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IT Procurement Forum

IT Procurement Forum. February 28, 2008. Agenda. Welcome Background Flexibility Solution Based Procurements Pre-Qualified Vendors Risk Assessment. Background. 1st Forum Listen to Industry issues Summarized common points 2 nd Forum Industry Recommendations Workgroup presentations.

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IT Procurement Forum

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  1. IT Procurement Forum February 28, 2008

  2. Agenda • Welcome • Background • Flexibility • Solution Based Procurements • Pre-Qualified Vendors • Risk Assessment

  3. Background • 1st Forum • Listen to Industry issues • Summarized common points • 2nd Forum • Industry Recommendations • Workgroup presentations

  4. Terms & Conditions • State Terms & Conditions • Potential Cost Driver. • Commercial Terms & Conditions • Lower Cost. • Moving Forward • Suppliers submit bids to both: • Standard Terms and Conditions; and • Commercial Terms & Conditions along terms and conditions required by statute (priced). • The State may accept either bid or use its authority under Public Contract 6611 to negotiate a contract.

  5. Solution Based Procurements • SB 954 • Focuses on a functional vs. technical approach. • Flexible approach and process to deliver the best business solution. • Moving Forward: • 954 used on all integration projects ≥$5 M. • COTS solutions.

  6. Flexibility • State of CA Terms and Conditions • Carve Outs • “Unless otherwise stated in the SOW” • Definitions • Acceptance • Warranty • Termination for Convenience • Rights in Work Product

  7. Flexibility--continued • “Unless otherwise stated in the SOW” • Order of Precedence • Termination for Default • Limitation of Liability • Termination for Convenience • Rights in Work Product

  8. Qualified Supplier Pool • Strategies for a Qualified Supplier Pool • Streamline procurement process • Allows suppliers to submit financial and reference information on an annual vs. per procurement basis. • Updates required if information changes are material (e.g. SEC filing, judgments, etc.). • Capabilities Index – opportunity for suppliers to demonstrate capabilities. • Final criteria under development.

  9. Risk Assessment • PCC 12112(a) (AB 617) • Requires at least 10% withhold for contracts with progress payments. • Each project will be evaluated individually. • Development of a risk framework, contract award expected in three weeks. • Framework due June 1, 2008.

  10. Risk Assessment-cont’d • PCC 12112(a) (AB 617) • Until rollout DGS will be using interim risk criteria guidelines that determine project risk based on: • Criticality; • Value (TCO); • Capital Risk (Financial/Human); • Impact (Internal/External); • Complexity (Knowledge Transfer/Customization).

  11. Risk Assessment-cont’d • Risk Protections: • High Risk Projects • 10% withhold and: • Performance Bond (30-50% of project value); or • Letter of Credit (1.5 – 2 times the value of the project). • Medium Risk Projects • 10% withhold and: • Performance Bond (20-30% of project value); or • Letter of Credit (1-1.5 times the value of the project). • Low Risk Projects • 10% withholds.

  12. COTS Software Language • Supplier Input • State proposed language and four suppliers provided input. • Revised language is being finalized and will be released by April 2008.

  13. E-Procurement • Reduction of paper processes. • Electronic process for requisitions, solicitations and purchase orders. • Electronic communication with vendors. • Return to vendor registration process. • Statewide spend analysis. • Rollout July 2008.

  14. Q & A

  15. Closing Comments • All this information is available only at: • http://www.pd.dgs.ca.gov/tas/default.htm • Or go to: pd.dgs.ca.gov; and select the IT COTS Project link from the topic list located on the right side of the webpage

  16. Thank You!

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