Governor Newsom Paves Way for Technology Procurement Reform

Client Alert

In his first full day in office, California Governor Gavin Newsom moved quickly to reform how the state contracts for technology systems. Traditionally, state agencies have opted for a prescriptive approach—specifying the solution necessary to satisfy a particular technology need. In a sweeping executive order, Governor Newsom ordered state agencies to “develop a new iterative procurement approach called an Innovation Procurement Sprint.”

The Innovation Procurement Sprint signals a shift away from a specifications-based methodology in favor of a two-phased collaborative process.

The first phase calls for the development of a problem statement by the state in consultation with industry experts. This will be followed by the issuance of a “Request for Innovative Ideas,” or RFI2, soliciting solutions to address the problem statement. A panel of subject matter experts, who may work outside of government, will then be called upon to advise state personnel in evaluating RFI2 responses and select which entities qualify to develop a solution.

In the second phase, once selected, solution providers will partner with the state to further define and understand the state’s needs. The solution providers will be asked to develop prototypes or conduct demonstrations of their proposed solutions. The state will evaluate the solutions, negotiations may commence, and the state will award a contract(s).

The executive order tasks the Department of General Services (DGS) and the California Department of Technology (CDT) with developing guidance on the Governor’s proposed approach. According to the executive order, this will also include consideration of whether the solution providers selected to develop prototypes or conduct demonstrations may be compensated for their developmental efforts.

Innovation Procurement Sprints “will be governed” by Public Contract Code (PCC) § 6611. Enacted in 2003, PCC § 6611 is intended to allow the state greater flexibility in contracting for technology and related services than would be the case under the state’s standard public procurement processes. Specifically, PCC § 6611 authorizes the state to use a “negotiation process” for “goods, services, information technology, and telecommunications” in new procurements as well as to amend existing procurements.

PCC § 6611 specifies a detailed list of conditions that must be satisfied to demonstrate negotiations are in the best interest of the state. The state may also have to contend with how the new approach comports with provisions in state law, such as Government Code § 19130, which sets forth standards for the use of personal services contracts. However, with the implementation of Innovation Procurement Sprints, DGS and CDT start the Newsom administration with the public support and direction of Governor Newsom, along with a procurement tool intended to bring new technologies and innovation to bear in addressing the state’s problems.

The first Innovation Procurement Sprint will be executed by DGS and CDT on behalf of CalFire. The executive order states that the sprint will “identify innovative solutions to the State’s wildfire crisis, with a goal of working-solutions deployments in 2019 and final awarded deployments by Spring 2020.” 

The executive order represents serious reform. Innovation Procurement Sprints call upon experts in technology to identify potential innovative solutions, engage relevant companies to demonstrate their solutions, and allow the state to move quickly to procure the best demonstrated solution(s). Moreover, it creates an environment where companies may have the opportunity to demonstrate their solutions against others being proposed. As the executive order explains, the state “will challenge innovators and entrepreneurs to provide California with leading-edge solutions by aligning our procurement methods with the pace of change of our State’s greatest innovators in academia and the private sector.”



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