Bacon's Rebellion

VITA Goes Corporate

—

by

James A. Bacon
in

Surprisingly, this blog, your source for stupefyingly wonkish coverage of state government issues, failed to flag yesterday’s Peter Bacque information technology story on the front page of the Richmond Times-Dispatch.

It seems that

Virginia’s information technology agency says it will keep secret the competing industry proposals for taking over major parts of the state’s IT sector.

The contracts, which are divided into two parts, are potentially worth billions of dollars to the winning firms and could affect the jobs of about 1,200 state employees.

First of all, who knew that the vaunted Virginia Information Technology Agency (VITA) needed this kind of help? Second, why the level of secrecy with this bidding, a secrecy not invoked by VDOT when it pursues public-private partnerships under the same authority?

I don’t know if this is a good idea or a bad idea, but I expect those who are suspicious of the private sector doing state work to be heard on this. If you like the influence of big corporations, you’ll love the companies involved in bidding on this work: IBM, Northrop Grumman, and Canada’s CGI-AMS. There is this comforting word:

The contracts would likely run from seven to 10 years, and should not cost Virginia any more than it now spends on IT services, said the state’s chief information officer, Lemuel C. Stewart Jr.

Have we heard that before?

Share this article

ADVERTISEMENT

(comments below)

Comments

Comments

  1. Jim Bacon Avatar
    Jim Bacon

    Will, I agree that keeping competing industry proposals secret may leave VITA’s procurement open to abuse. And in the normal course of things, I totally favor transparenc in government. However, there are competing considerations here. VITA wants to solicit creative solutions from the private sector. Bidders make significant investments coming up with original ideas for making VITA information systems more efficient. It’s understandable that bidders don’t want to share their intellectual property with each other. What’s the proper balance between transparency and fostering competition? I don’t think anyone knows for sure. We’ll have to feel our way.

    On another track, the original promise of VITA was that it would save the state money. Stewart’s comment that private proposals “would not cost Virginia any more than it spends now” is none too reassuring. My guess is that, with budget-cutting pressure all but gone, VITA is falling in love with the latest and coolest technology. If we won’t save money, hopefully we’ll at least improve quality or upgrade our capabilities.

  2. Paul Avatar
    Paul

    Everything I hear about VITA is that it’s an amazing success…..I don’t know how to prove that to you people (who don’t work there and read hyped non-descript stories about the agency), so I’ll just give up…but that’s my position, and I’m sticking to it!

    I do wonder if the reason for VITA sniping is dislike for Warner…

  3. Terry M. Avatar
    Terry M.

    Paul, I guess you don’t work in an agency or work with VITA directly. It is far from an amazing success from my perspective. It has made progress from when it started, but it has not saved me any money or improved my services as CIO.

  4. Will Vehrs Avatar
    Will Vehrs

    Paul, I don’t understand why such a total success would consider farming out the work of 1200 people to an outside vendor. Can you comment on that?

  5. Becky Dale Avatar
    Becky Dale

    There is information about the proposals on the VITA website. Here are some detailed reports, the proposals the four companies offered in June 2004:
    http://www.vita.virginia.gov/ppea/archive.cfm

    The letter on that webpage invites other proposals (along with a $50,000 fee for them to be considered). No other proposals came in.

    Roanoke Times has an editorial today on the subject (can’t get a link–maybe someone else can get it).

  6. CG2 Avatar
    CG2

    There are larger economic issues here. What will happen to the Virginia small businesses now providing services directly to VITA and other state agencies? There is another VITA proposal on the street to consolidate all of the state’s seat management contracts into one large contract. Once we send all this business to big out of state companies (along with the Capitol restoration project), what will happen to the 98% of Virginia businesses that are small businesses which produce almost all of the new jobs and drive our Virginia economy? How will small, women and minority businesses get their fair share of state business if all of the state’s business is done through the mega contracts now routine under the Governor’s spend management program? Bigger may not always be better even if private is better than public (another debate).

    President Bush has come down strongly against “contract bundling” at the federal level. “Spend management” is the same policy under a different name. Every major national small business organization is against contract bundling. Why no vocal opposition to “spend management”?

  7. Will Vehrs Avatar
    Will Vehrs

    Interesting comment, cg2. I suppose these huge contracts will contain clauses calling for the vendor to use small, minority and women-owned (SWAM) sub-contractors. How much oversight will go into that is hard to guess.

    It is odd that on the one hand, the Governor relentlessly encourages the use of SWAM vendors while simultaneously agencies are offering big contracts to out-of-state mega-firms.

  8. Becky Dale Avatar
    Becky Dale

    According to the March 30 T-D article (which is on the VITA website along with VITA clarifications), the contracts will probably include provisions on using the current state IT workers–1,200 of them would otherwise lose their jobs. If all the current state workers continue working (but for the private companies instead of the state) and we add the other costs the private companies will have to provide the services, it doesn’t sound like a moneysaver. Maybe there would be savings in other areas, but labor doesn’t seem to be one of them.

  9. Terry M. Avatar
    Terry M.

    I have asked the VITA staff leading the review how these companies will make money if nothing else chanes. THe answer I get is that they will make it on the margins as their purchasing power for hardware and software is so much greater than that of the state.

    -Tod

  10. Anonymous Avatar
    Anonymous

    I thought that was what VITA was supposed to do.. suck all the IT people out of the agencies for the purchasing power… Were they not able to do as they promised? Another line of big promises just to get everything lined up for a sell-out?

  11. Anonymous Avatar
    Anonymous

    terry m:

    Can ask the VITA staff:

    If they are just going to save money on equipment and software, why isn’t the state just leasing those items from them? Why send all the employees packing?

Leave a Reply

ADVERTISEMENT