RFP Planning and Evaluation for IT

1. RFP Planning and Evaluation for IT Phil Pippert / Mike Novak Supply Chain Management March 18, 2010

2. Agenda • VITA Supply Chain Management Overview • IT Sourcing Challenges • Technology Sourcing Process (TSP) • Roles and Responsibilities • SCM • Evaluation team • Steering/advisory team • Requirements Documentation • Evaluation Process • Timeline • Results • Summary/Questions

3. VITA’s Statutory Authority and Responsibility § 2.2-2012 A.Information technology and telecommunications goods and services of every description shall be procured by (i) VITA for its own benefit or on behalf of other state agencies and institutions or (ii) such other agencies or institutions to the extent authorized by VITA. Such procurements shall be made in accordance with the Virginia Public Procurement Act … and any regulations as may be prescribed by VITA. B.All statewide contracts and agreements made and entered into by VITA for the purchase of communications services, telecommunications facilities, and information technology goods and services shall provide for the inclusion of counties, cities, and towns in such contracts and agreements.

4. Category Management Contract Mgmt. Purchasing Operations Supplier Management Sourcing VITA Supply Chain Management • Category contract & sourcing plan • SLA determination • Strategy & communication • Sourcing process • Negotiation strategy • Contract negotiations • Market analysis • Pricing analysis • Develop custom contracts • Mitigate supplier risk • Negotiate contract modifications • Monitor contract pricing • Contract use review • Cooperative contracts • Contract administration • Bids, small procurements, quick quotes • Purchasing operations • Order management • P-card • NG Partnership transactions (P2P) • Supplier relationship management • Monitor supplier performance • SLA tracking, reporting & management • Supplier relationship methodology Focus area Policy Planning and Analysis

5. IT Sourcing Challenges • Complex products and services • Subject to disruptive technology changes • Industry consolidation and monopoly suppliers • Intangible products that don’t work without fixes • Rapid obsolescence • Significant barriers to exit • Part of business process; not just support • Subject to complex restrictions on ownership & usage rights • Supplier’s stockholders addicted to yearly increases in licensing and maintenance revenue

6. Technology Sourcing Process (TSP) • Follows Best Practice and the VPPA • Led by sourcing professional • Maximizes team advantage • Dependent upon comprehensive requirements • Documents roles, phases and deliverables • Drives selection based on data • Designed to involve all appropriate factors Data Driven Decision Process = Data Based Selection

9. SCM Role in Sourcing Project • Sourcing Process Leadership • Assist in organizing evaluation team • Scheduling and lead team meetings • Evaluate for their area of expertise • Serve as SPOC • Best Practice Process and Templates • Industry tested RFP, evaluation and Contract templates • Market Expertise • Conducts market research specific to project needs • VPPA Knowledge • Ensures VPPA is followed and procurement file is preserved and made available

10. Evaluation Team Role • Provide Subject Matter Expertise • Document requirements by area of expertise • Determine evaluation criteria and weight • Assist SPOC in responding to supplier questions • Evaluate and score proposals for their area of expertise • Be available for the project • At least 4 meetings – kickoff, review RFP and establish evaluation criteria, initial consensus scoring, final consensus scoring • Attend presentation/site visits as needed • Commitment to the initiative • Desire for the project to be successful – willingness to support • Broad perspective – best value for the Commonwealth • Diligently maintain confidentiality • Capture and save all records created • Direct suppliers/questions to SPOC

11. Customer/Steering Team Role • Provide overall project strategy and governance • Provide appropriate evaluation team members • Confirm scope of the project • Determine what success would look like • Obtain funding • Maintain confidentiality

12. Initiative-wide Reminders • Capture and save all records created • Diligently maintain confidentiality • Resource availability has direct impact on project timeline • Direct suppliers/questions to SPOC

13. Procurement File • All records must be preserved • Save all documents (including emails) in project folder • Capture individual notes in one place (eval worksheet) – not relevant to final score based on consensus • Burn files to CD – send to SCM • SCM will capture other relevant records – RFP, consensus score sheets, summaries, etc. File will be made available as required by the VPPA – but all documents and correspondence are subject to FOIA

14. Functional Technical Financial Business Relationship Comprehensive Requirements User perspective Environment and Support Best Value to Cost Ratio Contract and SLAs

15. Evaluation Template

16. Generic Sourcing Project Timeline Start Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Define need and scope Document requirements, evaluation criteria Draft RFP RFP review and approval Issue RFP Pre proposal conference; proposal development Proposals due Proposal evaluation, short list, demos, etc. Develop contract Negotiation & Award • Assumptions: • Project is of average complexity – timelines will vary by project • Initiation of efforts dependent upon completion of other efforts – eg. RFP cannot be drafted without requirements • Suppliers have about 4 weeks to develop proposals; 6 weeks to read and evaluate, attend presentations, site visits, etc. and 4 weeks to negotiate a final contract

17. Clear easy to use agreements that document the business relationship (4 corners contract) Meaningful Service Levels that tie to business performance Strong warranties with business remedies Significant attention to Intellectual property rights Contract commitments tied to solution not product Desired Results

18. Summary • IT Sourcing is challenging • Structured sourcing process (roles, phases & deliverables) • Comprehensive requirements – Functional, Business, Technical and Financial • Solutions-based solicitations • Team based evaluation, using subject matter experts • Contract is evaluated as part of decision process • Market research to evaluate market risk and sourcing strategy • Data driven process to coalesce many different needs and perspectives • Collaborative decision process • Feedback from customers to improve