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Deltek Pulse: Health and human services month in review, February 2015

In February 2015, Deltek saw the release of nearly 1,400 solicitations from the health and human services vertical, on par with the 1,340 solicitations released in January.

Notable RFP releases:

  • The Maryland Department of Labor, Licensing & Regulation (DLLR) released an RFP for the Vermont, Maryland and West Virginia (VMW) consortium's unemployment insurance (UI) information technology modernization projectThe new system will consist of core UI benefit, tax, and appeals software common to all VMW states, while allowing each state to continue to address their own specific goals. Proposals are due by March 26. 
  • The Louisiana Division of Administration Office of Technology Services issued an RFP for the Medicaid enrollment and eligibility system. The Department of Health and Hospitals (DHH) is seeking to implement an automated solution that will support Medicaid eligibility and enrollment processes using modern and lasting technologies. Proposals are due by April 3.
  • The Oregon Health Authority (OHA) released an RFP for HIE/HIT technology consultancy services to support OHA’s efforts to plan, define, develop, implement, and operate a state-level health information technology/health information exchange (HIT/HIE) infrastructure. Proposals are due by March 16.
  • The Alaska Department of Health and Social Services released an RFP for Medicaid redesign and expansion technical assistance services. DHSS is interested in developing a larger strategy for meaningful Medicaid reform that will improve care and health outcomes for eligible Alaskans, streamline requirements of providers, and create a financially sustainable service delivery system.

You can learn more about current procurement opportunities in the GovWin IQ State and Local Opportunities database. Not a Deltek subscriber? Click here to learn more about Deltek's GovWin IQ service and gain access to a free trial.


What's next for P3s for state and local infrastructure?

U.S. Congressman Paul Ryan (R-WI) recently indicated that he thinks the states should have more latitude to use tolling to fund roadways.  As chairman of the House Committee on Ways and Means, Ryan oversees the federal highway trust fund, which is due to go broke in May due to a drop in gas tax revenues.

Of course, where there’s discussion of tolling, discussion of public-private partnerships (P3s) is not far behind.  According to the National Conference of State Legislatures (NCSL), 42 states and the District of Columbia already have tolling authorities in place (as of 2013).  Twenty of those states have privately operated tolling facilities.

However, major toll road concessions tend to be the domain of global mega-corporations with convoluted and (often times) controversial financing schemes.  But, the state and local architecture, engineering, and construction (AEC) market is taking tentative steps toward P3 arrangements for other types of infrastructure.  For example, Indianapolis is finalizing a $1.6 billion arrangement with Paris concern for an integrated justice facility.  This is one of the highest profile contracts in what might be an emerging trend of “social infrastructure” partnerships at the sub-federal levels.  In fact, a whole summit was recently dedicated to the topic.

Senior strategists for AEC firms will need to familiarize themselves with the types of P3 arrangements in play and the risks they entail.  Fortunately, Brookings has done some great work in this area. (See Brookings chart below.)

 Figure 1. Different Levels of Private Sector Engagement in PPP Contracts










However, given the fact that P3 failures can result in billion dollar losses for one party or the other, the debate often gets bogged down in who assumes most of the risk—the contractor or the taxpayers.  Firms that seek to maximize the win-win aspect of P3s should focus on usage projections.  Any public facility with a strong fee-for-service revenue stream (e.g., courts, jails, parking garages, parks, etc.) can be a target for a P3 arrangement.  Yet, the long-term success of any deal will depend on complex usage forecasts based on population growth, crime rates, and so forth.  Any forecast—especially one tied to political winds—looking more than a few years out becomes highly speculative.

Deltek’s Take

  • Even the most elegant and politically savvy P3 arrangement will fail if revenue projections based on overly optimistic usage fees come up short.  Somebody will be left holding the bag.
  • Contractors should seek a P3 relationship where the buyer holds enough risk to ensure honest appraisal of future usage of the facility but not so much that incumbent and future politicians run the risk of being accused of giving away the store to the contractor.  Privatization watchdog groups are becoming ever-more vigilant and effective in their ability to inflict political and legal pain on parties to bad P3s.
  • Taking lessons learned from past P3 failures, an emerging concept of “availability-payment” is intended to balance the contractor’s need for compensation with the public’s need for contractor performance, but the model has only just begun to be tested in the real world.


Solicitation breakdown: Better understanding means better business

Vendors are often confused by the various terms used for solicitations, which isn’t surprising since they often differ per state or locality. However, an important first step in responding to solicitations is to understand the difference between them. Whether a request for proposals (RFP), a request for qualifications (RFQ), an invitation to bid (ITB), or one of the many others, each type of solicitation indicates a different level of engagement by the vendor and expectation by the issuing government. Here’s a rundown of key solicitation types and their subtle differences.

Request for Information

A request for information (RFI) is an inquiry made by a government entity to the vendor community in order to gather information and better understand a product or capability. An RFI is typically released when the government is unsure of which path to pursue and seeks input from vendors about the business environment, best practices, and current solutions. An RFI is often followed by a formal solicitation, but rarely results in a direct contract award.

Request for Expression of Interest

Similar to an RFI, a request for expression of interest (RFEI) is an optional stage that is carried out before a formal solicitation is released. It may be issued in place of an RFI or after an RFI to gauge vendor interest on a potential solicitation. An RFEI can also be used to gather information about a project and possible solutions, similar to an RFI. In some cases, governments may use an RFEI to short-list vendors for a subsequent solicitation. As a result, it is important to clarify with the government what the purpose of the RFEI is to avoid being excluded from participating in the future procurement process.

Request for Proposals

A request for proposals (RFP) typically occurs when a government needs to implement a service or solution, but is unsure of the best way to do so. Through the RFP process, vendors propose their recommended solution and pricing through a detailed proposal. With RFPs, price is not the only consideration for awarding a contract; the government also considers a vendor’s solution, qualifications, previous experience, and any other distinguishing skills. It is important for proposals to be thorough and well defined, as the RFP process allows vendors to set themselves apart from their competition. Negotiations with selected vendors often take place after the proposal deadline, and a contract is ultimately awarded. Governments may also call these types of solicitations requests for offers (RFO) or requests for responses (RFR), but RFPs, RFOs, and RFRs all have the same basic format and are used to meet a business need an entity has.

Invitation to Bid/Invitation for Bid/Request for Bids

Invitations to bid (ITBs), invitations for bids (IFBs), and requests for bids (RFBs) are released when a government entity knows exactly what it wants to procure. This can also be called a request for quotations (RFQ). All of these solicitations include specifications of the government’s desired service or solution – including type and quantity – and an award is typically made based on price. As a result, no discussions or negotiations take place with ITB, IFB, or RFBs; therefore, the procurement cycle from solicitation to contract award is typically much shorter than with RFPs.

Request for Qualifications

Requests for qualifications (RFQ) are often carried out as a pre-qualification process in order to identify qualified vendors for a subsequent solicitation. These pre-qualified vendors are placed on a shortlist that the government then uses for future projects. The government sometimes uses these lists for multiple projects and will reopen the RFQ list to new vendors over a period of several years.

In some cases, governments issue draft versions of solicitations prior to releasing the final solicitation. This is done in order to obtain feedback from the vendor community on requirements, technical components, and scope of the solicitation. It is important for vendors to participate in this stage of the process in order to begin building relationships with the government’s project and the procurement staff, which can be beneficial when the formal solicitation is released and the vendor selection process begins.

You can learn more about current procurement opportunities in the GovWin IQ State and Local Opportunities database. Not a Deltek subscriber? Click here to learn more about Deltek's GovWin IQ service and gain access to a free trial.


State and Local AEC Snapshots: Las Vegas, Nev.

Though cities nationwide felt the one-two punch of the Great Recession and its aftermath, Las Vegas, Nevada, was hit particularly hard. Aside from tourism naturally dwindling in the wake of economic collapse, property values in Sin City and surrounding areas also plummeted, resulting in a high number of residents fleeing the state. With Las Vegas’ biggest draw being casinos and entertainment, the city needed to find a way to bring people back – both to live and visit.

In fiscal year 2014, Las Vegas spent $180 million on construction within parks and recreation, far more than any other construction category (see chart, below). General public building construction ranked second for spending, at approximately $120 million. Please note that this data, provided by the U.S. Census, may include projects developed by various city agencies, though categorized under one label.

Las Vegas has upped the ante with spending on parks and other facilities in hopes of attracting new residents. It’s a smart move considering parks and recreational development often boosts quality of life and, in turn, attracts more people to houses that have dipped in value. The overall idea is to increase demand, which will increase property value and, ultimately, revenue for the city.

While Las Vegas is seen as a tourist destination, the city must also focus on improving infrastructure for non-tourists and businesses. The city is currently investing in infrastructure to attract Major League Soccer (MLS), National Basketball Association (NBA) and National Football Association (NFL) teams. While nothing is guaranteed, making a play to offer more parks and entertainment facilities makes the city more alluring for visitors, residents and businesses alike.

Architecture, engineering and construction (AEC) firms, both in the public and private sector, should bet on Las Vegas in the coming years. Construction is already beginning in the public sector and will only increase if the city lands a professional sports team. AEC vendors would be wise to monitor procurement activity and population increases in Las Vegas, all of which point toward more potential business.

You can learn more about current procurement opportunities in the GovWin IQ State and Local Opportunities database. Not a Deltek subscriber? Click here to learn more about Deltek's GovWin IQ service and gain access to a free trial.



Funding port authorities could create spending chain reaction

On January 29, the American Association of Port Authorities (AAPA) held an event in Tampa Bay, Fla., on shifting international trade routes. One major topic of discussion was the need for more federal funding for the nation’s ports. The infrastructure at ports is reliant on funding to assist with improvements including security, equipment and general components such as roads and entrance facilities.

While the majority of port traffic is goods imported into the United States, exports rely on a long line of infrastructure to move goods to those ports. Approximately 78 percent of all U.S.-made good are shipped via container. If port authorities receive more funding from the federal level, spending will inevitably increase at the local level. Farms, local factories and other consumer industries rely on ports to ship goods overseas, and if the infrastructure at ports around the country were capable of handling more goods and offering quicker shipping, industry may look to increase production.

This chain reaction is a two-way street. Improvements to ports would be felt throughout the architecture, engineering and construction (AEC) industry, as local roads, bridges and other infrastructure will need to be capable of handling large trucks carrying shipping containers. Certain regions have roads designed for trucks, such as the New Jersey Turnpike, which provides access to the third largest port in the U.S. (Port of New York and New Jersey/Port Newark). In the other direction, transportation infrastructure across the country (not just in areas near one of the 149 major U.S. ports) is in dire need of improvements. If state transportation departments can move forward with improvements via federal funds, there will be greater access and safer routes to ports.

Keep an eye out for future analysis on specific port authorities and construction spending as Deltek continues to expand reporting on the state and local AEC market. The graph below highlights construction expenditures within the Port Authority of New York and New Jersey (PANYNJ). While general construction topped $1.1 billion in 2014, spending has remained generally flat within the PANYNJ. Federal funding could provide the much-needed AEC boost to the nation’s ports.

You can learn more about current procurement opportunities in the GovWin IQ State and Local Opportunities database. Not a Deltek subscriber? Click here to learn more about Deltek's GovWin IQ service and gain access to a free trial.


Spotlight cast on child care in wake of block grant reauthorization

Congress brought new life to the federal child care subsidy program when it reauthorized the Child Care and Development Block Grant (CCDBG) late last year. States rely on CCDBG funding to help low-income families afford child care and improve statewide child care operations. On top of this long-awaited reauthorization, President Obama highlighted child care in his 2015 State of the Union address, calling for an increased child care tax credit and investments in the Child Care and Development Fund.

The CCDBG reauthorization has refocused national attention on child care and will prompt states to review their child care programs and invest in new technologies as well as quality improvement strategies to meet new requirements. This storm of activity will surely create new business opportunities for IT vendors.

Where will states invest?

1) Quality improvement - The CCDBG reauthorization calls for an increased investment in quality improvement and adherence to new health and safety requirements. States will be looking for vendors to provide child care licensing and other credentialing services, quality rating and improvement systems (QRIS), as well as provider training and education services. In 2014, Colorado awarded a contract to Berry, Dunn, McNeil and Parker for a next generation quality rating improvement system (Opp ID 79106) to improve the quality rating system and expand the availability and affordability of the QRIS. Other states may also seek to improve their systems in the coming year.

2) Improve core processes - States may seek more integrated technologies to improve intake, payment processing, case management, and time and attendance tracking in order to achieve operational efficiencies. For example, Virginia released an RFI in August 2014 for child care business application solutions, including an attendance tracking system that could interface with existing systems and banking networks, and create a provider Web portal (Opp ID 117252). Expect states to issue similar RFIs exploring how to best improve their child care administration processes.  

3) Coordination with other social services programs - The law requires child care providers to coordinate with early education and care programs. States may pursue efforts to exchange data and share information with programs like TANF, Head Start, and SNAP in order to aggregate data and improve child health and wellness programs. One such effort is being planned in Iowa, where the Early Childhood Office is pursuing an early childhood data system to house information about the operation, participation and outcomes of Iowa’s early childhood system, which includes early learning, family support, health/nutrition/mental health and early intervention for children with special needs (Opp ID 89854).

4) Increased consumer education and assistance - States will be required to provide electronic child care resources where parents can view provider inspection results, the number of injuries/deaths at each facility, licensing and monitoring requirements, and detailed information about the background check process. States may look for child care resource and referral systems to help match resources with individual family needs. In July 2014, Arizona awarded a contract for child care resource and referral services to the Association for Supportive Child Care (Opp ID 118194). 

Analyst’s Take

Quality improvement, business processes, integration and consumer assistance are just some of the areas states will target for investment over the next few years. State applications and plans are due to the U.S. Department of Health and Human Services in June 2015. States may solicit vendors to assist with the planning process and conduct needs assessments. States are not expected to comply with new regulations until FY 2016, but vendors can get a head start in preparing how to market their solutions to states. Vendors who can demonstrate solutions that seamlessly integrate with existing technologies and improve program efficiencies will be attractive to state governments.


State and Local AEC Snapshots: Fairfax County, Va.

The state and local architecture, engineering and construction (AEC) market reached new heights in the public sector last year, with construction put in place (CPIP) reaching $274.4 billion, per the U.S. Census Bureau. CPIP refers to the measure of the value of the construction installed. Looking beyond CPIP to related architecture and engineering consulting, the number would be even greater.

Deltek will begin looking at the AEC market through the lens of specific entities in order to understand how certain markets have evolved and where they are heading. Fairfax County, Virginia, is the subject of our first profile.

Fairfax County’s overall expenditures have increased 3.5 percent over the past nine years, due in part to increasing population and government employment. Drilling even further into the county’s construction expenditures tells a similar story.

The chart below depicts the top categories within the county’s construction spending as well as annual spending since 2011. Elementary and secondary education has consistently been the greatest construction expenditure, from $163 million in 2011, to nearly $180 million in 2014. 

One explanation for the significant rise in construction expenditures since 2011 is increasing population – from approximately 970,000 in 2000, to an estimated 1.13 million in 2013. With population increases comes a greater need for schools and other infrastructure to accommodate more people. While other construction categories showed modest growth, such as water utilities and highways, it doesn’t compare to the growth within education. Fairfax County, with its close proximity to the federal government, will likely see continued population growth and construction needs in widespread markets, not just the education space.

You can learn more about current procurement opportunities in the GovWin IQ State and Local Opportunities database. Not a Deltek subscriber? Click here to learn more about Deltek's GovWin IQ service and gain access to a free trial.


Deltek Pulse: Health and human services month in review, January 2015

Deltek saw the release of 1,340 solicitations from the health care and human services vertical in January – a 13 percent increase from December.

Notable RFP releases in January include:

  • The commonwealth of Kentucky Cabinet for Health and Family Services (CHFS), Department for Medicaid Services (DMS), has a requirement for a vendor to provide a configurable Software-as-a-Service (SaaS) solution for the Kentucky MEMS claims processing and fiscal agent (FA) services, as well as a custom-built encounter processing solution and a decision-support system/data warehouse (DSS/DW) solution. Proposals are due April 6.
  • The Arkansas Department of Human Services released an RFP for information systems support. The incumbent contract with Northrop Grumman expires on June 30, 2015, and the department is seeking maintenance, support and modifications of its various mainframe and client-server computer applications, as well as maintenance, support and development of new Web-based applications. Proposals are due on April 21.
  • The Mississippi Division of Medicaid has a requirement for independent verification and validation Services (IV&V) for the eligibility modernization project to replace current legacy systems – the Medicaid eligibility determination system (MEDS) and Medicaid eligibility determination system expansion (MEDSX) systems. Proposals are due February 27.
  • The Texas HHSC Office of Social Services (OSS) Division would like to procure services to implement HHSC-established business process redesign (BPR) principles and procedures currently operating in a select number of HHSC pilot offices to all remaining offices, statewide. Proposals are due February 23. 

You can learn more about current procurement opportunities in the GovWin IQ State and Local Opportunities database. Not a Deltek subscriber? Click here to learn more about Deltek's GovWin IQ service and gain access to a free trial.


Medicaid eligibility and enrollment systems: Which states still need to modernize?

Modernized and fully integrated Medicaid eligibility systems have proven to be a catalyst for successful enrollment in state and federally facilitated health insurance exchanges. Kentucky, New York, and Washington state have stood out for their top-performing exchanges and high enrollment numbers. All three states rely on integrated Medicaid eligibility systems that facilitate the consumer application process, eligibility determination, and enrollment in Medicaid/CHIP or private health insurance plans.

On the other hand, states with outdated and isolated technologies struggled to enroll new customers, which led to significant Medicaid backlogs, most notably in California, New Jersey, and Tennessee. Now that the feds have finalized 90/10 funding and extended the OMB A-87 cost allocation exception, more states will invest in upgrading their Medicaid eligibility systems and building integrated eligibility systems that incorporate human services programs, including Supplemental Nutrition Assistance Programs (SNAP) and Temporary Assistance for Needy Families (TANF). This analyst perspective will help vendors identify which states have already completed upgrades, which states are currently modernizing, what contracts may be rebid, and where to find potential business opportunities.

Current Landscape

While states have been working to integrate and modernize eligibility systems for more than a decade now, the vast majority of states took steps in recent years to upgrade their Medicaid eligibility systems in preparation for ACA enrollment. In fact, 19 states have issued contracts for upgrades to Medicaid eligibility and enrollment systems since 2012. Some states combined contracts for health insurance exchanges with eligibility upgrades (HIX/IES), including Connecticut, Maryland, Oregon, Rhode Island and Washington, D.C. Other states are still in the early planning stages for eligibility system modernization efforts, and a few states have indicated their intent to release a solicitation in the coming year. Below is a preview of a few of these upcoming opportunities.

Upcoming Solicitations

Louisiana – The Louisiana Department of Health and Hospitals anticipates releasing a Medicaid Eligibility Determination System (MEDS) request for proposals (RFP) this month. The department is designing new enterprise architecture to modernize the state’s Medicaid technologies. The previous contract with Deloitte was worth approximately $29 million (Opportunity ID 99187).

Massachusetts – The Massachusetts Executive Office of Health and Human Services plans to move forward with Phase II of the state health insurance exchange and integrated eligibility system (HIX/IES). The state expects to complete planning by the end of June 2015, and an RFP could be released sometime this fall, at the earliest. A $66 million contract with CGI was terminated in March 2014, and Optum and hCentive have worked to rebuild the system (Opportunity ID 89076).

New York – The New York Office of General Services is seeking a systems integrator for its integrated eligibility system to replace the statewide welfare management system (WMS) – a legacy system first implemented in 1977. An RFP was issued in May 2014 for a business advisory services contractor that will work during the first phase of the IES project; the systems integrator will conduct phase two. Deltek anticipates this legacy system modernization could approach $100 million (Opportunity ID 49905).

Possible Rebids

Tennessee – The Tennessee Department of Finance and Administration may have a requirement for the development and/or maintenance of the TennCare Eligibility Determination System (TEDS). The current contract with Northrop Grumman is behind schedule and the system remains unfinished, which has created months-long delays for Tennesseans who want to apply for Medicaid. Subsequently, three advocacy groups have filed a lawsuit against TennCare. The incumbent contract is valued at $35.7 million (Opportunity ID 117922).

New Jersey – The $83.5 million contract with Hewlett-Packard for maintenance of the Consolidated Assistance Support System (CASS) has been terminated, and a spokeswoman for the New Jersey Department of Human Services said the state and the vendor are still in talks regarding the contract termination (Opportunity ID 105816).

Early Planning Stages

California – The 2014-2015 Governor's Budget Highlights for the Department of Health Care Services requested expenditure authority for a multi-year IT project to modernize the Medi-Cal Eligibility Data System (MEDS). In 2012, a contract was awarded to PCG for IT project planning consulting services, including a feasibility study and advanced planning document (APD) for the MEDS Modernization Project. An RFP for the Medi-Cal Program integrity data analytics is currently in development (Opportunity ID 69871).

South Dakota – The state issued an invitation to discuss and demonstrate (IDD) to review and research existing Medical assistance eligibility systems that comply with the Affordable Care Act (ACA) and preferably have existing or planned capability to support other programs such as SNAP, TANF, Child Care, Low Income Energy Assistance (LIEAP), and Child Support. The Department of Social Services is now planning an RFP for an integrated eligibility system (Opportunity ID 83922).

Washington – In 2013, the Washington State Legislature passed Senate Bill 5034, directing a study of the state’s medical and public assistance eligibility systems and infrastructure with the goal of simplifying procedures and reducing state expenditures. PCG was awarded the contract to conduct the Medical and Public Assistance Eligibility Study, which was published in September 2014. The state may continue to make efforts to modernize the medical and public assistance eligibility systems (Opp ID 104365).

Analyst’s Take

Now that 90/10 funding has been made permanent and the A-87 waiver is extended until December 2018, states will continue to make upgrades to eligibility systems, which could yield significant business opportunities for vendors. Deloitte is the dominant vendor in this space, currently holding contracts in more than 15 states. Other vendors holding contracts in multiple states include Accenture, IBM, Northrop Grumman, KPMG, HP, and Maximus. Contract values for eligibility modernization projects vary significantly based on the size of the state and scope of the project. Contracts for Medicaid eligibility modernization average between $20-50 million, while IES projects that include major system overhauls can exceed $100 million.

Many states that have recently integrated health insurance program eligibility systems may now look to incorporate human services programs, starting the next wave of procurement activity. As Deltek continues to track upcoming eligibility projects, we encourage vendors to keep an eye on the above mentioned projects and expect to see more eligibility-related opportunities thanks to this funding extension.


Deltek Pulse: Health and human services month in review, December 2014

In December 2014, Deltek saw the release of 1,181 solicitations from the health and human services vertical – a 5 percent decrease from November.

Notable request for proposals (RFP) releases in December November include:

You can learn more about current procurement opportunities in the GovWin IQ State and Local Opportunities database. Not a Deltek subscriber? Click here to learn more about Deltek's GovWin IQ service and gain access to a free trial.


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