dollars down "to the street", from their door to the "sub-recipient" to the sub-recipient's vendors.

After quickly celebrating new rules that provided them with funds to cover the administrative and management costs of stimulus activities, states now face another set of challenges. Reporting requirements at the prime recipient level will undoubtedly flow down to S&L vendors, who as implementers, will bear a fair amount of the burden.

Some of the required data elements:

  • Amount of Federal Recovery Act funds expended to projects/activities
  • Project description and status
  • Infrastructure expenditures and rationale, if applicable
  • Total number and amount of small sub-awards (less than$25,000)
  • Job creation "narrative" and number
  • This last item also presents a challenge. OMB directs recipients to divide the number of hours work on stimulus projects by the total number of hours in a full-time schedule to come up with recovery-related FTEs. For example, if there are 480 hours in a quarter and an employee works 240 hours on stimulus work, that represents .5 FTE. The calculation for determining jobs created or saved seems fairly simple on the surface, but this could get a little sticky if:

    a) a vendor's employee is working on multiple projects and must track stimulus time separately

    b) stimulus money partly funds a stimulus project, which makes it difficult to attribute job creation to stimulus vs. non-stimulus activities

    Federal contractors - this guidance does not apply to you, but your day is coming. Final FAR rules for recipients of Federal contract awards directly from the Federal government are pending.

    OMB's guidance also provides step-by-step instructions for submitting the required information. I'm thinking that detailed instructions on how to collect the data requires much more detail than how to submit it. The silver lining: prime recipients may actually create more jobs to manage and report stimulus data than to complete the actual projects.

    Expect more investment in S&L critical infrastructure protection

    When it comes to trying to figure out what the Obama administration--or any administration, for that matter--has planned for a given function of state and local government, it's easy to make one of two mistakes.

    1. Taking the administration at its word – That is, believing what the administration says is or will be a priority will actually be so.

    2. Reading too much into what is or isn't said – Trying to read tea leaves is always risky. Government is a messy business and it's easy to read too much (or too little) intent into statements that end up vague and/or contradictory after being run through the sausage-maker of bureaucratic politics.

    So, what's a sure-fire indicator of intent? Staffing up.

    I read in an obscure article that DHS's National Protection and Programs Directorate (PPD), which includes the Office of Intergovernmental Programs (OIP), hired 300 people last year and is looking to add 621 more this year. This will include 71 new workers in cybersecurity and will bring the directorate's total workforce to 2,710 by September 30, 2010.

    One thing is for sure, DHS isn't hiring all of the folks to twiddle their thumbs. Critical infrastructure protection (CIP) is second only to emergency response in requiring federal-state-local coordination. States and localities operate and/or provide day-to-day protection for many critical infrastructure components, including mass transit systems, utilities, medical facilities, air/sea ports, education campuses, emergency operations centers (EOCs), data centers, and prisons (among many others). CIP was important to the Bush administration, but it had to take a back seat to more immediate concerns at the airports (TSA), borders (SBI), and drivers licensing offices (REAL ID). The cybersecurity subcomponent, however, was even farther down the list of priorities than CIP and never really gained any traction during the Bush years.

    GovWin will be watching for more specific development in this area. For now, vendors should begin looking at their relevance to state and local CIP and making plans for 2010 and beyond as CIP moves up DHS's priority list. Don't forget to review GovWin's research on the recent federal stimulus for Justice/Public Safety and Homeland Security for some early insights into the Obama administration's funding priorities in this area.

    New Jersey’s CCHIT Health IT Bill Not Supported by CCHIT

    New Jersey lawmakers are reportedly considering a bill that would outlaw health information technology (IT) products not certified by the Certification Commission for Health IT (CCHIT). The bill outlines financial consequences for not adhering to the bill, including a $1,000 fine for the first violation, a $2,500 fine for the second violation, and a $5,000 fine for the third and each subsequent violation.

    While the bill has good intentions, it seems to be misguided and as a result has received significant criticism from industry stakeholders. Questions have been raised surrounding how New Jersey intends to enforce such a bill; what kind of manpower and other resources would this require? Further, the Department of Health and Human Services (HHS) has not officially selected the health IT certifying body as mandated in the economic stimulus package and the possibility another entity or multiple entities may be selected remains. Making systems illegal is an extreme measure that sends the wrong message and does not "unlock the positive incentives for health IT adoption" that CCHIT is trying to encourage, according to Mark Leavitt who leads CCHIT. Leavitt posted a comment on June 12, 2009 on an ihealthbeat article discussing the bill, which read, "CCHIT feels this is an inappropriate use of certification and was not involved in any way with the bill's creation". Finally, the bill would impact all health care providers, not just the Medicare and Medicaid providers who are eligible to try to receive electronic health record (EHR) incentives from the stimulus package.

    While the bill under consideration is unwise it does highlight the fact that states are working furiously to prepare for the stimulus funding that will be funneled down and to align their governance policies with federal requirements. Further, the bill underlines the fact that CCHIT is a front-runner for the certifying body position. Monitoring this decision will be vital for vendors interested in getting a piece of the action, as systems must receive the stamp-of-approval from the selected entity(s). Further, states are already considering how to extend beyond Medicare and Medicaid providers and bring the remaining providers on board the health IT train. While providers working with entitlement beneficiaries are the focal point of the stimulus funding incentives, vendors should keep an eye on plans to reach all other providers in the future.

    Welfare to End in California?

    California welfare program CalWorks could be one of the many programs feeling the squeeze during the current budget crisis.

    On May 26, 2009, Governor Arnold Schwarzenegger proposed axing California's main welfare program, CalWorks, to help shrink the state's $24.3 billion budget deficit. Nearly 1.3 million Californians received benefit payments under the welfare program in February. By eliminating CalWorks and rejecting the $3.7 billion Temporary Assistance to Needy Families (TANF) block grant, the state will save its matching portion of $1.8 billion, but lose $600 million in federal stimulus funds- money that is desperately needed to invigorate the stagnant economy. If the program is cut, California will be the only state to not have subsistence benefits for children.

    Taking matters into their own hands, Los Angeles County voted on Tuesday to simply push for changes to CalWorks instead of cutting Welfare to Work outright. The County is looking to offset the cost of subsidized child care ($500 a month per child) by allowing parents to stay home and still receive benefits. LA County estimates that these changes could save the state nearly $140 million this fiscal year. Later that day a legislative budget committee in Sacramento rejected the Governor's elimination plan and instead proposed cutting CalWorks by $270 million, which include reductions to child-care and employment services. The Governor has not signed off on the California budget yet and it is already two days past the June 15 deadline.

    GovWin is tracking four opportunities related to the CalWorks program which may take a hit due to budget cuts or the possible welfare elimination:

    • Los Angeles Eligibility Automated Determination Evaluation and Reporting System Replacement Project (LEADER) 15968: The Governor has already delayed an award for this project for six months, and some are calling for an additional two years.
    • Los Angeles Eligibility Automated Determination Evaluation and Reporting System Maintenance and Operations (LEADER) 49872: Dependent upon Replacement Project award
    • Statewide Fingerprint Imaging System (SFIS) 15428
    • Employer Agent Services 56472

    New plan for Real ID includes repealing Real ID and implementing Pass ID

    What the future holds for Real ID is about as unsure as the temperature a year from today. However, Homeland Security Secretary Janet Napolitano has expressed her desire to repeal and replace the $4 billion initiative with a bill that would create the Pass ID initiative. This initiative might be more appealing to those states who have opposed Real ID from the beginning (AK, AZ, GA, ID, LA, ME, MT, NH, OK, SC, WA).

    The new plan keeps many of the same elements of Real ID such as a digital photograph, signature and bar code recognition equipment. Federal databases will still need to be utilized to verify status of an individual, however, the demand for new and updated databases will be eliminated. This new plan will in essence penalize states who have recently implemented costly driver's license systems, such as Michigan, California, and New Hampshire, who have spent a total of roughly $60 million to comply with Real ID requirements.

    If passed, the Pass Id initiative will provide state governments with more funding options to help implement the necessary hardware and software. With a recession that is worsening by the day, it will be interesting to see where this money will come from and when will it be issued. Some states are in the process of replacing their existing driver's license systems, such as North Dakota, Mississippi, and Illinois. With the potential for more funds, I expect to see these states, along with others, place their projects on hold until the Real ID/Pass ID issue can clear up.

    Vendors need to watch this legislation closely as it could possibly rewrite system requirements down the road. States have begun planning for new driver's license systems that are compliant with Real ID. Vendors should begin a dialogue with these agencies NOW in order to position themselves for any changes that may occur to their requirements. Vendors should also expect to see extended use of existing infrastructure should Pass ID become a reality. Costly and complex systems may not be needed as the timeline for the proposed Pass ID is narrow.

    Chopra Wants to Innovate the Health IT Procurement Process

    On June 4-5, 2009, the Health Information Management and Systems Society (HIMSS) held the annual Government Health IT Conference in Washington, DC. A myriad of prolific speakers from all parts of the health information technology (IT) industry addressed conference attendees, touching upon topics such as the economic stimulus package, the role of electronic health records (EHRs) in health care reform and the new administration's priorities. Amongst the speakers was the newly appointed Chief Technology Officer (CTO) Aneesh Chopra, who provided the closing keynote address. Chopra was the Virginia Secretary of Technology before accepting his new federal role.

    Technology vendors may see major improvements in the contracting process under Chopra which could enable them to more frequently engage in discussions and they may get more face-to-face time with government officers. Throughout Chopra's speech he focused on the ineffectiveness of the current Request for Proposal (RFP) process that has become commonplace in the government contracting world. He indicated that innovation by RFP is silly because RFP's stifle innovation with long lists of requirements. Historically, procurement rules and processes were built around obtaining the best and fair prices for commodities, but overtime have evolved to encompass complex IT systems that really don't fit within the model. Chopra indicated that it's hard for companies with innovative ideas to create a business case when they don't have GovWin in the development of the RFP which has led to a gap between federal architecture and IT acquisition. Chopra is interested in exploring different approaches to procurement that will foster innovation and align policy goals when purchasing technology. He intends to seek a separate, new methodology to acquire health IT systems. One example he cited of an innovative approach to IT procurement is an application that the Department of Defense recently released, called DefenseSolutions.gov, which is a web-site that outlines the problem and seeks vendor GovWin on potential solutions. Chopra will be looking to utilize similar innovative forums to spur health IT market innovation.

    As the health IT industry tries to tackle health care reform, out of control expenditures and improve health care outcomes, contractors will be called upon to provide innovative solutions which will no longer be smothered by lengthy requirements.

    State budget "certainty" increasing even as revenues continue to fall

    I sat in on a conference call today with Scott Pattison of the National Association of State Budget Officials (NASBO), which has just released the Spring edition of its state fiscal survey. Despite the usual gloom and doom details of state finances, Mr. Pattison did point out that state budget officials are feeling a bit less uncertain these days than they were back in December when the Winter edition of the survey was released.

    Of course, we pointed this out last December in our report, "Fiscal Crisis Will Trim $30 Billion from State & Local IT Spending Over Next Five Years," where I wrote:

    "Revenue forecasts and the policy responses to them will become more effective in 2009 as budgetary and elected officials gain further insight into economic conditions as well as federal economic stimulus plans."

    So, what does this mean? Are things getting better?

    Well, not exactly.

    So, what are state budget forecasters feeling so darn certain about these days?

    Well, at least now we know we're not going to have another Great Depression!

    (Here's some good graphical evidence of that.)

    As funny as that might sound, our national leaders have been toying with such warnings as late as the end of March. So, let's just enjoy the fact that a government budget planner who enjoys a higher level of certainty that the state is not collapsing will be less prone to recommending a slash-and-burn budget-cutting strategy or zeroing out all new spending. That's good news for vendors, who should find customers increasingly willing to at least hear proposals for projects--even if the likelihood of them getting funded is still historically low. That's better than being dismissed out of hand.

    As in the scene from the Jim Carrey movie "Dumb and Dumber" a slim chance is better than none!

    Cheeseheads Are Cutting Consulting Contracts: Proposed Wisconsin Budget Cuts 1% of Contracting

    In order to cut costs and increase transparency, Wisconsin State Senator Julie Lassa (D – Stevens Point) has proposed several provisions regarding state agency contracting procedures for the state budget. These provisions include cutting contracts by 1% over the next two years, or explain why those costs are necessary; prohibiting contracting to cover work done by state employees on furloughs or during a hiring freeze; and reporting in detail the number of contractors working for the state and the costs associated with those contractors. State employee unions claim that state employees are cheaper than contractors, even after factoring in benefits. The Unions therefore feel that if states are trying to save money, the best course of action would be to maintain the state employees.

    The budget has been sent to the Assembly and the Senate, and is awaiting approval before going to Governor Jim Doyle for approval. The Governor has stated that he has not yet made a decision regarding Lassa's approval. He claims that ideally, no people would be furloughed and then have contractors complete the work. However, he warns that a provision of this type could be an administrative nightmare so he will review the provision in detail before approving or vetoing the budget.

    What this means for contractors: Given the clause that agencies may still contract for work in situations where they can prove the costs cannot be eliminated or the project cannot be managed internally, contractors still have the opportunity to win bids. The successful contractors will be those who most clearly lay out their plans and explicitly demonstrate that their levels of expertise are both unmatched by state employees and required for the successful execution of the project. Additionally, contractors who are able to streamline processes and provide cost savings estimates will see results.

    Perks from these provisions are that state agencies will need to provide detailed cost and budget estimates, giving contractors clear direction in how best to design proposals. Furthermore, the increased reporting and transparency on contracting plans and activities will give contractors insight into their competition's activities.

    Cybersecurity Report: More Questions Than Answers

    The much anticipated cybersecurity report (hereafter referred to as the Hathaway report) was released on Friday, and I have to say I was a little underwhelmed. Not that it didn't address a critical issue - it simply didn't have the depth I was hoping to see. But perhaps my impression was skewed by the fact that I read it on the tails of the Center for Strategic International Studies (CSIS), which was a more detailed and straightforward report. While the general flavor of the Hathaway report closely matched the CSIS report, it left me with many more questions that I would love to pose to the new "cyber czar":

  • How much influence will this position really have?
  • According to President Obama's speech, this person will be backed by and have access to his office, but the language in the report leaves room for interpretation. According to the description in the report, the czar will "harmonize" policy and provide unified policy guidance. The position has also been referred to as a cybersecurity "coordinator." Considering the magnitude of the initiative, I'm wondering if this politically correct language is code for a Rahm Emanual-esque, hard-nose leader who will collaborate on the issues but put real muscle behind implementation.

  • Speaking of implementation, who's going to push compliance beyond a FISMA exercise?
  • The report suggests an entity fashioned after the Joint Interagency Cyber Task Force which runs the Comprehensive National Cybersecurity Initiative (CNCI) under the Director of National Intelligence (DNI). According to the report, this entity could be in OMB or elsewhere in the Executive Office of the President (EOP). If OMB gets this directive, it could significantly boost OMB's influence.

    Whether in the lead or not, the Hathaway report suggests that OMB should "use its program assessment framework to ensure departments and agencies use performance-based budgeting in pursuing cybersecurity-related goals." On the campaign trail, President Obama criticized these program assessments, calling for stricter guidelines. Cybersecurity could be a major driver in reconfiguring the Program Assessment Rating Tool (PART) for more comprehensive reviews and better outcomes.

  • What is the play between civilian and military cybersecurity efforts?
  • The report didn't go into much detail about this - possibly intentionally - but it discusses the need to blur the line between civilian and military cybersecurity activities. The cyber czar would "help coordinate intelligence and military policies and strategies for cyberspace." It also suggests shifting from the "artificial" distinctions between national security and other federal networks." Will this open the door for DoD - which receives 45% of cybersecurity dollars - to influence (or even lead) some civilian cyber activities?

    The Hathaway report lays the groundwork for a much needed national cybersecurity strategy. This report offered a high-level view of that strategy, and hopefully we'll see more detail in the coming months. What struck me more than anything is that the effort isn't so much about cybersecurity as it is about driving information sharing across agencies, with S&L/tribal governments and with the public sector. Whether it's green IT, IT consolidation or cybersecurity, it's the information sharing piece that could be the monkey wrench in this initiative. If they can accomplish that, they will have created a government-wide benchmark that could be applied across the board.

    For more discussion about cybersecurity policy, trends and spending, plan to attend the GovWin/ICG Government event "Cybersecurity in the Federal Government" on June 11.