Staff Augmentation Informational Inquiry

Transcription

1 Staff Augmentation Informational Inquiry Introduction The Commonwealth s current contract vehicle for obtaining contract IT staffing expires on 6/30/2013. In preparation for developing a replacement contract, the Strategic Sourcing Team (SST) responsible for this Request for Response is soliciting information from two types of vendors: 1. Companies who provide temporary IT staff (multiple vendor contracts) 2. Companies who provide a vendor-managed solution, wherein they manage a panel of other vendors who provide temporary IT staff (single vendor contract) This document includes information about the current Statewide Contract, including structure and contract usage (an associated spreadsheet provides detailed data), followed by two sets of questions, one for each of the two types of vendors/contract models noted above. The three methods for vendors to provide input are: 1. Written responses to the questions below, via to marge.macevitt@state.ma.us 2. On-site one-on one meetings with the SST (see Time Slots below) 3. Webinar to allow for additional input (date to be announced, posted in the same location as this document) Information about the Current Statewide Contract The current contract (ITS43 Staff Augmentation) is a contract with 46 IT staffing companies providing full service that is, these vendors locate/recruit resources and submit resumes in response to the Commonwealth s job requirements. The vendors are either the resource s direct employer or they subcontract with the resource s employer. There are also two contracts referred to as the Lower Overhead contracts that are used when the Commonwealth has located (recruited) the resource they wish to retain. Under Category 2a, the Lower Overhead vendor becomes the resource s employer (providing the resource s W-2). Under Category 2b, the Lower Overhead vendor subcontracts with the resource s employer. Category 1 Full Service Contract A Rate Card establishes maximum rates for each Job Title. The spreadsheet associated with this document includes the current Rate Card and the two previous Rate Cards. Currently Rate Card 5 governs rates for Executive Departments; other Commonwealth Agencies may use any of the three Rate Cards. When a Commonwealth Agency (hereinafter Eligible Entity, i.e., an entity eligible to use the Contract) wants to retain a temporary IT resource, the Eligible Entity posts the requirements on the Commonwealth s procurement system. Any of the current 46 full-service vendors may submit resumes in response to the posting, and ONLY those vendors may respond. The Eligible Entity selects candidates to be interviewed, conducts interviews, and enters into an agreement for the selected resource s services with the vendor who submitted the candidate s resume. Categories 2a and 2b, Lower Overhead Contracts Maximum rates for these categories are also governed by the Rate Card. Category 2a is used when the resource has no current employer. When the Eligible Entity has agreed to retain the resource, the resource is given the list of the two Category 2a vendors and chooses one of them to become the resource s employer. Category 2b is used when the resource already has an employer. The resource is

2 given the list of the three Category 2b vendors and chooses one to subcontract with the resource s employer. Additional Information on Current Contract Terms For more information about the current contract, please refer to the Solicitation that resulted in the contract. Go to Select Search for a Solicitation from the links near the bottom of the screen towards the left Enter ITS43StaffAugA as the Document Number (not as a Keyword) and Select Search Select the new link appearing toward the top of the screen, There are 3 Solicitations Select the view icon (eyeglasses) to the left of the first document listed (the only one without the word Announcement in the document description The main RFR document is found on the Specifications tab (ITS43StaffAugA RFR). Note also the amendments and answers to bidder questions posted on this tab. The Forms & Terms tab includes a number of documents referenced in the RFR. To review Comm-PASS Postings under Current Contract Go to Select SOLICITATIONS tab at the top Select Search for a Solicitation (3 rd bullet) Enter ITS43 in the Document Number box Select Open in the Document Status box and click Search Select the new link appearing toward the top of the screen, There are x Solicitations Select the view icon (eyeglasses) to the left of the one you wish to view Information appears on the various tabs Rate Card and Data from the Current Contracts (1/1/2011 6/30/2012) See the Rate Card and Contract Data spreadsheet posted with this document on Comm-PASS. Please note that the hourly rates shown in the spreadsheet are the vendors invoice rates. All vendors pay a 1% Administration Fee quarterly to the Commonwealth (1% of their gross income under the contract), and nearly all vendors offer a 5% Prompt Pay Discount, which is applicable to most payments. Thus the actual cost to the Commonwealth is between 1% and 6% lower than the hourly rates shown on the spreadsheet. Total spend for the first 18 months of the contract (1/1/2011 6/30/2012) was $47,644,373, with 630 different resources providing services under the contract. Questions for Vendors Below are two sets of questions, one for companies who provide temporary IT staff under a model similar to the current model (multiple vendor contracts) and the other for companies who offer a vendor-managed solution (single vendor contract). Vendors are welcome to comment on any or all questions and submit answers in writing. A. Vendors who provide IT Staff Augmentation Resources (multiple vendor contracts) Overall the Commonwealth is pleased with our current IT Staff Augmentation contracts, both Full Service and Lower Overhead. However we are seeking input from the vendor community on how we can improve the selection process and the contract for both vendors and the Commonwealth.

3 Two RFR areas were particularly controversial. Below, we identify the intent of those provisions and we invite comment on how best to address them. We also have some additional questions. 1. Years in business providing primarily (50% or more) IT Staff Augmentation services Intent The intent of this requirement was to get companies who had been successful over a number of years providing IT Staff Augmentation services. The SST s reasoning is that if this is the company s primary business, and they have been in that business for many years, then they must be good at it. Another factor is the assumption that if this is the company s primary line of business, they care about the client relationship and those managing it will have the authority to provide accommodations where necessary to maintain a successful relationship. Issues o Not easily verifiable o o Many bidders challenged responses of others Marketplace changes: Companies that would otherwise meet this requirement can be acquired by larger companies with a different focus that would not meet it, and yet continue to function as they did prior to the acquisition. We don t want to disqualify these companies. What requirements/desirable characteristics could we substitute that would meet our intent without causing difficulties? 2. % of IT placements that are W-2s Intent Preference for direct W-2s is because the fewer entities there are between the Commonwealth and the resource, the fewer entities need to be compensated and the more money there is for the resource. To attract the best resources and to keep the resources morale as high as possible and motivate them to stay with the Commonwealth, the SST prefers the largest possible percentage of the Commonwealth s dollars to flow to the resource rather than other entities. Issues a. Works against vendors who make a lot of placements of resources with H1B visas b. Difficult to prove since most documentation routinely provided for taxes, etc. does not distinguish between IT resources and other resources. Many bidders took issue with the high percentages attested to by other bidders. What requirements/desirable characteristics could we substitute that would meet our intent without causing challenges? 3. Low Overhead Category 2a (Vendor provides W-2) Short-term placements (defined as 3 months or less) are costly to vendors because of setup costs and the fact that all employer burden factors are at 100% throughout the placement. We are considering restricting use of this Category to instances where the Commonwealth agency intends a minimum three-month engagement (no penalty if shorter for reasons not anticipated by the Commonwealth agency). Engagements planned to be shorter than 3 months would be done under Category 1, Full Service.

4 Comments are invited from both Full Service and Low Overhead vendors about this possible change. 4. Ideal number of vendors Nearly all companies on the current contract have made at least one placement, meaning that it was beneficial to at least one Commonwealth agency to have them on the list. When we expanded the number of vendors on this contract, there were predictions that the Commonwealth would be overwhelmed by the number of resumes submitted and that quality would decline, as our vendors refrained from submitted their A-list candidates because of the lower likelihood of success. Based on input representing approximately 75% of Commonwealth contract users, neither of these predictions has come to pass. However, the initial bid was based on restricting the number of vendors to 18 (3 places reserved for small companies). From the perspective of getting competitive bids, and continuing to receive satisfactory resumes from the awarded vendors, recommend an ideal number of vendors and provide the basis for your recommendation. 5. Vendor Managed panel As part of Strategic Sourcing, the SST is considering whether a Vendor Managed panel could be more advantageous to the Commonwealth than our current model. The SST is particularly interested in hearing from vendors who presently work under both models for different clients, in terms of the quality and pricing for submitted candidates and any other relevant factors. 6. Other models Other than the two models described, are there additional models that should be considered by the SST? Please explain. 7. Vendor Selection What selection/evaluation criteria would you add, modify or drop from those used for ITS43? Please note, we MUST allocate 10% of the evaluation to the bidder s Supplier Diversity Plan commitment to work with a Massachusetts Supplier Diversity Office certified M/WBE. Also please note that the fact that a vendor may be incorporated in MA, or was awarded under the previous contract, cannot be considered in the evaluation. However, the SST could take contract performance under ITS43 (positive or negative) into account. The SST is more interested in specific, objective information that can be verified without undue effort than in descriptions of processes, successes, etc. We have found over the course of several procurements in this area that performance cannot be predicted based on the quality of narrative responses (at least, to the types of questions we have used in the past). 8. Other comments? Please provide any additional information you think would be helpful to the Commonwealth in creating a replacement for ITS43StaffAug. B. Vendors who provide a Vendor-managed solution (single vendor contracts) 1. Cost and quality Based on the information provided about our current contract, could your company provide high quality resources, at no greater cost to the Commonwealth, without lowering pay rate to resources, as we have with our current model? If so, please explain how this would work, given that it would

5 introduce another company that would need to be compensated into the process. If not, what are the advantages? 2. Process for Eligible Entity to retain a resource Describe the process from the perspective of a Commonwealth agency that wishes to retain a resource, from the point of determining that a new resource is needed to the resource s first day on the job (and beyond, to the extent that the vendor s role continues). If this varies depending on how difficult the position is to fill or on other factors, provide multiple scenarios. 3. Questions regarding job specifications Under our current model, vendors who have questions concerning the posting contact the contact person for the Commonwealth agency that issued the posting. If necessary, a brief conference call is scheduled for questions from multiple vendors. If a vendor has questions about a job posting, how is this handled by your process? Would it be more/less time consuming than under the current model? 4. Final rate negotiations Under the current system, once a candidate is selected, the Commonwealth agency is sometimes able to negotiate a lower rate with the vendor. Would this type of negotiation be possible and how would it work in your process? 5. Boston market experience Does your company currently assign resources in the Boston market? 6. Selection of vendor panel How will the IT Staff Aug vendors who will be supplying resources be selected? Please address the Commonwealth s role in selecting the panel of vendors, whether all vendors are offered the opportunity to respond to all postings, how/if vendors are added to the panel, and other factors pertaining to managing and selecting vendors. Does your company supply resources directly itself, or are resources supplied only by other companies on the vendor panel? 7. Lower Overhead contracts Does your model support anything comparable to our Lower Overhead contracts (see above)? If so, please describe. If not, or if we do not find it satisfactory, could your company support just the Full Service while we continue to run our own Lower Overhead contracts? 8. Other factors to consider? Are there other factors you suggest we consider in deciding whether to keep our current model or change to a Vendor Managed model? 9. Key differentiators among companies offering Vendor-managed solutions If we decide to go with a Vendor Managed model, what are the key differentiating factors among Vendor Management companies? What questions should we ask and how should responses be evaluated to select the company that will provide the most comprehensive service model to the Commonwealth? 10. Independent articles/studies

6 Can you refer us to any recent independent studies or articles comparing the Vendor Managed model to a self-managed panel of vendors? 11. Other comments? Please provide any additional information you think would be helpful to the Commonwealth in creating a replacement for ITS43StaffAug. Time Slots for One-on-one Meetings with SST The SST has established the following time slots for one-on-one meetings with vendors. Companies interested in meeting with members of the SST should marge.macevitt@state.ma.us with their choice of at least 3 time slots, no later than October 3, Please use the Subject IT Staff Augmentation Information Meeting, and indicate whether your company offers a vendor-managed model (single vendor contract model) or acts as a direct provider of resources (multiple vendor contracts model). The SST may not be able to meet with all vendors, but will in addition hold a Webinar to gather further input, at a date/time to be announced. All meetings will be 45 minutes beginning on the hour. Time slots are: Tuesday October 9: 1PM, 2PM, 3PM, 4PM Wednesday October 10: 1PM, 2PM, 3PM, 4PM Thursday October 11: 1PM, 2PM, 3PM, 4PM Friday October 12: 10AM, 11AM Monday October 15: 1PM, 2PM, 3PM, 4PM Tuesday October 16: 2PM, 3PM The SST is interested in meeting with vendors who offer vendor-managed systems and who have a least one client whose contract resource needs are similar in terms of volume and types of resources to the Commonwealth s (see Rate Card and Contract Data Spreadsheet), and who have at least one large government entity as a client. The SST is also interested in meeting with vendors who provide resources directly in response to client requisitions, regardless of size or previous government experience. Twenty-four time slots are shown above. Twelve will be reserved for vendors who offer vendor-managed solutions (single vendor model) and twelve will be reserved for companies who provide resources under contracts similar to the Commonwealth s current contract (multiple vendor contracts), however if not all time slots for one of the models are taken, they will be allocated to companies in the other model. Meetings will be scheduled on a first come, first served basis. Please provide at least 3 possible dates/times. The SST looks forward to meeting with IT Staff Augmentation companies and learning how we improve our contracts for our users and our vendors.