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Health and human services agencies’ cost effective approaches to good customer service

After reading the strategies published in a recent article about transforming state health and human services agencies, I thought back to a forum I attended earlier this year, and more specifically, a session on procurement and financing methods for modern technology that can transform an agency. Much like the authors of the article, the guest speakers at the conference outlined business and technology challenges and recommended approaches in the delivery of enterprise services. They demonstrated ideas that agencies may find useful in today's fiscal outlook while focusing on 21st century customer service.

During the session, Secretary of Louisiana's Department of Children and Family Services (DCFS) Ruth Johnson talked about the implementation of DCFS' Common Access Front End (CAFÉ) for all programs. Johnson discussed realigning business processes for program and quality integrity, which parallels the article's coverage of business process reengineering to better deliver services. A priority for Louisiana was to increase access and improve customer flow; and even while having to reduce staff, it was imperative to have current staff working efficiently. One of the ways the state increased productivity was having employees work from home. With 80-95 percent of interviews conducted over the phone, there was no need to continue paying for real estate when costs could be cut by closing offices. In fact, she suggested other governments look into using Skype at a lower cost for long-distance service. Ultimately, it was community partners that were the keys to success. Johnson said DCFS currently has more than 200 community partners such as faith based organizations and food banks. However, she was quick to point out that the agency contracts with community partners and provides no financial support.

Howard Hendrick, director of the Oklahoma Department of Human Services (OKDHS), talked about the department's successes with quick wins for IT. He playfully asserted that those quick wins took 1-3 years, but that can be considered pretty fast for IT. He spoke about how the department changed the application process for child care electronic benefit transfer (EBT) services and a child care time and attendance project where parents can swipe a card, like a Supplemental Nutrition Assistance Program (SNAP) card, and they can tell who's there and for how long. This required process reengineering and paperless claims with internal controls to reduce fraud. In both of these projects, he said focus was on creating those quick wins for all stakeholders involved. Hendrick also touched on OKDHS LIVE, a transfer system from San Francisco that is an online notification services for SNAP, Medicaid and child care. This system gets the Oklahoma Health Care Authority and OKDHS closer to the "no wrong door" aspect of human services. He also spoke briefly about MOSAIC, an enterprise human services project, and the need for burdensome, but complex legacy systems to be replaced. He joked about pulling people out of nursing homes to fix COBOL code anytime there are program changes.

When asked where the money comes from for these types of projects, Johnson reiterated how the state closed down offices and relied on Temporary Assistance for Needy Families (TANF) emergency funds drawing down $40 million in FY 2010. Oklahoma used TANF funds as well as savings from fraud and abuse detection efforts. Hendrick also pointed out that source code was free for the OKDHS initiative and that once agencies have a full year of operation, their operating costs should be less than what they were before implementation.

Another notable take away from this session was Rick Friedman, director of the Division of State Systems at the Centers for Medicare and Medicaid Services, talking about standards for eligibility enrollment systems for Medicaid. Hopefully the innovator states will quickly build the modular systems so that other states may follow by sharing, leveraging, and reusing the Medicaid technologies. This allows for more multistate activities since rules have been largely standardized under the Affordable Care Act (ACA) for eligibility, which can foster states working together on a similar approach. States can look to sharing services through cloud or open source because not all states need to build from the ground up. When asked about the reality of non-innovator awardees abilities to meet deadlines while the early innovators complete their models, Friedman responded that if they use a national repository, states don't need to wait around for the innovator states to finish. The innovator states can begin sharing sooner rather than later, and other states can begin adopting the transferable technologies.

One theme throughout the three presentations was garnering political will within agencies to share across programs. Johnson said it's typically the internal folks thinking they can't share with others, and her answer to them is that, technically, if there is a business need to share, you can. Hendrick said leadership needs to be committed to the greater good of delivering good service, not just service, to the public. Friedman concurred and said senior leaders and middle management need to have strong belief in what they are doing.

After all, these systems will need to tie into states' human services programs, community organizations, health information exchanges, electronic medical records, and public health. Interoperability is more than a buzzword. It is an approach that health and human services agencies believe in. While integration is enabled though IT solutions and services, states have to optimize these investments through non-IT such as sound business strategies, leadership support, and leveraging labor and real estate savings to be more cost effective. Technology concepts that impact this market today include shared enterprise capabilities and a focus on efficiency. Vendors have to accommodate states in providing these solutions, but have to also prove them to be quickly self financed. States may be more likely to identify and consider more transfer systems as viable for value. Ultimately, states and vendors need to build partnerships that focus on the outcome of providing a first-class customer experience by focusing on automation and making the interaction between government and citizen a pleasant one.

FEMA and FCC announce a new PLAN to keep the nation safe

The Federal Communications Commission's Emergency Alert System (EAS) is most commonly identified by the phrase "This is a test ..." and a series of loud beeps. However, beginning in 2012, the EAS will take on a new form. Currently, the EAS provides alerts through television and radio, but has no way to notify people away from those mediums. A pilot project to drastically increase the availability of alert information and align the system with how many people consume most of their information was announced in New York City last week. Beginning this year, citizens and visitors to New York state and Washington, D.C. will be able to receive important alerts to their mobile phones. This new addition to the EAS, frequently known as the Personal Localized Alerting Network (PLAN) and formally known as the Commercial Mobile Alert System (CMAS), will provide text messages accompanied by a special tone reserved just for the system, and likely a special vibration with alert information as well.

PLAN will be run by the FCC and FEMA with the assistance of local, state and national government officials who will provide alerts for their specific area. The officials will send the alerts to PLAN, which will authenticate them as coming from a legitimate source and then pass them to wireless carriers who will send the messages to recipients in affected areas. The wireless carriers will have the ability to push the alerts regardless of call volume as they will take priority over all other calls or texts. This will ensure people get the information they need even when systems are overloaded, as was the case directly following the September 11, 2001 attacks.

At present, AT&T, Sprint, T-Mobile and Verizon have signed up to participate in the system and have begun to develop phones with a special chip that will be needed to utilize the network. Other wireless carriers have until April 2012 to activate PLAN technology if they intend to participate in the network. Many new smartphones are already capable of handling PLAN communications, and all phones released in 2012 will contain the technology. Network providers will automatically sign their customers up to receive the free text alerts and provide them with an opt-out feature so that all alerts other than those issued by the president can be blocked. While the FCC and FEMA hope the system will never have to be put to use, both agencies want to ensure they have the capability to notify the maximum amount of people in the most efficient way possible should the need arise.

The alerts will be broken down into three categories: those issued by the president, which may consist of information on specific terrorist or other national threats; those that provide information on direct threats to the community's safety, such as severe weather and natural disasters; and Amber Alerts that provide information on missing children. These alerts will not only send information on the nature of the threat; they will also include any action that should be taken. These alerts will be sent to anyone in the affected coverage area regardless of area code or where they purchased their phone. This means that anyone visiting New York state would have the ability to receive alerts issued for the city.

GovWin'S TAKE:

There are still many questions yet to be answered about the system for both consumers and vendors. One of the main ones from the consumer standpoint is whether the new phones that include the PLAN chip will come at an increased price. It is likely that it will cost the wireless companies additional funds to manufacture and insert the chip, and it is equally likely that these costs will be passed on to consumers. The real question is how much the additional cost will amount to. For vendors, this system offers a myriad of opportunities as it provides communities across the country with incentive to upgrade their wireless communications systems. Only phones that are turned on and have service will be able to receive text messages, which means there is an increased need to ensure so-called "dead-spots" in coverage areas are filled.

Communities may be more likely to approve the placement of cell towers to increase the coverage area if the safety of citizens is at stake. In some areas like underground transit systems where coverage from cell phone towers cannot reach, routers may be placed to ensure passengers can still receive service. Vendors who focus on expanding current coverage models are likely to benefit from the widespread implementation of this system. This system also represents a unique public-private partnership (PPP) between wireless companies and many forms of government. Vendors should be on the lookout for further PPPs that allow them to pair with the government and be at the forefront of emerging technologies.

Illinois awards 10 year, $114 million Sole Source contract to Motorola

Yesterday, the state of Illinois announced it received final approval from the Sole Source Hearing Panel to move forward with a 10-year, $114 million sole source contract with Motorola for the continued operation of the state's STARCOM 21 public safety radio system. The contract will extend from September 28, 2011 to September 27, 2021, and will have a full execution value of $114,092,000.

STARCOM21 was commissioned by the state of Illinois as a groundbreaking public/private partnership with Motorola. It is a statewide 700/800 MHz P25 compliant digital trunked public safety voice radio network that is open to all Illinois public safety and public service agencies, and enables seamless interoperable communications among state, local and federal government users. It takes advantage of shared system resources and economies of scale and has a public safety grade of service. It is the only network of its kind in Illinois.

The STARCOM21 network is owned and operated by Motorola. The network currently services more than 18,000 subscribers from various state, local, and federal government and nongovernment entities. The goal of this procurement was to allow the state to award a master contract to allow the continued use of and to help facilitate the maintenance, improvement, and growth of the existing STARCOM21 network.

In its sole source justification, the state noted that no other statewide system exists in the state and a new network would have to be built to provide such a service. They also stated that continuing the use of the STARCOM21 network will enable the state to completely leverage its original investment in the network and maintain the current infrastructure and equipment to its projected end of life and likely beyond. The cost of a new system has been estimated at more than $300 million for a network of this size and complexity. That price would not include the network connectivity and service fees required to use the new network or the associated transition costs. This compares to the $5 million a year the state estimates spending on service fees and network connectivity to continue using the STARCOM21 system. An additional $6-7 million a year is estimated to be spent by non-state agency subscribers on service fees.

When asked if alternatives were evaluated, the state said "No" and that CMS Knowledge Management performed a search that revealed there are no networks in Illinois that are comparable in terms of size, complexity, capability, and technology to the STARCOM21 network. This sole source contract was originally brought up in the end of 2010, at which time Harris Corporation submitted a formal contract protest. The protest was eventually denied and thus allowed the state to move forward with this contract.

This contract, ironically enough, coincides with a recent notice of inquiry submitted to the Federal Communications Commission (FCC) by Fred Upton (R-MI) and Henry Waxman (D-CA) of the House Energy and Commerce Committee. Upton and Waxman wrote a letter to FCC Chairman Julius Genachowski stating that they found reports of Motorola having an 80 percent share of the public safety narrowband equipment marketplace "troubling." Their main concern was over the impact this would have on the eventual build out of public safety LTE systems. Genachowski has requested additional time to address this inquiry.

GovWin Take:

This is a story we are seeing all across the country. Motorola continues to dominate the public safety radio market, and agencies are making the case to purchase or extend contracts with Motorola. On top of this, agencies are doing their research to ensure they are getting the best price when it comes to large communication initiatives. In order to win more of these dollars, vendors will need to reevaluate their pricing models and cost points. They will also need to ensure that current customers are completely satisfied with their systems. Agencies talk to one another and pass on judgments to their brethren, so it is important that vendors make a good name for themselves not only in cost, but in planning and implementation.

When implementing $100 million+ radio systems, vendors need to ensure that they have properly quoted agencies and have established realistic implementation strategies and timelines. The Oregon Wireless Interoperability Network (OWIN) is a prime example of the dangers in implementing large-scale radio systems. A lack of proper planning and budgeting has put the OWIN project in what seems to be a never-ending tailspin. Vendors need to make sure that they have built a good working relationship with agencies and show commitment to system development and deployment. With budget and staffing cuts, it is more imperative that vendors provide additional resources to ensure the agency is meeting deadlines.

Recap of 2011 NASCIO Midyear Conference

I had the opportunity to attend the 2011 National Association of State Chief Information Officers (NASCIO) Midyear Conference on May 5 and 6, 2011. It was a wonderful opportunity to meet with vendors and state chief information officers and hear their take on past, current, and future technology undertakings.

The keynote address was given by John O'Leary, a research fellow at Harvard's Kennedy School of Government and coauthor of "If We Can Put a Man on the Moon: Getting Big Things Done in Government." O'Leary spoke of the challenges in achieving goals in government, specifically in the IT space. He addressed several problems that keep technology initiatives from succeeding, including the fact that government policies and practices have not kept pace with technology. He also noted the possibility of failure is not taken seriously. Following the keynote address was a general session titled "New Leadership Priorities: Moving Beyond the Magic 8 Ball." Virginia Chief Information Officer Sam Nixon, Jr. moderated a panel that included representatives from the National Association of State Budget Officers (NASBO), the National Conference of State Legislatures (NCSL), and the National Governors Association (NGA). According to NASBO Executive Director Scott Pattison, modest budget growth will be the new norm for states, at least in the foreseeable future. The representatives from NCSL and NGA echoed similar sentiments, with Dan Crippen, Executive Director from NGA, stating that while spending is up, it probably will not return to pre-recession levels until at least 2014.

The first session I attended was titled "Walk the Talk: Successful IT Consolidation." The panel was facilitated by Utah CIO Stephen Fletcher and was comprised of CIOs from Ohio, Pennsylvania, Tennessee, Michigan's chief technology officer, and Alabama's director of information services. Stuart Davis, Ohio CIO, discussed his state's successful email consolidation, stating that the end result was a hybrid solution with both on-premises and cloud email solutions deployed. Dan Lohrmann, Michigan's Chief Technology Officer, discussed Michigan's agency and data center consolidations. He advised the early engagement of politicians and executives to help things run more smoothly. Lohrmann also said the people factor has to be considered. In any consolidation, employees will want to make sure their positions are safe and that they are receiving services equal to those provided prior to the consolidation.

The final session I attended, titled "Shared Services, No Limits," provided insight into the benefits of connecting the dots not only within departments, but across departments. One concept addressed was multistate shared services. Both Montana and Washington state are participating in multistate shared service projects. Montana is currently part of a multistate procurement for GIS cloud computing through the Western States Contracting Alliance (WSCA). Multiple states are currently maintaining electronic records in a facility in Cheney, WA. Washington State Archives Director Jerry Handfield emphasized the importance of maintaining electronic records and said preservation leads to access, and one isn't possible without the other.

Thursday proved to be a full and informative day at the NASCIO conference. Friday, though only a half-day event, provided a great deal of information as well. The morning session, "Control Cost and Streamline Operations," was moderated by GovWin's State and Local Industry Analysis Manager Chris Dixon. The session addressed cost-controlling methods used by several states including Pennsylvania, Virginia, Delaware, Oklahoma, Maine, Alabama, and North Carolina. Many of the methods involved consolidating agencies and back-office functions, as well as reducing travel expenses by hosting online meetings and utilizing various telecom options. Other solutions included reducing wireless phone costs by reducing the number of devices used by state employees. Delaware instituted a personal digital assistant (PDA) reduction initiative that allows employees to be reimbursed for data costs on personal devices when used for work purposes instead of issuing employees an additional device strictly for work.

The final conference session was titled "Taking the Nebulous Out of the Cloud: State Examples and Adoption." The major takeaways from this session involved the benefits of moving services to a cloud. One of the benefits laid out by the panel was the cost savings of automation. Michigan's Chief Cloud Architect Bob McDonough emphasized the benefit of automation as processes that involve human touch tend to cost more. Another benefit revolves around the recruitment and retention of employees. Moving monotonous processes to a cloud can leave the challenging and satisfying work to the employees.


The NASCIO Midyear 2011 Conference was an incredibly informative event that provided insight into what is next for states in the coming months and years. The prevailing theme of the event seemed to be consolidation of various services and agencies as a method of streamlining and cutting costs. Many states are already working on these consolidations, and it seems many more will follow.

Fairfax County Public Schools approves $252M for architecture, engineering, construction and IT

Fairfax County Public Schools (FCPS)proposed accelerating the renovation schedule for many schools in its FY 2012-2016 Capital Improvement Program (CIP) due to lower construction costs. Favorable market conditions and lower than estimated construction bids have made it possible for FCPS to save more than $31 million over the past three years, enabling the school system to begin planning and construction on many projects sooner than expected. Renovations for schools in this year's CIP accelerate from one to three years.

The five-year capital requirement totals $804.9 million or roughly $161 million per year. It represents roughly 45 percent of the $1.8 billion total CIP cost for FY 2012-2021. Funds approved in the 2009 School Bond Referendum and previous referenda will address approximately $199.4 million of the five-year requirement, leaving a balance of $605.5 million unfunded. The Fairfax County Board of Supervisors approved the 2011 School Bond Referendum on May 10, 2011 for $252.7 million.

Breakout of the approved referendum allocations is as follows:

Capacity Enhancement Subtotal: $13,688,696
Elementary School Renovation Subtotal: $97,744,388
Middle School Renovation Subtotal: $46,468,958
High School Renovation Subtotal: $96,225,065
Infrastructure Management Subtotal: $26,175,000

Out of the $26.1 million for infrastructure management, $4 million was approved for technology upgrades. Below is a listing of all schools with proposed renovations:

The FY 2012-2016 CIP proposes the renovation of 21 elementary, three middle, and three high schools, along with planning funds for one elementary, one middle, and one high school. The five-year cost of renovations is $649.7 million, of which $533.2 million is unfunded. The CIP also includes capacity enhancements at eight elementary schools and one middle school as well as funding to support the possible expansion of full-day kindergarten.

Eighty percent of the FCPS CIP funding is dedicated to renovating existing facilities. Twenty percent of the CIP funding is dedicated to new construction and infrastructure upgrades such as roof replacements; heating, ventilation, and air conditioning upgrades; security enhancements; and technology infrastructure.

Highlights of FY 2012-2016 five-year capital requirements

New Facilities:

A summary of the 5-year new construction projects follows: The 5-year cost of new facilities is $14.9 million, all of which is funded with approved bonds.

Capacity Enhancement

CIP proposes funding of $75.4 million for capacity enhancements. The total 5-year requirement for capacity enhancements is $69.7 million, of which $30.2 million is unfunded.


This 5-year CIP proposes the renovation of 21 elementary, three middle, and three high schools. Planning funds are included for one elementary, one middle, and one high school. The 5-year cost of renovations is $649.7 million, of which $533.2 million is unfunded.

The Current (Five-Year) Renovation Requirement Elementary Schools: $313.7M Middle Schools: $92M High Schools: $244M Total = $649.7M

Special Program Facilities

The CIP proposes funding of approximately $11.5 million to support adult education and full-day kindergarten, of which $9 million is beyond the 5-year CIP requirement. The total 5-year requirement for special program facilities is $2.5 million, all of which is funded with approved bonds.

Infrastructure Management

The following chart identifies funding proposed to continue implementation of several ongoing infrastructure programs that protect FCPS investments of approximately $4 billion in existing facilities.

Five-Year Infrastructure Management

Technology Infrastructure: $10.2M
Americans with Disabilities Act Improvements: $6.2M
Roof Replacement Program: $18.8M
Athletic Infrastructure: $6.3M
HVAC Replacement Program: $19.0M
Security Enhancements: $2.6M
Asphalt Paving: $5.0M
Total = $68.1M
Unfunded = $42.1M

For the complete Fairfax County FY 2012-2016 advertised capital improvement plan (with future fiscal years through 2021), please go to the Fairfax County Department of Management and Budget website. For vendors, interested in doing business with FCPS, please visit the FCPS Office of Procurement Services. Specific projects for design and construction can be found under the Department of Facilities & Transportation Services. Architectural & Engineering Contracts are administered by the Department of Facilities and Transportation Services, Office of Design and Construction Services. A&E Firms are solicited for the design of Capital Bond Improvement Projects every two years. This advertisement is posted in July prior to the November vote for bond approval. A&E firms are required to submit GSA 254 and 255 regarding firm's capabilities to be considered for future projects. A Selection Advisory Committee will select architects most appropriate, and oral interviews are conducted. Upon completion of successful negotiations, award is recommended to the Fairfax County Public School Board. For information on the process of introducing technology into the FCPS, please refer to the FCPS Technology Plan

The New Wave of Eligibility Systems

In case you missed the boat, the Affordable Care Act (ACA) includes several key technology pieces that states must implement by 2014. One with noticeable emphasis is designing streamlined, consumer-friendly eligibility and enrollment systems for health insurance exchanges, Medicaid, and the Children's Health Insurance Program (CHIP). To help states, the Centers for Medicare and Medicaid (CMS) proposed new federal funding that would be available to all states to streamline and upgrade their Medicaid eligibility systems. After meeting qualifying conditions, eligibility systems will be eligible for an enhanced federal matching rate of 90 percent for design and development of new systems, and a 75 percent federal matching rate for maintenance and operations. The current match rate for eligibility systems is 50 percent. The enhanced funding will be available until December 31, 2015, and the 75 percent matching rate will be available beyond that date, assuming qualification conditions are continually met.

The funding can apply to standalone Medicaid systems or integrated eligibility systems, but only for the portion of the costs that can be directly attributed to Medicaid. CMS estimates 25 states will be looking to upgrade or replace its respective Medicaid eligibility system. Kansas was already in the process of procuring and implementing a new Medicaid eligibility system (K-MED) when the ACA became law, while Iowa recently wrapped a request for information (RFI) process while planning for its integrated eligibility project. Other states looking to upgrade their Medicaid eligibility systems include Georgia, Louisiana, Kentucky, South Carolina, Vermont, Rhode Island, Illinois, Alabama, Arkansas, Maryland, Virginia, West Virginia, and Wisconsin.

Vendors should be aware that states looking to apply for funding are encouraged to invest in modular systems that minimize duplication, effectively reuse available infrastructure, and produce a seamless experience for the customer. Strong emphasis is being place on increasing Medicaid information technology architecture (MITA) maturity. With an estimated 36 million newly-eligible Medicaid recipients, it is essential that states have modern and cost-effective eligibility systems. Vendors wanting to help shape future policies need to work with those agencies and states invested in creating a conceptual human services information architecture that can be shared among state programs. Interoperability may be the buzzword of the moment, but the idea of devising innovative ways of breaking down barriers between programs to place clients at the center of services is the future of human services.

Make sure to follow GovWin's Health Care and Social Services Team on Twitter @GovWin_HHS or connect with us through LinkedIn. Click here for an analyst perspective diving deeper into the eligibility topic (log-in required)!

GSA Schedule 70 contract use by state and local governments keeps positive growth through 2010

GSA Schedule 70 purchases by state and local governments and public educational groups grew 7.5 percent in fiscal year (FY) 2010 to $608 million (Table 1), according to a new Deltek report. In addition, Schedule 70 orders for the first quarter of fiscal year 2011 increased about 4 percent to $144.9 million compared with $139.5 million in the corresponding quarter of FY 2010. The study, "GSA Schedule 70 Use by State and Local Governments," is issued annually by Deltek's GovWin business unit and analyzes vendor-reported volume data from the GSA contracts.

Table 1 GSA Schedule 70 Orders by State and Local Governments

Again, in 2010, Schedule 70 state and local orders were driven by wireless services and perpetual software licensing. The report details the top five Schedule 70 state and local sales contractors by volume in FY 2010, which were Verizon Wireless, Oracle, DLT Solutions, Mythics and CDW-G.

The National Association of State Procurement Officials (NASPO) and its sub-organization the Western States Contracting Alliance (WSCA) also maintain contracts for IT use by state and local governments in addition to non-IT offerings. Table 2 is a view of annual sales through WSCA's Personal Computer contracts. While Schedule 70 use by states and localities has been a growing strategy, the WSCA PC contracts were popular from the go and have grossed more than $1 billion annually since 2002. The current set of WSCA PC contracts includes 23 suppliers and the participation of 45 states.

Table 2 WSCA Personal Computer Contract Sales to State and Local Governments

So, despite the economic downturn and state budget crisis, the swell of popularity of cooperative purchasing vehicles like GSA Schedule 70 and WSCA PC contracts continues to rise. This can be accredited to the administrative and cost savings offered by purchasing consortia. Interestingly, the budget crisis encountered by most states has lately acted as a supportive and disruptive driver in the use of cooperative purchasing vehicles. Use is driven by increased scrutiny of business practices and the demand for administrative and cost efficiencies in all functions of government. Purchasing departments are just as challenged as other departments trying to find savings, and many are considering cooperative purchasing vehicles to attain those goals. The political concern is that national cooperatives can potentially direct state spend outside of that state's borders and away from the local vendor pool. In the end, this means the cooperative suppliers and purchasing officials have to make clear the cost savings and local impact of their contracts.

GovWin Pulse: Justice, Public Safety and Homeland Security April Review

Taking a look back at the justice, public safety and homeland security markets for April, there are a few trends that seemed to carry over from March, along with the emerging trend of agencies holding back large projects until the next fiscal year. The carry-over trend is prescription drug monitoring programs (PDMPs). With only a handful of states still without a PDMP in place, it is a significant development to see the few stragglers getting closer to statewide programs.

The state of Delaware issued a request for proposals (RFP) for its own PDMP, and with responses due in late May, the state expects to have a contract in place by June 2011. As mentioned in last month's recap, Maryland is on the cusp of passing legislation that would be sent to the governor for his signature. By most accounts, the law is expected to pass, and the state can then move forward with an RFP of its own. Georgia is also nearing legislation with a bill passed in both houses and awaiting the governor's signature. Florida also seems to be on track to move forward with its PDMP after a contentious battle over legislation. Soon, nearly every state will have implemented the important program.

Last month, GovWin attended and spoke at the New Jersey National Emergency Number Association (NENA) conference, and learned a bit more about the state's plans for a next generation 911 (NG911) system. A recently-enacted law created the Statewide Public Safety Communications Commission in the Office of Information Technology (OIT), and this commission will discuss the future of NG911 and radio interoperability throughout the state. Due to the fiscal climate of New Jersey, it is unlikely the state can afford to assist each individual public safety answering point (PSAP) with upgrading to a NG911 compatible system. Many states want to move to NG911, but often don't have the money nor want to spend the money to get there. In Kansas, a statewide NG911 project is moving forward with a pilot at three PSAPs, but each individual PSAP must pay for the upgrades to allow for an NG911 network. Like New Jersey, a 911 coordinating council was created to oversee these efforts.

Despite economic woes, large-scale interoperability projects continue to move forward. Both Texas and Illinois appear to be moving closer to new radio systems. While the system in Texas is actually for the city of Dallas, it is a project that has been ongoing for several years and appears to be close to being awarded. It is estimated that the cost of the system will reach $187 million. Illinois, which is implementing a statewide system, estimates the cost at $114 million, nearly $75 million less than the city of Dallas' system. Illinois appears to be sole sourcing its system to Motorola, pending several hearings.

The overarching trend evident across the country is keeping projects on hold. GovWin has seen this trend in the past, specifically after the economic collapse and start of the country's recession, but this seems to be a bit different. With most localities following a fiscal year that ends on June 30, 2011, agencies are waiting until the new fiscal year starts before bidding on some of the larger projects. Some localities may look to bid out these projects in late 2011 and hold off on awards until fiscal year 2013, or until a long-awaited grant is awarded. Either way, localities are finding ways to postpone certain projects while moving ahead with others. Prioritizing different projects will be essential until economic conditions improve.

A lot of big projects were awarded in April, but an even greater number of projects remained on hold. Though agencies have found funding for large interoperability projects planned and budgeted for years, they have held up mid-level projects like computer-aided dispatch upgrades and other systems that may be perceived as lower priority. Soon, nearly every state will be equipped with a prescription drug monitoring program, which is long overdue. As the public safety market moves closer to the next fiscal year, vendors may begin to ready themselves for a big FY 2012.

North Carolina's Proposed FY 11 - 13 Budget: A Vertical Overview

North Carolina Governor Beverly Perdue presented her proposed biennial state budget (FY 11 - 13) on February 17, 2011. Like most governors, Perdue's budget focused on cutting government spending and creating jobs. Despite the fact that North Carolina is one of eight states retaining a Triple-A credit rating, it is also one of 31 states facing a consecutive fiscal year with a double-digit deficit percentage ($2.4 billion, or 12.7 percent). Along with the absence of federal stimulus dollars to act as a safety net, North Carolina is projecting deeper spending cuts this year compared to last.

Table 1: North Carolina Budget Comparison Across FY 11 - 13

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Source: GovWin and NC Governor's Proposed FY 11 - 13 Budget

Compared to FY 10 – 11 spending, Governor Perdue's FY 11 - 12 proposed budget cuts target community development (-12.05%) and social services (-10.35%) verticals. Many of these cuts translate into layoffs and the elimination or reduction of 176 state programs and commissions. Perdue's FY 11 - 12 budget increases spending in economic development (133.75%) and public finance (60.15%) with the State Treasurer, Commerce, and Labor Departments seeing the biggest bumps.

Along with Perdue's strategic cuts and increases in funding, she also recommends streamlining North Carolina's government to operate more like a private business. This means "efficiency" becomes a defining and active term to ensure all angles of attack on the state's deficit are deployed. Perdue signed an executive order in March 2011 proposing the consolidation of 13 state agencies into eight, which included transferring the Office of Information Technology Services to the Department of Management and Administration. The state is also considering the privatization of some information technology services, privatization of portions of health care services, and an overhaul of the state's procurement system to close the deficit gap.

Figure 1: North Carolina Budget Vertical Comparison Across FY 11 13

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Source: GovWin and NC Governor's Proposed FY 11 - 13 Budget

The move toward IT privatization would add North Carolina to the roster of states including Virginia, Georgia, and Texas that have partnered with private vendors to manage their state's IT services. The release of the state's much anticipated third party IT assessment in late April 2011 supported the argument for the cost effectiveness of outsourcing some of the state's IT needs (read more on INSA recommendations here and here).

Technology spending (comparing the FY 11- 12 budget to the FY 10- 11 budget) experienced the largest increase in the PK-12 education vertical (79.42%) and a minimal bump in the higher education vertical (1.13%). Contrarily, Perdue's proposed FY 11- 12 budget is a bit heavier handed when it comes to IT spending cuts, notably in the social services (-49.54%) and public finance (-35.61%) verticals.

GovWin projects that due to the state's consolidation and privatization efforts, smaller department or agency specific solicitations will wane, while larger statewide solicitations will increase. These larger value solicitations will attract steeper competition from larger vendors or vendor partnerships. Also, as the state moves toward what is likely to be significant IT privatization, non-specialized IT consulting bids could decrease. Lastly, as North Carolina's purchasing process is centralized, it is expected that the variety of IT hardware and software manufacturers may become smaller and more standardized.

(Subscription to GovWin State & Local Industry Analysis required.)

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GovWin Pulse: Health Care and Social Services April Review

Like the past few blogs detailing state health care and social services activity, this one is dominated by news surrounding health insurance exchanges. Though an overall slow month for state and local procurement activity, April was rife with news about health insurance exchanges.

Most notably, and perhaps most surprisingly, Oklahoma announced it would return $54.6 million in federal grant funds, making it the largest reform grant ever rejected by a state. This decision on the part of Governor Mary Fallin represents the latest in a series of measures by state leaders designed to undermine federally-mandated health care reform. However, unlike some states, Oklahoma will still work to develop a free-market equivalent of the exchange. Though the "private enterprise network" will use a combination of state and private resources to develop functionality similar to that of the Affordable Care Act-mandated exchange, two questions remain: will this satisfy the federal government, or will these actions lead to a federally-operated exchange with the state, and thus nullify the state effort to usurp federal mandates?

Aside from the lingering doubts and questions about state health reform, GovWin saw the following health care procurement activities April:

  • Minnesota - The Department of Human Services requested $2.5 million for FY 2012-2013 to design, develop, and install a streamlined eligibility determination system to interface with the health insurance exchange and various social services programs.
  • Iowa - The Department of Human Services released a request for information (RFI) on April 26, 2011 for an electronic medical record incentive program administration tool. Responses are due by May 16, 2011.
  • North Carolina - The North Carolina Health Information Exchange (HIE) released a request for proposals (RFP) on April 29, 2011 for a technical services vendor for the HIE. Proposals are due by May 20, 2011.
  • Massachusetts - The Massachusetts e-Health Institute confirmed plans to release an RFP for a statewide health information exchange solution integrator. The RFP released is tentatively scheduled before the end of 2011.
  • Connecticut - The Department of Information Technology released an RFP for the Health Information Technology Exchange of Connecticut (HITE-CT) system services on April 14, 2011. Proposals are due by May 13, 2011.

On the social services front, GovWin reported the following activity in April:

  • Hawaii - The Department of Education released an RFI on April 7, 2011 for child nutrition program technology services. RFI responses were due on April 19, 2011.
  • Tennessee - The Department of Health released an RFP for Women, Infants and Children fiscal intermediary services on April 11, 2011. Proposals are due by May 5, 2011.
  • Connecticut - The Department of Social Services plans to replace the eligibility management system (EMS) by 2014. The department will also release a planning solicitation for the EMS replacement project.
  • Maryland - The Department of Labor, Pricing, and Regulation will use $5.5 million in federal funds to purchase and implement a commercial-off-the-shelf Maryland benefit payment control system.

Award highlights for April include:

  • South Carolina - The Department of Health and Human Services awarded a contract to Health Management Systems, Inc. for $10.5 million for the National Correct Coding Initiative and other prepayment edits.
  • Indiana - The Department of Administration awarded a contract to Deloitte Consulting for $999,950 for the health care reform exchange initiative RFI.

Over the next month, GovWin anticipates further planning activities and passage of governance legislation establishing health insurance exchange. It is also clear that the expected, exemplified by Oklahoma's recent decision, will continue to dominate the discussion of state health reform activity. With anticipation and a healthy dose of consternation, we look forward to these developments and the impact they have on the health care and social services market.