Single Source Procurement: New York State of Health (NYSOH) Insurance Exchange

Pursuant to New York State Finance Law § 163.10(b), The New York State Department of Health is presenting the following summary of relevant circumstances, and material and substantial reasons why a competitive procurement was not feasible.

The Department of Health Office of Health Insurance Programs (OHIP), Division of Systems, received approval of a Contract Reporter Exemption Request waiver to amend contract number C027853 with Computer Sciences Corporation (CSC) to increase funding to support additional services related to existing system change requests (SCRs). CSC was awarded the contract to design, develop, implement (DDI), operate, and enhance the State's health insurance exchange, now called the New York State of Health (NYSOH). The Funding Availability Solicitation (FAS) for the Office of Health Insurance Programs New York State Health Benefit Exchange (NY-HX) was released July 15, 2011 and the contract was approved by OSC on June 1, 2012. The term of the contract is June 4, 2012 through May 31, 2016.

While operational, the NYSOH is still undergoing a high degree of development effort to accommodate planned phased development and changing regulations. Due to CSC's intricate knowledge of the current NYSOH application and architecture, it is challenging and adds risk to bring in new vendors for system development, including the risk of incurring significant delays that would result from the resultant learning curve. Where reasonable, the Department has sought alternative sources, such as for the notices solution where it solicited interest from State preferred sources. After following the Office of General Services State preferred source process it was found that the sources did not meet the Department's needs.

One notable concern is the enforcement of system performance contractual service level agreements. It is a challenge to hold the current vendor accountable if parts of the system are performed by a third party. The contractor would rightly, in the Department's opinion, claim relief, if not immunity, from many of the service level agreements as it would not be solely responsible for the system. The hardware, the software, the facility are all licensed and owned by the contractor and it is ultimately responsible.

Procurement / Program Name	New York State of Health (NYSOH) Insurance Exchange
Contractor Name(s)	Computer Sciences Corporation, Inc.
Contract Period	6/1/2012 – 5/31/2016
Contract Number(s)	C027853