Background on Jefferson Solutions

1. Department of EducationRace to the Top Assessment ProgramProcurement Strategy DiscussionDr. Allan V. BurmanPresidentJefferson Solutionsaburman@jeffersonconsulting.comJanuary 14, 2010

2. Background on Jefferson Solutions • Government consulting division of Jefferson Consulting Group, a small, woman-owned, DC-based consulting firm • Established in 1996; have worked with over two dozen agencies since then, including DoED • Extensive experience providing acquisition, performance-based approaches, and management and organizational expertise to federal agencies • Since 2008, have assisted the General Services Administration in researching and analyzing state and local procurement regulations and practices

3. Key Procurement Questions/Issues • Recovery Act constraints • Impact of state procurement regulations on consortium development and contracting process • Quest for innovation • Ground rules for vendor selection

4. ARRA Challenges • Dispersing funds quickly but also responsibly • Awarding contracts on a competitive and fixed-price basis • Unprecedented levels of transparency • Ensuring accurate and timely reporting • Maintaining high quality performance data • Putting internal controls and oversight mechanisms in place • Having sufficient, well-trained staff to oversee contractors

5. State Procurement Regulations • Regulations vary from state to state and procurement practices vary among agencies within the same state • Most states have centralized procurement offices, but delegate procurement authority at various levels to state agencies • In 2009, for example, Georgia provided delegated authority to agencies for procurements up to $20k-$100k depending on the agency • IT is an exception as most states have created centralized IT organizations • State regulations require different levels of competition based on the dollar threshold of the procurement • Pennsylvania requires any purchase over $10k to be publicly procured through its electronic procurement system • Competition will more likely than not be required, given anticipated funding levels and Recovery Act requirements

6. State Procurement Regulations (Cont.) • Orders of Precedence are often used that require state procurement officials to first look to established statewide multiple award contracts (similar to GSA Schedule contracts for the federal government). Certain multiple award contracts are mandatory and require waivers if seeking an alternative approach • The majority of these pre-established contracts are for commodities rather than services or solutions • Preference programs exist that require the use of in-state companies or give competitive advantages to in-state companies (e.g., Buy Indiana provides a price discount and additional evaluation points to in-state companies bidding on solicitations) • Similar to Recovery Act requirements that opportunities be posted to FedBizOpps, states often require that solicitations be publicized in specific communication mediums • Definitions of “small business” and other set-aside categories are not consistent with federal definitions

7. Addressing Procurement Complexities • Allow flexibility in consortia charters regarding procurement practices • Encourage states to create templates that leverage commonalities and provide flexibility for state-specific needs while offering some standardization (e.g., standard terms and conditions) • Highlight innovation as a key discriminator in the consortium/vendor selection process

8. The Quest for Innovation: Market Research • Market research (Federal Acquisition Regulation, Part 10) helps guide the solicitation development process • Federal rules allow for direct communication with potential contractors by: • Directly contacting knowledgeable individuals regarding market capabilities to meet requirements • Publishing formal requests for information and reviewing responses • Participating in interactive, online communication among industry, acquisition personnel, and customers • Conducting interchange meetings or holding pre-solicitation conferences to involve potential offerors early in the acquisition process • Address organizational conflict of interest issues in advance

9. Some Market Research Options • Work with consortia to identify states with potential market research roadblocks and communicate with state procurement officials on exemptions or methods to circumvent roadblocks • Instruct interested vendors to provide only publicly available information, or advise consortia to use market research tools, such as GSA Advantage! to identify potential vendors • For the Race to the Top GSA Schedule, contract vendors would only be available to states if a solicitation falls under the information technology Schedule (Schedule 70) • Advise consortia on Organizational Conflict of Interest issues to ensure they are getting good advice while not precluding firms from bidding

10. For Consortium/Vendor Selection:Consider a Performance-Based Approach • Performance-based methods are intended to ensure: • Required performance levels are achieved • Total payment is related to the degree that services meet contract standards • Work statements are expressed in terms of “what” the required service is, rather than “how” the work is to be done • Results-focused, not process-focused • Government monitoring plans correspond to performance standards • The Government role shifts from checking process compliance to validation of performance and results, including over time • Most importantly, the approach encourages innovation

11. The Performance-Based Approach • Identify requirements that reflect needs of all stakeholders • Develop Performance Work Statements that define desired results, not how each task should be completed • Establish performance standards that are meaningful, measurable and fair • Having tangible, measurable objectives • Ensuring quality, timeliness, accuracy, completeness, reliability, cost, compliance • Employ a practical quality assurance or monitoring plan that ensures value for the government while not being overly burdensome on the contractor or the government official providing contract management/oversight • Establish incentives/disincentives based on achievement of specific performances measures

12. A Performance-Based Matrix