Random Moment Sampling

Cost allocation vehicle of Federal, State and Local funds

 How do you distribute the cost incurred by Local, State and Federal of the staff (as an example In a State Dept. of Children and Families) who works on multiple programs often crisscrossing or related to these 3 agencies? One way is to collect each time slot of each staff and attribute the nature of work to local, state or federal “buckets” but then it’s a huge overhead – the other sensible way is to randomly select one (sample) – and randomly select a time slot and identify the distribution of work into these 3 buckets. Once you have this random moment sample – extrapolate it across all the employees and time (usually fiscal quarter) one would now have the effort of the month at the department by the bucket (categories) – now appropriate the funds according to efforts. 

Government Stamp of approval and sponsorship

As outlined in OMB Circular A-87 Section 11.h(6), random moment sampling is a recognized and accepted alternative to burdensome 100% time reporting.

Using the unique RMS service even small agencies can cost effectively collect the data required to confidently apply for reimbursement for salaries and wages spent servicing public assistance programs. Many of these groups would previously have been discouraged from claiming their share of Federal and State monies by the onerous data collection and reporting requirements.  

One time - high value purchase 

I was looking into this market – and found its very niche, and not many players. Though most of state and other govt. agencies often procure RMS systems. The usual deal size for RMS systems are close to $10 million.

Example CSG won a deal with State of Illinois, in 2011, for the RMS solution at Human and Healthcare Framework, the deal size there was $16 million. Fairbanks LLC and Public Consulting group won deals in RMS at State of Illinois and Michigan in the same year which again are deals ~ $10 million.

The second observation was that the RMS value chain is very short.  The product companies provide it end to end, with hosting included. There is a lesser role for system integrators or value added service players. Therefore the entry barrier is quite high. Also since the customers are mostly government, and they typically look for good references (existing sales) before they procure, new comers will have a lesser say in the market.  The brand identity is huge.

On the other hand the existing engagement mandates that hosting is of impeccable standards, security is true north – this would make the exit barriers high. One might contend that hosting players might take over from the RMS solution or product and run the business as is – but then since most of the RMS products are based on proprietary platforms; it would be a difficult goal.  

HIGH ENTRY - HIGH EXIT - REGULATED MARKET

With HIGH entry barrier, and HIGH exit barrier; and limited players in the market; under the un-intentional government procurement policy (of looking for reference and experience and therefore high barrier) has ironically facilitated an OLIGOPOLISTIC market. The only reason it’s not making noise because the RMS players are intentionally or otherwise flying low under radar. A question to linger and ponder over is does any of the RMS provider have a transparent and open balance sheet? 

Thanks for the Comments- other related questions are 
a. Will the agencies like Medicaid make repeat procurement for RMS? 
b.  If these agencies make repeat procurement then would they go for replacing the incumbent vendor - would they try out a new entrant in the market, with possibly low references/ clients ?