# Presentation: 567683

## Laying the Foundation for EBT

**NWA Technology Conference**
**Atlanta, Georgia**
**November 13-15, 2007**

## Are You Interested In EBT?

- Interest in EBT is growing
- Planning for EBT needs to start early
- If funding is available in FY 2008, FNS will award grants to States for EBT pre-planning activities
**HOWEVER**
- States CAN also use their own NSA funds for EBT

**Notes:**
We know there is a growing interest in EBT. 
Not ready for widespread implementation at this time, however interested SA’s should begin the planning process.
This presentation is for States interested in EBT who may not know where to start.
Some of the things I’m going to discuss do not require the expenditure of funds; others do.
There are 2 sources of funding for EBT:
EBT grant funds (very limited)
SA NSA funding (includes OA)

## EBT Planning Activities

- Do Your Homework
- Obtain Stakeholder Support
- Consult With Your IT Department
- Determine Procurement Options
- Conduct Alternatives Analysis and Cost Benefit Analysis

**Notes:**
Basically, these are things you can do to plan for EBT..... And I’ll talk a little bit about each one.

## EBT Planning Activities - continued

- Do Not “Reinvent the Wheel”
- Review Documents on FNS website at www.fns.usda.gov/apd/
- Discuss Your Plans With Your RO
- Apply for an EBT Pre-planning grant or submit a Planning APD to RO and HQ

## Do Your Homework

**Readiness**
- Is your system EBT-ready?
- Review FReD and EBT readiness documents
**Cost**
- Is EBT affordable in
- your State?
- Identify baseline paper costs
- Use EBT National Cost Model
- Talk to other States that have done EBT

**Notes:**
As part of your homework, determine whether your MIS is EBT-ready
*Review FRED and draft EBT-readiness documentation
*If not EBT-ready, how will system modifications be achieved?  RFP for MIS?  SAM transfer?
*Ideally, system should be state-of-the-art before undertaking EBT

Is EBT affordable in your State?
*There will be a lot of unknowns during the early planning stages, but you do need to know what it costs you now to operate a paper system.  *You will need to document these paper costs in a future cost evaluation report. 
*We don’t require that you to prove that EBT costs will be the same or less than your paper costs, but you will need to show that EBT is affordable – can be maintained with NSA grant.
*The EBT National Cost Model should be used in assessing paper costs. 
*And you can talk to other states with experience.

## Do Your Homework (continued)

**State Resources**
- Can you devote State staff time to EBT?
- Is there State expertise available?
- Who will manage your EBT project?
- Are there other competing priorities?
**Risk Management**
- What are the risks
- in doing EBT?

**Notes:**
Experience has shown that it takes considerable resources to manage a project of this magnitude.
*Can you devote state staff time to EBT?
*Will you need to hire additional staff?
*How much of the State Directors time will be devoted to EBT?

*Who will manage your EBT project?
*You will need a project manager to manage things on behalf of the state.  
*That person should have project management experience or training.

*Do you have the time to devote to EBT or are there other competing activities within the State requiring your attention?

*What are the risks of doing EBT and how will you minimize those risks?
*Need to identify and manage your risks – good practice regardless of whether EBT or MIS

## Obtain Stakeholder Support

**Retailer Support**
- Critical to involve retailers early on
- Do you have support from major chain stores?
- Review EBT evaluation documents
- Have you established a vendor
- advisory group for EBT?
**State Support**
- Do you have the support
-  of State officials?

**Notes:**
The need for retailer support cannot be emphasized enough.  

*Do you have support from your major chain stores? 
*Are the vendors in your State interested in EBT?
*What are you doing to keep them informed of your plans for EBT?  Periodic meetings, newsletters?
*Are you listening to their concerns?  What design issues are important to them?  
*Review State pilot evaluations documents (TX, WA, Partners, MI) to find out what vendors in other states have had to say about EBT

*Have you established a vendor advisory group for EBT? – its highly recommended   

*Do you have the support of State officials? -- might come in handy if State resources becomes an issue.

## Consult With State IT Department

**State Requirements**
- Are there internal IT requirements for 	system development?
- What technical support will the State 	agency require?
- How will that be obtained?
- Are there State legislative 	requirements?
- Do you need to coordinate with other 	programs?  Other card requirements?

**Notes:**
You will need to consult with your IT folks to let them know what you’re up to
They can advise you on internal requirements for IT development

*Will they be able to provide any assistance to you with planning?

*What technical support will you require?  How will that be obtained?

*Will you need to contract out for technical assistance?  What is the timeline for doing an RFP?

*What’s in your state statute regarding systems development?

*Do you need to coordinate with other programs?  

**How can you obtain the needed expertise?**
- Project Management
- Card Technology Expertise
- Requirements Definition
- Quality Assurance
- EBT Contractor or Contractors to
- 		Implement an EBT System
**Can you piggyback on an existing contract?**

**Determine Procurement Options**

**Notes:**
You will need to consult with your procurement office to let them know your procurement plans.
During the course of your project, you will need expertise in these areas:  

Project mgmt
Card technology
Requirements definition and technical writer
Quality assurance
EBT contractor

Texas is acting as their own EBT contractor.  While there may be some cost savings to do it this way, not all states will have this capability.  Here’s where it pays to talk to the states with experience in EBT. 

In most states, the contract to provide FSP EBT contains a clause that allows additional programs to be added to the contract at a later date.  Find out who the contractor is in your state that provides FSP EBT services and check out their contract.     

## Technology / Cost / Operational  Considerations

**Conduct feasibility study/cost benefit analysis**
- What is the cost/benefit of available 	technologies?
- On-line vs. off-line?
- Are there barriers to EBT implementation 	in your State?
- Do you have remote sites where 	telecommunications (i.e., phone, 	internet, network) would be difficult 	to provide?
- What, if any, assumptions were used in 	your analysis?

**Notes:**
Typically, a feasibility study or alternatives analysis is done as part of the planning process.  

*Should include discussion of technology alternatives, costs and the unique needs of your particular state.
*Feasibility is not to determine whether participants will like EBT – we already know it’s preferred over paper.
*Need to find out what’s feasible from a technical, operational and cost standpoint. 
*Need to look at on-line and off-line technology to determine which fits best within your state.  Things to consider would be whether or not you have lots of remote clinics where telecommunications may be a problem.  If so, the smartcard may be the better choice.   

## Do Not “Reinvent the Wheel”

**Examine existing WIC EBT **
**	****	****projects to determine best ****	****practices**
**Learn about work in progress to ****	****define common business rules**
- Receipt format
- Manufacturer & store coupons
- Mixed basket
- Others
**Attend EBT Users Group Meetings **

**Notes:**
Examine existing projects to determine best practices.  
FNS will be working with the NWA Technology Committee and State agencies to identify common business rules for EBT.  
Policies are being developed receipt formats, transactions involving manufacturer & store coupons, and the mixed basket concept – to separate or not to separate foods.
Stay connected – attend EBT Users Group Meetings – become a member.

## Review Documentation

**www.fns.usda.gov/apd/ **
- EBT National Cost Evaluation Model
- WIC EBT Policy Memoranda
- UPC Category/Subcategory Table
- Status of EBT pilot projects
- EBT 5-Year Plan
- FReD EBT-Ready Functions

##                EBT Pre-Planning Grants

**       ****FNS to announce in 1****st**** or 2****nd**** qtr FY ****	****2008 funds available to all States **
**	****	****to be used to: **
- address specific needs of individual State 	agencies to facilitate eventual EBT 	implementation, to include modification of 	existing systems to interface with the 	National WIC UPC database, and/or
- develop prototype tools for assessing costs for 	State agency use nationwide.

**Notes:**
We are planning to solicit proposals in FY 2008 from States who want to conduct planning activities 
We hope to have a limited amount of funds available for this purpose.  
The solicitation could go out as early as next month and States would have 60 days to submit proposals.  
Funds could be used to address individual State agency needs and/or to develop prototype tools for assessing costs.

## Prepare a Planning Advance Planning Document (PAPD)

**Submit a PAPD to RO/HQ**
- If using NSA funds for EBT planning, a PAPD is required, regardless of cost
- PAPD must adequately address all planning activities to be conducted by the State agency or outside contractor

**Notes:**
*Your PAPD should mention the internal planning that has already taken place as well as the planning activities for which federal funds will be used.

*If you submit a proposal to receive EBT grant funds (competitive process), the PAPD requirement does not apply.

*This PAPD requirement for EBT is being proposed at this time.  If FNS decides to go this route, the requirement will be incorporated in Handbook 901.

## Content of Planning APD for EBT

**The PAPD is an **_***8-10 page document***_** that consists of:**
- Transmittal Letter
- Executive Summary
- Resource Requirement
- Schedule of Planning Activities, 	Milestones, and Deliverables
- Proposed Budget for Planning
- Cost Allocation Plan

## Discuss Plans With Your FNS RO

**Obtain FNS Advice**
- Will you use your NSA
- funds for EBT?
- Will OA funds be needed?
- Will EBT grant funding be needed?

**Notes:**
Your regional office can advise you on the availability of funds for EBT.
Consult with them early on.

## State Agency Options Following Planning Activities

**If planning results support EBT implementation, the State agency may  **
- submit an IAPD for approval to use NSA and/or OA funds to conduct EBT
- 				or
- submit a grant proposal to compete for EBT funds to conduct EBT

**Notes:**
If all of your planning activities indicate that you are ready to take the next step, then you have 2 options.
*Either submit an IAPD for approval to use NSA funds for EBT implementation or submit a grant proposal to compete for EBT grant funds

*The IAPD or grant proposal should address the outcome of all your planning activities to include all of the things discussed in this presentation, i.e.,:

Readiness
State resources
Affordability
Retailer support
Etc.

*We are not actively encouraging States to do EBT at this time because we are not ready for widespread EBT implementation.
*But if states want to pursue EBT, they can, provided they have done the upfront planning required.