In an effort to protect low-income residents from benefits theft, the Maryland Department of Human Services tentatively secured a $20 million contract to reduce the risk of fraud in the state’s EBT system.

The Maryland Board of Public Works approved a $19,982,015.28 contract with Conduent State & Local Solutions Inc. at its Annapolis meeting Wednesday to upgrade Maryland’s EBT system, which delivers benefits to Marylanders eligible for the Temporary Cash Assistance Program, the Temporary Disability Assistance Program and SNAP.

The Maryland State Board of Contract Appeals is to discuss the lawfulness of the bid evaluation process that procured the system at a hearing July 31. Wednesday’s contract was approved in spite of that appeal at the request of Department of Human Services officials.

“If we fail to act now, Maryland will pay more for extension of the current system contract, which does not provide enhanced security features to protect Marylanders from benefit theft,” Rafael J. Lopez, the secretary of the Maryland Department of Human Services, said at Wednesday’s meeting.

An average of 943,000 Marylanders use EBT annually.

According to Lopez, EBT is a federal-state partnership. The U.S. Department of Agriculture’s Student Nutrition Service provides 75% of funding for the system. The other 25% is provided by the state.

Lopez said that, as of Wednesday morning, more than 40,000 households in the state have been reimbursed over $27.1 million in stolen benefits.

Federal funding to replace stolen benefits will cease Sept. 30.

People who receive benefits access them through EBT Cards, also known as Independence Cards. They function like debit cards, allowing recipients to access their benefits from an EBT food or EBT cash account each month. Each card has a PIN, which users are required to enter during every transaction.

In 2023, Gov. Wes Moore, a Democrat, signed legislation to enhance security for the state’s EBT system, including a measure requiring that all new cards have an embedded microchip.

Only two vendors submitted requests for proposals, RFPs, for the contract awarded Wednesday. Over 30 vendors were directly solicited by the state in the search for a contract.

Lopez told the Board of Public Works that his department followed the USDA procurement guidelines, and kept the RFP live for 90 days.

On April 17, the Department of Human Services received a protest from another vendor, Fidelity Information Services, regarding the evaluation of the selected vendor’s bid before the contract was secured, alleging that it was unlawful and did not adhere to the criteria listed in the RFP. The Department of Human Services denied the protest on April 29, stating that the evaluation was performed in accordance with both the RFP criteria and Maryland code.

“We would not bring to you, the constitutional officers of Maryland, an unlawful contract to sign,” Lopez said. “We just wouldn’t do it.”

Fidelity Information Services requested a review from the Maryland State Board of Contract Appeals. Should the board side with the appellant, the state would have to re-enter into the vendor solicitation and RFP process.

The contract for the system used now began on Jan. 1, 2015, and is set to expire Dec. 31.

Lopez asked the board to approve Wednesday’s contract, which will go into effect immediately, allowing the Department of Human Services to transition to the new system quickly.

“Should the non-awarded vendor proceed with the appeal, we are confident that the Board of Contract Appeals will uphold our decision,” he said.