14 Companies Off and Running in Kentucky

By Steve LeSueur, Staff WriterFourteen companies have won the right to bid on virtually all major information technology work Kentucky will award to industry during the next three to five years as part of a new program to revolutionize the way the state buys such services.Winners of the Strategic Alliance Services program will be able to compete for nearly $100 million worth of projects pending under the Empower Kentucky technology initiative, as well as multimillion-dollar contracts to modernize criminal justice and work force investment programs.The first project under the new program is the Kentucky Integrated Tax Entity System. State officials sent out a notice to the alliance vendors late last month about the system, which will be designed to ease tax administration. The vendors' responses are due April 20. Designating a limited number of players in advance of state IT procurements should forge closer ties with the companies and help speed the acquisition process, state officials said. The state also will benefit because the alliance companies likely will devote more time and resources to serving the state, industry officials said."We want the vendors to be partners with the state," said Aldona Valicenti, Kentucky's chief information officer. "We'll get better solutions, and it will drive down the costs of doing business for both the vendors and the state."The winners, announced March 26, include five full-service companies that can provide the state a wide range of services from systems development and maintenance to systems integration. They are: American Management Systems Inc., Deloitte Consulting, PricewaterhouseCoopers LLP, TRW Inc. and Unisys Corp.Another nine are niche vendors chosen for their expertise in areas such as criminal justice, imaging, electronic commerce and data warehousing. State officials plan to select one more niche vendor. Thirty-four companies submitted proposals under the Strategic Alliance Services program.While alliance vendors can bring subcontractors onto projects, state officials must approve these companies, just as the alliance partners received prior approval. "There's a strong expectation and desire that the [alliance] vendors will partner with each other," said Nancy Ward, deputy project manager for Empower Kentucky. "They're on the team together." In the past, the procurement process took too long and didn't allow for sufficient collaboration between the state and its vendors. It frequently took up to a year to define the requirements and select a vendor for major IT projects, said Ward, who helps oversee the statewide initiative to redesign business processes, improve government services and save money. The technology changes so fast, she said, that often "we would be shooting ourselves in the foot if we tried to stay with original technical requirements." "This is truly innovative," said Thomas Davies, senior vice president of Federal Sources Inc., McLean, Va. "The relationship offers the promise of a completely new and different way for the state to work with these companies."The new arrangement should work to the advantage of both the state and the alliance companies, government and industry officials said."Kentucky will achieve the benefits of the commitment of several strong technology vendors to a long-term strategic relationship," said Bob Campbell, regional industry leader in the public sector for Deloitte Consulting. Because the state is limiting its vendors, "these folks will get to know the business of the commonwealth and can really serve as partners with us in offering solutions," said Robin Morley, executive assistant in the office of the chief information officer. All state agencies will be required to procure IT services from the alliance companies, except when purchasing geographic information systems or when exceptions are approved by the state's CIO, said Kentucky officials. Consequently, these companies will be working on small departmental projects as well as larger, enterprisewide projects.Alliance companies, for example, can respond to new projects for Empower Kentucky. One project under way is a $28.5 million administrative and reporting system to streamline the state's financial and budget management. AMS is developing this system, which is expected to save the state $104 million over the next six years.The state also is planning to use the alliance companies for IT improvements to its unemployment insurance program, a unified criminal justice information system and a Virtual University and Virtual Library.Kentucky officials said they know of individual state and federal agencies that have adopted similar approaches to procuring IT services, but Kentucky appears to be the first to do so on an enterprisewide basis.Kentucky's new relationship with its strategic business partners will require the state's IT workers to hone new skills, such as working with the private sector to develop business solutions. The new arrangement calls for strong leadership to define project needs, negotiate contracts and monitor contractor performance."This is a major paradigm shift in how we buy IT services," said Morley."We'll learn and improve the practice as we go," added Ward.