Contract freeze won't halt California tech initiatives

A freeze on new contracts in California that went into effect this month is unlikely to have an adverse impact on technology initiatives, a top state official said this week.

California Gov. Arnold Schwarzenegger, who took office in November, issued an executive order Dec. 5 prohibiting the signing of new contracts and extensions without approval from the state's Department of Finance.

But State Chief Information Officer Clark Kelso told Washington Technology that the new administration is sensitive to the need for a timely information technology procurement process and that essential IT contracts and programs would proceed on schedule.

"Projects already funded or well under way won't be stopped," Kelso said. "The intention [of the executive order] is not to stop contracts, but to get agencies looking at how they can reduce the pressure on the general fund. If stopping contracts is going to increase costs, then we're not going to do that."

California is facing a budget shortfall of $14 billion for fiscal 2004-05, according to state officials and budget experts. The freeze is one of several measures Schwarzenegger is taking to get state employees to cut spending.

In the same order, Schwarzenneger instructed state agencies and departments to cancel or postpone any nonessential trips, such as those routinely made for seminars, conferences and training.

Kelso, who was one of former Gov. Gray Davis' top advisers, said he will continue to serve as state CIO until the governor appoints a new one at an unspecified date. The Schwarzenegger administration, which received upwards of 8,000 applications for various political appointments that opened up as a result of the turnover, has not had time to make all of those appointments, Kelso said.

As for long-term technology strategy, Schwarzenegger is planning a major reorganization of the executive branch that will include a review of the current IT strategy, Kelso said.

"We are aware of the need for greater flexibility and innovation in the way we procure IT," he said. "You don't restructure government without having IT be a big part of that."