Finance Officers Briefing

1
VITA Northrop Grumman Transition/Transformation

• Finance Officers Briefing
• July 14, 2006

2
In the Beginning

• VITA Creation 2003
• Infrastructure (in-scope)
• Individual agency applications (out-of-scope)
• 367 FTE
• Three agencies/organizations
• Integration 2004 2005
• 90 Executive Branch agencies
• PPEA Unsolicited Proposals Received 2004
• Infrastructure track
• VITA - Northrop Grumman
• Enterprise Applications track
• Secretaries Administration Finance

3
Scope

• Desktops 69,323
• Servers 3,099
• Telecommunications 15,441
• Peripherals 72,778
• 1,100 Employees
• 90 Executive Branch Agencies

4
Public/Private Partnership IT Infrastructure

• Northrop Grumman Selection
• Model Utility/unit cost vs. direct bill
• Infrastructure and service delivery 875 FTE
• Contract administration, governance, E-911, GIS,
  Security, other
• Retained agency _at_200 FTE (350 to 1,100 to 200)
• Service Commencement - July 1, 2006
• Transitional service improvements, equipment
  replenishment in years 1-3
• Contract Base Funding Not to Exceed 2005 Levels
  Across the Enterprise
• lt15 economic contingency
• VITA retained except for cost-of-living also
  capped for current workload

5
Select Partnership Milestones

• Employee Offer Letters May 2006
• Begin Desktop Refresh March 2007
• New Data Center July 2007 (Full Operation Late
  in 2007)
• Statewide Help Desk September 2007
• Computer Security Incident Response Center
  October 2007
• Complete Agency Desktop Refresh March 2009
• Enterprise-wide Messaging June 2009
• Server Consolidation Complete June 2009

6
Response to Employment Offersfrom Northrop
Grumman

• 846 VITA Employees Received Offer Letters
• 65.2 (553) Accepted in First Wave
• 15.8 (128) Declined (to be managed)
• Offer Expires September 12

7
Current Rates

• Direct Service - Operations
• Legacy (Telecom, computer, direct service)
  enterprise shared unit costs
• Direct Bill Cost 5.52 - move to agency
  specific unit cost
• Transition MOU Process (amendments as needed)
• Goal SINGLE enterprise shared service rates in
  2008
• Governance
• Security Management
• Product/service specific rate
• Project Management
• Project specific rate

8
Why Move from Direct Bill

• Interim JLARC Approval Rate for Two Years to
  Support Integration began FY04-05
• Allows/Improves Capacity Planning and Usage
• Reduces Large Swings in Budgeting and
  Expenditures
• Eliminates Annual Agency Administrative Hoops to
  Get Dollars for IT
• Caps VITAs Cost for Current Services at 2005
  Expenditure Levels
• Cost Model Will Provide Consistent Service,
  Consistent Planning at a Predictable Cost

9
The Challenge Service and Financing

• Direct Bill Moves to Agency-Specific Services
  Rates Based on Asset Categories (Charge-Back
  Model)
• Maintains current levels of service
• Implement July 2006 for Up to Two Years
• Base Not to exceed cost before NG partnership
  (2005)
• 100 million legacy (telco/mainframe existing)
• Agency Based Support
• 52 million labor (executed)
• 75 million non-labor (in process)
• MOU amendment
• Challenges
• Enterprise view
• Variable agency spending patterns
• Budgets vs. actual expenditures, year-end
  balances
• Small/medium agencies budgets
• Federal/audit allowable costs documentation
• Tracking Assets (new refresh)

10
Enterprise Shared Services Rates Phase III

• GOALS
• Enterprise-Wide shared service rates based on
  asset categories
• Customers choose service levels
• Consistent service levels at consistent costs
• Implement by July 1, 2008
• Aligns with NG contract
• Challenge
• Will cause increases or decreases to base funding
  depending upon service levels selected
• Eliminates need for one-time investments

11
What We Need Help With

• Understanding of the Enterprise Rate Structure
  Objective
• Understanding That VITA is Working with the
  Agencies to Agree on Real, Acceptable Numbers
• Commitment to Help Manage Change with Agencies
• MOU Process Under Way
• Collaborative meetings with agencies, based on
  records of actual agency spending/financial data
  and plans
• Asking for consistent monthly spend on
  non-personal/ equipment based on the real numbers
• NG Partnership Success Depends on COV Enterprise
  Cooperation and Support

12
Key Milestones

• To improve communication and coordination between
  the Commonwealth and Federal agencies
• To position agencies to move to service-based
  rates
• More details will be provided on specific
  milestones as they become available