Professional Memo

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SOLE-SOURCE DETERMINATION FOR SUPPLIES AND SERVICES Memo to File To:

Contract #XXXXX – J&B Software / Lockbox Studio, Extracts and Reports Training

From: Oregon Department of Revenue (DOR), Administrative Services Division, Finance Analyst/Procurement Specialist: Jennifer Jolley Designated Procurement Officer: Stephanie Lehman Date: June 23, 2014 Re: Sole Source Determination pursuant to Oregon Revised Statute (ORS) 279B.075 and Oregon Administrative Rule (OAR) 125-247-0275 for Oregon Department of Revenue Employees to attend Lockbox Studio, Extracts and Reports Training for the creation and maintenance of Sort Patterns for the TMS 2011 Remittance Processing system. Authority to enter into a Sole-Source Contract: OAR 125-246-0170(2)(c)(H) [and DAS Delegation #_____, if any] Estimated Total Value of Contract: $ 40,000.00 Project Name: Background: The Oregon Department of Revenue (DOR) uses proprietary remittance processing software that is solely owned by J&B Software called TMS 2011 Suite. DOR has contracted with J & B since 1997 for the initial installation and various upgrades in 2006, 2008 and 2009. The system uses industry standard transports and J&B Software's TMS 2011 suite of applications. The TMS upgrade uses a one-pass approach on the transport with an intermediate data entry stage that takes place on separate data entry workstations. Various processing options exist for handling different work types and special processing requirements. The software consists of the standard TMS 2011 suite with custom modifications as indicated by the processing requirements of the Oregon Department of Revenue. The general capabilities of the system are provided with the following base modules: TMS Image, Electronic Clearing Suite, eCapture (Remote Data Capture), Transport TMS Image application software and TMS CAR/LAR/IQUA/ICR (Using A2iA). Lockbox Studio is also included in the TMS 2011 Suite.

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DOR would like to attend the Lockbox Studio, Extracts and Reports training offered only by J&B Software. DOR is in the process of upgrading the TMS system and modernizing its core systems and will use this training to learn how to create and maintain Sort Patterns for the upcoming Core Systems Replacement project. The training will also provide DOR with the skills needed for future opportunities so that DOR may build and maintain Lockbox functions for other state agencies. Furthermore, DOR personnel will gain the skills to add the necessary Sort Patterns and Worksources to the TMS Customer Profile, Lockbox definition services and Extract Generator, rather than having to contract with J&B Software each time to perform these functions. The following reasons are why the agency is seeking this procurement method.

DOR intends to award J&B Software a sole source contract to provide Lockbox Studio, Extracts and Report Training for Department of Revenue employees. This software performs a very specialized and integrated function within the existing Banking Units financial systems. J&B Software estimated that the cost for the development of new sort complex sort patterns for the TMS 2011 system costs approximately $24,000 - $30,000. The Department of Revenue estimates it will need 2 new sort patterns and may need to modify existing sort patterns for the Core System Replacement project. Total cost is $40,000. Findings: Market Research Overall finding. DOR researched the Association for Work Process Improvement, the Internet, had conference calls with J&B Software, and had J&B perform testing of our source documents. Our sole source determination is based on the following.

1) The Transaction Management System (TMS) (“Software”), including the Electronic Clearing Suite, is solely owned and developed by J & B. 2) These applications are comprised of proprietary software developed and maintained by J & B. No other company or individual is allowed to resell these applications. 3) J & B is the sole provider of maintenance and technical support for the Software Modifications. Changes, alterations or enhancements to the Software without the expressed written consent of J & B will void all warranty provisions and maintenance agreements. Pursuant to ORS 279B.075 (2)(a): Provide findings supporting your determination that the efficient utilization of existing goods requires the acquisition of compatible goods or services from only one source. J&B Software’s TMS 2011 is proprietary software; this software must work with the character recognition software (A2iA) that the department has in place, also proprietary software and licensed to DOR through J&B, and be fully compatible, tested, and approved by J&B Software. This software must also work with the existing Unisys (proprietary hardware and software) remittance processing transports. The department also has 10 field offices that use a check image processing application that is solely owned and licensed by J&B and this application also is proprietary software. The software is tightly integrated with the main application at DOR’s central headquarters.

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Pursuant to ORS 279B.075 (2)(d): Any other findings that support the conclusion that the goods or services are available from only one source. Any modifications or additions to the existing TMS 2011 system now in production, other than those provided by J&B Software, will void the current maintenance contract that DOR has in place. No other companies or third parties are authorized or certified to provide TMS Image software changes, enhancements, modifications, or support.

Instructions for a Sole-Source Procurement All sole-source procurements must comply with the requirements of ORS 279B.075 and OAR 125-247-0275. These steps are outlined and clarified as follows: I. Initial Determination. The Authorized Agency must conduct research and make a Determination (above). See OAR 125-246-0170 for who is authorized to do this. If the State Procurement Office (SPO) has the authority, it is the “Authorized Agency.” II. Approval of the Determination. For sole-source procurements of Public Contracts exceeding $150,000, the Authorized Agency must obtain the prior written approval of its Sole-Source Determination from the Chief Procurement Officer or delegatee. To make this request, submit on ORPIN a Purchase Request and attach the above Determination. Approvals may be conditioned upon: proper Notice, confirmation that no protests were received, or confirmation that any protests received were resolved. If a protest is not resolved, the Authorized Agency must deliver that protest to the SPO delegatee. III. Notice. The Authorized Agency must place a Notice on ORPIN for a continuous period of at least seven (7) calendar days. SPO is available for consultation prior to this posting. The Notice must include the minimum information listed in OAR 125-2470275(2)(b)(B) and should also be understandable to the public. Here is a list of information that should be included in the Notice: (A) The Supplies and Services to be acquired; (B) The prospective Contractor; (C) The Authorized Agency’s determination, either by: (1) A summary and referral to a contact person for copies of this determination; or

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(2) Attachment of the Determination to the Notice; (D) A request that the public inform the Authorized Agency of any information contrary to that Agency’s Determination; (E) Identification of a contact person at the Authorized Agency who is available to provide copies of the Determination (if not attaché), answer questions, receive requested information, and receive any protests. (F) The date, time, and place that protests are due. IV. Contracts over $150,000. The SPO is the Authorized Agency for Contracts exceeding $150,000, unless SPO has delegated that authority in writing to an Agency. The Agency must submit a Purchase Request through ORPIN and also attach to the Purchase Request its proposed Determination (above) and a draft Statement of Work

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