Peter Kelly, chief deputy director of the California Health and Human Services Agency's Office of Systems Integration. JESSICA MULHOLLAND

For years, the state of California has been doing multi-year, multimillion-dollar software projects, only to find that many of them don’t produce the results the state had hoped for. They take too long to plan and execute, and cost more than expected.

“Customers have one consistent thing they tell us: You gave me what I asked for, but it is not really what I wanted,” said Peter Kelly, chief deputy director for the California Health and Human Services Agency’s Office of Systems Integration (OSI).

Determined to break out of that cycle, the state looked for a significant project to which it could apply agile project management methodology and develop software more iteratively. Agile development breaks software projects up into short “sprints” of a few weeks, while business officials and IT teams work closely on refinements. The traditional and linear software development approach is referred to as “waterfall.” Each phase of a project is completed before moving to the next.

In late 2015, the Health and Human Services Agency decided that the replacement for a 20-year-old Child Welfare Services case management system would be the test bed for agile adoption. Did that require rethinking how to do procurement for the project and what type of RFPs would be developed?

“It required rethinking everything,” Kelly said, “and procurement was definitely at the spearhead of the effort.”

Changing requirements

Federal, state and local government IT departments are gaining more experience with agile processes and are starting to develop staff competencies to work in a more iterative fashion, but among the transition challenges, many have identified procurement as a particular stumbling block. In 2017,  Accenture partnered with the National Association of State Chief Information Officers (NASCIO) to survey state CIOs and agency heads. Of 53 completed responses, 70 percent said procurement was not set up for agile projects.

Keir Buckhurst, Accenture’s managing director for the public service industry, said that in traditional waterfall project procurement, you have three sides to a triangle: time, resources and requirements. The requirements are fixed, and you can have variations in time and resources.

“With agile, we are switching it to say time and resources are fixed, but the requirements can change and evolve. Therefore, how you contract is very different. That is the toughest thing for people to wrap their heads around.”

In California, several agencies have been experimenting with agile on smaller projects, but the Child Welfare Digital Services case management system was the first place the state got behind this approach on a major capital investment. Hoping to learn from past failures, the agency wants to break the large project into smaller pieces and deliver value more iteratively, rather than spend years on procurement and development.

Rethinking procurement

Breaking up such a huge project meant rethinking procurement. For one thing, if you are going to engage in multiple procurements, there is no foregone conclusion that the same vendor will win all of them, Kelly noted. If the project involves multiple vendors, that has implications for systems integration. OSI had a 13-year history of bringing in a single vendor to be the systems integrator but decided to play the role of systems integrator itself for this project, which required adding new skill sets.

OSI sought consulting help on procurement from 18F, a federal office housed within the U.S. General Services Administration, and Code for America, a nonprofit that augments local governments’ efforts involving technological innovation.

Kelly said Dave Zvenyach, an 18F official, “led a conversation for a day and a half with more attorneys and acquisition specialists than I could count. Going through laws, policies, regulations and statutes, he helped debunk their notions that agile procurement couldn’t work.”

It turned out that in order to make the major shift to iterative procurements to do agile work, not a single law had to be changed.

But even with legal questions set aside, the state had to create a mechanism to procure faster. “If you are going to do lots of small procurements, you can’t work on a 12- to 24-month time frame,” Kelly said. “It doesn’t work.”

California chose to follow 18F’s example and create a pool of vendors pre-approved to do agile work who could respond quickly to smaller procurements. In 2016 the state gave vendors a problem to solve using software with examples of what they wanted them to demonstrate. They had 30 days to reply. More than 20 companies made submissions, and 11 vendors, both big and small, qualified based on the state’s criteria.

As work ramps up on the child welfare system, the procurement process has shifted away from language around specific products the agency wants vendors to build and more toward how the agency wants to work, according to Kelly.

“The ‘how,’ for me, is so important,” he said. “It is a shared ownership, a shared responsibility. It is a gigantic paradigm shift for all parties involved. The last year for us has been as much about establishing how we work as it has been about what we are building.”

 

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