Subject to applicable federal guidelines and regulations and the provisions of appropriations acts, the secretary shall negotiate and enter into a contract for a pilot project to be conducted during the fiscal year ending June 30, 1992. If the secretary conducts a pilot project under this section, the pilot project may be conducted to provide the medicaid services related to psychiatric and substance abuse services for Kansas medicaid eligible residents who are less than 21 years of age on the basis of a described set of such services to a predetermined population as prescribed by the contract. The contract shall not be subject to the competitive bid requirements of Kan. Stat. Ann. §§ 75-3739 and amendments thereto. The services to be provided for such residents under the contract shall include but not be limited to case management services, day treatment, outpatient services and emergency services. The contract may be entered into by the secretary with a single mental health center or with a contracting agency to provide such services through a mental health center or other qualified service providers, or both, within an area of Kansas determined by the secretary. In determining the location of the pilot project and the area in which such services shall be provided, the secretary shall consider both those areas in which such services are being provided currently for such residents by mental health centers and those areas of Kansas in which such services can be provided for such residents at the time the pilot project is to commence under the contract. The secretary shall submit a preliminary report on the results of the pilot project to the committee on ways and means of the senate and the committee on appropriations of the house of representatives at the beginning of the 1992 regular session of the legislature. The secretary shall submit additional reports and information regarding the pilot project as requested by such committees during such legislative session.