CIOs chart new path of partnership

Rules of the road aren't always clear in new era of technology contracting

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Federal chief information officers play a major role in managing a new breed of partnerships that have begun supplanting traditional approaches to information technology contracting.

CIOs' role -- never an easy one -- is multifaceted and largely unscripted when it comes to partnership arrangements. CIOs engaged in outsourcing or performance-based contracts serve as change agents, communications managers and arbitrators. Unfamiliarity compounds the CIO's challenge. Information managers who leave the comfort zone of familiar contracting methods may have few peers to emulate.

"The CIO is adjusting to being on the front edge of these types of arrangements," said Ellen Glover, chairwoman of the Industry Advisory Council and executive vice president at ICF Consulting. "They don't get to follow the leaders."

The Department of Health and Human Services' $65 million outsourcing pact with Unisys is an example of the issues CIOs face in managing a partnership. That contract departs from earlier arrangements in which contractors provided personnel to augment the agency's own employees. It also represents a shift from a government-owned, government-operated model to a contractor- owned, contractor-operated approach.

"We wanted to look at business best practices," said Byrne Huntley, director of HHS' IT Services Center and CIO for the department's Office of the Secretary. Huntley said he didn't want to restrict the contract to conventional government contracting methods.

Instead, HHS established a contract in which Unisys agrees to purchase the network and computer assets of eight HHS agencies and charge the department for IT services. To manage such a deal, Huntley had to make some organizational changes.

"Our organization was formed to manage the traditional type of contract," he said. The new contract led HHS to establish a group devoted exclusively to program management.

Contracting officers' technical representatives, engineering employees and support staff populate that group, which provides daily management of the Unisys contract. Huntley's task is to help his team go through a transformation, said Tim Kelleher, vice president and general manager of civilian agency infrastructure services at HHS.

Shepherding organizational change is one CIO job. Another major task is creating a communications plan that will help keep the partnership on track. Generally, such a plan consists of a program management tier and an executive-level tier.

The program management tier should focus on commonplace contracting issues and should involve agency and contractor employees. Communication at this tier typically concerns project status and contractor performance.

Jay Jones, vice president of global public services at BearingPoint, said the program management tier focuses on the roll-up-your-sleeves aspects of running a partnership.

Occasionally, problems might arise that program managers can't resolve, such as significant contract modifications. Those issues usually are escalated to the executive level, where the CIO dons the arbitrator's hat.

"It's good to have an impartial person to solve problems," Jones said, adding that CIOs and their industry counterparts aren't directly involved in the daily operational details of the contract.

Executive-tier communication may be ad hoc or formalized and handled through an executive council. Key players on the government side would include the CIO and line-of-business executives. Industry representatives might include the CIO and other senior management officials.

At BearingPoint, senior vice presidents and even the chief executive officer might join client discussions, Jones said.

HHS has established layers of communication to help guide its outsourcing contract. At the program management level, HHS and Unisys met initially to identify the roles necessary for maintaining the partnership, Huntley said. The next step was to assign a government representative and a contractor counterpart for every role.

A networking technology lead at Unisys collaborates with an HHS counterpart, and so on. Pairs of contract monitors meet every two weeks to review the overall contract and individual subprojects, such as e-mail migration, Kelleher said.

Meanwhile, Huntley and Kelleher meet regularly at the executive level.

The executives tend to discuss questions of policy, Kelleher said. For instance, an agency request for a technology upgrade not explicitly covered under the contract would require high-level attention. Executives would need to devise a plan for dealing with an upgrade exception and build it into the contract. That kind of improvisation comes with the territory in a partnership. But CIOs aren't entirely without guideposts.

Alan Balutis, president and CEO of government strategies at Input, said CIOs have an array of management tools and mechanisms to help them. Balutis, a former Commerce Department CIO, said project management certification programs and the use of earned value management tools are examples.

Contractors, for their part, have methodologies for managing complex projects. Kelleher said the HHS partnership lets Unisys employ its methodology without much modification. Because Unisys can use its facilities to monitor and manage the contractor-owned, contractor-operated program, "we have a much better chance of utilizing our processes pretty much the way they are," Kelleher said.

The CIO's role and place in the agency structure are still evolving, Balutis said. In some agencies, they have more authority and more of a leadership position than in others.

"In some cases, we saw a move a couple of years back that was troubling, in that after CIOs had made great progress [with] a direct reporting relationship to the secretary or deputy secretary [of an agency], a couple of agencies [were] starting to backslide and have it back under a chief financial officer," Balutis said. "All in all, it's been a positive evolution," he added, "but more change is needed to really realize the full promise of Clinger-Cohen," the 1996 act that defined the federal CIO position.


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Changing places

Partnerships call for a mutual understanding of needs and objectives.

With that in mind, the federal government recently launched a program to let government and industry officials walk a mile in the other's shoes. The Office of Personnel Management worked with the Industry Advisory Council to create the Information Technology Exchange Program (ITEP).

The program, which OPM announced in December 2005, allows industry to assign a few executives to temporary detail in a government agency and vice versa. OPM posts assignment opportunities on the ITEP Web site. In one posting, Ninth House, an e-learning content design firm in San Francisco, announced it is seeking a deputy project manager and instructional designer for an assignment lasting four to six months.

Ellen Glover, IAC's chairwoman, said the exchange program was created by the E-Government Act of 2002. "It's been in the process of being developed for the last year or so," she said.

-- John Moore

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