Officials in Ohio were hoping to transform IT procurement to benefit citizens, the state and vendors when they streamlined their process late last year to reduce the liability burden and work history requirement for smaller vendors.
Now, more than three months after the Jan. 5 release of the resulting RFP, state CIO Stu Davis said reconfiguring how Ohio buys IT hardware, software and services has delivered on its promise before a contract is even awarded.
When it began to look closely at the process last year, the state wanted a way to find the right data analytics tools for agencies including the Office of Family and Children, Bureau of Workers Compensation, and departments of Taxation and Public Safety.
The issue, CIO Stu Davis has told Government Technology, was that in some cases the bar was set too high to qualify nimble but smaller companies that may have had innovative solutions — but didn’t fit the financial or employment profile.
Ohio went so far as to seek guidance from 18F, the federal team of disruptors within the General Services Administration, though those conversations didn’t yield a cooperative agreement.
But officials had high hopes when they released their RFP earlier this year, calling on vendors to tell the state what they could do to provide it new data analytics capabilities in 14 disciplines ranging from crime, corrections and recidivism to life sciences, public health and transportation.
Davis joked with Government Technology in December that he had a running bet with staff. They thought the RFP would generate around 100 responses; he thought responses could run as high as 350.
Leading up to actual proposal submissions, Davis said the state received around 225 inquiries to the online question-and-answer process it conducts during all bids. Far more significantly, he said, around 500 potential vendors attended an online pre-bid conference that was the first of its kind.
“We knew we had at least the right audience coming out of the gate,” Davis said. When the filing period closed, the state had received 82 total proposals involving 129 business entities, 99 of which were new and 30 of which were existing state vendors.
The vendors’ responses, which are still under review, spanned disciplines — with Ohio State University submitting a proposal that covered all 14.
The state averaged roughly 31 respondents across all 14 disciplines, with the life science and public health area generating the highest number at 55. The crime, corrections and recidivism category yielded the lowest number of respondents at 17.
Overall, the response was exponentially greater than Ohio might typically expect, Davis said, noting that a typical RFP would yield between three and eight respondents, and an average pre-bid conference might draw an audience of 50 to 60 “and nobody says anything, nobody asks anything … .”
Ohio has done other RFPs like this one, which will effectively pre-qualify vendors and let them respond to the state’s statement of work with a short proof of concept.
But this RFP was the first to target the so-called “little guys” in IT who may not be able to spend $50,000 on a submittal, handle its liability requirements, or have experience working with another state the size of Ohio.
Davis said IT procurement will always have a place for “the value and the experience and the knowledge” that larger vendors like Oracle bring to very complex projects. But Davis is hopeful that their approach to the analytics RFP will bring new ideas from new players and ultimately improve outcomes.
"If we can break those [procurements] into smaller chunks, we have less risk as we go forward and we have corrections quicker if we see things starting to get off-track,” he said.
The success of the RFP, which Ohio hopes to award by May 1, comes in the wake of a seven-month investigation into state IT procurement by daily newspaper The Columbus Dispatch, the results of which were published on April 2 and had two primary issues: that IT contracts it found were not competitively bid by the state Department of Administrative Services (DAS) per state policy, and agreements were made with companies it said employed former state IT officials.
DAS Chief Communications Officer Tom Hoyt told the newspaper that the state did nothing wrong, as awarding no-bid contracts is permissible under the law through a waiver of competitive selection granted by Ohio’s Controlling Board. And he later told Government Technology that some state IT vendors simply offer unique hardware and software solutions not available elsewhere.
DAS also utilizes state term schedules (STS) in IT purchases. These are negotiated contracts for potential purchasing opportunities with suppliers, to provide specialty or uncommon/unique supplies and services at times when competitive selection is not advantageous to the state.
“The state currently has 15.8 percent of its IT spend procured through STS contracts,” Hoyt said via email. “During the past four years, less than 20 percent of state IT spend was through STS contracts.”
As for contracting with companies where former state officials work or have worked, Hoyt said that the state seeks outside IT expertise when it is in need of highly specialized skills, knowledge and experience. "Hiring specialized IT consulting when needed is a common practice in both the public and private sectors,” he said, noting that ultimately, DAS was “in compliance with state law.”
As part of the state’s overall IT optimization, DAS said in a background statement on procurement, STS has resulted in more than $103 million in direct savings during the past three years. Ohio has also consolidated the computer systems of 22 of 26 state agencies in the State of Ohio Computer Center.
Ohio’s Controlling Board has granted DAS permission to create and use STS since 1970, and has waived the competitive selection requirements for these contracts every two years.
Other states, DAS said in its background statement, “use similar procurement procedures for IT work,” and its use of the schedules are “at or below” GSA contract pricing.
Davis said in an interview that the authority for IT procurement and purchasing runs through his office and allows him to review purchases that come from state cabinet agencies. As part of that review — which is also part of overall IT optimization — the CIO’s office aligns agency purchases with the enterprise strategy DAS has articulated and worked with the agencies to craft.
An example, he said, is the Ohio Department of Taxation’s recent need to purchase around $500,000 of storage.
“And we went to them and said, ‘Look, if you use our storage, it’ll save you money and it will drop the rate for all the others using our storage,’” he said, noting that the resulting arrangement, now nearly three years old, saved the department and all other agencies money.
All of which is not to say that Ohio doesn’t continually review IT procurement.
“Currently, the Office of Information Technology and the Office of Procurement Services are working together to review various state procurement policies to reflect current market conditions,” DAS said in its Dec. 20 STS fact sheet.
Davis said he doesn’t think procurement policies are out of step with market conditions, but — as with this current RFP — the state has to continually be mindful that mandatory requirements don’t become too restrictive and limit bidding to “the usual subjects proposing.”
As for lessons learned during this RFP process, Davis said the turnout to the online pre-bid conference underscores the importance of ongoing real and virtualized communication during the process.
He cautioned agencies contemplating their own reviews of IT procurement that “there isn’t a check list,” but improving a project’s requirements, statement of work and the evaluation criteria can make an RFP clearer for respondents.
Ultimately, streamlining the RFP process to “move at the speed of business,” Davis added, “benefits the citizens and the state of Ohio.”