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Texas Continues to Seek Efficiency Through Shared Services Contracts

Texas is committed to increasing adoption of shared technology services, said Hershel Becker, chief procurement officer at the Texas Department of Information Resources.

The Texas Department of Information Resources (DIR) is continuing to drive its own efficiencies through shared services.

DIR is continuing its relationship with Paris-based technology services company Capgemini, the agency’s Chief Procurement Officer Hershel Becker said via email. The state’s existing contract with Capgemini is set to expire Aug. 31, but a new four-year contract starts Sept. 1, with the opportunity for four one-year renewals.

Capgemini’s multi-sourcing services integrator (MSI) role going forward will include integrating and managing services for several service component providers. These include, the state’s digital service platform; data center services (DCS); managed application services (MAS); and managed security services (MSS).

Texas also hired Deloitte earlier this year to spearhead its online platform. During the Texas Digital Government Summit* in May, Texas CIO Todd Kimbriel told Government Technology a new personal digital assistant, “My Government My Way,” is on the way, and by Sept. 1, will be plugged in to the state’s enterprise MSI to continue driving efficiencies across all shared services programs.

The state, Becker said, is committed to increasing adoption of shared technology services through “realized benefits and efficiencies.”

“These include increased transparency and understanding of IT spend, cost savings as a result of shared infrastructure, reduction of legacy debt as a result of required technology refreshes, and reduced cyber-risk as a result of contractually required cyberstandards and frameworks,” Becker said.

DIR served as a guide to the Virginia Information Technologies Agency (VITA) in its recent migration to an IT multi-sourcing model. Atos, which Virginia hired for “advanced managed security services” to its executive branch agencies, also holds the DCS contract in Texas, which includes mainframe, server, DCS facilities and network. However, DCS service components are “subject to change” under the new Next Gen Data Center Services contract or contracts due in September 2020. DIR’s contract for DCS components expires Aug. 31, 2020, and the agency is currently in procurement for a Next Gen DCS contract, Becker said, noting shared technology services (STS) procurements “may result in a single or multiple award.”

STS are offered to eligible state customers in areas including managed application and security services, with each service component awarded through competitive procurement, and resulting in single or multiple awards, Becker said, “depending on the nature of the services and what may be in the best interest of the state.” State agencies and local governments are eligible for DIR’s shared services program.

The overarching idea behind a multisourcing model in making IT services available to individual agencies is that smaller, shorter-term contracts rather than larger agreements of a decade or longer can go further toward providing timely, relevant service at a cost-effective price.

In a recent interview, Virginia Chief Information Officer Nelson Moe said most IT contracts should be long enough to avoid being “constantly in contract mode,” but no longer than about five years “because things change so much.”

“The decision has to keep up with the speed of the market change. If not, you’re going to be left behind,” Moe said. VITA gave notice earlier this year it would terminate a 12-year contract with Northrop Grumman Aug. 17 and forge agreements with other providers. The agency said in May it would hire the Science Applications International Corp. as its MSI.

When asked whether larger contracts to achieve standardization were a precursor to smaller, more specific contracts when outsourcing IT, Becker said this is not necessarily the case. He explained that contracting entities, if implementing an MSI model, would still need to weigh factors including customer demand for service offerings, maturity of the existing outsourcing model, the nature of the outsourced services and the term of the current contracts.

“Contracting entities must consider cross-functional requirements and effectively communicate those across service component providers,” Becker said, indicating each provider must understand those requirements and the “integration required under the MSI model.”

Theo Douglas is assistant managing editor for Industry Insider — California, and before that was a staff writer for Government Technology. His reporting experience includes covering municipal, county and state governments, business and breaking news. He has a Bachelor's degree in Newspaper Journalism and a Master's in History, both from California State University, Long Beach.