Kyle Janek, M.D. Executive Commissioner VENDOR CONFERENCE

1. Kyle Janek, M.D. Executive Commissioner VENDOR CONFERENCE Design, Development and Implementation Services for Enterprise Data Warehouse/Business Intelligence Solution RFP No. 539-13-0018 February 12, 2012

2. Welcome Introductions Steve Bailey & Alice Hanna, Enterprise Contract and Procurement Services (ECPS) Rick Allgeyer, Director of Strategic Decision Support Clark Snodgrass, CTO Raj Nayak, Enterprise Data Warehouse (EDW) Program Manager Megan Maldonado, Contract Manager Max Werkenthin, Office of General Counsel Larry Fisher, Financial Services Sherice Williams, Historically Underutilized Business (HUB) Housekeeping Items

3. Vendor Conference Agenda • Business and Technology Sponsors • Procurement Activities • RFP Overview • Question Submittal • HUB Overview • Question Submittal ========================== • Break ========================== • Preliminary Responses to Questions • Closing

4. HHSC Procurement Roles • ECPS - Responsible for procurement activity • Program - Responsible for project scope, requirements, performance, results, contract management/monitoring • Financial – Responsible for evaluating/monitoring financial activities. • HUB - Responsible for evaluating/monitoring HUB activity • Legal – Procurement oversight & legal issues

5. ECPS Procurement Activities • Sole Point of Contact • Questions & Answers • Procurement Schedule • Solicitation Accesshttp://www.hhsc.state.tx.us/contract/529130018/announcements.shtml • Submission Requirements • Solicitation Updates • Screening & Evaluation • Award Information

6. Procurement Schedule • Draft RFP Release November 16, 2012 • RFP Release February 5, 2013 • Vendor Conference February 12, 2013 • Vendor Questions DueFebruary 14, 2013 • Response to Questions Posted (est.) February 28, 2013 • Proposals Due (2:00 PM Central Time)March 28, 2013 • Tentative Award Posting June 13, 2013 • Anticipated Contract Start Date To be Announced

7. Submission Requirements • Submit one original and: • 17 Business Proposals • 17 Technical Proposals • 8 Financial Proposals • If you are proposing a Hosting Component submit one original Hosting Proposal and: • 16 Hosting Proposals • 11 additional Technical Proposals • Submit 28 electronic copies of the Proposal on flash drives, compatible with Microsoft Office 2003 • Submit one electronic version of the Proposal in a Portable Document Format (.pdf file)

8. Health and Human ServicesCommission Enterprise Data Warehouse RFP Scope of Work

9. Statement of Work • Mission and Vision • Background and Objectives • Project Schedule • Strategic Elements

10. Statement of Work • EDW/BI Foundation Project • BI Migration Project • Technical Requirements • Hosting • Security Requirements • Oversight Requirements and Responsibilities • Service Levels and Service Level Agreements (SLAs) • Project Management • Change Process

11. Statement of Work • RFP – Provides background and requirements; establishes response format • Attachments – Include further requirements and information necessary for completion of the response • Procurement Library – Information for the benefit of the respondents but no response is required

12. Office Of General Counsel Max Werkenthin Special Counsel for Contracts Health and Human Services Commission

13. TOPICS COVERED • Collusion • Conflict of Interest • Former Agency Employees • Permissible Contact with HHSC

14. Definition of Collusion(This is not exhaustive but merely representative) • Collusion occurs when two persons or representatives of an entity or organization make an agreement to deceive or mislead another. • Such agreements are usually secretive, and involve fraud or gaining an unfair advantage over a third party, competitors, consumers or others with whom they are negotiating. • The collusion, therefore, makes the bargaining process inherently unfair. • Collusion can involve price or wage fixing, kickbacks, or misrepresenting the independence of the relationship between the colluding parties.

15. Conflict of Interest • A vendor must certify that it does not have personal or business interests that present a conflict of interest with respect to the RFP and resulting contract (see the Required Certifications form). Additionally, if applicable, the vendor must disclose all potential conflicts of interest. • The vendor must describe the measures it will take to ensure that there will be no actual conflict of interest and that its fairness, independence and objectivity will be maintained (see the Vendor Information and Disclosures form) over the course of the contract. HHSC will determine to what extent, if any, a potential conflict of interest can be mitigated and managed during the term of the contract.Failure to identify potential conflicts of interest may result in HHSC’s disqualification of a proposal or termination of the contract.

16. Former Employees of a State Agency Vendors must comply with Texas and federal laws and regulations relating to the hiring of former state employees (see e.g., Texas Government Code §572.054 and 45 C.F.R. §74.43). Such “revolving door” provisions generally restrict former agency heads from communicating with or appearing before the agency on certain matters for two years after leaving the agency. The revolving door provisions also restrict some former employees from representing clients on matters that the employee participated in during state service or matters that were in the employees’ official responsibility.

17. Permissible Contact • The sole point of contact for inquiries concerning this RFP is Alice Hanna. • As a reminder, all communications relating to this RFP must be directed to the sole HHSC contact person for this procurement. Otherwise failure to comply with these requirements may result in proposal disqualification.

18. Larry Fisher, Senior Financial Analyst Financial ServicesHealth and Human Services Commission

19. Financial Overview HHSC has chosen to use a Fixed Price/Not to Exceed approach related to the service delivery requirements included in the RFP. This approach will also ensure that all Services required of the Respondent are provided as efficiently and effectively as possible to assist HHSC in its responsibility for the efficient and effective administration of federal awards through the application of sound management practices. 19

20. Financial Overview Allowable and non-allowable direct and indirect costs, wherever applicable to any payments to the successful Vendor, will be governed by the principles set forth in the following regulations (as may be amended during the term of the contract) and documents: • Title 48 CFR, Chapter 1, Part 31 — Contract Cost Principles and Procedures. • Title 48 CFR, Chapter 1, Part 30 — Cost Accounting Standards Administration. • Title 48 CFR, Chapter 99 — Cost Accounting Standards. In addition to costs that are unallowable pursuant to the above accounting principles, HHSC has deemed certain items within the allowable costs to be specifically unallowable for any contract resulting from this RFP. The list of additional unallowable costs is included in Section 6.5.3 of the RFP. 20

21. Financial Overview Payment to the successful Respondent for Service and Deliverable requirements will be based on multiple fixed fees as described in Attachment C-1 (Pricing Workbook Instructions) and RFP Section 6. The Respondent will receive payments monthly as compensation for correctly and appropriately performing the Services and Deliverables required in the contract resulting from this RFP. A Respondent will submit one or more monthly invoice(s) following the month in which the Respondent provides the applicable Services HHSC will process and pay fees in accordance with Chapter 2251, Texas Government Code. Each invoice will be processed and paid separately. 21

22. Financial Overview HHSC anticipates that, during the life of any contract resulting from this RFP, implementation of federal and state mandates and other state initiatives will require additions or changes to the normal activities performed under the Contract. All such changes will be negotiated between HHSC and the Respondent. The pricing associated with additional or modified activities will be negotiated between the Respondent and HHSC after HHSC determines that the Respondent has submitted all the detailed cost information (including detailed supporting metrics and detailed supporting costs deemed acceptable by HHSC) necessary to accurately modify the applicable fixed fee formulas. 22

23. Financial Overview A Vendor must maintain separate financial records for the following service Components of the Contract(s) resulting from this RFP: 1) Design, Development & Implementation Component; and 2) Operational Support Component. A Vendor must maintain an accounting system that provides an audit trail containing sufficient financial documentation to allow for the reconciliation of billings, reports, and financial statements with all general ledger accounts. A Vendor must retain sufficient documentation and persuasive audit evidence to support and verify all costs submitted to HHSC for reimbursement, including proper invoices, underlying accounting records, and/or other documents to support all payables and intercompany charges. 23

24. Financial Overview The costs for Service and Deliverable requirements for each Component will be subject to the Prospective Price Re-determination (PPR) provisions documented in Section 6.4.2 of the RFP and summarized below. This PPR approach will allow the total Fees paid during a specified time period to be lowered during a succeeding time period if the actual profits earned by the Respondent during a specified time period are at least 20% greater than the agreed-upon profit percentage included in the negotiated fixed and variable Service Delivery Fees at the beginning of the Contract. The PPR provisions will be applied separately to the Design, Development & Implementation component service area and the Operational Support component service area. 24

25. Financial Overview Specified PPR time periods related to the Design, Development & Implementation (DD&I) Component Services are as follows: • Initial Eighteen (18) months of DD&I Services; • Month Nineteen (19) through month Forty-two (42); and • Month Forty-three (43) through month Sixty (60). Specified PPR time periods related to the Operational Support Component Services are as follows: • Initial Twenty (20) months of Operational Support Services; • Month Twenty-one (21) through month Thirty-eight (38); and • Month Thirty-nine (39) through month Fifty-six (56). 25

26. Financial Overview 26

27. Financial Overview 27

28. Cost Proposal Overview All Vendors will submit a comprehensive and complete DIR-hosted financial solution that meets all of the requirements specified within the RFP. If the Vendor elects to submit an optional Vendor-hosted solution, the Vendor will provide a separate set of DD&I Pricing Schedules (Attachment C-2), Operational Support Pricing Schedules (Attachment C-3), and Price Summary Sheets (Attachment C-4) for the Vendor-hosted option. A Vendor that proposes a solution for both hosting options must: • Clearly label all Pricing Schedules and Price Summary Sheets to distinguish between the two proposals. • Identify and clearly document any overlaps , inconsistencies, or material assumptions • Clearly identify how the State would benefit from the Vendor-hosted option and where efficiencies would be realized. 28

29. Cost Proposal Overview As described in Attachment C-1, Respondents shall submit a Cost Proposal that includes the following: • Cover Letter; • Cost Proposal Assumptions; • Design, Development, and Implementation (DD&I) Pricing Schedules (Attachment C-2); • Operational Support Pricing Schedules (Attachment C-3); • Price Summary Sheets (Attachment C-4); • DD&I FTE and Pricing Narrative; • Operational FTE and Pricing Narrative; • Financial Statements; • Corporate Guarantee; • Financial Operations Plan; • Initial Accounting Policy Manual; and • Disclosure Statement. 29

30. Cost Proposal Overview Section 6.5.3 Financial Accounting Requirements; Table 72 – Financial Accounting Requirements; TFR 08 currently states: Submit a copy of the Respondent’s Cost Accounting Standards Board Disclosure Statement (form CASB DS-1) as approved by the Federal government. (Refer to 48 CFR 9903.202.) Pursuant to Addendum 2, that language is being replaced in its entirety with: Submit a copy of the Respondent’s Cost Accounting Standards Board Disclosure Statement (form CASB DS-1). (Refer to 48 CFR 9903.202.) Prospective vendors that already have a Federal Disclosure Statement in use by one or more Federal agencies would need to submit a copy of the current Federal Disclosure Statement with their proposal. Prospective vendors that do not currently do business with the Federal government or are not required to have a Federal Disclosure Statement will not be required to create / submit one to HHSC with their cost proposal. 30

31. Cost Proposal Overview The Vendor will submit Pricing Schedules and Price Summary Sheets that are substantially similar to those described in Attachment C-1. The DD&I Pricing Schedules (Attachment C-2), Operational Support Pricing Schedules (Attachment C-3), and Price Summary Sheets (Attachment C-4) will provide the component costs of the Firm Fixed Prices quoted for providing the Services and Deliverables set forth in this RFP. Electronic copies of the Vendor’s completed Pricing Schedules and Price Summary Sheets (Attachments C-2, C-3, and C-4) must be submitted in MS Excel format . These files must contain any and all formulas used to calculate pricing information contained on the forms and include any and all links to other worksheets/forms included in the Vendor’s Cost Proposal. 31

32. Cost Proposal Overview These forms must include all position staffing levels, staffing costs, capital equipment costs, subcontractor costs, consultant costs, other costs, and any required supporting documentation to validate all costs included in the Vendor’s Cost Proposal. The Vendor will structure its pricing quotation to allow HHSC a method to map the proposed costs for the Cost Proposal submitted back to the Vendor’s Detailed Work Plan for the initial term of the Contract. The Vendor will provide separate costs for the entire DD&I period and for the entire Operational Support period. The DD&I and Operational Support periods will consider all applicable fixed costs as defined in Section 6 of this RFP. The pricing quotation(s) for each specific Release or Functional Area will agree with the Firm Fixed Prices proposed. 32

33. Cost Proposal Overview Summary forms will be supported by the detailed information contained on monthly schedules. Amounts shown on the monthly schedules will agree with the cumulative amounts shown on the summary forms. Some costs (such as the salaries of Project Management personnel) may be attributed to both the DD&I Component and the Operational Support Component. • Vendors will take care not to duplicate these costs in the DD&I Pricing Schedules and the Operational Support Pricing Schedules. • Instead, Vendors will allocate these costs between the two Components using a logical allocation methodology. • Each Cost Proposal response submitted will clearly explain the allocation methodology used. 33

34. Cost Proposal Overview • The Vendor’s DD&I Pricing Schedules will be delineated by the applicable Releases/ Functional Areas: • Project Management; • EDW/BI Foundation Project Release I - Client, Provider, & Enrollment Visibility; • EDW/BI Foundation Project Release II - Service Delivery; • EDW/BI Foundation Project Release III - Drug Integration; • EDW/BI Foundation Project Release IV - CLH: Historical Data + HIE; • EDW/BI Foundation Project Release V - CLH: Health Insurance Exchange; • EDW/BI Foundation Project Release VI - CLH: Supplemental Claims Data; • Business Intelligence Migration Project (Vision 21, MFADS, TIERS DM); and • Hosting. • Section 4 of Attachment C-1 contains detailed instructions for completing each DD&I Pricing Schedule. 34

35. Cost Proposal Overview The Vendor’s Operational Support Pricing Schedules will be delineated by the following primary business functions (Functional Areas) for the Operational Support period: • Project Management; • Project Operations; • System Operations; • System Maintenance and Modifications; and • Transition to State-Operated Data Center (if Vendor is hosting during DD&I). Section 5 of Attachment C-1 contains detailed instructions for completing each Operational Support Pricing Schedule. 35

36. Cost Proposal Overview Price Summary Sheet 1 shows the proposed Fixed Administrative Fees for the DD&I period for each Release and Functional Area. The total fixed fees on this sheet will be consistent with the detailed DD&I Pricing Schedules in Attachment C-2. Price Summary Sheet 2 shows the proposed Fixed Administrative Fees for the Operational Support period and the fixed annual inflator proposed by the Vendor that would be applicable for any option years. The total fixed fees on this sheet for each year will be consistent with the detailed Operational Support Pricing Schedules in Attachment C-3. 36

37. Cost Proposal Overview Price Summary Sheet 3 shows the all-inclusive hourly labor rate(s) and the proposed fixed annual inflator associated with additional non-recurring and/or periodic activities to be performed by the Vendor by position classification. The maximum fees associated with additional non-recurring and/or periodic activities to be performed by the Vendor will be based on explicit fixed prices proposed for Vendor inputs and the actual number of hours worked on the specific modification by the Vendor’s staff and/or the staff of a Vendor’s subcontractor. 37

38. Texas Health and Human Services Commission First Round of Question Submittal

39. HUB Subcontracting Plan(HSP) Requirements

40. Agenda Topics • RFP Section 4.0 Historically Underutilized Business Participation Requirement • HUB Subcontracting Plan Development and Submission • HSP Quick Checklist • HSP Methods • HSP Prime Contractor Progress Assessment Report

41. RFP Section 4.0 Historically Underutilized Business Participation Requirements • HUB Participation Goals • Potential Subcontracting Opportunities • Vendor Intends to Subcontract • Centralized Master Bidders List and HUB Directory

42. RFP Section 4.0 Historically Underutilized Business Participation Requirements • Minority or Women Trade Organizations • Self Performance • HSP Changes After Contract Award • Reporting and Compliance with the HSP

43. HUB Participation Requirements HUB Subcontracting Plan (HSP) Development and Submission

44. If HSP is inadequate, response will be rejected HUB GOALS Special reminders and instructions HSP Information Page

45. HUB Participation Requirements HSP Quick Checklist

46. HUB Participation Requirements HSP Methods

47. METHOD I • If all (100%) of your subcontracting opportunities will be performed using only HUB vendors, complete: • Section 1 - Respondent and Requisition Information; • Section 2 a. – Yes, I will be subcontracting portions of the contract; • Section 2 b. – List all the portions of work you will subcontract, and • indicate the percentage of the contract you expect to award to HUB • vendors; • Section 2 c. – Yes; • Section 4 – Affirmation; and, • HSP GFE Method A (Attachment A) – Complete this attachment for each subcontracting opportunity.

48. HSP Information Page Respondent and Requisition Information

49. Company Name and Requisition # Subcontracting Intentions: Complete Section 2-a; Yes, I will be subcontracting portions of the contract.

50. Complete Section 2-b;List all the portions of work you will subcontract, and indicate the % of the contract you expect to award to all HUBs. Complete Section 2-c; Yes if you will be using only HUBs to perform all SubcontractingOpportunities in 2-b.