Advantages

Challenges

Key Considerations

• Access to staff with the appropriate technical skills and experience
• The ability to move to a new technical environment with less State staff turnover or retraining because the contractor’s technical staff perform the system development and maintenance function instead of State staff
• Greater control over project schedule because contractor resources may be more flexible than State resources
• Reduced likelihood that competing demands could take away project resources because of the contractual commitment of resources
• Possible cost savings by substituting internal development and maintenance costs with a COTS application or a potentially more efficient development process
• Shared project risk—some risk and liability assumed by contractor
• Frees Agency staff to focus on other high-priority needs and tasks

• Time and cost of procurement
• Requires properly scoped contracts to avoid schedule and cost overruns (Chapter III, Section B offers more discussion on this point)
• Validating that contract staff members have sufficient program knowledge
• Flexibility and ability to accommodate changing program regulations, policies, and processes without expensive and time-consuming change orders
• Loss of organizational competencies if development occurs outside the Agency because no State staff work on the application
• Dependence on a third-party contractor that may not have the same organizational goals and mission and thus may be more focused on meeting their business and profit objectives than meeting the Agency’s service objectives
• Difficulty in communicating program mission, goals, and service requirements to contract technical staff

• Is there at least one supplier available to perform the scope of work?
• Is the Agency confident that the chosen vendor has the capacity to meet the contract deliverable? Is the vendor stable enough for the State to feel confident they will be in business for the life of the contract?
• Does the Agency have the expertise to develop and evaluate a Request for Proposal (RFP) that adequately scopes the project?
• Is there a good communications plan in place between the Agency and vendor?
• Are the contract deliverables and deadlines realistic, including any deadlines for State staff to review and sign off on work products?
• Has human resources been involved in the decision-making process to ensure that contracting fits with the Agency’s plans for developing and maintaining competencies within the organization?
• If layoffs are part of the formula for implementation, has the State accounted for full cost of severance?
• If significant program knowledge is required, does the contractor possess this knowledge or would Agency staff members be required to provide this expertise?
• Does the Agency have a project manager qualified to oversee an IT project?