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Two Tier Contracting. Lean Improvement and ITPS Pilot. What is it?. When do we use it?. Scope of work varies significantly from project to project A prequalified pool of vendors is necessary to facilitate the needs of the state Vendor community and/or service/commodity is rapidly changing - PowerPoint PPT Presentation
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Two Tier Contracting
Lean Improvement and ITPS Pilot
What is it?
A Two Tier Contract(s) is a prequalified bidder pool arranged in specific categories which are periodically refreshed.
• First tier includes vendor qualifications and may include “not to exceed” pricing
• Second tier competition that includes a specific SOW, final vendor selection and contract
When do we use it?
1. Scope of work varies significantly from project to project2. A prequalified pool of vendors is necessary to facilitate
the needs of the state3. Vendor community and/or service/commodity is rapidly
changing4. Where DES should have greater oversight for projects
over agencies delegation5. A broad market offering is available6. Savings to the state (cost/time/efficiency/effort/etc.)
Initial Challenges
DES Master Contracts inherited ~ 600 contracts from 4 different agencies with many different philosophies and processes.
• Inconsistent use of vendor pools• Inconsistent processing of work requests• Cumbersome and time-consuming processes• Large DES workload to manage many different
processes
Value Stream Mapping (VSM)
Three different current state pools were mapped during a 2 day session in November• Janitorial• Personal Services• Information Technology Professional Services (ITPS)
Research of 2 tier pool contracting in other states was completed in December
Future state was mapped during a 4 day session in January
Pain Points of Current State
Complex and time consuming first tier evaluation process
Duplicate information gathering between 1st and 2nd tier evaluations
Qualified contractors may have to wait up to 2 years to enter the pool
Contractors that originally qualified may no longer qualify 4 years later
Contractors required to report even when they do no business
Qualified contractors may be not be selected to the pool due to restrictive first tier price scoring models
Goals
Reduce time and complexity for 1st and 2nd tier processes
Standard process that can be applied to other contracts
Decrease customer and vendor complaints
Ability to add qualified vendors to a pool within 30 days
New Program Approach
Charter and facilitate ongoing Customer Advisory Teams to keep the contracts fresh and on point
Focus tier-one on vendor qualifications by creating a “check list” of metric driven mandatory and desirables
Create an “open pool” vendor application process with clear and transparent policies
Establish best practice Statement of Work processes for 2nd tier
Vendor Evaluations
Tier 1
• High level requirements• Objective • Specific Metrics
• May include ‘not to exceed’ $
(no evaluation)• Licenses• Certifications• Contact Info• General T’s and C’s
Tier 2
• Specific Statement of Work• Objective refined metrics• Subjective criteria
• $/Value• References• Resumes• Interviews• Site Visits
ITPS Pilot
~300 contracts
17 categories of services
Expire June 30, 2013
External Influences and Inputs
ITPS
Procurement Reform
Two Tier Lean Project
Internal Customers
External Customers
Vendor FeedbackITPS
Operational Team
Market
IT Professional Services Categories
•Created ITPS Customer Advisory Team (ITPSCAT)•Established Team Charter•Held (4) workshops & (1) WebEx session•Review of existing category strategy and set new “going forward” strategy and categories•Decided on category grouping and priorities
Accomplishments To-Date
Process Improvement
•Held a internal workshop with past and current staff to document “as-is” and pain points•Held a customer workshop to establish existing practices and brainstorm best practice ideas•Completed LEAN workshop for 2nd tier to document as-is workflows•Next Steps•Apply VSM and Workshop ideas to ITPS Processes
Accomplishments To-Date
Customers see this program as “high
value”•Lesson 1: Existing categories can be reorganized into major and sub categories which will enhance the quality of vendors and focus the procurement•Lesson 2: There is a need establish a process where we can include new vendors into categories when they become available as well as removing vendors that no longer qualify•Lesson 3: Agency participation in requirement development is key but SME resources are constrained•Lesson 4: Procurement and contracting resources are constrained and the level of effort is great
Lessons from the Teams
Proposed New Strategy
• Group “like” sub-categories and perform separate procurements in a phased approach
• Extend current contracts in categories that will take place in a later phase
• Create an ongoing “open evaluation” process, where new vendor offerings are reviewed & scored on a periodic basis
• Create annual review process for existing vendors• ITPSCAT will meet twice annually to review existing categories
and recommend improvements
Going Forward
Quality Focus
•Focus on a single major category will increase the quality of vendor pool•Phasing SME and Procurement workload significantly enhances successful completion and quality and sets up a more manageable workload going forward•“Open evaluation” keeps the vendor pool fresh•Extending current contracts will keep continuity of service•Ongoing ITPSCAT review will help keep up with technology changes
New Strategy Benefits
•Project management is the discipline of planning, organizing, motivating, and controlling resources to achieve specific goals. A project is a temporary endeavor with a defined beginning and end (usually time-constrained, and often constrained by funding or deliverables),[undertaken to meet unique goals and objectives typically to bring about beneficial change or added value.
Category Title & Definition
•Project Manager must have current PMI Certifications with at lease 1 year of experience
Mandatory requirement statements
•Project management experience with 3 years of SAP project implementation experience•Project management experience with project totaling at least $500k
Desirable requirement statements
SME FocusExamples
Category GroupingsService Strategy &
Service Improvement Service Design Service Transition & Operations Services
Cat1 – Funding & Financial Analysis
Technical Architecture
Application Development Cat12 & 15- Client/Server
Cat2 – IT Business Analysis
Cat9 - Systems Analysis
Systems Administration Cat17 - Database
Cat5 - Enterprise Architecture Cat4 - Project
Management Cat16 - Mainframe
Cat8 - Business Continuity Planning Cat3 & 11 - QA IV&V
Testing Cat13 - GIS
Cat10 - Network Cat6 - Security Cat14 - Infrastructure Mobile Web
Focused 3 Phase Effort
ServicesTechnical
ArchitectureDesign
Systems Analysis
Application Development
Transition
Security Systems Administration
OperationsClient/Server
DatabaseMainframe
GISInfrastructure
MobileWeb
Funding & Financial Analysis
IT Business Analysis
Enterprise Architecture
Business Continuity Planning
Project Management
QA IV&V Testing
Service Strategy & Improvement
Project Management
Services
Service
Strategy
2013 Early
Project
Management QA (IV&
V)2013 Late
Services
2014
Tier-One Timeline
• Existing ITPS agreements – Extended for 2 years– Categories will be terminated as new
categories come on line– Existing work orders will survive termination of
contracts but renewals will not be available
Transition Plan