Existing law establishes in state government the Department of Technology within the Government Operations Agency. Existing law provides that the Department of Technology is responsible for the approval and oversight of specified information technology projects. Existing law requires specified contracts for the acquisition of information technology projects to be made by or under the supervision of the Department of Technology.

Existing law sets forth requirements for the acquisition of goods and services by state agencies and sets forth the various responsibilities of the Department of General Services and other state agencies in overseeing and implementing state contracting procedures and policies. Existing law requires, unless otherwise expressly provided, that all contracts for the acquisition of information technology goods or services be made by or under the supervision of the Department of General Services.

This bill would require the Director of Technology, by January 1, 2017, to develop a standardized contractor performance assessment report system to evaluate the performance of a contractor on any information technology contract or project reportable to the Department of Technology, as provided. The bill would require the Director of Technology to implement that evaluation system for all reportable information technology contracts and projects, as specified, and would require that system to be used in addition to any other procurement procedures when evaluating or awarding those contracts or projects.

Existing law establishes in state government the Department of Technology within the Government Operations Agency. Existing law provides that the Department of Technology is responsible for the approval and oversight of specified information technology projects. Existing law requires specified contracts for the acquisition of information technology projects to be made by or under the supervision of the Department of Technology.

Existing law sets forth requirements for the acquisition of goods and services by state agencies and sets forth the various responsibilities of the Department of General Services and other state agencies in overseeing and implementing state contracting procedures and policies. Existing law requires, unless otherwise expressly provided, that all contracts for the acquisition of information technology goods or services be made by or under the supervision of the Department of General Services.

This bill would require the Director of Technology, by January 1, 2017, to develop a standardized contractor performance assessment report system to evaluate the performance of a contractor on any information technology contract or project reportable to the Department of Technology, as provided. The bill would require the Director of Technology to implement that evaluation system for all reportable information technology contracts and projects, as specified, and would require that system to be used in addition to any other procurement procedures when evaluating or awarding those contracts or projects.

Existing law establishes in state government the Department of Technology within the Government Operations Agency. Existing law provides that the Department of Technology is responsible for the approval and oversight of specified information technology projects. Existing law requires specified contracts for the acquisition of information technology projects to be made by or under the supervision of the Department of Technology.

Existing law sets forth requirements for the acquisition of goods and services by state agencies and sets forth the various responsibilities of the Department of General Services and other state agencies in overseeing and implementing state contracting procedures and policies. Existing law generally requires requires, unless otherwise expressly provided, that all contracts for the acquisition of information technology goods or services be made by or under the supervision of the Department of General Services.

This bill would require the Director of Technology, by January 1, 2017, to develop a standardized contractor performance assessment report system to evaluate the performance of a contractor on any information technology contract or project reportable to the Department of Technology, as provided. The bill would require the Director of Technology to implement that evaluation system for all reportable information technology contracts and projects, and would require that system to be used in addition to any other procurement procedures when evaluating or awarding those contracts or projects.

Existing law establishes in state government the Department of Technology within the Government Operations Agency. Existing law provides that the Department of Technology is responsible for the approval and oversight of specified information technology projects.

Existing law sets forth requirements for the acquisition of goods and services by state agencies and sets forth the various responsibilities of the Department of General Services and other state agencies in overseeing and implementing state contracting procedures and policies. Existing law generally requires that all contracts for the acquisition of information technology goods or services be made by or under the supervision of the Department of General Services.

This bill would require the Director of General Services and the Director of Technology Technology, by January 1, 2017, to develop a standardized contractor performance assessment report system to evaluate the performance of a contractor on any information technology contract or project, project reportable to the Department of Technology, as provided. The bill would also require the Director of General Services and the Director of Technology to implement that evaluation system for all subsequent reportable information technology contracts and projects, and would require that system to be used in addition to any other procurement procedures when evaluating or awarding those contracts or projects.

Existing law establishes in state government the Department of Technology within the Government Operations Agency. Existing law provides that the Department of Technology is responsible for the approval and oversight of specified information technology projects.

Existing law sets forth requirements for the acquisition of goods and services by state agencies and sets forth the various responsibilities of the Department of General Services and other state agencies in overseeing and implementing state contracting procedures and policies. Existing law generally requires that all contracts for the acquisition of information technology goods or services be made by or under the supervision of the Department of General Services.

This bill would require the Director of General Services and the Director of Technology by January 1, 2017, to develop a standardized contractor performance assessment report system to evaluate the performance of a contractor on any information technology contract or project, as provided. The bill would also require the Director of General Services and the Director of Technology to implement that evaluation system for all subsequent information technology contracts and projects, and would require that system to be used in addition to any other procurement procedures when evaluating or awarding those contracts or projects.

GOVERNOR'S VETO

GV Bill Id:AB 522

Author:(Burke)

As Enrolled Ver:September 14, 2015

2/3 vote

Original Committee Reference: A. & A.R.

SUMMARY: Requires the Director of the Department of Technology (CalTech) to develop a standardized contractor performance assessment report system to evaluate the performance of a contractor on any information technology (IT) contract or project reportable to CalTech.

The Senate amendments:

1. Require multiple evaluations of a contractor before the final evaluation.

2. Specify that the contractor will have at least 30 days to respond to the final evaluation.

3. Clarify that the standardized contractor performance assessment report system will be used to evaluate only IT contracts or projects that are reportable to CalTech.

EXISTING LAW provides that CalTech is responsible for the approval and oversight of specified types of IT projects.

FISCAL EFFECT: According to the Senate Appropriations Committee:

1. CalTech estimates annual costs of approximately $350,000 to develop a performance assessment system, and to maintain the information received from evaluations of contractors and vendors. (General Fund)

2. Unknown ongoing costs to state departments or agencies acquiring IT projects to perform contractor evaluations. These costs are likely to be built into overall contract costs. (General Fund or special funds, as applicable)

COMMENTS: The prior version of this bill did not specify that a contractor would have an opportunity to respond to the evaluation.

GOVERNOR'S VETO MESSAGE:

This bill requires the Director of Technology to develop a standardized performance assessment system for information technology contracts.

While holding technology contractors accountable for their performance is important, this bill is not necessary because it duplicates what the Department of Technology is already doing.

Analysis Prepared by: Scott Herbstman / A. & A.R. / (916) 319-3600 FN: 0002465

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 522

Author:(Burke)

As Amended Ver:September 4, 2015

Majority vote

Original Committee Reference: A. & A.R.

SUMMARY: Requires the Director of the Department of Technology (CalTech) to develop a standardized contractor performance assessment report system to evaluate the performance of a contractor on any information technology (IT) contract or project reportable to CalTech.

The Senate amendments:

1. Require multiple evaluations of a contractor before the final evaluation.

2. Specify that the contractor will have at least 30 days to respond to the final evaluation.

3. Clarify that the standardized contractor performance assessment report system will be used to evaluate only IT contracts or projects that are reportable to CalTech.

EXISTING LAW provides that CalTech is responsible for the approval and oversight of specified types of IT projects.

FISCAL EFFECT: According to the Senate Appropriations Committee:

1. CalTech estimates annual costs of approximately $350,000 to develop a performance assessment system, and to maintain the information received from evaluations of contractors and vendors. (General Fund)

2. Unknown ongoing costs to state departments or agencies acquiring IT projects to perform contractor evaluations. These costs are likely to be built into overall contract costs. (General Fund or special funds, as applicable)

COMMENTS: The prior version of this bill did not specify that a contractor would have an opportunity to respond to the evaluation.

Analysis Prepared by: Scott Herbstman / A. & A.R. / (916) 319-3600 FN: 0002361

 THIRD READING  

Bill No: AB 522

Author: Burke (D), et al.

Amended: 9/4/15 in Senate

Vote: 21

SENATE GOVERNMENTAL ORG. COMMITTEE: 10-1, 7/14/15

AYES: Hall, Block, Gaines, Galgiani, Glazer, Hernandez, Hill, Hueso, Lara, McGuire

NOES: Vidak

NO VOTE RECORDED: Berryhill, Runner

SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/27/15

AYES: Lara, Beall, Hill, Leyva, Mendoza

NOES: Bates, Nielsen

ASSEMBLY FLOOR: 78-0, 6/2/15 - See last page for vote

SUBJECT: Public contracts: information technology: contractor performance assessment report

SOURCE: Author

DIGEST: This bill requires the Director of Technology, by January 1, 2017, to develop a standardized contractor performance assessment report system to evaluate the performance of a contractor on any information technology (IT) contract or project reportable to the Department of Technology (Caltech), as provided.

Senate Floor Amendments of 9/4/15 clarify that the contractor performance assessment report shall be utilized to evaluate and award any information technology contract or project reportable under the State Administrative Manual.

ANALYSIS:

Existing law:

1. Establishes Caltech within the Government Operations Agency.

2. Provides that Caltech is responsible for the approval and oversight of specified IT projects.

3. Sets forth requirements for the acquisition of goods and services by state agencies and sets forth the various responsibilities of the Department of General Services (DGS) and other state agencies in overseeing and implementing state contracting procedures and policies.

4. Requires, generally, that all contracts for the acquisition of IT goods or services be made by or under the supervision of DGS.

This bill:

1. Requires the Director of Technology, by January 1, 2017, to develop a standardized contractor performance assessment report system to evaluate the performance of a contractor on any IT contract or project reportable to Caltech.

2. Specifies that the contractor performance assessment report system shall include, but is not limited to, multiple evaluations before the final evaluation, a minimum 30-day response period for the contractor to respond to the final evaluation, an objective evaluation of the performance of the contractor, information about the type of contract or project and whether or not that contract or project was completed on time, and information about the number of completed contracts or projects by the contractor.

3. Provides that upon the development of the contractor performance assessment report system, the Director of Technology shall implement the contractor performance assessment report system for all IT contracts and projects.

4. Specifies that the contractor performance assessment report system shall, in addition to any other applicable information technology procurement procedures, be utilized to evaluate and award any IT contract or project reportable under the State Administrative Manual awarded pursuant to the provisions of this bill.

Background

Purpose of the bill. According to the author, “over the past several years, the State of California has experienced many difficulties with IT projects that have resulted in projects going over budget, over time, and in some cases not working at all. As indicated in the recent state auditor report between 1994 and 2013 the state terminated or suspended seven IT projects after spending nearly $1 billion and currently the state has 45 IT projects under development that are reported to cost more than $4 billion.”

The author further argues that, “currently the federal government relies heavily on past performance of vendors as an evaluation criterion and has implemented a system known as the Contractor Performance Assessment Reporting System (CPARS). This provides real-time data that is collected through the use of a report card that evaluates vendor performance in key areas that are directly correlated to the quality of work, including project schedule, cost control, project management, communication, and compliance. Providing a means to collect real-time data on vendor’s performance during an IT project offers a significant benefit to California by offering a relevant way to assess quality of work, gauging actual customer satisfaction, and creating an incentive to maximize performance on contracts.”

Contractor Performance Assessment Reporting System. CPARS is a web-enabled application that collects and manages the library of automated Contractor Performance Assessment Reports (CPAR). A CPAR assesses a contractor's performance and provides a record, both positive and negative, on a given contractor during a specific period of time. Each assessment is based on objective facts and supported by program and contract management data, such as cost performance reports, customer comments, quality reviews, technical interchange meetings, financial solvency assessments, construction/production management reviews, contractor operations reviews, functional performance evaluations, and earned contract incentives.

Prior/Related Legislation

AB 2523 (Cooley, Chapter 391, Statutes of 2014) required Caltech to review a specified project management methodology manual and, based on that review, provide a report to the Legislature by July 1, 2016, recommending how a team of senior consulting IT experts can assist senior department executives charged with oversight of major IT projects.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Senate Appropriations Committee, Caltech estimates annual costs of approximately $350,000 to develop a performance assessment system, and to maintain the information received from evaluations of contractors and vendors (General Fund). In addition, unknown ongoing costs to state departments or agencies acquiring IT projects to perform contractor evalutions. These costs are likely to be built into overall contracts costs (General Fund or special funds, as applicable).

SUPPORT: (Verified 9/4/15)

Natoma Technologies

OPPOSITION: (Verified 9/4/15)

None received

ARGUMENTS IN SUPPORT: According to Natoma Technologies, “currently, State IT procurements qualify vendors via irrelevant and arbitrary data points that include the vendor’s annual revenue, the size of previous contracts the vendor has acquired, and whether a vendor can provide a positive reference. To be clear, most vendors can identify someone associated with the project who will speak positively about it, rendering the highly used reference method rather arbitrary. While conclusions can be made from collecting this type of data, it falls short of providing key evaluation criteria that actually matter for successful IT projects.”

ASSEMBLY FLOOR: 78-0, 6/2/15

AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins

NO VOTE RECORDED: Chávez, Grove

Prepared by: Felipe Lopez / G.O. / (916) 651-1530

9/8/15 15:27:26

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Ricardo Lara, Chair

2015 - 2016 Regular Session

AB 522 (Burke) - Public contracts: information technology: contractor performance assessment report.

*********** ANALYSIS ADDENDUM – SUSPENSE FILE ***********

The following information is revised to reflect amendments

adopted by the committee on August 27, 2015

Bill Summary:

AB 522 would require the Director of Technology to develop and implement a standardized contractor performance assessment report system by January 1, 2017 to evaluate contractor performance on specified information technology (IT) contracts and projects.

Fiscal Impact:

• Department of Technology estimates annual costs of approximately $350,000 to develop a performance assessment system, and to maintain the information received from evaluations of contractors and vendors. (General Fund)

• Unknown ongoing costs to state departments or agencies acquiring IT projects to perform contractor evaluations.  These costs are likely to be built into overall contract costs. (General Fund or special funds, as applicable)

Author Amendments:

Amendments would require the contractor performance assessment report system to include multiple evaluations before a final evaluation and a minimum 30-day response period for the contractor to respond to the final evaluation.

-- END --

 THIRD READING  

Bill No: AB 522

Author: Burke (D), et al.

Amended: 8/31/15 in Senate

Vote: 21

SENATE GOVERNMENTAL ORG. COMMITTEE: 10-1, 7/14/15

AYES: Hall, Block, Gaines, Galgiani, Glazer, Hernandez, Hill, Hueso, Lara, McGuire

NOES: Vidak

NO VOTE RECORDED: Berryhill, Runner

SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/27/15

AYES: Lara, Beall, Hill, Leyva, Mendoza

NOES: Bates, Nielsen

ASSEMBLY FLOOR: 78-0, 6/2/15 - See last page for vote

SUBJECT: Public contracts: information technology: contractor performance assessment report

SOURCE: Author

DIGEST: This bill requires the Director of Technology, by January 1, 2017, to develop a standardized contractor performance assessment report system to evaluate the performance of a contractor on any information technology (IT) contract or project reportable to the Department of Technology (Caltech), as provided.

ANALYSIS:

Existing law:

1. Establishes Caltech within the Government Operations Agency.

2. Provides that Caltech is responsible for the approval and oversight of specified IT projects.

3. Sets forth requirements for the acquisition of goods and services by state agencies and sets forth the various responsibilities of the Department of General Services (DGS) and other state agencies in overseeing and implementing state contracting procedures and policies.

4. Requires, generally, that all contracts for the acquisition of IT goods or services be made by or under the supervision of DGS.

This bill:

1. Requires the Director of Technology, by January 1, 2017, to develop a standardized contractor performance assessment report system to evaluate the performance of a contractor on any IT contract or project reportable to Caltech.

2. Specifies that the contractor performance assessment report system shall include, but is not limited to, multiple evaluations before the final evaluation, a minimum 30-day response period for the contractor to respond to the final evaluation, an objective evaluation of the performance of the contractor, information about the type of contract or project and whether or not that contract or project was completed on time, and information about the number of completed contracts or projects by the contractor.

3. Provides that upon the development of the contractor performance assessment report system, the Director of Technology shall implement the contractor performance assessment report system for all IT contracts and projects.

4. Specifies that the contractor performance assessment report system shall, in addition to any other applicable information technology procurement procedures, be utilized to evaluate and award any IT contract or project awarded pursuant to the provisions of this bill.

Background

Purpose of the bill. According to the author, “over the past several years, the State of California has experienced many difficulties with IT projects that have resulted in projects going over budget, over time, and in some cases not working at all. As indicated in the recent state auditor report between 1994 and 2013 the state terminated or suspended seven IT projects after spending nearly $1 billion and currently the state has 45 IT projects under development that are reported to cost more than $4 billion.”

The author further argues that, “currently the federal government relies heavily on past performance of vendors as an evaluation criterion and has implemented a system known as the Contractor Performance Assessment Reporting System (CPARS). This provides real-time data that is collected through the use of a report card that evaluates vendor performance in key areas that are directly correlated to the quality of work, including project schedule, cost control, project management, communication, and compliance. Providing a means to collect real-time data on vendor’s performance during an IT project offers a significant benefit to California by offering a relevant way to assess quality of work, gauging actual customer satisfaction, and creating an incentive to maximize performance on contracts.”

Contractor Performance Assessment Reporting System. CPARS is a web-enabled application that collects and manages the library of automated Contractor Performance Assessment Reports (CPAR). A CPAR assesses a contractor's performance and provides a record, both positive and negative, on a given contractor during a specific period of time. Each assessment is based on objective facts and supported by program and contract management data, such as cost performance reports, customer comments, quality reviews, technical interchange meetings, financial solvency assessments, construction/production management reviews, contractor operations reviews, functional performance evaluations, and earned contract incentives.

Prior/Related Legislation

AB 2523 (Cooley, Chapter 391, Statutes of 2014) required Caltech to review a specified project management methodology manual and, based on that review, provide a report to the Legislature by July 1, 2016, recommending how a team of senior consulting IT experts can assist senior department executives charged with oversight of major IT projects.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Senate Appropriations Committee, Caltech estimates annual costs of approximately $350,000 to develop a performance assessment system, and to maintain the information received from evaluations of contractors and vendors (General Fund). In addition, unknown ongoing costs to state departments or agencies acquiring IT projects to perform contractor evalutions. These costs are likely to be built into overall contracts costs (General Fund or special funds, as applicable).

SUPPORT: (Verified 8/28/15)

Natoma Technologies

OPPOSITION: (Verified 8/28/15)

None received

ARGUMENTS IN SUPPORT: According to Natoma Technologies, “currently, State IT procurements qualify vendors via irrelevant and arbitrary data points that include the vendor’s annual revenue, the size of previous contracts the vendor has acquired, and whether a vendor can provide a positive reference. To be clear, most vendors can identify someone associated with the project who will speak positively about it, rendering the highly used reference method rather arbitrary. While conclusions can be made from collecting this type of data, it falls short of providing key evaluation criteria that actually matter for successful IT projects.”

ASSEMBLY FLOOR: 78-0, 6/2/15

AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins

NO VOTE RECORDED: Chávez, Grove

Prepared by: Felipe Lopez / G.O. / (916) 651-1530

8/30/15 19:42:15

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Ricardo Lara, Chair

2015 - 2016 Regular Session

AB 522 (Burke) - Public contracts: information technology: contractor performance assessment report

This bill meets the criteria for referral to the Suspense File.

Bill Summary:

AB 522 would require the Director of Technology to develop and implement a standardized contractor performance assessment report system by January 1, 2017 to evaluate contractor performance on specified information technology (IT) contracts and projects.

Fiscal Impact:

• Department of Technology estimates annual costs of approximately $350,000 to develop a performance assessment system, and to maintain the information received from evaluations of contractors and vendors. (General Fund)
  
  

• Unknown ongoing costs to state departments or agencies acquiring IT projects to perform contractor evaluations. These costs are likely to be built into overall contract costs. (General Fund or special funds, as applicable)

Background:

Existing law generally requires that all contracts for the acquisition of IT goods or services be made by, or under the supervision of, the Department of General Services (DGS), unless otherwise expressly provided. Acquisition authority may be delegated by DGS to any state agency determined to be capable of effective use of that authority, subject to specified limitations. Existing law provides the Department of Technology with the express authority over all contracts for the acquisition of IT projects that are “reportable” under Chapter 4800 of the State Administrative Manual (those that require advance approval from the Department of Technology) and not delegated to state agencies, as specified.

Section 4819.37 of the State Administrative Manual (SAM) specifies which IT projects are “reportable,” requiring state agencies to either obtain a specified reporting exemption or obtain approval from the Department of Technology before dedicating funding or staff resources for projects that meet the following criteria:

• Projects whose initiation depends upon decisions made during the state budget process, such as proposals to increase the agency’s existing IT activities.

• Projects that involve a new system development or acquisition that is specifically required by legislative mandate, or is subject to legislative review, as specified.

• Projects that have a cost that exceeds the agency’s delegated cost threshold assigned by the Department of Technology and do not meet the criteria of a specified desktop and mobile computing commodity expenditure.

• Projects that meet previously imposed conditions by the Department of Technology.

Generally speaking, the Department of Technology provides independent project oversight for medium- and high-criticality state IT projects. Currently, there are 45 projects under development with a reported cost of over $4 billion that are subject to oversight by the Department of Technology.

Proposed Law:

AB 522 would require the Department of Technology to develop a standardized contractor performance assessment report system by January 1, 2017 to evaluate the performance of a contractor on any IT contract or project reportable under Chapter 4800 of the SAM. The bill requires the system to include an objective contractor performance evaluation, and information about the type of contract, whether the contract was completed on time, and the number of previously completed contracts or projects by the contractor.

The bill would also require the Department of Technology to implement the contractor performance assessment report system for all reportable IT contracts and projects, and requires that the system be used to evaluate and award any IT contract or project awarded under existing law for the acquisition of IT goods and services.

Proposed Author Amendments:

The author proposes to amend the bill to require multiple evaluations before the final evaluation, and to provide a minimum 30-day response period for the contractor to respond to the final evaluation

Recommended Amendments:

Staff recommends a technical amendment to paragraph (2) of subdivision (b) of the new code section for consistency with the rest of the bill, as follows:

(2) The contractor performance assessment report system shall, in addition to any other applicable information technology procurement procedures, be utilized to evaluate and award any information technology contract or project reportable under Chapter 4800 of the State Administrative Manual awarded pursuant to this chapter.

-- END --

SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION

Senator Isadore Hall, III

Chair

2015 - 2016 Regular

Bill No: AB 522 Hearing Date: 7/14/2015

SUBJECT: Public contracts: information technology: contractor performance assessment report

DIGEST: This bill requires the Director of Technology, by January 1, 2017, to develop a standardized contractor performance assessment report system to evaluate the performance of a contractor on any information technology (IT) contract or project reportable to the Department of Technology (Caltech), as provided.

ANALYSIS:

Existing law:

1. Establishes Caltech within the Government Operations Agency.

2. Provides that Caltech is responsible for the approval and oversight of specified IT projects.

3. Sets forth requirements for the acquisition of goods and services by state agencies and sets forth the various responsibilities of the Department of General Services (DGS) and other state agencies in overseeing and implementing state contracting procedures and policies.

4. Generally requires that all contracts for the acquisition of IT goods or services be made by or under the supervision of DGS.

This bill:

1. Requires the Director of Technology, by January 1, 2017, to develop a standardized contractor performance assessment report system to evaluate the performance of a contractor on any IT contract or project reportable to Caltech.

2. Specifies that the contractor performance assessment report system shall include, but is not limited to, an objective evaluation of the performance of the contractor, information about the type of contract or project and whether or not that contract or project was completed on time, and information about the number of completed contracts or projects by the contractor.

3. Provides that upon the development of the contractor performance assessment report system, the Director of Technology shall implement the contractor performance assessment report system for all IT contracts and projects.

4. Specifies that the contractor performance assessment report system shall, in addition to any other applicable information technology procurement procedures, be utilized to evaluate and award any IT contract or project awarded pursuant to the provisions of this bill.

Background

Purpose of the bill. According to the author, “over the past several years, the State of California has experienced many difficulties with IT projects that have resulted in projects going over budget, over time, and in some cases not working at all. As indicated in the recent state auditor report between 1994 and 2013 the state terminated or suspended seven IT projects after spending nearly $1 billion and currently the state has 45 IT projects under development that are reported to cost more than $4 billion.”

The author further argues that, “currently the federal government relies heavily on past performance of vendors as an evaluation criterion and has implemented a system known as the Contractor Performance Assessment Reporting System (CPARS). This provides real-time data that is collected through the use of a report card that evaluates vendor performance in key areas that are directly correlated to the quality of work, including project schedule, cost control, project management, communication, and compliance. Providing a means to collect real-time data on vendor’s performance during an IT project offers a significant benefit to California by offering a relevant way to assess quality of work, gauging actual customer satisfaction, and creating an incentive to maximize performance on contracts.”

Contractor Performance Assessment Reporting System (CPARS). CPARS is a web-enabled application that collects and manages the library of automated Contractor Performance Assessment Reports (CPAR). A CPAR assesses a contractor's performance and provides a record, both positive and negative, on a given contractor during a specific period of time. Each assessment is based on objective facts and supported by program and contract management data, such as cost performance reports, customer comments, quality reviews, technical interchange meetings, financial solvency assessments, construction/production management reviews, contractor operations reviews, functional performance evaluations, and earned contract incentives.

Prior/Related Legislation

SB 624 (Anderson, 2015) establishes the Office of Accessible Technology within Caltech to monitor and facilitate compliance of state and federal laws relating to the accessibility of technology. (Held on the Senate Appropriations Suspense File)

AB 573 (Pan, 2015) establishes the position of Chief Data Officer (CDO) in state government and requires the CDO to create a statewide open data portal by January 1, 2017. (Pending in Assembly Privacy and Consumer Protection)

AB 2523 (Cooley, Chapter 391, Statutes of 2014) required Caltech to review a specified project management methodology manual and, based on that review, provide a report to the Legislature by July 1, 2016, recommending how a team of senior consulting IT experts can assist senior department executives charged with oversight of major IT projects.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

SUPPORT:

Natoma Technologies

OPPOSITION:

None received

ARGUMENTS IN SUPPORT: According to Natoma Technologies, “currently, State IT procurements qualify vendors via irrelevant and arbitrary data points that include the vendor’s annual revenue, the size of previous contracts the vendor has acquired, and whether a vendor can provide a positive reference. To be clear, most vendors can identify someone associated with the project who will speak positively about it, rendering the highly used reference method rather arbitrary. While conclusions can be made from collecting this type of data, it falls short of providing key evaluation criteria that actually matter for successful IT projects.”

Natoma Technologies further argues that, “providing a means to collect real time data on a vendor’s performance during an IT project offers significant benefits to the State by offering relevant ways to assess quality of work, gauging actual customer satisfaction, and creating a powerful incentive for vendor’s to maximize their performance on current contracts.”

ASSEMBLY THIRD READING

ATR Bill Id:AB 522

Author:(Burke)

As Amended Ver:May 28, 2015

Majority vote

SUMMARY: Requires the director of the California Department of Technology (CalTech) to create and use a standardized contractor performance assessment report system when awarding information technology (IT) contracts and projects.

EXISTING LAW provides that CalTech is responsible for the approval and oversight of specified IT projects.

FISCAL EFFECT: According to the Assembly Appropriations Committee: Special Fund costs for CalTech to develop and implement the contractor assessment system, which would involve evaluating contractor proposals (in light of past performance) and evaluating performance upon conclusion of contracts should be absorbable. Currently about 45 IT projects would be subject to the performance evaluation.

COMMENTS: This bill requires CalTech to create an IT contractor performance system by January 1, 2017. The system must include an objective evaluation of the performance of the contractor and information about the type of contract or project and if it was completed on time. The system would also contain information about the number of contracts or projects completed by the contractor.

This bill charges CalTech with implementing the system and requires its use, along with other existing procurement procedures, when the state awards IT contracts or projects.

This bill specifies that the performance will be evaluated for IT projects that are reportable under Chapter 4800 of the State Administrative Manual. That chapter generally requires that large state IT projects are overseen by CalTech.

According to CalTech, the department is already working to create an IT contractor performance system. Several IT vendors and IT groups voiced support for the concept of establishing such a system at an Accountability and Administrative Review hearing on IT procurement in July 2014.

The author cites the state's past IT project difficulties in which several projects were completed late and over budget. "Assembly Bill 522 creates a report card for IT vendors and requires the state's procurement process to take into account a bidder's past performance when awarding projects," the author states. "This bill will ensure that California has an accurate picture of the vendor it is entering into contracts with by using the data collected by the performance assessment in addition to other procurement procedures to evaluate and award any future IT contract or project."

Other governments use past contractor performance when assessing potential vendors. The federal government has implemented the Past Performance Information Retrieval System, a federal government-wide repository of contractors' past performance that is used to inform contracting decisions.

Analysis Prepared by: Scott Herbstman / A. & A.R. / (916) 319-3600 FN: 0000690

Date of Hearing: April 29, 2015

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Jimmy Gomez, Chair

ABPCA Bill Id:AB 522

Author:(Burke) – As Introduced Ver:February 23, 2015

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill requires the Department of General Services (DGS) and the Department of Technology (CalTech) to develop a standardized contractor performance assessment reporting system and to use this system when awarding all information technology (IT) contracts.

FISCAL EFFECT:

Special fund costs for DGS and CalTech to develop and implement the contractor assessment system, which would involve evaluating contractor proposals (in light of past performance) and evaluating performance upon conclusion of contracts, would be up to several hundred thousand dollars annually.

The above cost is in part because, as currently written, the bill would cover all IT contracts for goods and services, regardless of dollar amount, including contracts for off-the-shelf software and equipment. According to DGS, in the 12 months between November 1, 2013 and October 31, 2014, the state awarded 12,000 unique contracts for IT goods and services.

COMMENTS:

Purpose. The author cites the state's past IT project difficulties in which several projects were completed late and over budget. "Assembly Bill 522 creates a report card for IT vendors and requires the state's procurement process to take into account a bidder's past performance when awarding projects," the author states. "This bill will ensure that California has an accurate picture of the vendor it is entering into contracts with by using the data collected by the performance assessment in addition to other procurement procedures to evaluate and award any future IT contract or project."

According to CalTech, the department is already working to create an IT contractor performance system and plans to continue to work with IT vendors and DGS during its development. Several IT vendors and IT groups voiced support for the concept of establishing such a system at a July 2014 hearing of the Assembly Committee on Accountability and Administrative Review regarding IT procurement.

Analysis Prepared by: Chuck Nicol / APPR. / (916) 319-2081

Date of Hearing: April 15, 2015

ASSEMBLY COMMITTEE ON ACCOUNTABILITY AND ADMINISTRATIVE REVIEW

Rudy Salas, Chair

ABPCA Bill Id:AB 522

Author:(Burke) – As Introduced Ver:February 23, 2015

SUBJECT: Public contracts: information technology: contractor performance assessment report

SUMMARY: Requires the directors of the Department of General Services (DGS) and the California Department of Technology (CalTech) to create and use a standardized contractor performance assessment report system when awarding all information technology (IT) contracts and projects.

EXISTING LAW:

1. Provides that CalTech is responsible for the approval and oversight of specified IT projects.

2. Generally requires that contracts for the acquisition of IT goods and services are made by or under the supervision of DGS.

FISCAL EFFECT: Unknown

COMMENTS: This bill requires DGS and CalTech to create an IT contractor performance system by January 1, 2017. The system must include an objective evaluation of the performance of the contractor and information about the type of contract or project and if it was completed on time. The system would also contain information about the number of contracts or projects completed by the contractor.

This bill charges both DGS and CalTech with implementing the system and requires its use, along with other existing procurement procedures, when the state awards IT contracts or projects.

According to CalTech, the department is already working to create an IT contractor performance system and plans to continue to work with IT vendors and DGS during its development. Several IT vendors and IT groups voiced support for the concept of establishing such a system at an Accountability and Administrative Review hearing on IT procurement in July 2014.

The author cites the state's past IT project difficulties in which several projects were completed late and over budget. "Assembly Bill 522 creates a report card for IT vendors and requires the state's procurement process to take into account a bidder's past performance when awarding projects," the author states. "This bill will ensure that California has an accurate picture of the vendor it is entering into contracts with by using the data collected by the performance assessment in addition to other procurement procedures to evaluate and award any future IT contract or project."

Other governments use past contractor performance when assessing potential vendors. The federal government has implemented the Past Performance Information Retrieval System, a federal government-wide repository of contractors' past performance that is used to inform contracting decisions.

Natoma Technologies, a supporter of this bill, states that having a contractor performance system in place will prevent the state from contracting with IT vendors that have had repeated project failures. IT Alliance for Public Sector (ITAPS), which has a support if amended position, would like the author to consider amendments that require an assessment to determine if state entities had a role in IT project nonperformance, cost overruns, or delays. Additionally, ITAPS wants to ensure that the performance system will allow vendors to review and respond to their evaluations.

There is no opposition on file.

REGISTERED SUPPORT / OPPOSITION:

Support

Natoma Technologies

ITAPS (if amended)

Opposition

None on file

Analysis Prepared by: Scott Herbstman / A. & A.R. / (916) 319-3600