ITS Procurement Workshop Module 2: ITS Procurement Characteristics and Challenges

ITS Procurement Workshop

ITS Procurement Workshop

Module 2: ITS Procurement Characteristics and Challenges

ITS Procurement Workshop

Horror Stories

• “Burying the Software Contractor”• “A Risky Proposition”

ITS Procurement Workshop

“Burying the Software Contractor”

• VDOT disaster – project folded• WSDOT – one year late, $$$$ lost

ITS Procurement Workshop

“A Risky Proposition”

• Project delayed 6 months.

• ITS Division got a black eye in the view of the Commissioner

• System Integrator bore all costs of testing.

• System Integrator went out of business.

ITS Procurement Workshop

Horror Stories:Lessons Learned

• Don’t “bury” your software developer!

• Select software developer based on qualifications.

• Don’t shift all the risk to a system integrator.

ITS Procurement Workshop

Workshop Terminology

• Acquisition• Procurement• Work Structure• Method of Award• Contract Type

ITS Procurement Workshop

Workshop Terminology

• Acquisition– Comprises the complete cycle from

concept to installation and (sometimes) maintenance and operations.

• Procurement– A step in acquisition. Includes the

work and contract “structures”, contractor selection and payment structure.

ITS Procurement Workshop

Workshop Terminology

• Work Structure– How is the work allocated to

contracts. Are multiple contracts used?

• Method of Award– How the contractor is selected.

• Qualifications, cost, combined qualifications and cost.

ITS Procurement Workshop

Workshop Terminology

• Contract Type – How the contractor is paid.

• Fixed Price, Cost Reimbursement, Incentive

ITS Procurement Workshop

Federal Contract Terminology

• “… the supervising, inspecting, actual building, and all expenses incidental to the construction or reconstruction of a highway...”

Construction

ITS Procurement Workshop

Engineering and Design Services

• “planning, preparation of detailed design, specifications, and cost estimates”

Federal Contract Terminology

ITS Procurement Workshop

• Allows states to use their own processes to procure projects that are NOT defined as construction under federal rules.

Common Rule

Federal Contract Terminology

ITS Procurement Workshop

• “Special Experimental Project 14” - encourages and solicits innovative procurement and project delivery practices of all types

SEP 14

Federal Contract Terminology

ITS Procurement Workshop

Procuring ITS Projects

• FHWA determined that many ITS projects are not considered Construction (10-6-99 Memo)

• If it is not Construction, then method of contract award does not have to be low-bid

ITS Procurement Workshop

Terminology Review

• Acquisition• Procurement• Work Structure• Method of Award• Contract Type

• Legal Framework– Construction– Engineering and

Design Services– Common Rule– SEP 14

ITS Procurement Workshop

Exercise 1: Traditional Vs. ITS Projects

• Maturity of the Technology• Design Criteria• How Described• Design Life• Client vs. Vendor Knowledge• Progress Visibility• Procurement Process

ITS Procurement Workshop

Lessons Learned

• ITS is different from traditional projects.

• Different nature implies a different approach to:– project management– procurement

ITS Procurement Workshop

Exercise 2

If Architects Had to Work like Programmers

ITS Procurement Workshop

Architects as Programmers

• Part 1 Discussion– Can you identify any missing

requirements?– Is there enough information to correct

deficiencies of the existing house?– What are the main functions for the

new house?

ITS Procurement Workshop

Architects as Programmers

• Part 2 Discussion– What are the implications to

designing for the 1952 Gibson refrigerator?

– How could siding specification (aluminum, vinyl, composite) be improved?

– Who makes decisions on design?

ITS Procurement Workshop

Review Questions

• Given that the specifications for this house are problematic, how should the contractor and client work together?

• Should this be a low bid selection?• How would this affect

procurement?

ITS Procurement Workshop

What’s The Point?

• We would never try to design a house like this. But this is how we have been procuring ITS.

• And, you cannot specify ITS as readily as you can a house.

ITS Procurement Workshop

Lessons Learned

• It is difficult to describe things completely using words - there are often things missing, misinterpretations and conflicts.

• Need a process that allows iterative approach to complex requirements development. More iterative than traditional approach - why?

ITS Procurement Workshop

Virginia DOT-Video

ITS Procurement Workshop

Virginia DOT-Lessons Learned

• One impetus for change is FAILURE• Definition of a “construction”

project– Wireless construction– Fiber = construction

• Separate the ITS Work• Look at other department’s or

agency’s IT procurement process

ITS Procurement Workshop

Break - 15 Minutes