Transcript PowerPoint Template

VITA and IT Procurement
VITA Supply Chain Management
www.vita.virginia.gov
www.vita.virginia.gov
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Topics
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New value-oriented technology sourcing process
New contracting strategy for IT commodities
Vendor-managed solutions
Service Level Agreements (SLAs)
New IT procurement manual
www.vita.virginia.gov
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Technology Sourcing Process
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Follows Industry Best Practices and the VPPA
Led by sourcing professional
Maximizes team advantage
Dependent upon comprehensive requirements
Documents roles, phases and deliverables
Drives consensus selection based on data
Designed to involve all appropriate factors
Data Driven Decision Process = Data Based
Selection
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SCM Role in Sourcing Project
• Sourcing Process Leadership
– Assist in organizing evaluation team and lead meetings
– Serve as SPOC
• Best Practice Process and Templates
– Industry tested RFP, evaluation and Contract templates
• Market Expertise
– Conducts market research specific to project needsplanning for negotiation begins here
• VPPA Knowledge
– Ensures VPPA is followed and procurement file is
preserved and made available
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Customer/Steering Team Role
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Provide overall project strategy and governance
Determine what success would look like
Confirm scope of the project
Provide appropriate evaluation team members
Obtain funding
Maintain confidentiality
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Evaluation Team Role
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Provide Subject Matter Expertise
Document requirements by area of expertise
Determine evaluation criteria and weight
Assist SPOC in responding to supplier questions
Attend presentation/site visits
Evaluate and score proposals for their area of
expertise
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Comprehensive Requirements
User
perspective
Best Value
to Cost Ratio
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Environment
and Support
Functional
Technical
Financial
Business
Relationship
Contract and
SLAs
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Identify Business Need
Sourcing Process Example
Role
Customer
Description
START
1.0 Customer identifies business need
2.0 Customer completes an APR form and
identifies funding source
(i.e.: Budget, Federal funds, Revenue Streams). Submits APR to PMD.
PMD
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PMD reviews APR and decides whether to approve or deny the
request. If approved, PMD routes to SCM Assistant Director.
SCM Associate
Director
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Decision: SCM Associate
Sourcing Manager
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Director determines if procurement is
statewide or is agency specific.
-If statewide, route to Sourcing Manager
-If agency-specific, determines whether to delegate back to
agency or send to Sourcing Manger
Assigns project to a Sourcing Consultant.
Reviews project with Sourcing Consultant
Decision:
-If project appears to have clearly defined requirements and
award will be price-based, consider IFB process.
-Otherwise continue with Technology Sourcing Process.
END
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Section 5: Requirements
Technical Requirements
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Does your solution provide
configuration tools? Please
describe
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Does your solution provide
administrative monitoring tools?
Please describe
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Dos your solution provide on-site
training? Please describe
4.
Dos your solution provide a
trouble-shooting mechanism?
Please describe
www.vita.virginia.gov
A
B
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The Solution
• Process arrives at best value to the
Commonwealth
• Solution is often a surprise. (PB, BI, Sun
replacements, etc)
• The surprise factor highlights the value of the
process!
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IT Commodities Strategy
• VITA’s role is to provide vehicles for the
Commonwealth
• Multiple awards-one size does not fit all
• Request for Quote concept:
– Allows for further competition
– Most effective in dealing with suppliers. The best deal occurs
when there is money on the table
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Managed Services
• Contract with Computer Aid (CAI)
• Staff Augmentation
• Statement of Work projects
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Supply Chain Management Links
• Main web page: www.vita.virginia.gov/scm
• VITA contracts: www.vita.virginia.gov/procurement
• Managed Services:
http://www.vita.virginia.gov/scm/default.aspx?id=11
906
• BUY IT Manual: www.vita.virginia.gov/scm
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Utilizing Service Level
Agreements
BUY IT MANUAL
Supply Chain Management
www.vita.virginia.gov
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SERVICE LEVEL AGREEMENTS IN CONTRACTS
Service level agreements (SLAs) are contracts which specify in
measurable terms the services to be provided, the standards to
be attained in the execution of those services and the
consequences that occur in the event the standards are not met.
SLAs often include:
• Percent of time services should be available
• Number of users to be supported
• Performance benchmarks
• Schedule for advanced notification of system changes, upgrades,
downtime
• Response time
• Usage statistics
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Service Level Agreements (SLA’s) = VALUE
How SLAs should be written:
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Outcome oriented
Clearly defined objectives
Clearly defined timeframes
Performance incentives
Performance monitoring
SLA Objectives:
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Maximize performance – supplier delivers based on best practices and customer’s desired
outcome.
Maximize competition and innovation – encourage innovation using performance requirements.
Minimize burdensome reporting and reduce use of contract provisions that tie supplier’s hands.
Shift risk to suppliers so they are responsible for achieving contract objectives through their own
best practices and processes.
Achieve cost savings through performance requirements.
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WHAT SLAS SHOULD MEASURE
The
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contract MUST include SLAs:
Everything buying or covered by the contract;
Volume assumptions for services (particularly if there are large variable costs involved.)
Reliability, availability and performance (RAP) requirements, methods of dealing with
operational issues (escalation, help desk, hot line and severity levels) and conditions of
use or change of use conditions/restrictions.
Dates/deadlines where specific deliverables are due at initial switch on, ramp up, ramp
down or upgrade of service; e.g. year end, implementation dates, legislation changes.
Method of delivery (paper/fax/hand, means/source or object code.)
Time after which deliverables must be consumed or tested and still supported
(obsolescence limits).
Documentation/manual and standards.
Definition of what is considered a service failure and what is considered an
“enhancement” to the service.
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MEASURE WHAT CAN AND WHAT NEED TO KNOW
Measure What’s Important:
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TCO – Total Cost of Ownership
Quality of Goods/Services
Proposed technical performance
Financial stability
Cost of Training
Qualifications of Individuals employed/utilized by supplier
Risk Assessment
Availability and cost of technical support
Cost/Price
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Performance Incentives
• Cost-based - Relate profit/fee to results achieved by the
supplier in relation to identified cost-based targets.
• Award fee - Allows suppliers to earn a portion (if not all) of an
award fee pool established at start of an evaluation period.
• Share-in-savings - Supplier pays for developing an end item
and is compensated from the savings it generates. Established
baseline of costs is extremely important.
• Share-in-revenue - Generates additional revenue
enhancements; compensation based on sharing formula.
• Balanced scorecard -Used when performance is less tangible,
i.e., quality of lead personnel or communication and resolution
of issues.
• Non-performance Incentives - Specified procedures for
reductions in payment when services are not performed or do
not meet contract requirements.
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Non-$ Incentives
Non-Monetary
• Revised schedule
• Reduced oversight
• Positive performance evaluation
• Automatic extension of contract term or option exercise
• More frequent payments
• Lengthened contract term (award term contracting) or purchase
of extra items (award purchase)
• Publish article(s) in agency newsletter or speak at agency
seminars
• Letters of appreciation to individual employees may translate to
bonuses
• Use trade space for licensing, access to agency officials, etc.
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BUY IT: THE MANUAL
• Where is it? VITA web site, SCM, BUY IT or
http://www.vita.virginia.gov/scm/default.as
px?id=5522
• Forms, Templates, “How tos”, Links to Code
and policies
• Cost/Value Ratio Evaluations, PerformanceBased Contracting, Statements of Work,
SLAs
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BUY IT
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Cooperative and GSA IT Purchases
Forming the IT Contract
Negotiating IT Contracts
Software Licensing and Maintenance
Intellectual Property
Telecommunications
IT Contract and Supplier Management
NG Partnership
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BUY IT
• IT Contract Administration
• IT PPEAs
• We strived to make the manual user-friendly, highly
interactive and informative about the differences and
complex issues surrounding the acquisition of IT
products, solutions and services.
• The goal of BUY IT is to enhance consistency in the
Commonwealth’s processes for IT acquisition and
inform individual procurement professionals of critical
IT acquisition principles.
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