Big IT Purchases Don’t Always Fit a State’s Procurement Process

The Georgia State Capitol in Atlanta.

The Georgia State Capitol in Atlanta. Rob Hainer / Shutterstock.com

 

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An alternative approach used in Georgia “gives us multiple bites at the apple,” according to the state’s CTO.

ALEXANDRIA, Va. — The procurement process states use to buy highway paint or office supplies is not always well suited for big technology purchases.

That’s according to Steve Nichols, the state of Georgia’s chief technology officer, who said there’s an alternative procurement approach that the Peach State has used a handful of times in recent years. It’s an iterative process, which allows for substantial back and forth dialogue between the state and the vendors vying for a contract.

Nichols, and Tom Fruman, director of enterprise governance and planning for the Georgia Technology Authority, said that for some complicated, high-dollar state purchases, this non-standard procurement process can reduce misunderstandings before contracts get signed, and also save money by lowering risks.

Fruman likened the normal procurement process to the state slipping a solicitation for goods or services under a door, and vendors then slipping a proposal back in response.

“We think we’ve got an answer, we open the door, shake hands and we’ve got a deal,” he said in an interview on Tuesday at the the 2015 National Association of State Chief Information Officers mid-year conference. “Nobody talks to each other.”

The alternative process, which the Georgia Technology Authority first tried in 2008, gives vendors several opportunities to revise their proposals based on feedback from the state.

The state can also tweak proposal requirements to reflect what a given industry can deliver.

“It kind of gives us multiple bites at the apple, on getting the requirements right,” Nichols told Route Fifty.

“If we aren’t clear in communicating the requirements, or if we misunderstand how a certain industry works,” he said, “it gives us a way to solve it before we’ve got a signed contract.”

This process has the potential to reduce a vendor’s uncertainty over the state’s requirements in a request for proposals, which can result in lower bid prices.

“If they don’t understand something, they’re going to build in some risk, which builds in cost,” noted Fruman, referring to vendors.

Nichols agreed. “It’s really about reducing that risk premium for everybody,” he said.

During remarks he made earlier in the day at the conference, Nichols said the state typically only considers the process for contracts that are at least $10 million. So far, he said, it has been used about four or five times for procurement processes involving various technology projects and initiatives, including the outsourcing of IT infrastructure and telecommunications.

A downside of the process is that it can be time consuming. “It’s super heavy,” Nichols said.

He pointed out that vendors incur costs sending staff to Georgia to attend meetings throughout the process, some of which can last all day, and that it takes them additional time to re-write proposals. State employees, meanwhile, need to evaluate and score multiple versions of the proposals vendors submit.

Despite the extra time involved, clarifying misunderstandings before a contract is signed has value for both states and vendors, according to Fruman.

“This whole process allows people to sit down at the table and actually talk about what we’re trying to accomplish,” he said. “We’ve got to answer these questions a lot of times, it makes more sense to answer them earlier.”

Bill Lucia is a Reporter for Government Executive's Route Fifty.

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