February 24, 2009 By Matt Williams
As California CIO Teri Takai dives headlong into what promises to be a challenging statewide consolidation of information technology services, she'll undoubtedly be keeping a close watch on spending.
The state spends at least $3 billion annually on information technology, and it flows through a procurement process that is complicated and cumbersome, according to some who use it.
As part of the consolidation, Takai's department -- the Office of the State Chief Information Officer (OCIO) -- will ensure IT-related procurements are driven by technology standards, that they complement the enterprise, and that competition is encouraged. The Department of General Services (DGS) -- the agency in charge of procurement statewide -- will continue to oversee technology purchases, but Takai's office will play a larger role in developing requirements and reviewing IT projects.
"DGS and Procurement -- we are not the best place to go to lock down [technology] requirements," said DGS Deputy Director Jim Butler, who is in charge of the Procurement Division. With the OCIO taking the lead, Butler said decision-making for procurement will be a lot faster.
Butler and Takai made their remarks Monday at a public forum at DGS headquarters in West Sacramento, Calif.
Mark Weatherford, the director of the state Office of Information Security and Privacy Protection, was also on hand. Another difficulty, he said, is that some CIOs for California government agencies don't know how and where to purchase basic equipment like firewalls and routers.
"I've had a number of CIOs come up to me and say, 'Even if I know what I need, I don't know where to find it,'" Weatherford said. To remedy this, he said he is working to pull together the existing procurement contracts into an easily retrievable document that state IT workers can use for purchasing.
The new process for IT procurement is rooted in legislation signed by Gov. Arnold Schwarzenegger in October 2007. California AB 617 amended state contracting code to require the state CIO's office to review and assess the performance of IT contracts, and for the DGS to develop "risk mitigation analysis" models for IT contracts. The amendment also waives the requirement of performance bonds for IT vendors, which is required in only a few states.
The DGS is developing an automated tool and will launch a pilot program within the next year that will assign proposed IT solutions a "risk score" determined by a matrix of financial risk mitigation.
In March, the department is also introducing a new Web-based system called eProcurement for the state, local government and suppliers. It will replace the California State Contracts Register, the State Contracting and Procurement Registration System, the online Small Business and Disabled Veteran Business Enterprise and the statewide Leveraged Procurement Agreements. These will be accessible only through eProcurement.
A more efficient process for procurement might be timely, as OCIO is awaiting funds disbursed by the federal government's $787 billion economic stimulus bill. Takai said Monday that her office was still waiting to figure out how the stimulus would be impactful. She said there might be opportunities for IT projects in areas like unemployment insurance.
The Little Hoover Commission, a bipartisan oversight agency, is conducting a hearing Wednesday of the Governor's Reorganization Plan, which includes the IT consolidation. The commission could recommend the state Legislature approve the plan. Schwarzenegger said the consolidation would save $1.5 billion over five years, and the Governor's Office included that savings last week in its budget package that closed a $42 billion deficit.
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