Hybrid RFP Procurement Process - 1406.5

While the preceding techniques are appropriate for most acquisitions, some business problems offer unique challenges where the use of different procurement techniques, within a competitive framework, may better meet the State's needs.  As warranted, and generally only for the most complex, risk sensitive IT procurements, DGS will consider using an RFP procurement process that includes a mixture of techniques from the traditional ten section RFP process and some or all of the following elements:

• Accelerated RFP development sessions
• Solution based requirements
• Multiple proposal stages

For the targeted projects, the techniques will 1) maximize the State’s ability to obtain the best value solution, 2) ensure that all participants are in agreement as to the activities necessary to successfully deliver the solution, and 3) reduce processing time for some projects when supported by customer departments.

Due to the complexity of the RFP procurement process, only DGS/PD has the authority to conduct such procurements.

Accelerated RFP

The accelerated RFP may be considered for any formal RFP procurement that includes a critically constrained timeframe in which to complete the procurement and may include some or all of the following elements:

• Accelerated RFP development sessions where representatives from the Department, DGS/PD, DGS/OLS and the CDT are committed to meet for consecutive days to write the RFP requirements and evaluation criteria.
• Smaller procurement teams
• Parallel reviews of the solicitation documents (the Department, DGS and the CDT representatives).
• Request for Information (RFI) required prior to the development of the solicitation document to enable the bidder to determine merit of participating, and whether funding levels are appropriate.  The RFI is also used by the department to determine what is available in the marketplace, and if their requirements can be met by the bidder community.
• Expanded use of Confidential Discussions during the solicitation process, prior to submission of Final Proposals.
• Phased implementation and progress payments
• Use of Alternative Protest Process

Solution Based Requirements

Solution based requirements (Public Contract Code, Section 12103-5(d)) may be considered for any formal RFP procurement, and describe, in general terms, the State’s problem to be solved or a goal to be achieved, as opposed to a known, detailed and clear requirement used in the IFB.  The State outlines the business problem and describes the results that are required and the bidders propose business solutions.

Confidential discussions, that are iterative in nature, are conducted throughout the solicitation process to encourage dialogue between the State and bidders.  This is critical to ensure that the State’s business requirements and goals are clearly stipulated in the procurement document and the contractor is qualified and capable of meeting the requirements prior to entering into a contract.

Multiple Proposal Stages

The multiple proposal stages approach is used for only the most complex and risk sensitive IT procurements.  It will generally include most elements of the accelerated process and solution based requirements outlined above, and the following 2 stage process:

• Stage 1 is the contractor pre-qualification that results in separate contracts for 1) the proposal submittal stage and 2) the solution implementation stage.
• Two or more contractors are pre-qualified in Stage 1
• Contract language for Stage 1 contracts is standard, and not negotiable.  Contract language for Stage 2 contracts can be negotiable.
• A contractor’s Stage 1 and 2 contracts are separate documents, but part of an overall single procurement.
• Contractors may be paid for both Stage 1 and Stage 2 deliverables

The multiple proposal stages approach is conducted under Public Contract Code, Section 6611 and provides for negotiations for which only DGS has authority, instead of Public Contract Code, Section 12100.

Public Contract Code, Section 10365.5, with specified exceptions, prohibits any person, firm, or subsidiary thereof who has been awarded a consulting services contract from submitting a bid for, or being awarded a contract for, the provision of services, procurement of goods or supplies, or any other related action that is required, suggested, or otherwise deemed appropriate in the end product of the consulting services contract.  Public Contract Code, Section 10430 provides that this prohibition does not apply to incidental advice or suggestions made outside of the scope of a consulting services contract with regard to certain contracts for the acquisition of information technology goods and services, as specified.

Per Public Contract Code, Section 10430, also exempt from this authorization are contracts that are part of a single competitive procurement conducted in more than one stage for information technology goods or services, when the Director of DGS and the Director of CDT determine that there is no conflict of interest, as specified, and that it is in the best interest of the state to utilize this procurement method.  DGS is required to annually post a report on its website describing each determination, as specified, and to provide notice to the Joint Legislative Budget Committee within 30 days of the posting of the report.

Contact DGS/PD to Start

Departments that wish to partner with DGS to use any of the elements of the hybrid RFP processes, including use of a multiple proposal stages approach, are encouraged to contact DGS/PD early to discuss their requirements.  Techniques such as these require advanced planning and a focused commitment by all parties involved.

EXECUTIVE SPONSORSHIP AND COMMITMENT IS CRUCIAL TO THE SUCCESS OF THESE PROCUREMENT APPROACHES.  RESOURCES MUST BE FULLY DEDICATED BY BOTH THE DEPARTMENT AND DGS/PD.  THE ACCELERATED RFP DEVELOPMENT APPROACH REQUIRES 30-60 BUSINESS DAYS OF ATTENDANCE OF THE CORE PROJECT TEAM TO DEVELOP THE RFP AND SUBJECT MATTER EXPERTS MUST BE AVAILABLE TO ANSWER QUESTIONS AND DEVELOP REQUIREMENTS.  THE MULTIPLE PROPOSAL STAGES APPROACH REQUIRES WEEKS OR MONTHS OF NEGOTIATIONS AND IS RESOURCE DEPENDENT.

Once a collaborative decision has been made to go forward, the Department is required to submit a written request to DGS/PD that minimally includes the following:

• Problem(s) to be solved
• Reasons why a hybrid procurement approach may be appropriate
• Description of market research, risk management (bonds/payment holdback), and contract management approach, refer to State Administration Manual (SAM), Section 4819.31.

In addition, when utilizing the multiple proposal stages approach, the following is required:

• Approval letter from the CDT and DGS/PD to utilize the Hybrid RFP procurement process(es).  This is in addition to the CDT approval of the PAL/SPR.

A letter requesting DGS to release the solicitation under Public Contract Code, Section 6611. DGS/PD will review the request and either approve or deny the request.

NOTE: Due to the complexity of the hybrid processes, only DGS/PD has the authority to conduct such procurements.