Final
Department of State Presentation
STATE PROCUREMENT PROCESS
Votes:
Action Taken:
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9:00 AM -- Department of State Presentation
Senator Groff called the meeting to order and invited representatives from the Department of State to the table.
9:05 AM
Bill Hobbs, Deputy Secretary of State, introduced Patti Fredrick, Co-Director of Elections, and Brian Mouty, SCORE Project Manager for the Help American Vote Act Program (HAVA). Mr. Hobbs's testimony centered on the department's contracting procedures as they relate to the department's many IT projects. Mr. Hobbs noted that the department dispenses information to the public in an e-government format. To this end, the former Secretary of State, Donetta Davidson, sought funding for IT projects as soon as she assumed her position. Mr. Hobbs noted that all information available on the department's website is accessible for free.
As its primary approach, the department contracts for IT services off of the state's bid list because a state rate has already been negotiated. This approach makes contracting go more quickly and efficiently. All state agencies file their rules with the Department of State. Due to the volume, the department contracts with an outside vendor to perform this function.
Mr. Hobbs discussed several problems with the state contracting process:
• vendors know how much the agency has to spend because of the state's appropriation process;
• estimating the cost of pending legislation for fiscal notes is difficult due to the limited time to do so, and sometimes results in estimates which are either too low and/or too high;
• the process is very slow — it is not uncommon to take up to 12 months to finalize a project due to in-house analysis, inclusion in the annual budget submission, JBC staff analysis, and final approval through the annual budget process;
• technology may be obsolete once the project is implemented if the process moves too slowly;
• although elected officials are exempt from certain constraints of the contract process, if they choose to take the exemption path they do not benefit from the contract review process in the State Controller's Office;
• comments received back by the State Controller or the Attorney General's Office can prove problematic — although both agencies provide good contract language, objections to the contract seem to go beyond the legal review; and
• the IMC and JBC reviews of IT projects add to delaying a project's start date and, in effect, require the department to make its arguments for technical approval/funding twice — requiring more staff time.
9:25 AM
Mr. Hobbs took questions from the committee. Senator Groff asked for the total dollars spent on contracting annually in the department. Mr. Hobbs stated that the department's overall budget is approximately $15.0 million (does not include $15.0 million from the Federal Elections Assistance Fund for HAVA), but he did not know the specific amount spent on contracting. Sen. Groff also pursued whether past performance of contractors was considered prior to entering into a contract. Mr. Hobbs said that the department did look at past performance of contractors.
Senator Teck asked for recommendations for change in light of the problems the Department of State identified in the procurement and IT process. Mr. Hobbs noted that the procurement process is much like the personnel system — very slow but may have to be to ensure fairness. Mr. Hobbs will get back to the committee with more concrete solutions/recommendations.
Mr. Felice asked what happens if money runs out at the end of the fiscal year? Mr. Hobbs noted that often times the department requests multi-year funding to ensure that funding does not run out, in addition to using its "roll forward" spending authority. There has never been a time when the department ran out of money to continue a contract — perhaps because of its use of the elected officials' exemption. All this said, the department cannot spend more than its appropriation. Should the department require added funds due to unforeseen circumstances with potential contract overruns, the department seeks supplemental funding. Only once has the department selected a vendor who failed to fulfill its contract requirements and that was for e-filings.
Mr. Houlihan asked if there are problems with an "advisory" manual. Mr. Hobbs stated that the department is small with limited staff to manage and keep up to speed with contract management. There is no single full-time person dedicated to its contract process. The department may exercise its exemption status but never works off of a separate set of rules — the department follows the state's fiscal rules. He recommended involving the Controller's Office and the Attorney General's Office earlier in the process, not just fiscal and legal review at the end of contract negotiations but during the negotiations. Mr. Hobbs said that timetables and deliverables are written into their contracts to ensure a good time track.
9:38 AM
Mr. Brian Mouty began his testimony on the SCORE project — a federally-funded project designed to replace all county voter registration systems with one statewide system. In 2003, a team was selected from all counties prior to issuing the 175-page RFP for the SCORE project. Additionally, the department hosted a pre-bid conference on the RFP for vendors to allow them to better develop their bids. Inquiries could be submitted in writing, without the knowledge of other vendors, to ensure competition. The department received 13 responses. Evaluation of the bids was done by the team (county representatives) with no influence or voting by the Secretary of State. Additionally, an administrative review was done on all the bids to ensure each had met the requirements of the RFP (one failed to meet RFP requirements). The evaluation team was provided a list of items to examine and evaluate, reference checks were performed, and numerical scoring was used to determine the bid award. Although the award could have been made after the first review, the evaluation team chose to select three vendors to enter the competitive range. The selection of the final vendor was unanimous.
The SCORE project has 44 deliverables spread across 20 months with payments tied to milestones. No payment is made without a deliverable, and each payment has a 20 percent holdout to ensure final acceptance of the deliverable. The vendor gets its profit at the end of the project. An active steering committee meets monthly, updates are regularly provided to the IMC, and the project has had high level participation from the Secretary of State. Independent verification of project deliverables is ongoing.
9:50 AM
Representative Weissmann asked how Mr. Mouty, as the contract manager for the SCORE project, was selected to roll out project implementation - what process was used to hire him. Mr. Hobbs stated that Donetta Davidson did not do formal bids for Mr. Mouty's position and selected Mr. Mouty because he had the necessary skills and she was familiar with his work.
Mr. Houlihan asked what types of background questions were asked of bidders on the project. Were there standard statewide questions or statutorily required questions regarding past performance and experience? Did the department have ample time to canvas the counties on the matter of reference checks? Mr. Mouty stated that the evaluation team developed questions to be asked of all contract bidders.
Senator Teck asked about the current status of SCORE. Mr. Mouty responded that it is about 4 months behind schedule but a pilot is to begin in 5 counties in December with full statewide rollout by April 15, 2006. Senator Teck asked for Mr. Mouty's perceptions of the IT procurement process. Mr. Mouty responded that it is difficult to award a contract and take a hands off position and hope for the best from the vendor. Monitoring is essential to ensure that the vendor is developing the product to the state's specifications and that the project is not meandering. Ambiguity can still play a factor — the vendor must be monitored to ensure they don't go off track. Senator Teck rhetorically asked how the state can get the necessary expertise to ensure that these IT contracts are effectively and properly implemented with accountability.
Representative Marshall asked about Mr. Mouty's relationship with Accenture. (Accenture LLP has the contract for the SCORE project.) Mr. Mouty stated that he had no relationship with Accenture other than his role on the IV&V team on the Genesis project in the Department of Labor and Employment. He had no voting role when Accenture was selected for the SCORE project.
Senator Groff followed up and asked if the past performance of Accenture was considered given the lawsuit pending in Wisconsin and the purging of African Americans from the voter rolls in Florida during the 2000 presidential election. Were these problems taken into account before Accenture was selected? Mr. Mouty responded that the problems in Wisconsin came to the surface after Accenture was selected in Colorado, and he did not known whether the problems which occurred in Florida were considered. He will get back to the committee.
10:00 AM
Committee recessed for 30 minutes.