Evening the Odds

The combination of increasingly complex technologies and increases in IT spending poses a dilemma for state and local buyers as they try to maintain the right mix of technical expertise and business management skills throughout the IT procurement process.

Bridging the "expertise gap" between the early part of the buying process, where technical knowledge is crucial for determining needs and evaluating products, and the later stages, where the emphasis is on the business skills necessary to select vendors and negotiate contracts, is more crucial than ever as the purchase of software, hardware and support services becomes a more complicated — and more closely watched — part of state and local spending.

To help provide expertise at each stage of the procurement process, New York's Office for Technology (OFT) announced in December that it would form a Statewide Negotiation Team to assist and advise agencies in the acquisition of IT goods and services.

"We know that the folks at each agency know the technology, but we also recognize that contract negotiation is an art unto itself," said Thomas Duffy, OFT deputy director for administration. "Our idea is to get a negotiation team in place that can secure the best possible terms and conditions for each purchase."

Consisting of four staff members and an administrative support person, the OFT team is designed to provide agencies with expertise in the legal and financial aspects of contract negotiation, Duffy said.

In addition to helping negotiate individual procurements, the team will also negotiate enterprise agreements on behalf of multiple state agencies, and will seek opportunities for agencies to cut costs by combining similar purchases into multiple-agency, large-volume agreements with vendors.

Plans also call for the team to work closely with the state's Office of General Services to save money by extending the state's volume purchasing power to existing agency and state centralized contracts.

In all cases, the negotiation team will work with the agencies involved. Although the OFT's ideal is for the team to be involved in the early stages of defining each new request for proposal (RFP), the emphasis on each group's different areas of expertise will remain well-delineated throughout the procurement process.

"It's important to note that we're not trying to tell agencies what their needs are, or what we think they should be," Duffy said. "In each case, the involved agency or agencies will be at the table with us. The agencies have to be comfortable with the process and the purchase, because they will ultimately be responsible for using the products and services that are purchased."

In addition to providing a more consistent procurement process and exploring new ways to save money, the new approach to negotiation is also designed to provide agency officials with a bit of parity when they sit down to hammer out a contract with representatives of IT vendor companies.

In announcing the formation of the statewide team, the OFT noted that vendors frequently negotiate separately with individual agencies for the same technology, and often send the same staff to negotiations, while state agencies negotiate independently of each other.

The OFT is betting that the presence of the statewide team, armed with an overview of the state's IT needs and the legal and financial expertise of its members, will help to even the odds at the negotiation table.

"If negotiations fall through, a vendor will often send in a second team that's also trained to handle the process," Duffy said. "We want our agencies to have similar expertise at their disposal when they are negotiating, so we can leverage our purchasing power throughout the state and make our IT purch ses more responsible and cost-effective. Our goal is to always have people with contract negotiating skills at the table when we are arranging to purchase IT products and services."

— Walsh is a freelance writer based in Peekskill, N.Y.


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