BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
                              Senator Isadore Hall, III
                                        Chair
                                2015 - 2016  Regular 

          Bill No:           AB 522           Hearing Date:    7/14/2015
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          |Author:    |Burke                                                |
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          |Version:   |5/28/2015    Amended                                 |
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          |Urgency:   |No                     |Fiscal:      |Yes             |
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          |Consultant:|Felipe Lopez                                         |
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          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.







          AB 522 (Burke)                                      Page 2 of ?
          
          

          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  








          AB 522 (Burke)                                      Page 3 of ?
          
          
          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










          AB 522 (Burke)                                      Page 4 of ?
          
          
            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."