Solutions-Based Procurement NIGP Forum, Tampa, FL 8/8/2006
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Solutions-Based Procurement NIGP Forum, Tampa, FL 8/8/2006

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    Solutions-Based Procurement NIGP Forum, Tampa, FL 8/8/2006 Solutions-Based Procurement NIGP Forum, Tampa, FL 8/8/2006 Presentation Transcript

    • Solutions-Based Procurement for Information Technology Acquisitions Michael B. Spicer South Carolina Chief Procurement Officer for Information Technology
    • Gartner and Forrester
        • 70% - 75% of all IT projects fail
        • Success Criteria:
          • On time
          • Within Budget
          • Originally Defined Functionality
    • Background South Carolina
      • Consolidated Procurement Code enacted in 1981
        • Based on the ABA Model Code drafted in 1970s
        • Preferred source selection method is Invitation To Bid
    • Background South Carolina
      • 1981 Code - Request For Proposals
        • Seven Paragraphs
        • “The request for proposals shall state the relative importance of price and of each other evaluation factor …”
        • Negotiations limited to price.
    • Background South Carolina
      • 1993
        • Expanded negotiations to include scope
        • Price need not be an evaluation factor
      • 1997
        • Two-Part RFP
          • Request For Qualifications
          • RFP
        • Best Value Bidding
          • Cost at least 60%, other factors 40%
    • Gartner and Forrester
      • 70% - 75% of all IT projects fail
      • Success Criteria:
        • On time
        • Within Budget
        • Originally Defined Functionality
    • A Prescription for Failure
      • The Boss or end user calls IT department and says:
        • I need this report
        • I need to process this form
        • I need to automate this process
    • A Prescription for Failure
      • 1970s
        • Data Processing was in the “glass” room
        • All IT acquisitions were data processing department responsibility
        • IT Director assigns someone to manage project
          • The best programmer in the department
          • The programmer not busy at the time
          • Maybe even a programmer analyst
    • “ Problem” Definition
      • Project Manager meets with end user to identify the problem
        • End users identify problems in terms of symptoms
        • Technologists identify problems in terms of solutions
    • End Users Define Problems in Terms of Symptoms
      • Symptoms may emanate from more than one problem
      • One problem may generate more than one symptom
      • There may be multiple symptoms emanating from multiple problems
      • Fixing symptoms may not solve the problem
    • Technologists Define Problems in Terms of Solutions
      • Search the marketplace looking at possible solutions to the “Problem”
      • The Solutions are identified in terms of
        • Software and/or hardware that solves the end user’s “Problem”
    • “Problem” Definition
      • The Problem is not a set of symptoms
      • The problem is not a technological problem
      • The Problem is a business problem
        • I need to perform a business operation more efficiently
        • I need to perform a newly assigned business operation
      • Define the Problem, not a solution
      • Technology is not the Problem, IT is a solution
    • Detailed Specifications
      • After reviewing as many solutions as time allows (6 mos.), the end user and project manager create detailed specifications
        • Define an existing manual or automated system
        • Define specific vendor’s solution
        • Define a solution that does not exist
      • Can anyone say PROTEST?
        • Define a minimum acceptable level of performance
    • Firm-Fixed Price
      • We ask vendor to propose a firm-fixed price for a poorly defined “Problem”
      • Question:
      • If you define the solution and it does not work, who is responsible?
      • If the vendor defines the solution and it does not work who is responsible?
    • Contract Management
      • State’s Project Manager – Technologist
        • “ Problem” not properly & completely defined
      • Contractor
        • Contract signers and promisers never seen again
        • Contractor’s PM – Professional
          • Efficient, profitable project – success optional
        • Contract Compliance Manager
          • Make sure contractor complies with contract
          • Generate change orders whenever possible
    • Failure to Define the Problem
      • Failure to properly and completely identify the Business Problem results in:
        • Scope Creep
        • Delays
        • Cost Overruns
        • Contract Modifications and Change Orders (maybe)
    • A Solutions-Based Procurement
      • Request for Qualifications
      • Request for Proposals
      • Pre Proposal Conference
      • Receipt of Proposals
      • Evaluation
      • Award
      • Looks like an RFP, doesn’t it?
    • Request For Qualifications
      • A description of the scope of the work to be solicited by the RFP
      • Require information only on their qualifications, experience, and ability to perform the requirements of the contract.
      • Responses ranked from most qualified to least qualified.
      • Proposals solicited from at least the top two qualified offerors
      • Failure to be selected to receive RFP is not subject to protest
    • The Solutions-Based RFP
      • Organizational Background
      • Define the Current Business Environment
      • Define the Current Technical Environment
      • Define the Business PROBLEM
      • Demonstrations
      • Business Proposal or Cost
      • Options
      • Minimum Offeror Qualifications
      • Evaluation Criteria
      • Desired Proposal Format
    • Organizational Background
      • Organizational History
      • Mission
      • Agency Budget
      • Organizational Structure
      • Number of Employees
    • Define the Current Business Environment
      • Current Processes and Procedures Directly or Indirectly Related to This Project
      • Current Legal or Business Mandates
      • Any Procedural or Process Documentation Directly or Indirectly Related to This Project
    • Define the Current Technical Environment
      • All Hardware and Software Currently Used to Address the Requirements of This Project
      • Any Currently Owned or Operated Hardware or Software That Could or Should be Utilized to Solve The Problem
    • Define the Problem
      • Define the Problem, Not The Solution
      • The Problem is ALWAYS a Business Problem
      • Business Problems Can Include Legal Mandates
      • Technology is a Solution, Not the Problem
      • Define the Budget Range for this Project
    • Evaluating Demonstrations?
      • Demonstrations
        • Validation
          • Highest Ranked Offeror, Not Scored
        • Demonstration Evaluations
          • All Offerors
          • Short List
            • All Offerors within a percentage of the highest ranked offeror
    • Perform Agency Risk Analysis
      • Perform agency risk analysis
        • Identify any internal or external political, business, or technological factors or issues that may affect the successful completion of this project.
        • There may be opportunities to shift agency risk to contractor in the solicitation
    • Business Proposal or Cost?
      • If cost is not an evaluation criteria, you may consider a business proposal including cost and submitted with technical proposal, or
      • A Business Proposal with Cost submitted separately
        • Require a Bill of Materials without cost be included in technical proposal
    • Business Proposal?
      • Total Cost of Ownership
      • Risk Analysis of proposed solution
      • Risk Mitigation Plan
      • Opportunities for Risk Sharing
      • Performance Incentives (maybe allowed)
      • Financing Options
      • Implementation Schedule
        • Staff Deployment Schedule
        • Milestones and Deliverables
        • Payments tied to Deliverables
    • Cost?
      • Offeror to include project risk analysis, risk mitigation plan, implementation plan, options, staffing plan, and bill of materials (without pricing) in the technical proposal
      • TCO, financing options, performance incentives submitted under separate cover to include Bill of Materials with itemized cost.
    • Considering Options
      • Offerors may have multiple solutions to the same functional requirement, each of which will work fine with their solution.
      • Offerors may propose options that shift risk
      • Offeror must fully explain each available option, the cost delta for each option and the exact parts of the original proposal for which the option may be substituted.
      • Each option will be considered prior to commencing full proposal evaluation
    • Offeror’s Original Proposal Offeror’s Technical Proposal Offeror’s Business Proposal -$$ -$$$ +$ Fully compliant with all the specifications, terms, and conditions B o M Bill of Materials Total Cost of Technical Proposal Risks or Options $$$$$$$ $$$$ $$$$ Offeror’s New Technical Proposal Why should the State accept the proposed Risk or Option?
    • Determine Evaluation Methodology
      • Traditional RFP Evaluation Committee
      • RFP Evaluation Committee
        • Subject Matter Consultants Available
      • Subject Matter Evaluations
    • Subject Matter Evaluation
      • Program personnel only evaluate program portions of proposal
      • Technologists only evaluate technology portions of proposal
      • Business personnel only evaluate business portions of the proposal
      • These areas may be further subdivided
      • Evaluation criteria for each subject area or SME scores roll up into a superset evaluation criteria.
    • Determine Evaluation Criteria
      • Functional Capabilities: How well does the proposed solution meet the needs of the State as identified herein.
      • Technical and Performance Capabilities: How well do the technical and performance capabilities of the proposed solution meet the needs of the State.
      • Business Plan: - The impact of the proposed systems on the business and financial operations of the Agency.
      • Cost
    • Determine Evaluation Criteria
      • Installation and Support: The degree to which the proposed installation and support capabilities meet the needs of the State.
      • Implementation Plan: Is the plan complete, reasonable, and does it meet the objectives outlined in the offeror’s proposal?
      • Qualifications: References (corporate and/or personal), resumes, financial statements, and evidence of ability to conduct business in the State.
      • Demonstrations
    • Set Desired Proposal Format
      • Submittal Letter
      • Executive Overview
      • Technical Overview
      • Detailed Technical Explanation of Proposed Solution with specifications
      • Any Available Options
      • Business Proposal
      • Offeror’s Qualifications
    • Evaluation and Award
      • Evaluation of Options
      • Oral Presentations and Discussions
      • Initial Evaluation
      • Demonstrations
      • Final Scoring
      • Demonstration of Highest Ranked
      • Negotiations
      • Award
    • Final and Conclusive
      • The determinations required by the Code are final and conclusive, unless clearly erroneous, arbitrary, capricious, or contrary to law:
      • No Specifications – No Protest
      • Request for Qualifications – No Protest
      • Award – No Protest
    • Conclusion
      • Define the Problem, not the solution
      • Technology not the problem, IT is a solution
      • Reduce the probability of a successful protest
      • A successful IT project must include people:
        • Program People
        • Technologists
        • Project Managers
        • Procurement
        • Financial
        • Legal
    • Questions?