Little Hoover Grapples With IT Procurement’s ‘Procedural Fetishes’

The Little Hoover Commission heard testimony this week about the problems and opportunities around state IT procurements.

During the hearing Thursday morning, experts familiar with the state’s procurement processes delivered their assessments of where the system falls short and what needs to be done to fix it.

The answer to the latter issue seemed to be a substantial overhaul, as several experts outlined the problems with bolting on new regulations and steps to address issues on a piecemeal basis.

“Every time something goes wrong, somebody tries to address the problem, and usually that involves adding another layer of complexity; it doesn’t actually fix the problem,” former Assemblymember and current T-Mobile Senior Executive Lloyd Levine said in his comments to the commission.

Another resounding theme among the experts was what they called a “culture of fear” surrounding the IT procurement process. Departments tend to default to “checking every box” as a defense should things go sideways with the project, Levine said, when they should be focusing on outcomes.

“That culture of fear is something that can’t be addressed directly, but will be addressed through an improved process. If there’s less ambiguity about the process, there will be less fear in the bureaucracy,” he added.

Commissioner David Beier called the overreliance on process and adherence to overly complex and/or strict rules in the space “procedural fetishes.”

Levine also noted that the state’s approach to large projects often differs from private industry in that the private sector launches and iterates, rather than building a monolithic project in totality and then turning it on.

Amy Tong, former senior adviser to the governor and state CIO, agreed that the box-checking process sets an adversarial tone.

“That is not the right culture to continue,” Tong said.

Tong added that the role of procurement specialists has been overemphasized, while program specialists take a backseat.

“I would also recommend that when we look at procurement, we need to get into differentiating the roles of a procurement team that needs to have way more emphasis and involvement, empowerment of business representatives, and then you involve the tech and security folks for the tech and security requirement,” she said. “And then, at last, is having a procurement specialist to shepherd the correct terms and conditions, not the other way around.”

Tong — and other experts — also noted that large monolithic projects need to be deprioritized moving forward, as they are not able to keep pace with technology needs and are often hampered by budgetary constraints.

Michael Wilkening, who previously served as the secretary for the California Health and Human Services Agency and as the special adviser on innovation and digital services to Gov. Gavin Newsom, agreed with Levine’s assessment that the larger system is too piecemeal to function smoothly.

“I think Lloyd brought up a really important point, which is that there have been incremental changes and improvements to the system over time; it’s not enough,” Wilkening said. “We actually should start over; we’re building on top of things that have not worked.”

He added that a lack of executive sponsorship is another area of needed improvement.

The ever-present issue of budget was also a key component of the conversation, with Tong, Wilkening and the Weideman Group’s Director of Procurement Daniel Kim underscoring that the state’s 18-month cycle makes properly funding and adapting IT projects difficult in the real world.

Kim previously served as director for the California Department of General Services. One of his ideas, which he shared in a contributed piece with Industry Insider — California, is that major technology modernizations should be funded in much the same way that roads and bridges are funded — through bonds and overseen by a dedicated IT infrastructure board.

“We could have a bond and treat technology the way we treat roads and buildings. We could issue bonds. We could allocate the proceeds outside of the budget process,” he said, likening it to buying a home through a line of credit.

Wilkening agreed that the current budget process isn’t nimble enough and doesn’t build in the proper funding for staff and continuity.

Kim also encouraged the use of long-term project advisers or owner’s representatives to work with the state staff throughout the life of the project, rather than hiring individual consultants at each stage of the project.

“If they could work on that, you’d have continuity in a way that we don’t have right now,” Kim said.

Another major issue surfaced by the group, though widely discussed throughout the industry, was that of the administrative burdens on companies looking to work with the state, particularly where requests for information (RFIs) are concerned.

The experts noted that smaller companies are often not able to spend the time and resources needed to participate in an RFI, especially if there is no promise of a potential contract at the end of it.