BILL ANALYSIS �
Bill No: AB
2523
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Lou Correa, Chair
2013-2014 Regular Session
Staff Analysis
AB 2523 Author: Cooley
As Amended: June 25, 2014
Hearing Date: July 1, 2014
Consultant: Paul Donahue
SUBJECT
Department of Technology
DESCRIPTION
Requires the Director of the Department of Technology (DOT)
to review a specified manual and draft a report to the
Legislature by July 1, 2016. Specifically, this bill :
1)Requires the DOT to report to the Legislature
recommending how a team of senior consulting information
technology experts could be developed to serve as support
for state agencies and senior project team members in
state government to support their exercise of leadership,
monitoring, control, and direction over information
technology projects to minimize risks of those projects
being completed improperly and over budget.
2)In preparing the report, directs DOT to review the
California Project Management Methodology Reference
Manual.
3)Specifies that the report shall be based on the review of
that manual, and shall also consider how a team of senior
consulting advisors can assist senior executives charged
with oversight of major information technology projects
in terms of the challenges arising from all of the
following:
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a) Governance.
b) Development and management of contracts.
c) Testing.
d) Organizational change management.
e) Data conversion and migration.
f) Schedule development and management.
g) Evaluation and possible pitfalls of seeking value
for taxpayers by re-engineering state systems and
procedures.
h) Risk and issue identification and management.
i) Interface identification and management.
j) Quality assurance and quality control.
aa) Requirements definition and management.
bb) Architecture.
cc) Roll-out planning and approach.
4)Requires the Director of Technology (aka the State Chief
Information Officer) to establish a unit within DOT of
consulting information technology experts to serve as
support for state agencies.
5)Contains an urgency clause. The facts constituting its
necessity are to facilitate early support for ongoing
technology projects.
EXISTING LAW
Existing law establishes the Department of Technology (DOT)
within the Government Operations Agency. The director of
the DOT is also known as the State Chief Information
Officer (CIO). The DOT is responsible for the approval and
oversight of information technology projects by, among
other things, consulting with agencies during initial
project planning to ensure that project proposals are based
on well-defined programmatic needs and consider feasible
alternatives to address the identified needs and benefits
consistent with statewide strategies, policies, and
procedures.
BACKGROUND
1)Purpose of the bill : According to the author, large State
technology projects often take years, and may span
multiple gubernatorial administrations. There is often
costly and disruptive turnover in staff due to change in
senior managers, retirements, and career changes that
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occur during development and implementation of the
projects. The author believes that the long time horizon
of major projects and staffing turnover destroys
continuity at the project management level and this
hinders active project leadership.
The author believes that AB 2523 would provide needed
guidance and would strengthen State government by
developing a strong class of IT professionals whose
career track will allow them to grow a depth of
familiarity with the unique challenges across a broad
array of large and complex IT projects - providing a
source of highly seasoned and experienced IT advisors to
support strengthened management of complex projects.
2)Selected State information technology problems in recent
years : In 1987, the Department of Motor Vehicles (DMV)
undertook a major project whose goal was to update its
20-year-old system and merge the DMV's driver's license
and vehicle registration databases. At the beginning of
the project, it was expected to cost $27 million and be
up and running within 5 years. However, in 1993, six
years later, the DMV project was abandoned completely.
The DMV had spent $44.3 million on a system that
ultimately did not work.
The Department of Information Technology (DOIT) was
created in 1995 to oversee planning development of
government information technology and was instrumental in
securing a six-year, $95 million contract with Oracle for
enterprise software. The no-bid, sole-source deal was
widely scorned and triggered an investigation by the
State Auditor in 2002, who issued a report criticizing
the deal, alleging among other things that the State
might have saved $41 million if it had obtained the
software without the contract. In the wake on the
controversy, four state officials resigned, including the
director of DOIT, and in July 2002, the State officially
canceled the contract.
In 2012 the State Auditor reviewed and roundly criticized
Administrative Office of the Courts' (AOC) oversight of
the development of its statewide case management project.
The audit revealed that the AOC:
Inadequately planned for the statewide case
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management project and did not analyze whether the
project would be a cost-beneficial solution to the
superior courts' needs.
Was unable to provide contemporaneous analysis
and documentation supporting key decisions on the
project's scope and direction.
Did not structure the development vendor's
contract to adequately control cost and scope - over
the course of seven years, the AOC entered into 102
amendments and increased the cost from $33 million
to $310 million.
Failed to develop accurate cost estimates - in
2004 the cost estimate was $260 million and by 2010
the estimated cost was $1.9 billion.
Did not obtain the funding needed for statewide
deployment, noting that, without full deployment to
the 58 superior courts, the value of the project is
diminished.<1>
In recent years, the Employment Development Department
(EDD) has spent roughly $158 million upgrading the
State's 30-year-old unemployment payment processing
system. The upgraded system was originally supposed to
cost $35 million and be operational in 2009, but a series
of missteps delayed the delivery schedule and increased
costs.
Once the system was operational last year, EDD discovered
that the new computer system was misreading its existing,
legacy beneficiary data, and that the "glitch" was
significantly more widespread that first anticipated. EDD
admitted that nearly 50,000 claimants were affected by
the system's operational problems. It was later revealed
in news accounts that the new unemployment system was
essentially broken from the start, that EDD officials
knew it was not fully operational, and yet they moved
forward with the rollout of the system in any event.
1)Organizational history of State technology management
entities : On July 1, 2002, the statutes establishing the
Department of Information Technology (DOIT) were allowed
to sunset by the California State Legislature. As a
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<1> Administrative Office of the Courts: The Statewide Case
Management Project Faces Significant Challenges Due to Poor
Project Management, Report 2010-102, February 2011.
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result, decision-making in the Executive Branch for
enterprise information technology issues fell to a
handful of other agencies exercising discretion pursuant
to existing delegations of authority. Decisions about
information technology policy, project initiation,
project oversight and security policy fell to the
Department of Finance. Information technology procurement
policy and implementation became the responsibility of
the Department of General Services.
Four years after the closing of DOIT, Senate Bill 834
(Figueroa) in 2006 authorized the establishment of the
Office of the State Chief Information Officer (OCIO).<2>
The CIO is a cabinet-level officer. In August 2007 the
Legislature appropriated funds to establish the OCIO as
the first cabinet-level agency with statutory authority
over strategic vision and planning, enterprise
architecture, IT policy, and project approval and
oversight.<3>
In May 2009, Governor's IT Reorganization Plan (GRP 1)
took effect, consolidating statewide information
technology functions under OCIO. Specifically, GRP
1combined four agencies - OCIO, Office of Information
Security and Privacy Protection, the Department of
Technology Services, and the Department of General
Services' Telecommunications Division - into an expanded
OCIO. The GRP and its subsequent enabling legislation
also re-established the office as the California
Technology Agency and renamed the State Chief Information
Officer as the Secretary of California Technology.
On July 1, 2013, the California Technology Agency became
the Department of Technology (DOT) pursuant to GRP 2 of
2012. The DOT now reports through the newly established
Government Operations Agency. The GRP also includes a new
Statewide Technology Procurement Division, which is now
responsible for procurement of the State's largest IT
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<2> Govt. Code � 11545
<3> SB 90 (Budget & Fiscal Review), Chapter 183, Statutes
of 2007
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projects.<4>
2)California Project Methodology Manual : As noted in the
Legislative findings and declarations in AB 2523, the CIO
issued the manual in July 2013. "The manual breaks large
information technology projects into the phases of
initial concept, initiating, planning, executing, and
closing. The manual emphasizes that the critical role
throughout these phases is with the attendant management
duties of monitoring and controlling to ensure the
project is advancing in accordance with budget and
outcome expectations. The manual highlights the critical
role of the project management team, which includes the
distinct roles of the executive sponsor, project steering
committees, project director, and project manager."
The report required by AB 2523 must be based on the
review of the manual. The author thereby believes that
the manual highlights critical leadership functions that
successful IT project management requires.
3)Technical amendment : On Page 4, lines 25 through 28,
inclusive, the following technical amendment should be
adopted by the author or the Committee:
(b) The report shall be transmitted to all legislative
committees with jurisdiction over state information
technology, including, but not limited to, the Senate
Committee on Governmental Organization and the Assembly
Committee on Accountability and Administrative Review, in
compliance with Section 9795.
PRIOR/RELATED LEGISLATION
AB 2408 (Smyth), Chapter 404, Statutes of 2010. Codified
GRP 1 and Executive Order S-03-10, extending the sunset
date of the provisions of law [SB 834 (Figueroa), infra]
that first established the OCIO. The OCIO was reestablished
as the California Technology Agency (Technology Agency),
and the bill renamed the State Chief Information Officer as
the Secretary of California Technology.
SB 834 (Figueroa), Chapter 533, Statutes of 2006.
Implemented GRP 2 from 2005. Authorized the establishment
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<4> The Public Safety Communications Office moved to the
Governor's Office of Emergency Services under GRP 2 of
2012.
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of the Office of the State Chief Information Officer
(OCIO), established the Department of Technology Services
(DTS) in state government within the State and Consumer
Services Agency, and the Technology Services Board, with a
specified membership, within DTS. Authorized DTS to
acquire, install, equip, maintain, and operate new or
existing business telecommunications systems and services
and requires it to coordinate all matters affecting
statewide business telecommunications policy and planning.
SB 791 (Florez), 2003-2004 Session. Would have created the
position of the State Chief Information Officer (CIO) for
the purpose of directing the state's information technology
investments through strategic planning that would advance
statewide information policy. Would also have created the
Information Technology Board, administered by the Director
of Finance (DOF) with the assistance of the Director of
General Services, to advance the procedures and policies
for state agencies as developed by the CIO. Would have
required DOF to establish policies for information
technology projects. (Failed passage in Senate Governmental
Organization Committee)
SB 1 (Alquist), Chapter 508, Statutes of 1995. Replaced the
Office of Information Technology with the Department of
Information Technology, and prescribed the duties and
responsibilities of the department.
SUPPORT:
None on file
OPPOSE:
None on file
FISCAL COMMITTEE: Senate Appropriations Committee
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