California Wants Shorter IT Procurements, Streamlines Process

California Department of Transportation will begin first IT project statewide Wednesday using new procurement process that officials hope will shorten timelines and improve deliverables.

by / August 11, 2009

Photo: Adrian Farley, chief deputy director for Policy and Program Management, California Office of the Chief Information Officer

A construction management system for the California Department of Transportation (Caltrans) will be the first to fully implement a new procurement process specifically for large IT projects that state officials say will be quicker and cheaper.

Officials intend to complete the Caltrans procurement in about 12 months -- cutting years off the time it typically takes California to procure and deliver a complex IT project. The state is counting on a streamlined process to meet that ambitious timeline.

The state Office of the Chief Information Officer and the Department of General Services (DGS) -- the agency that procures most of the state's goods and services -- have collaborated for more than a year to enact reforms that address vendors' complaints that California's purchasing process is burdened by unreasonable terms and conditions.

The changes include assembling small teams of DGS attorneys, engineers and procurement specialists to hammer out terms and conditions for major IT projects, according to Jim Butler, chief procurement officer for the DGS, who spoke at an event Tuesday to publicize the new policies. Butler said the changes are designed to reduce time-consuming paper-pushing among siloed state agencies.

The appeals process will be streamlined, some reporting requirements will be dropped mandatory financial withholding requirements for IT vendors will be reduced in some cases, according to the DGS. Multistage "phased" procurements will also be allowed, Butler said, which would allow a selected bidders to develop pilots or prototypes of a project -- a common practice in the private sector.

Requests for Information and a "proof-of-concept" process also will be mandated, he said. The state also plans to utilize as needed a process spelled out in the state code that allows negotiation on terms and conditions with qualified vendors before contracts are signed, Butler added.

"We found in many cases we had too many requirements ... and requirements that couldn't be supported in the marketplace," Butler said.

In the past, the purchasing process usually took three to five years, but officials hope the revamped workflow will deliver projects in as few as 10 months and no more than two years. Under the old system, sometimes only one bidder emerged for a large-scale IT project, so the quicker pace and streamlined approval process should spur more vendors to compete for contracts, Butler said.

California CIO Teri Takai said Tuesday that the state has been challenged by large IT projects. It takes too long to develop RFPs and procure them, and it's been costly and frustrating for the vendors that bid on them, she said.

"We're hoping for, and plan to get, better projects -- and better deliverables," she said.

Takai said 95 percent of state IT purchases are covered under existing procurement contracts. But the remaining 5 percent -- the largest and most complex IT procurements -- account for 30 to 35 percent of all the state's technology spending.

Earlier this year, the Office of the Chief Information Officer released a five-year capital spending plan that includes 122 project proposals, but the state's budget crisis likely will dampen many of them. "Clearly we are revenue-challenged. There's no question about that," Takai said.

A kickoff meeting for the new Caltrans construction management system will be held Wednesday, August 12.

Matt Williams Associate Editor
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