Tuesday, August 19, 2008

Streamline Procurement by Innovating IT Staff Augmentation

Grow District's Tech Economy by Transforming Staffing Procurement

District of Columbia Signs New Best-Practice Technology Staff Contract

The District of Columbia’s Office of Contracting and Procurement (OCP) and Office of the Chief Technology Officer (OCTO) today announced the execution of a new information technology (IT) staff augmentation contract that promises to transform the District’s IT staff augmentation (ITSA) process. The new contract will inaugurate an innovative method of procuring IT contract staff resources and save the District millions of dollars annually on technology spending.

OCP and OCTO developed the new ITSA structure after a six-month study of IT staff procurement in the District and other states. The study found the District’s process too costly and time consuming, and found 80 percent of vendors were dissatisfied based on lack of transparency, lack of opportunity, and slow payment. The study also found that at least 18 other states have solved similar problems through a new structure in which one or more prime contractors provide capped rates for IT staff positions and subcontract with other vendors to fill them. This best-practice structure formed the basis for the District’s ITSA Request for Proposal (RFP).

The new contract requires that 95 percent of the total spend go to District Certified Business Enterprises (CBEs). The new process also widens opportunity and transparency for all businesses by enabling all vendors to see all IT staff procurement opportunities--online and in real time--including, the winning bidder, the rates, and the program manager who selected the bidder.

The new ITSA contract will deliver major cost savings and other benefits for the District and its IT staffing vendors. These benefits include:

  • An estimated $10 million in annual savings on IT staff costs alone;

  • Increasing the speed of IT staff procurement from the FY 2007 average of 37 business days to a projected average of 10 business days;

  • Freeing 60 percent of OCP’s technology procurement staff time and 16,000 hours annually in OCTO program manager time for more mission-critical initiatives;

  • Improving the transparency of the IT staff procurement process; and

  • Substantially increasing CBE participation in IT staffing contracts from 71 percent in FY 2007 to the 95 percent required under the contract.

Because the new ITSA contract represents a significant change in current ways of doing business, OCP and OCTO worked with the District Department of Small and Local Business Development (DSLBD) and the District of Columbia Council to explain the new structure to stakeholders, and incorporate their views, well before contract execution. OCP, OCTO, and DSLBD held a two-hour pre-proposal conference for the business community on May 6, 2008 and included recommendations from attendees in the RFP. OCTO created a website, http://itsa.dc.gov/, dedicated to providing information about the proposed contract for vendors and the general public. Councilmember Carol Schwartz, Chair of the Committee on Workforce Development and Government Operations, held a five-hour hearing on August 7 and requested modifications in the contract based on the hearing. OCP and OCTO fulfilled all the requested modifications, and the contract parties executed them following DC Council approval of the contract.

The contract modifications:

  • Reduce the contract cap from $150 million per year to $75 million per year;

  • Clarify the relationship between the prime contractor and the CBE subcontractors;

  • Require the prime contractor to create a dispute resolution and appeal process;

  • Ensure that each subcontracting vendor is in good standing as to tax status;

  • Require each subcontracting vendor to adopt the terms of the First Source Act; and

  • Require OCP and OCTO to report to the Mayor and the DC Council semiannually on the usage of the contract by the District government.

This contract kicks off a new era of greater openness and broader opportunity in the District’s procurement of IT staff,” said District of Columbia Mayor Adrian M. Fenty. “I commend OCP and OCTO for their hard work. I thank the Council, and especially Councilmember Schwartz, for their leadership in making this excellent idea a reality.”

With this new contract, the District joins the ranks of states around the nation that are reforming procurement in the public interest,” added District Chief Procurement Officer David Gragan. “The new ITSA structure provides government efficiency, cost savings, and fairness.”

"We are always looking for ways to use technology to increase transparency and efficiency in government operations,” said District Chief Technology Officer Vivek Kundra. “With this new vehicle, we’ll bring highly qualified staff on board much faster and at lower rates. And finally technologists can focus on technology without having to continuously interrupt their work to conduct recurring and predictable procurement actions.”

To learn more about DC Government technology initiatives and resources, visit http://www.octo.dc.gov/. To learn more about DC Government procurement opportunities, visit http://www.ocp.dc.gov/.