PUBLIC ROUNDTABLE
ON
PERFORMANCE OF THE INFORMATION TECHNOLOGY STAFF AUGMENTATION (ITSA) CONTRACT
BEFORE THE
COMMITTEE ON GOVERNMENT OPERATIONS AND THE ENVIRONMENT
MARY M. CHEH, CHAIRPERSON

COUNCIL OF THE DISTRICT OF COLUMBIA

Introduction

Good afternoon, Madam Chair.  I am David P. Gragan, Chief Procurement Officer for the District of Columbia, and Director of the Office of Contracting and Procurement (OCP).  I appreciate the opportunity to testify on the District’s contract for temporary information technology (IT) staff augmentation (ITSA).  I want to recognize my partners in the development and implementation of this important contract:  Interim Chief Technology Officer Chris Willey, and the Director of the Department of Small and Local Business Development, Lee Smith.  I will discuss the objectives of ITSA, the program and process, and our experience in implementing this contract since the Council approved it in August 2008.  As always, I will post my written testimony on my agency website by the end of today.

Objectives of the ITSA Program
In late 2007, the Office of the Chief Technology Officer (OCTO) approached OCP with a request for assistance in solving some problems they were having in hiring IT temporary personnel.  My office, in partnership with OCTO and the Department of Small and Local Business Development (DSLBD), developed an acquisition strategy to address those problems, which included very long lead times to bring an IT temp aboard, hourly rates for IT temps that exceeded the going rate in the region, a general lack of transparency in the selection process, and too much business going to companies located outside the District.  OCP, OCTO, and DSLBD sought a solution that would accomplish the following three objectives:  reduce costs while increasing efficiency in the hiring of temporary IT personnel; increase objectivity, transparency, and accountability in the selection process; and expand the breadth of vendor participation in District IT staff augmentation, with a focus on expanding business opportunities for our DC-based certified businesses.

We conducted extensive best-practice research on all 50 states, and modeled our solution on the best practices of 18 other states, including Pennsylvania, Texas and Virginia. This Committee held a hearing on the proposed contract in August 2008, and during that hearing, requested several changes before approving the contract.  Three changes were made, including reducing the contract ceiling from $150 million to $75 million; adding a dispute resolution process for vendors; and including a First Source compliance reporting requirement in the contract. I believe that this contract is meeting its objectives very well and, as a foundation, will briefly explain the structure and operations of the ITSA contract.

ITSA Contract Structure and Process
The overall ITSA structure is a contract between the District and a single prime vendor who engages other vendors to supply temporary IT staff.  The prime contract sets capped (not-to-exceed) rates for a total of about 400 IT job categories.  The prime contractor is responsible for administering the program, paying the subcontractors and evaluating subcontractor performance in return for an administrative fee per billed hour.  Under our contract, 95 percent of program dollars must go to District Certified Business Enterprises (CBEs).  Today, 99.18 percent of the dollars have actually been awarded to CBEs.  Both the prime contract and all subcontracts include detailed performance requirements and sanctions for failure to meet them.  To provide internal oversight of the program, we engaged a dedicated Contracting Officer’s Technical Representative (COTR) for the ITSA contract.

The process, including the duties of the prime contractor, is described in detail in the letter OCTO submitted to the Committee on September 15.  To summarize:  when a new temporary IT staff position becomes available, the responsible hiring manager completes a standardized requirements form that describes the position, identifies the job category and lists the minimum skills and education or experience qualifications required. After a thorough interdisciplinary review (starting with the ITSA COTR and ending with the OCP Contracting Officer), the requirements form goes to the ITSA prime contractor, which is a company named OST, who then posts the form online, using an application called PeopleClick and feeds it to the DC government data catalog Website.  This posting alerts all participating CBEs that there is a new requirements document available for response.  Any certified business can submit the resume of one candidate within five business days.  OST screens the resumes for the minimum objective qualifications, removes the identity of the vendor from each resume, and passes those that meet the minimum objective requirements to the hiring manager.  If no resumes meet those minimum objective criteria, OST posts the requirement for a second round of responses.  If a second round is needed, non-CBE vendors may respond.

The winning candidate is chosen through an interview process, works under the supervision of the hiring manager, and submits his or her time using the automated eTime system.  OST uses the eTime system to screen vendor invoices, to invoice the District, and to pay its subcontractors.  Invoices are reviewed for accuracy by the ITSA COTR before payment by the Office of the Chief Financial Officer.

The dedicated ITSA COTR continuously monitors and evaluates the program.  OST evaluates subcontractors quarterly, and submits reports to the ITSA COTR.  Each hiring manager must execute an ITSA Program Agreement pledging compliance with the program rules, and the COTR monitors hiring managers to ensure compliance with the Agreement.  The COTR also reviews OST’s evaluations of ITSA subcontractors, and evaluates OST against the detailed performance standards in the contract.  The COTR also coordinates a quarterly roundtable discussion with any interested parties.  I, and my counterpart agency heads from DSLBD and OCTO, participate in those roundtables.

Both the District and the prime contractor maintain public-facing Websites dedicated to the ITSA contract and related opportunities.  The Websites provides greater transparency to the entire IT staff augmentation process - including how to become part of the subcontractor network, what to expect from the District for temporary IT staff augmentation needs, and how taxpayer dollars are being awarded.  On itsa.ostglobal.com (maintained by the prime contractor), the public can find the standard subcontractor vendor agreement, the types of jobs available for hire, the not-to-exceed rates, and the invoice schedule.  This site also links to the District’s Website at itsa.dc.gov, which archives the information from each quarterly CBE roundtable, and notifies the public that the District has paid its monthly invoice to the prime contractor.  Furthermore, the District has added real-time contract-related data feeds to its existing data catalog (data.octo.dc.gov), which includes the current subcontracting vendors, any active requirements for IT temporary personnel, and prior award information – all in an easy to use format by the public.

Program Experience and Benefits
ITSA has been operating for approximately 12 months since the first requirements document was posted in October 2008.  During that time, ITSA has been used to fill a total of 340 temporary IT staff positions.  A total of 61 vendors have won ITSA awards, including 58 CBEs and 3 non-CBEs.  In contrast, in 2007 before the ITSA contract was awarded, 48 CBEs and 71 non-CBEs participated in IT staff procurements.  It now takes an average of 10 days to hire a temporary IT staff worker, as compared to 37 days prior to implementation of this contract.

Through the combination of process standardization and automation, the ITSA contract has saved District taxpayers an estimated 4,000 hours of program manager time, and allowed me to reduce the number of personnel I have to dedicate to contracting for temporary IT staff.  In addition, the program has yielded an estimated $2.3 million in cost avoidance based on FY 2007 spending levels.

As these figures demonstrate, the ITSA program is meeting its stated objectives of reducing costs, increasing efficiency in the hiring of temporary IT staff, and increasing the opportunities and awards for District-based businesses.  The program is also meeting its additional goals of increasing objectivity, accountability, and transparency in the selection and management of temporary IT staff.

We have significantly increased objectivity through the use of a standard requirements document with minimum objective qualifications, and the screening of resumes for these requirements by a party independent of the hiring manager -- the prime contractor, OST.  In addition, the ITSA program includes numerous features that strengthen accountability and reduce the potential for fraud, waste, and abuse, such as:

• Capping contract staff rates;
• Providing objective qualifications in each Requirements form;
• Requiring a formal ITSA Program Manager Agreement;
• Establishing extensive oversight mechanisms in the program, including a number of layers of review;
• Requiring quarterly evaluation of participating vendors; and 
• Providing a full-time, dedicated ITSA COTR.
  

Finally, regarding the very important issue of transparency, the Website data.octo.dc.gov
provides unprecedented transparency about ITSA hiring opportunities, the awards, and the names of contract awardees for the vendor community and the public at large.

Conclusion
In conclusion Madam Chair, I believe that the ITSA contract represents an extremely effective collaboration between the Administration and the Council for the benefit of both District agencies and, most importantly, for our taxpayers.  I thank the Council for its support of the ITSA contract, and look forward to working with you and your colleagues to strengthen the program even further.  Thanks for the opportunity to testify.  I will be glad to answer any questions you may have.