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  • Panel presentation

    1. 1. We didn’t make the rules, but let’s make the most of them… IPMA Forum 2002 “ IT Services Contracting – Best Practices” Or
    2. 2. Presenters: <ul><li>Lourdes Collins, DIS </li></ul><ul><li>Susan Johnsen, OFM </li></ul><ul><li>Steve Demel, GA </li></ul><ul><li>Don Cotey, Milestone Technology </li></ul><ul><li>Glenn Briskin, Sierra Systems </li></ul>
    3. 3. Authorities and Approvals <ul><li>PURCHASED SERVICES </li></ul><ul><li>Function is performed under agency direction where typical management authorization and work methods are maintained and are not at the discretion of the contractor. </li></ul><ul><li>Services are more routine or repetitive and meet more general needs of the agency. </li></ul><ul><li>Follows established or standardized procedures. </li></ul><ul><li>Decision-making is made on more routine activities in support of a project or activity. </li></ul><ul><li>Payment is typically based on hourly rates. </li></ul><ul><li>PERSONAL SERVICES </li></ul><ul><li>Function is performed independent from control of the agency; consultant maintains control of work methods. Work is more creative or original. </li></ul><ul><li>Services are more specialized. </li></ul><ul><li>Exercises judgment and discretion in accomplishing outcome. </li></ul><ul><li>Decision-making is at a level that determines the strategic direction of the project and/or includes non-routine activities or events. </li></ul><ul><li>Payment is typically deliverables-based. </li></ul>GA Non-IT Purchased Services , e.g., temporary office & accounting services, janitorial, bldg. maintenance, conducting predetermined surveys, conference coordination, etc. DIS IT Purchased Services e.g., programming, PC maintenance, network back-up services, help desk support, delivering agency-designed IT training etc. OFM Personal Services e.g., consulting services, legal services, actuarial services, strategic planning, survey design and results analysis; conference coordination SERVICES DIS / OFM IT Personal Services e.g., IT:software systems design; quality assurance, feasibility studies, etc.
    4. 4. Authorities and Approvals <ul><li>What about projects that have elements of both personal and purchased services? </li></ul><ul><li>Agency should determine the primary purpose of the contract. </li></ul><ul><li>When hardware purchases or programming services are part of a project that is primarily for personal services, then the entire contract is designated as a personal service. </li></ul><ul><li>Projects with IT components must comply with ISB IT policies and standards. </li></ul>
    5. 5. Authorities and Approvals <ul><li>ISB/DIS approval, if required, is obtained in advance of the solicitation. </li></ul><ul><li>OFM filing and review or approval of the contract is obtained after award, but prior to start of work. </li></ul>
    6. 6. Authorities and Approvals – DIS <ul><li>When do you need DIS/ISB approval? </li></ul><ul><li>Costs greater than delegated authority </li></ul><ul><li>Level 2 or 3 Severity & Risk </li></ul><ul><li>Under ISB oversight </li></ul><ul><ul><li>902 Proviso </li></ul></ul><ul><ul><li>ISB Discretion </li></ul></ul>
    7. 7. Authorities and Approvals – DIS <ul><li>Delegated Authority </li></ul><ul><li>The ISB delegates IT purchasing authority to agency directors who are in compliance with IT portfolio management policies and standards. </li></ul><ul><li>The three basic levels of delegated authority are: </li></ul><ul><ul><li>$50,000 for agencies with 49 or less total agency FTEs. </li></ul></ul><ul><ul><li>$250,000 for agencies with 50 to 149 total agency FTEs. </li></ul></ul><ul><ul><li>$1 million or greater for agencies with 150 or more total agency FTEs. </li></ul></ul>
    8. 8. Authorities and Approvals – DIS <ul><li>Level 2 & 3 Severity & Risk Criteria - Defined in the IT Portfolio Management Standards </li></ul><ul><li>Impact on citizens </li></ul><ul><li>Visibility to the public and Legislature </li></ul><ul><li>Impact on state operations </li></ul><ul><li>Consequences of not doing the project </li></ul><ul><li>Impact of the project on the organization </li></ul><ul><li>Effort needed to complete the project </li></ul><ul><li>Stability of the proposed technology </li></ul><ul><li>Agency preparedness </li></ul>
    9. 9. Authorities and Approvals - DIS <ul><li>IT Purchased Services Competitive Thresholds: </li></ul><ul><li>0 - $9,999 – Direct Buy </li></ul><ul><li>$10,000 – 99,999 – at least 3 vendors, verbal or written rqmts, ads discretionary </li></ul><ul><li>$100,000 – 249,999 – at least 5 vendors, written rqmts, ads discretionary </li></ul><ul><li>$250,000 and up – ads required, include all vendors responding, written rqmts </li></ul><ul><li>Contact DIS for further details </li></ul>
    10. 10. Authorities and Approvals – DIS <ul><li>For IT personal and purchased services, use DIS model contracts. </li></ul><ul><li>For more information see: </li></ul><ul><li> </li></ul>
    11. 11. Authorities and Approvals - OFM <ul><li>Personal Service Competitive Thresholds </li></ul><ul><ul><li>$5,000 - $19,999 – informal competition – at least 3 vendors, written rqmts, ads discretionary </li></ul></ul><ul><ul><li>$20,000 or more – formal competition, ad required, all vendors responding, written rqmts </li></ul></ul><ul><ul><li>RCW 39.29 </li></ul></ul><ul><ul><li>OFM Web Site </li></ul></ul>
    12. 12. Acquisition – Most Important Step <ul><li>Clear Statement of Work/Scope of Work </li></ul><ul><ul><li>Identify project requirements </li></ul></ul><ul><ul><li>Determine your desired business outcomes </li></ul></ul><ul><ul><li>Establish key deliverables and associated milestones </li></ul></ul>
    13. 13. Acquisition – Hourly Rate vs. Fixed Bid <ul><li>Time and materials (hourly rates), fixed bid, or a combination </li></ul><ul><ul><li>Well defined deliverables and cost drivers - FB </li></ul></ul><ul><ul><li>Deliverable and cost driver definition needed – TM </li></ul></ul><ul><ul><li>Need to transfer risk, OK to transfer control - FB </li></ul></ul><ul><ul><li>Have strong mgt , just need productive cost effective staff – TM </li></ul></ul><ul><ul><li>Combination approach </li></ul></ul><ul><ul><li>ISB or agency policy/guidelines may dictate </li></ul></ul>
    14. 14. Acquisition – RFP/RFQ – Evaluation Criteria <ul><li>Determine your evaluation approach </li></ul><ul><ul><li>Focus on evaluation criteria important to you </li></ul></ul><ul><ul><li>Weight the criteria to reflect their importance </li></ul></ul><ul><ul><ul><li>Cost and non-cost factors </li></ul></ul></ul>
    15. 15. Acquisition – RFP/RFQ Evaluation Criteria <ul><ul><li>Appropriately express your needs and constraints to get consistent responses and encourage competition </li></ul></ul><ul><ul><li>Use references effectively </li></ul></ul><ul><ul><li>Don’t over complicate </li></ul></ul>
    16. 16. Contract Approvals - OFM <ul><li>Contract Filing Thresholds for Personal Services </li></ul><ul><ul><li>Sole source contracts of $5,000 or more </li></ul></ul><ul><ul><li>Competitive contracts of $20,000 or more </li></ul></ul>
    17. 17. Contract Approvals - OFM <ul><li>There are two types of contract filing – “Review” or “Approval” </li></ul><ul><li>OFM Review = Review contract and make recommendations as needed – Agency can sign and start work immediately </li></ul><ul><li>OFM Approval = 10 day waiting period required before work begins – review contract and may require changes – may disapprove </li></ul>
    18. 18. Contract Approvals - OFM <ul><li>“ Review” vs. “Approval” depends on acquisition method, size, and type of work - Examples Subject to OFM Review </li></ul><ul><ul><li>Enhancements to existing systems </li></ul></ul><ul><ul><li>IT systems analysis services </li></ul></ul><ul><ul><li>IT network implementation services </li></ul></ul><ul><ul><li>On-call IT technical services </li></ul></ul><ul><li>(If sole source of 20K or over, subject to OFM approval.) </li></ul>
    19. 19. Contract Approvals - OFM <ul><li>Examples of IT Personal Service Contracts Subject to OFM Approval </li></ul><ul><ul><li>Design, development and implementation of a major information processing system </li></ul></ul><ul><ul><li>Re-engineering of major information technology systems </li></ul></ul><ul><ul><li>Quality assurance on IT systems </li></ul></ul><ul><ul><li>Development of IT strategic plans </li></ul></ul><ul><ul><li>Conduct of IT feasibility studies </li></ul></ul><ul><ul><li>Project management services </li></ul></ul>
    20. 20. Contract Approvals - OFM <ul><li>Sole Source Filing Requirements: </li></ul><ul><ul><li>All sole source 5K or more must be filed </li></ul></ul><ul><ul><li>All sole source filings require 10 day waiting period </li></ul></ul><ul><ul><li>All sole source 20K or more require approval </li></ul></ul>
    21. 21. Contract Management - Good Working Relationship <ul><li>Require a project charter defining high level expectation, roles, responsibilities, decision making needs </li></ul><ul><ul><li>Get assumptions on the table </li></ul></ul><ul><li>Emphasize good project management discipline </li></ul><ul><ul><li>Issue and change management </li></ul></ul><ul><ul><li>Clear acceptance criteria </li></ul></ul><ul><li>Open and complete communications </li></ul><ul><li>Work as a team </li></ul>
    22. 22. Contract Management - Technology Transfer <ul><li>Depends on type of contract – FB vs. TM </li></ul><ul><li>Depends on your commitment to having qualified resources available </li></ul><ul><li>Look for ways to create a team and work together </li></ul><ul><li>Build team involvement and technology transfer into the work plan </li></ul><ul><ul><li>Include staff in project and phase kickoffs </li></ul></ul><ul><ul><li>Involve staff in producing deliverables </li></ul></ul><ul><ul><li>Include staff in reviews of deliverables </li></ul></ul><ul><ul><li>Train staff at turnover time </li></ul></ul>
    23. 23. More Information <ul><li>OFM – http:/ </li></ul><ul><li>DIS – http:/ </li></ul><ul><li>GA – http:/ </li></ul><ul><li>Lourdes Collins, [email_address] </li></ul><ul><li>Susan Johnsen, [email_address] </li></ul><ul><li>Steve Demel, [email_address] </li></ul><ul><li>Don Cotey, [email_address] </li></ul><ul><li>Glenn Briskin, [email_address] </li></ul>