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Committee reviews dozens of out-of-state contracts and DHS plan to modernize EBT to chip cards
Summary
The subcommittee reviewed multiple out-of-state contracts (including a $12.5M BDO contract for rural health grant management and a $17M increase to ACT for pre-ACT testing) and questioned DHS about an EBT transition that will move mag-stripe cards to chip cards to reduce fraud.
The Review Subcommittee considered a lengthy list of out-of-state contracts, spanning financial services, education testing, grant management and cloud migration. Katie Walden noted key items including a Wellington Management amendment tied to compliance with Act 937 (China divestment initiative), a $17,000,000 increase to ACT Education Corp to comply with a recent session requirement to provide pre-ACT testing free to ninth- and tenth-grade students, and a $12,500,000 contract to BDO Government Services for rural health transformation program (RHTP) grant management.
Committee members pressed DHS staff on a new contract for electronic benefit transfer (EBT) services. Mary Franklin, Director of the Division of County Operations at DHS, said the previous EBT contract had reached end-of-life and the state is transitioning to a new vendor and updated functionality. She said the new contract will support moving from traditional mag-stripe cards to chip cards to make benefits less susceptible to fraud, and will include enhanced fraud detection and prevention capabilities. "...we will also be transitioning from the traditional EBT mag-stripe cards to chip cards which are much less susceptible to fraud and stolen benefits," Franklin said.
Representative Laideman raised an estimate that the committee had reviewed roughly $70.8 million in out-of-state contracts versus about $8.3 million in in-state contracts and asked whether procurement law gives in-state vendors an advantage. Jessica Patterson, state procurement director, replied there is currently no legal preference for in-state vendors under procurement law, though national firms may have local presence that provides operational benefits.
The committee voted to review the out-of-state contracts and later reviewed in-state contracts; staff noted OSP had reviewed the contracts for lawfulness. Members asked agencies for additional data on specific contracts and requested follow-up reports where appropriate.
Next steps: agencies agreed to provide requested data sets and justifications to the committee; no final contract awards were approved by roll-call vote in this meeting.
