August 3, 2005 By Tod Newcombe
By Gordon & Glickson
Publisher: ICMA 2005, 2nd Edition
In 1997, Connecticut awarded a $1.35 billion outsourcing contract to EDS, only to kill the project as political opposition to the deal mounted. This year, Texas has awarded a $1 billion outsourcing contract to Accenture to run its human service and Medicaid eligibility systems.
In between, governments have awarded numerous outsourcing contracts for IT services worth billions of dollars every year. As the debacle in Connecticut illustrated so spectacularly, however, outsourcing is not a risk-free solution to what ails government when keeping up with IT and maintaining its infrastructure in today's Information Age.
Philip P. McGuigan, a partner with Gordon & Glickson, the law firm that wrote the first and current editions of Information Technology Outsourcing: A Handbook for Government, once pointed out that the key to outsourcing is about relationships and responsibilities. Getting those right can go a long way toward having a mutually satisfactory outsourcing arrangement between two parties. Outsourcing is also about defining project scope, pricing and disentanglement, any one of which can easily turn any IT outsourcing project into a disaster if not handled correctly.
That's where the Handbook comes in. Based on 25 years of experience with outsourcing agreements, the latest edition examines this complex subject, and describes quite clearly and succinctly the business issues that any government entity must consider when forging an agreement with a private-sector company.
The Handbook is divided into four chapters: an executive overview, a rundown of the central issues to be worked out in any outsourcing agreement, a catalog of potentially costly issues to be considered, and a short discussion of human resource concerns. In addition, the book includes two checklists: one that outlines the high-level business and legal issues that arise during the evaluation of any IT outsourcing opportunity, and another that serves as a template for an IT contract.
While the depth and detail in this book are, without question, top-notch, the one thing it lacks is a section on the role of open source agreements and licenses as they relate to outsourcing and IT contracting. More than likely, however, the authors will have the same sound and practical advice on that subject in the next edition as they do on the other topics so aptly covered in this new edition -- now available with a searchable CD that contains the full text of the book.
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