Ohio is just days away from releasing an RFP that will completely upend the way the state does business with IT vendors. Up until now, the state has relied upon a constant rotation of the tech industry’s big-name players, largely leaving smaller, but potentially more innovative, companies out of the mix.
Where larger businesses can often afford to jump through the hoops and spend the cash required to win bids, firms with less government experience often struggle to meet the laundry list of procurement requirements and conditions imposed by the state.
But now CIO Stu Davis – with the support of the governor and other state leaders – is changing direction and focusing his energy on kicking off a system that will work to include the little guys and cut back the time-intensive procurement process.
“Our mandatories would preclude them from doing business with the state. We didn’t want to make the responses so onerous that a company of five guys doing some pretty cool artificial intelligence or machine learning type applications and analysis, would have to spend $50,000 to respond to whatever we would put out,” he told Government Technology.
The effort will focus on getting the right data tools in the hands of agencies like Child and Family Services, the Bureau of Worker’s Compensation, Taxation and Public Safety. In all, the search for vendors will cover 13 different disciplines.
Rather than struggling through a typically lengthy RFP process, Davis said he and his team began looking at how to streamline the process. The CIO looked to the disruptive, but effective, team within the federal General Services Administration (GSA) known as 18F for guidance. 18F made waves in the federal procurement space with tools like micro procurements and new vendor on-ramping techniques.
The outcome was two pages of notes and suggested changes that could curtail the lofty requirements and attract a greater diversity of bidders. Though conversations did not ultimately evolve into a cooperative agreement between the state and the federal innovation agency, Davis said their suggestions were an invaluable piece of the process.
He explained that existing processes made it very difficult for innovative technology to make its way into government. Limitations on what could be accepted “for free” put both government and potential vendors at a loss.
“What was happening was we were having companies come in and say they would do a proof of concept – small companies – to prove that their particular algorithms were really, really good and would be insightful,” he said. “In government, it’s very difficult for us to do a proof of concept and then put out an RFP unless you let a bunch of people have that same opportunity to do that proof of concept. So, we can’t really say yes to free stuff without pre-positioning whatever happens at the end of it.”
Instead, Davis said the new system will offer firms that prequalify the ability to respond to the state’s statement of work with a less than a dozen-page proof of concept. This will allow for documents from multiple firms to be reviewed at once in what Davis calls a “bake off,” making it much more efficient than the traditional sequential process.
“We did a real heavy look at our mandatory requirements. We have stupid things in our mandatory requirements like you have to have done work in a like-sized state as Ohio ... which would preclude these guys because they don’t have any state customers. We stripped all of those kinds of things out so we can bring these guys in.”
Additionally, the state has cut sections of its terms and conditions around liability. Larger companies may not wince at the idea of shouldering unlimited liability, but for a startup, the issue is a nonstarter. Davis said that balancing the risks with the rewards was an essential conversation with legal counsel.
The undertaking will also have the added benefit of ensuring the state’s myriad of agencies access to a running list of approved analytics vendors and the same tools. As Davis sees it, the more unified front will present its own benefits when it comes to deep dives into data sets around opioid addiction, infant mortality and fraud waste and abuse.
“As the state CIO, I have been extremely restrictive to the agencies about data analytics because I don’t want them to buy their own tools. The value of real predictive analytics is pulling in data from multiple agencies, not just a single agency. What I would have is 26 data analytics platforms with 26 different tools, …” Davis said. “If [someone is] defrauding Medicaid, they’re probably defrauding other organizations within the state. So, I’ve been holding [agencies] at bay and articulating this process that I want to go through.”
The CIO said that the list will not be static, but rather will allow for changes in the startup and small business environment. Rather than cutting off the qualification periods for vendors, the list will allow for these companies to revolve in and out more fluidly.
“If you can think about this business ecosystem with these startup companies, some are going to go away, some are going to be around, so the process for our prequel will be sort of a rolling thing,” Davis said. “We’re trying to create a process on this prequalification for these startup companies, so it’s not just a one shot and we don’t open it up for three years. It’s more of a rolling every six weeks we’ll put something out."
As far as the next steps in the RFP process are concerned, Davis expects it to be posted within the next few days. The response period will be open for six weeks, and he expects to have a list for agencies to draw from by February or March.
Though there is some debate about how successful the project will be in terms of respondents, Davis is betting initial interest will be substantial. The primary targets for this project will be Ohio-based startups, but he said companies from outside of the state are welcome to respond as well.
“I have a running bet with a couple of my folks. They think we are going to get 100 responses, and I think we’re going to get 350 responses,” he joked.