State of California

Task Force on Reengineering IT Procurement for Success

In both the public and private sectors, 98 percent of Information Technology (IT) projects with initial budgets in excess of $10 million fail to be implemented on schedule and within budget.1 This disappointing percentage highlights the heavy risk the State faces as it replaces outmoded technology infrastructure to meet its business needs and serve its citizens. Today, the state is in the midst of 54 major IT projects, with a total taxpayer price tag of $4.5 billion. The State of California established the Task Force on Reengineering IT Procurement for Success to address the frustrating all-too-frequent delays and cost overruns plaguing its IT procurements. The Task Force is charged with identifying best practices and innovative solutions used in other states and municipalities to ensure that the right vendors can be hired at the best price and to hold those vendors accountable for their performance. The Task Force will consist of a diverse group of accomplished leaders and reformers in the field of information technology, representing both public and private sectors. With more than 100 years of collective experience and expertise, the Task Force will begin by focusing on analyzing and proposing solutions to some of the following problems that are commonly associated with todays procurement and vendor management practices: Ensuring Best Value - Despite efforts to seek best value, Californias procurement policies sometimes result in vendors lowering their costs to win the bid, while knowing they will be forced to cut corners and assign resources that do not have sufficient experience to deliver a successful project. Identifying the most qualified vendor Californias procurement process relies heavily on quantitative scoring, often times rewarding vendors who check off the right boxes. The current narrow focus process makes it difficult for the State to determine the most qualified vendors. Contracts lack the necessary carrots and sticks to get the job done right Californias technology contracts lack the financial rewards and disincentives commonly found in Performance-Based Procurements that encourage completing projects on time and within budget. Holding California hostage When the procurement process is undermined, the resulting contracts may have unrealistic or incomplete requirements, deliverables, and terms. This forces California into additional contracts to deploy, operate and maintain new technology systems, making the State further dependent on contractors.

Source: CHAOS Manifesto, The Standish Group International, Incorporated, p1, 2010.

300 Capitol Mall, Suite 1850, Sacramento, CA 95814 P.O. Box 942850, Sacramento, CA 94250 (916) 445-2636 Fax: (916) 322-4404 777 S. Figueroa Street, Suite 4800, Los Angeles, CA 90017 (213) 833-6010 Fax: (213) 833-6011 www.sco.ca.gov

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Completing technology initiatives on time and within scope and budget should not be an outlier, but rather the expected norm. By considering best practices from throughout the nation, this reform effort seeks to not only establish Californias leadership in this area but to earn the confidence of the public that their investment in public IT infrastructure projects is secure and optimized.