New York has always had a larger-than-life influence on the state and local IT market. While perhaps not as innovative as Pennsylvania or as vendor-friendly as Colorado, the Empire State doles out upwards of a billion dollars in IT spending every year — and with that comes buying power and trendsetting influence on a scale that few other states can match.
Now, state officials are cooking up plans for a set of IT contracts that could change the way state and local governments purchase their technology goods and services.
This past March, the state Office of General Services released a request for information to canvass the contractor community on an ambitious question: Instead of establishing separate contracts for every kind of software, hardware and professional service under the sun, what if we established a single, umbrella contract that provides all or most of these services? What might that look like? How would that work from a contracting perspective?
To those in the contracting world, this is the equivalent of a nuclear blast. Within the IT realm alone, New York and other states typically have dozens of perpetual term contracts in place for certain types of software, computers, printers, professional services and consulting.
These contracts are often supplemented with one-off, limited-time bids for large-scale software systems or services related to a major project.
While the establishment of an IT umbrella contract would not nullify or replace any existing state contracts (at least not right away), it could have a dramatic effect on the kind of agency procurements that make up a significant percentage of non-term contract spending.
In fact, the OGS has stated “these contracts will improve the procurement process by reducing the amount of time and effort required by state agencies and other authorized users to engage services on a deliverable-based and fixed price for projects.”
After getting vendor feedback, the state decided that a one-size-fits-all contract would be too cumbersome and unwieldy; instead, it split the umbrella into three major future contracting opportunities:
A project-based IT consulting services contract, including design, architecture, implementation, systems integration and content management.
A contract for computers and telecommunications equipment manufacturers, on-premises software, cloud computing and connectivity services.
A third contract for any hardware and software not included on the manufacturer-based contract.
Depending on how frequently the state allows access to these contracts — periodic recruitment and “mini bids” for state-selected vendors are among the options being considered — this idea could provide a blueprint for other states and streamline IT procurement process.
Since many localities also leverage state contracts, we could be looking at a dramatic consolidation of business opportunities across the state and local landscape.
Derek Johnson is a general government services analyst at Deltek, which analyzes the government contracting market and can be found at www.deltek.com.