Companies that have large IT contracts with the state of California might soon be assessed more closely for the work they perform.
A measure moving through the Legislature with bipartisan approval would require the Department of Technology to develop and implement a vendor scorecard — part of a larger ongoing effort by both lawmakers and the Brown administration to foster successful IT projects.
“As we all know, over the last two decades the state has experienced several high-profile IT project failures resulting in major cost overruns and time delays,” Assemblywoman Autumn Burke said on the Assembly floor before lawmakers unanimously passed her bill in June.
“Because results matter,” the Democrat from Inglewood added. “AB 1546 is an effort to ensure that we do not continue to see major IT failures.”
The bill is relatively straightforward. It requires the Department of Technology, which is responsible for the approval and oversight of statewide IT projects, to develop and implement a standardized contract or performance assessment system by Jan. 1, 2019. And it’s something the department has already been exploring for the last several years, reaching out to vendors and soliciting their feedback on what a scorecard might look like.
Industry representatives are also on board with the idea — provided, they say, it’s done in a holistic way that rates both vendors and the state on projects.
Yet there’s a good chance the bill might not become law.
Gov. Jerry Brown vetoed similar legislation two years ago, saying it duplicated efforts already underway in the department. And Brown has made a point of vetoing measures that seek to legislate something the government can do on its own.
Brown spokesman Brian Ferguson declined to give a position on Burke’s bill, noting that the governor rarely comments on pending legislation. Burke told senators at a recent hearing that she hoped her second bill would serve as a reminder to the governor.
“It should be noted that it has been approximately two years since the veto message, and the performance system has yet to be finalized,” she told lawmakers.
Department Chief Deputy Director Chris Cruz said CDT is vetting a scorecard system with contractors and plans to release one in fiscal 2017-18.
“It’s been a long road, but we want to make sure we’re getting the scorecard correct, and we’re checking all the boxes,” Cruz said.
Specifically, Cruz said, the department wants to ensure that any scorecard aligns with other initiatives, including its recent rollout of its agile methodology and its project oversight report process. They’ve also taken to heart vendor concerns that both contractors and the state should be scored on projects, he said.
Lawmakers, however, don’t seem inclined to wait for the department to act. Not a single lawmaker has voted against the bill, and it is scheduled for a hearing in the Senate Appropriations Committee after lawmakers return from their summer recess later in August.
Of concern to lawmakers are the repeated reminders of failed IT projects or those that have gone way over budget.
A March 2015 report by the California State Auditor found that between 1994 and 2013, the state terminated or suspended seven IT projects after spending approximately $1 billion. Other reports by the state auditor have revealed that the state had paid nearly $28 million for a flawed IT system that failed to meet the needs of veterans’ homes, and that costs escalated with the California Department of Consumer Affairs’ BreEZe System because of inadequate planning and oversight.
Burke’s bill would require the evaluation of a contractor’s performance on any information technology contract or reportable project, such as projects that exceed an agency or department’s cost authority or one that was authorized by the Legislature. CDT is currently responsible for 28 reportable projects across the executive branch, totaling roughly $3.1 billion, according to the bill analysis.
Martin McGartland, president and CEO of Natoma Technologies Inc., which has contracted with the state for nearly two decades, testified that a performance measurement system is “way overdue” in California because “it does hold some accountability to the vendor community.”
In fact, many state vendors also do business with the federal government, which operates its own report card known as the Contractor Performance Assessment Reporting System, evaluating vendor performance on areas such as project schedule, cost control, project management, communication, and compliance, according to the bill analysis.
Nevertheless, many vendors initially opposed Burke’s bill because it mandated a variety of criteria, including an evaluation of contractor performance, whether or not a contract or project was completed on time, and information about the number of completed contracts or projects by the contractor.
“We’re not opposed to oversight, but we want to ensure it’s done in the right way,” said Liam Crawford, a senior manager with the IT Alliance for Public Sector. “Too often it’s one-sided.”
For example, Crawford argued, government also holds some responsibility on each project, including how it performs and allocates resources.
“We need a two-way analysis,” said Jennifer Saha, director of the Public Sector Councils for CompTIA. “We don’t want contracts ending in failure. Test scoring the vendor is only part of the problem.”
Burke amended her bill in early July and removed the vendor-specific provisions, winning at least neutral positions from key trade groups that represent state contractors. Whether her slimmed-down bill will win the governor’s signature is still anyone’s guess.
