District of Columbia overhauls its IT staff procurement process

According to the district’s Office of Contracting and Procurement and Office of the Chief Technology Officer, the contract “will inaugurate an innovative method of procuring IT contract staff resources.”

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

The district developed the new ITSA structure after a six-month study of IT staff procurement in the district and other states revealed that the district’s IT staff procurement process is too costly and time-consuming, The study also found 80 percent of vendors dissatisfied because of the lack of transparency, lack of opportunity and slow payment in IT staff procurement, according to the district.

The study 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. The best-practice structure formed the basis for the district’s ITSA request for proposal.

The new contract requires that 95 percent of the total spend go to district-certified business enterprises.

According to the district, the new process also widens opportunity and transparency for all businesses by enabling all vendors to see all IT staff procurement opportunities, and by posting online – in real-time – the winning bidder, the rates and the program manager who selected the bidder.

District expects to save $10 million on IT staff costs alone

According to the District of Columbia, the new ITSA contract will deliver major cost savings and other benefits for the district and its IT staffing vendors. The benefits will include:

• An estimated $10 million in annual savings on IT staff costs alone.
• Increasing the speed of IT staff procurement from the fiscal year 2007 average of 37 business days to a projected average of 10 business days.
• Freeing 60 percent of the Office of Contracting and Procurement’s technology procurement staff time and 16,000 hours annually in Office of the Chief Technology Officer program manager time for more mission-critical initiatives.
• Improving the transparency of the IT staff procurement process.
• Substantially increasing district-certified business enterprise participation in IT staffing contracts from 71 percent in fiscal year 2007 to the 95 percent required under the contract.

“This contract kicks off a new era of greater openness and broader opportunity in the district’s procurement of IT staff,” District of Columbia Mayor Adrian Fenty said.

District held meetings, created a Web site to explain changes

Because the new ITSA contract represents a significant change in current ways of doing business, the Office of Contracting and Procurement and the Office of the Chief Technology Officer worked with the District Department of Small and Local Business Development and the Council of the District of Columbia to explain the new structure to stakeholders and incorporate their views well-before contract execution. The three entities held a two-hour pre-proposal conference for the business community on May 6 and included recommendations from attendees in the RFP.

The Office of the Chief Technology Officer created a Web site, http://itsa.dc.gov, dedicated to providing information about the proposed contract for vendors and the general public.

Councilwoman Carol Schwartz, chair of the Committee on Workforce Development and Government Operations, held a five-hour hearing on Aug. 7 and requested modifications in the contract based on the hearing. The Office of Contracting and Procurement and the Office of the Chief Technology Office fulfilled all the requested modifications, and the contract parties executed them following 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 district-certified business enterprise 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.
• Require the Office of Contracting and Procurement and the Office of the Chief Technology Office to report to the mayor and the Council of the District of Columbia semiannually on the usage of the contract by the district government.

“We are always looking for ways to use technology to increase transparency and efficiency in government operations,” District Chief Technology Officer Vivek Kundra said. “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.”