There are many challenges to using the competitive procurement process to purchase IT solutions for government.
The dilemma is more than just large and cumbersome RFP package production, long software demos and lengthy review and contracting. Government has reduced funding for investments and can no longer afford to get it wrong – especially for core systems like document management, GIS, accounting and finance solutions and other large, critical systems. That means the best approach is to improve the way you procure IT.
Traditional procurement rules and processes aren’t designed for the complexity of IT. Procurement focuses on getting the best price and terms for commodity items that are easily definable and available from multiple vendors. IT purchases don’t often fit this approach because technology is usually deployed as a “solution” — a set of products, consulting and support services and processes that are often developed after vendors are selected. And, often proposals come in with different pricing schemes and different descriptions that make it difficult to do an “apples to apples” comparison.
Similarly, standard purchasing terms and conditions were usually not created for IT. The nature of IT investments might require adjustments to payment terms, delivery parameters, considerations of warranty coverage and other standards that are defined for general purchasing. You may need to develop new terms and practices for the “best-value” contracting that is often a better choice for IT projects.
For all of these reasons, I think procurement staff, like most of us, struggle to keep up with technology. An IT investment typically includes many variable elements such as multiple licenses, product bundles or versions, and multiyear support contracts or service subscriptions. These elements can be confusing and is only compounded by rapid technology change and the increasing number of highly diverse IT projects.
Additionally, the increasing adoption of IT services and cloud solutions instead of hardware or software product purchases requires a new understanding of service pricing and delivery models.
So, how can your procurement get smarter about IT?
- Use vendor white papers or invite vendors to educate staff about a technology before the RFP is developed. This gives you a way to be more precise in describing what you need for your organization from the solution under consideration.
- Visit neighboring jurisdictions that have implemented a solution or use an online meeting to see actual solutions that address your needs so you can understand realistic outcomes before you write requirements. Use your peers’ experience to write your RFP and to understand how to evaluate a type of solution.
- Shared services and interlocal agreements can also be used to to leverage another jurisdiction’s procurement. TUsing contracts such as GSA or state term schedules in order to avoid creating your own contract is another option. This can save money and allow you to benefit from IT pioneers at the county or city level.
- Check resources like the National Association of Counties, the National League of Cities, the National Association of State CIOs and the Center for Digital Government to learn more about specific solutions and who is using them.
- Finding new ways to research and procure technology solutions begins with knowing what you don’t want every bit as much as what you do want. To identify this knowledge within your organization, ask the question that is at the core of what you are trying to achieve: What will success look like for your organization and why is it important? This question about project success prompts discussion with the business side and with users about what they need and what they can realistically expect from a technology purchase. In turn, this discussion helps to create more realistic RFPs, more targeted vendor responses, and a more efficient purchasing effort.
Changing procurement does not mean throwing out competitive bidding, but it does mean evaluating our practices to ensure that your process picks the solution with the best chance of meeting the project needs at a fair price.
Terri, we fully agree with all of the points you make in your posting. And recognizing that the Government is buying more of its IT projects using Agile (aka iterative or modular) software development, ASPE, Inc. and ASI Government have developed a course, Acquisition for Agile, to educate both Federal acquisitions staff (COs/KOs) as well as program managers on what Agile is, why government IT managers want to use it, and what the relevant government guidelines are for acquiring Agile services. Projects managed with Agile are by their very nature not typical firm fixed price with fixed deliverables contracts – the idea of buying capacity (aka “velocity”) takes special training to get it right. This training will help those who are headed into, or executing within the Agile path.
Terri – Although I am not against your approach, I wanted to look at this issue from another lens. That is to say, the issue you raise is not necessarily a procurement issue, but one that needs to be addressed up front before the acquisition process starts; requirements developments.
I do disagree, however, that the procurement process is incapable of procuring IT in a timely fashion. It is an issue with people, who lack the fundamental skills and knowledge to acquire IT in a timely fashion.
Further, all the bullets you mention are subsets of market research, governed under FAR Part 10. Procurement personnel (of whom I include Program Managers), are notoriously bad at doing market research properly or even at all, stumbling around in the dark putting together horrific RFPs that do not take into account market realities or complexities of IT. Here is where the breakdown starts.
Agile development can be beneficial in this process, but again it requires effective market research and communications and collaboration with industry to get a handle on IT and work the procurement process properly.