We didn

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We didnt make the rules, but lets make the most
of them

• IPMA Forum 2002
• IT Services Contracting
• Best Practices
• Or

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Presenters

• Lourdes Collins, DIS
• Susan Johnsen, OFM
• Steve Demel, GA
• Don Cotey, Milestone Technology
• Glenn Briskin, Sierra Systems

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Authorities and Approvals
SERVICES

• PURCHASED SERVICES
• Function is performed under agency direction
  where typical management authorization and work
  methods are maintained and are not at the
  discretion of the contractor.
• Services are more routine or repetitive and meet
  more general needs of the agency.
• Follows established or standardized procedures.
• Decision-making is made on more routine
  activities in support of a project or activity.
• Payment is typically based on hourly rates.

• PERSONAL SERVICES
• Function is performed independent from control of
  the agency consultant maintains control of work
  methods. Work is more creative or original.
• Services are more specialized.
• Exercises judgment and discretion in
  accomplishing outcome.
• Decision-making is at a level that determines the
  strategic direction of the project and/or
  includes non-routine activities or events.
• Payment is typically deliverables-based.

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
DIS / OFM IT Personal Services e.g., ITsoftware
systems design quality assurance, feasibility
studies, etc.
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Authorities and Approvals

• What about projects that have elements of both
  personal and purchased services?
• Agency should determine the primary purpose of
  the contract.
• 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.
• Projects with IT components must comply with ISB
  IT policies and standards.

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Authorities and Approvals

• ISB/DIS approval, if required, is obtained in
  advance of the solicitation.
• OFM filing and review or approval of the contract
  is obtained after award, but prior to start of
  work.

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Authorities and Approvals DIS

• When do you need DIS/ISB approval?
• Costs greater than delegated authority
• Level 2 or 3 Severity Risk
• Under ISB oversight
• 902 Proviso
• ISB Discretion

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Authorities and Approvals DIS

• Delegated Authority
• The ISB delegates IT purchasing authority to
  agency directors who are in compliance with IT
  portfolio management policies and standards.
• The three basic levels of delegated authority
  are
• 50,000 for agencies with 49 or less total agency
  FTEs.
• 250,000 for agencies with 50 to 149 total agency
  FTEs.
• 1 million or greater for agencies with 150 or
  more total agency FTEs.

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Authorities and Approvals DIS

• Level 2 3 Severity Risk Criteria - Defined in
  the IT Portfolio Management Standards
• Impact on citizens
• Visibility to the public and Legislature
• Impact on state operations
• Consequences of not doing the project
• Impact of the project on the organization
• Effort needed to complete the project
• Stability of the proposed technology
• Agency preparedness

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Authorities and Approvals - DIS

• IT Purchased Services Competitive Thresholds
• 0 - 9,999 Direct Buy
• 10,000 99,999 at least 3 vendors, verbal or
  written rqmts, ads discretionary
• 100,000 249,999 at least 5 vendors, written
  rqmts, ads discretionary
• 250,000 and up ads required, include all
  vendors responding, written rqmts
• Contact DIS for further details

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Authorities and Approvals DIS

• For IT personal and purchased services, use DIS
  model contracts.
• For more information see
• http//www.wa.gov/dis/portfolio

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Authorities and Approvals - OFM

• Personal Service Competitive Thresholds
• 5,000 - 19,999 informal competition at
  least 3 vendors, written rqmts, ads discretionary
• 20,000 or more formal competition, ad
  required, all vendors responding, written rqmts
• RCW 39.29
• OFM Web Site

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Acquisition Most Important Step

• Clear Statement of Work/Scope of Work
• Identify project requirements
• Determine your desired business outcomes
• Establish key deliverables and associated
  milestones

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Acquisition Hourly Rate vs. Fixed Bid

• Time and materials (hourly rates), fixed bid, or
  a combination
• Well defined deliverables and cost drivers - FB
• Deliverable and cost driver definition needed
  TM
• Need to transfer risk, OK to transfer control -
  FB
• Have strong mgt , just need productive cost
  effective staff TM
• Combination approach
• ISB or agency policy/guidelines may dictate

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Acquisition RFP/RFQ Evaluation Criteria

• Determine your evaluation approach
• Focus on evaluation criteria important to you
• Weight the criteria to reflect their importance
• Cost and non-cost factors

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Acquisition RFP/RFQ Evaluation Criteria

• Appropriately express your needs and constraints
  to get consistent responses and encourage
  competition
• Use references effectively
• Dont over complicate

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Contract Approvals - OFM

• Contract Filing Thresholds for Personal Services
• Sole source contracts of 5,000 or more
• Competitive contracts of 20,000 or more

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Contract Approvals - OFM

• There are two types of contract filing Review
  or Approval
• OFM Review Review contract and make
  recommendations as needed Agency can sign and
  start work immediately
• OFM Approval 10 day waiting period required
  before work begins review contract and may
  require changes may disapprove

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Contract Approvals - OFM

• Review vs. Approval depends on acquisition
  method, size, and type of work - Examples Subject
  to OFM Review
• Enhancements to existing systems
• IT systems analysis services
• IT network implementation services
• On-call IT technical services
• (If sole source of 20K or over, subject to OFM
  approval.)

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Contract Approvals - OFM

• Examples of IT Personal Service Contracts Subject
  to OFM Approval
• Design, development and implementation of a major
  information processing system
• Re-engineering of major information technology
  systems
• Quality assurance on IT systems
• Development of IT strategic plans
• Conduct of IT feasibility studies
• Project management services

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Contract Approvals - OFM

• Sole Source Filing Requirements
• All sole source 5K or more must be filed
• All sole source filings require 10 day waiting
  period
• All sole source 20K or more require approval

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Contract Management - Good Working Relationship

• Require a project charter defining high level
  expectation, roles, responsibilities, decision
  making needs
• Get assumptions on the table
• Emphasize good project management discipline
• Issue and change management
• Clear acceptance criteria
• Open and complete communications
• Work as a team

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Contract Management - Technology Transfer

• Depends on type of contract FB vs. TM
• Depends on your commitment to having qualified
  resources available
• Look for ways to create a team and work together
• Build team involvement and technology transfer
  into the work plan
• Include staff in project and phase kickoffs
• Involve staff in producing deliverables
• Include staff in reviews of deliverables
• Train staff at turnover time

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More Information

• OFM http/www.ofm.wa.gov
• DIS http/www.wa.gov/dis/portfolio
• GA http/www.ga.wa.gov/pca/ps2
• Lourdes Collins, lourdesc_at_dis.wa.gov
• Susan Johnsen, susan.johnsen_at_ofm.wa.gov
• Steve Demel, sdemel_at_ga.wa.gov
• Don Cotey, donc_at_milestone-tech.com
• Glenn Briskin, glennbriskin_at_sierrasystems.com