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Virginia Eyes End of 13-Year Single-Vendor IT Contract

When Virginia wants technology, it goes to its sole contractor, who then sub-contracts out to other vendors — but the state is now looking toward a faster-paced model that matches the speed of the businesses it supports.

by Colin Wood / December 22, 2015

The Virginia Information Technologies Agency (VITA) has had the same contract for IT procurement since 2006. The contract, which is with Northrop Grumman, will be 13 years old when it expires in 2019 — ancient in an industry where technology turns over new generations as fast as fruit flies. And a report by Integris Applied handed over to VITA last month recommends how the commonwealth ought to handle its transition from a slow-paced, consolidating body to a more nimble and innovative organization in the years to come.

Nelson Moe, Virginia's CIO of seven months, hasn't made any decisions yet; he's still weighing the report's recommendations. But one thing the former U.S. House of Representatives CIO said he is clear on: that 13 years for a single technology contract is a long time.

"John F. Kennedy announced that the U.S. space program was going to start and be on the moon within a decade," Moe said. "He made that speech in 1960 and we're on the moon in July of '69. Nine years. This contract's four years longer than that."

When Virginia wants technology, it goes to its sole contractor, who then sub-contracts out to other vendors. The arrangement has served Virginia well the past decade as the commonwealth's agencies and data centers have consolidated, Moe said, but the state is now looking toward a faster-paced model that matches the speed of the businesses it supports.

The report makes four key recommendations to VITA based on 60 90-minute interviews with department leaders.

The first is that the commonwealth should begin its efforts to extricate itself from the old contract now. Virginia's technology agencies are entrenched in a particular way of doing things that aren't likely to change overnight.

"We're going from making donuts to tires," Moe said. "They're both similar in that they're round with a hole in it, but other than that, they're different. And so we have to make sure we're geared and staffed up to make sure we can handle a best-practices model to move forward."

The report's second recommendation was that Virginia adopt a multi-supplier model similar to what's found in many state technology offices today.

Ten years ago, the technology market was less mature and less sophisticated than it is now. In 2006, there was no iPhone, the Web economy was still finding its footing, people thought cloud computing was something airline pilots did, and computer chips and sensors were still relatively expensive. The contract Virginia established was not practical for acquiring the kinds of technologies agencies would soon be requesting.

"It's problematic because if you look at the contract vehicle, the type of contract was not designed for technology innovation and injection — it was designed to consolidate infrastructure," Moe said. "The contract did a good thing. It took all these disparate infrastructure setups by different agencies, put them all in one place and consolidated them and updated them. It did that. And now we have an opportunity to leapfrog and say, 'Ok, we know what we have, we know what we do, and now what do we do next?'"

The report's two final recommendations are that the state create an office to manage the new service delivery model and that it implement a new governance model that increases agency involvement.

Though Moe hasn't committed to anything in the report yet, he admits it's time for change.

"My general philosophy is that in order to be adaptive — in order to be responsive to technology, responsive to individuals — we have to move at the speed of business and build things to adapt," Moe said. "We have to be able to adapt at that speed. We cannot be the slowest horse in the cavalry, to be frankly honest."

Moe compared the disadvantage of slow-moving technology to that of a football team that's only allowed to switch out its players once a quarter. The other team is allowed to make substitutions whenever they want, and if they're going to meet that demand, they need to be able to move just as fast, Moe said.

"IT for state and local government has to match the serviceability you get in the private sector," he said. "Apple Pay, Google Pay, Amazon Prime. Those are the types of services people expect in the private sector, so they say, 'Why can't I get that from my government?'"

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