OPINION: TaxWatch IT Report Gets Some Things Right, Some Wrong

TaxWatch/AIF Report

Today, I’m reviewing a joint report published last week by Florida TaxWatch and the Associated Industries of Florida (AIF). The report is titled “It’s Time to Reform Florida’s Information Technology Procurement and Oversight” (the “Report”). It makes ten (10) recommendations designed to give the Florida Digital Service (FL[DS]), a “fighting chance” of success. I’m going to tell you the recommendations and give my opinion about whether they would be successful. I suggest you read the report for yourself before making any final decision on its merit.

But first, an honorable mention to TaxWatch and AIF for putting out the Report. It contains a lot of well-done research about the history of some of the worst IT procurement blunders in Florida. They did a fine job with this Report even if I don’t agree with everything they suggested. It’s important that someone is starting the conversation because it needs to be had.

Basis For My Thoughts

First, some background. My opinions do not come from thin air. I was Deputy General Counsel/Interim General Counsel of DMS when the Legislature dissolved the Agency for State Technology (AST) and created the DMS Division of State Technology (DST) in 2019. I witnessed the attempts to integrate them into DMS, as well as some of the failures of that process. When I returned to DMS as Chief of Staff in late 2021, the DST had become the Florida Digital Service. I interacted with the State CIO on numerous occasions and witnessed the struggles he faced in staffing and operations. I also led the negotiation team responsible for outsourcing the State Data Center, operated by FL[DS], to the Northwest Regional Data Center, operated by FSU. This was forced down FL[DS]’s throat by the Legislature. I saw many good employees come and go throughout that process.

I’ve also seen technology contracts become disasters. Many years ago at DMS there was an issue with a company, who shall remain unnamed, that was contracted to build a system on an hourly basis. The vendor never presented a functioning system but had billed all the available contract dollars. When the agency balked, the vendor took a hardline stance and said it performed under the contract and was owed additional money. The state never received a system or its money back. The culprit? Poor wording of the contract…allegedly.

Now on to the show!

The Recommendations

1. A joint committee of the House and Senate on information technology, appointed by House and Senate leaders, with whom is vested sole and exclusive authority for overseeing the governance of the FL[DS] and IT policy and budget issues, will help to ensure the successful operation of FL[DS].

– Thumbs DOWN. The number one suggestion is to put FL[DS] policy and budget under the thumb of a new legislative committee? That’s like putting the state’s cybersecurity and IT project oversight on dial up. The Legislature is not equipped to handle the day-to-day issues that arise in FL[DS]’s mission. Governance by committee works for a lot of things, but it doesn’t work well in the world of fast-paced technology and cybersecurity.

If the Legislature wants to exert that kind of control it can do it through legislation. If it wants to handle the budget it can negotiate during the budget process and line item every major expense or purchase. The Report noted that the Legislature gave a proviso contract for SLERS-2. Why couldn’t it do the same for FL[DS] purchases?

2. A governance model like the one shown in Appendix A should serve as the model structure to govern future enterprise-wide IT projects.

– NEUTRAL. The governance document in Appendix A is not a bad document. I think it’s probably a big improvement for agencies who don’t have a robust framework already in place. The flip side to this, however, is the look on some agency employees’ faces when you tell them you’re adding additional recurring meetings to their schedule. At first, recurring meetings can seem effective, but without proper management they can quickly devolve into aimless small talk and personal gossip sessions. This is where a good project manager (PMP) can keep everyone on task.

3. Statewide standardization of core agency business processes would alleviate some of the software customization and additional workload issues associated with trying to accommodate so many different business processes.

– THUMBS UP. I’ve worked at four (4) different agencies and each one had their own nuances and issues when it came to information technology. For example, it took the Department of Corrections one week to get me a functioning computer. My first week there I sat in my office and read Joseph Goldstein’s Bid Protest book. The DOC also (previously) had an old email search system that caused a 9-month public records backup. The Attorney General’s office used some billing platform called Lotus Notes/Lotus Express, which was ancient at the time. DMS had a functioning IT department and support staff that responded very quickly, but the legal department’s case management software was custom code from the 1990s.

Many agencies utilize customizations (custom code) instead of configurations (enabling already existing functionality) simply due to preference. The problem with customization is it’s costly and difficult to unwind when a new system needs to be procured. This keeps agencies locked into long-term deals because there’s so much custom code it’s hard for a new vendor to come in and handle it. When the agency attempts to reprocure, the incumbent has a significant advantage because of the esoteric knowledge it has about how the code has evolved over time.

An alternative way to accomplish this goal could be to instruct DMS to procure state term contracts (mandatory use) for various forms of software components that would be used universally across the enterprise. This would force agencies to use standardized software applications and would theoretically reduce cost by leveraging volume. I suspect agencies will buck though because every agency think its situation is unique.

4. Section 287.057, Florida Statutes, should be amended to permit agencies to publish draft ITN specifications and solicit vendor input before releasing the final ITN specifications.

– Thumbs DOWN. I understand the mentality here, but I have some concerns as a procurement lawyer. If the agency publishes the draft ITN and then makes changes due to a vendor’s input, there could be allegations that the agency favored that vendor. This could result in more bid specifications challenges.

There is already an existing “Request for Information” process that agencies can use to solicit input from the vendor community prior to releasing a solicitation. I think that process is sufficient. Further, even if you made the change, you would likely have to amend the cone of silence provisions to make sure all draft-ITN communications went through proper channels. Otherwise, there will be back channeling (lobbying) downtown about what ends up in the final ITN. The end result, 2 years later, could be an administrative law judge reversing the award and finding that the winning vendor’s repeated pre-launch meetings with agency leadership and the governor’s office gave it an unfair advantage.

5. The state should consider dividing acquisitions of major systems into several smaller increments (modules) that are easier to manage individually than would one comprehensive system solution.

– NEUTRAL. It’s not a bad policy proposal and it makes sense on a macro scale. Obviously, the current model of one big mega contract hasn’t worked very well. The potential drawback is that a multi-vendor solution can result in multiple vendors pointing the finger at each other when something goes wrong. At least with one big contract you have one theoretical “throat to choke.” With a multi-vendor solution, there’s always the risk of failure without accountability.

The other consideration is that it’s hard to replace one big monster system with a lot of tiny new parts over time. The agency needs the current system to function while it builds out the new system. This overlap time is something agencies already dread when changing systems. Likewise, technology evolves at such a fast pace that by the time the numerous modules were built and programmed and functioning, they might be obsolete. The state already has enough issues with slow IT implementation. Modules would slow it down even more.

6. Section 287.057, Florida Statutes, should be amended to define the term “history of nonperformance” and to require state agencies to incorporate an IT vendor’s history of nonperformance into the scoring of their response to a procurement solicitation.

– Thumbs UP, provided that the “history of nonperformance” standard is defined and articulated clearly. I think many vendors would try to challenge the scoring on this criteria if it’s too subjective. State employees would have to use objective metrics rather than their own personal histories and hearsay when scoring this section. There’s also the issue that most agencies do not actually enforce contract provisions against IT vendors (agencies will deny this), so it’s unlikely for there to be a paper trail of noncompliance absent something major like the OIG Investigation into the CONNECT system. The reason everyone knows about CONNECT is because the failures were made very public, but not by the agency. If an agency attempts to hold a vendor accountable, it opens the door for scrutiny of the agency’s management of the contract. Imaging raising an issue about a vendor up the chain and then getting chewed out for allowing it to get so bad. The focus becomes on the employee’s job performance and not the vendor. Who would want that?

7. The legislature needs to look for ways to foster a more flexible working environment that permits the state to be more competitive when it comes to attracting and retaining IT talent. Further, FL[DS] and other state agencies’ IT managers need to be trained in the new leadership skills needed to retain and develop younger employees.

– Thumbs UP UP UP UP UP UP UP UP UP UP UP. One of the biggest pain points post-pandemic was the transition away from hybrid work solutions. It’s already a hard sell to get people to move to Tallahassee. This might be hard for native Tallahasseeans to understand, but Tallahassee is light years behind Central and South Florida. It is not the center of the world that you think it is. People outside Tallahassee largely don’t care about Tallahassee or what happens here. The culture is completely different and expecting people to leave their SoFla City Life to be stuck in an office all day, in what they view as “the middle of nowhere,” is a hard sell.  

8. Signing/recruitment bonuses — like those provided to teachers and law enforcement officers — can help FL[DS] and state agencies in the recruitment of IT talent.

– Thumbs UP. If you look at my comment on recommendation number 7 you’ll see why I support this. You need to provide these bonuses to convince quality employees to move to Tallahassee, a city with an airport to nowhere, and sit in an office all day in a bureaucracy.

9. FL[DS] and state agencies’ job descriptions (and salary bands) should be revised or rewritten to focus on the skills required to do each job and not on the type(s) of degree likely to have those skills.

– NEUTRAL. I think degrees are less important in information technology jobs than certifications. The technology space is constantly evolving and new components come out every day. Someone can have an advanced understanding of computer science, but it won’t mean squat if they aren’t trained in today’s current technology marketplace. Modern certifications can fill the gap that degrees once held. I believe this to be particularly true in the technology space.

10. The State CIO should work closely with the Chancellor of the SUS to establish a talent pipeline through which the SUS’ “best and brightest” Computer and Information Science graduates can be recruited by the FL[DS].

– Thumbs UP UP UP UP UP UP UP UP UP UP UP UP UP UP. The only issue here is you need to make it worth it for the “best and brightest” to come sit in an office all day long in Tallahassee instead of working from home in some swank tech-oriented city. Lower comparative pay and less comparative quality of life aren’t exactly the shiny objects that up-and-coming tech bros are looking for. You need to fix the cultural stigmas against remote work held by people who don’t understand or respect technology. Until that happens, it’s going to be very difficult in my opinion to foster the kind of talent you’re looking for.

Conclusion

I give credit to TaxWatch and AIF for publishing this report and discussing the issue. Something needs to be done. It’s obvious there is no simple solution, but I think the discussion will need to involve all stakeholders. In my view, the most important short term change is to allow remote working opportunities to recruit staff. The systemic problems associated with IT procurements will not be fixed by IT staff. They require wholesale changes in the belief structures of those in power in Tallahassee. An agency needs the ability to actually hold a vendor accountable without backlash. The agency employees tasked with managing these contracts are 20 levels removed from the Capitol, whereas vendors’ representatives have full access. The process plays out exactly like you think it would.