Everyone seems to acknowledge that Virginia's IT department faced an uphill battle transitioning to a new multi-supplier service model, but a recent audit raises multiple critical concerns.
Legislators and the majority of agency heads in Virginia have expressed dissatisfaction with the services of the Virginia Information Technologies Agency (VITA). But state CIO Nelson Moe maintains that critics should consider the time it requires to implement a multi-supplier service model, especially after a disastrous stint with a single uncooperative supplier, Northrop Grumman.
Yesterday, the Joint Legislative Audit and Review Commission (JLARC) presented findings of a VITA review that ended in July. Although VITA only started the implementation of its multi-supplier model in August 2018, the commission recommended an early review of the model “given JLARC’s ongoing oversight responsibility for VITA and the critical importance of getting the model right early in the implementation,” said JLARC Director Hal Greer at the meeting.
The review findings, presented by JLARC Principal Legislative Analyst for Ongoing Oversight Lauren Axselle, were largely negative and included the following details (as of July):
In an interview with Government Technology, Moe said VITA embedded JLARC’s staff in his agency so that a detailed review could be completed, and although he appreciates what JLARC does, the timing of the review affected the findings.
“It was done as it [the implementation] was happening and not at the end of it,” Moe said. “Normally these types of audits happen some months after you’re done.” He added that VITA knew there were issues with service, governance and contract management and that it was “actually making changes” as JLARC pointed out problems.
JLARC Senior Associate Director Justin Brown said that his organization, as part of its basic function, routinely evaluates different things that VITA is doing, though he noted that Moe makes an interesting point in that other JLARC reviews may be more “transactional” in how they approach a topic or an agency.
Brown added that if VITA had completed the implementation when it was supposed to, JLARC’s review would have indeed come after the fact. It also didn’t help that JLARC heard many complaints about IT services from state agencies.
Moe said it’s important to be aware of the “long-term view” of his agency’s adoption of a multi-supplier model. He pointed out that about a year ago, VITA was still in a lawsuit with its incumbent supplier, Northrop Grumman. This dispute wasn’t adjudicated until December 2018.
“We all realized we needed to end that situation and move on,” Moe said. “The new model is fine, but the way we had to move into it was not optimum. Our sister states that had the same model had a much, I’ll be honest, easier transition because they had cooperative incumbents.”
During a phone interview, Axselle said JLARC looked at what other states, namely Georgia and Texas, had done with their multi-supplier models. Topics examined included procurement processes, contract management processes, as well as issue-resolution platforms.
Axselle said Georgia and Texas did give JLARC the sense that a model like Virginia’s can take time to mature. Having said that, those states moved more quickly on some activities, such as adequately staffing one’s agency and resolving contract issues before they become formal.
In regard to VITA’s three formal contract disputes with suppliers, Moe said disputes are normal, even if contracts are well-written. Additionally, JLARC’s report found that VITA’s contracts are generally well structured.
Axselle, however, said Texas mentioned that “large financial claims are rarely escalated to the status of a formal dispute,” as issues are “typically resolved through more effective supplier relationship management.” Axselle added that it was JLARC’s understanding that neither Texas nor Georgia had ever had a material breach of contract like VITA.
In response to different Virginia agencies’ complaints about VITA services, Moe said he understands the situation given his 20-year career in government IT. With services, people usually expect stability over innovation. VITA’s new system, which recently won a National Association of State Chief Administrators award, is part of a “disruptive event,” Moe said, but he believes agencies will change their opinions as the model matures.
Moe mentioned more about the prospects of the future. Jonathan Ozovek started working as VITA’s chief operating officer in August. Moe said Ozovek has injected “discipline and data” into the model, getting suppliers to work more effectively together. He added that he and Ozovek are holding suppliers accountable right now as everyone speaks about JLARC’s review.
Brown said there are signs that the situation is “beginning to improve” at VITA. But if one includes the stint with Northrop Grumman and this new transition, agencies and legislators have been hearing VITA’s “trust us” mentality for years.
“I think some of it is not an implementation status issue, it’s a ‘being positioned correctly to manage the change that they knew for years was going to need to happen’ issue,” Brown said.
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