Planning Page 7 - 1

1. 5/1/2012 5:25 AM Planning Page 7 - 1 Revised 22Jan2001 based upon inputs from FMCSA. Revised 02May2001 to incorporate attendee motivators under session objectives. From Jim Peter: I marked with a star the pages I believe are most critical to be presented.Revised 22Jan2001 based upon inputs from FMCSA. Revised 02May2001 to incorporate attendee motivators under session objectives. From Jim Peter: I marked with a star the pages I believe are most critical to be presented.

2. 5/1/2012 5:25 AM Planning Page 7 - 2 Acknowledgment

3. 5/1/2012 5:25 AM Planning Page 7 - 3 Session Plan CVISN background, issues and challenges (5 min) Combined and coordinated procurements (3 min) Planning for a successful procurement (10 min) Procurement categories (5 min) Formulating a CVISN procurement strategy (10 min) Questions (10 min) Breakout Plan Instructions (2 min) Breakout (60 min): Develop your draft procurement strategy Total Time: 1 hour & 45 minutes Mention that CVISN procurement strategy is an overview…the techniques will be applied in a subsequent breakout session to develop a state procurement strategy and implementation plan. There is a humongous amount of information here. Explain that most of it is for reference. Hit the key points, and target about 35 minutes in duration.Mention that CVISN procurement strategy is an overview…the techniques will be applied in a subsequent breakout session to develop a state procurement strategy and implementation plan. There is a humongous amount of information here. Explain that most of it is for reference. Hit the key points, and target about 35 minutes in duration.

4. 5/1/2012 5:25 AM Planning Page 7 - 4 Session Objectives Provide overview of alternatives Provide overview of a process to plan and implement CVISN procurements Awareness of the calendar time involved Discuss components of a procurement strategy Provide technical procurement information to support development of your state procurement plan in a subsequent workshop session Extensive background material is provided regarding contract types, Payment Methods and methods of award. They will not be discussed in detail. They will however, provide the technical procurement requirements to be integrated into your state procurement strategy and implementation plan. Information is layered: Presentation Handouts References for further research Goal is to provide “tools” to proactively interact with contracting officersExtensive background material is provided regarding contract types, Payment Methods and methods of award. They will not be discussed in detail. They will however, provide the technical procurement requirements to be integrated into your state procurement strategy and implementation plan. Information is layered: Presentation Handouts References for further research Goal is to provide “tools” to proactively interact with contracting officers

5. 5/1/2012 5:25 AM Planning Page 7 - 5 Why Should You Care About Procurement Strategy?? Your project will inherit restrictions from the source of funding. You help develop the bidders list. You prepare specifications. You develop the evaluation criteria. You serve on the source evaluation board. You will be the COTR = Contracting Officer’s Technical Representative. You are impacted by the schedule. Procurement personnel are risk-averse; you want to be an advocate for flexibility and optimism on your project. You have to live with the results. You ought not assume that state procurement regulations will automatically take care of everything, and that you don’t need to take preemptive action yourself. Procurement should not be an afterthought, or done on “automatic pilot”. Rather, there should be a roadmap of sorts, that you follow for procurement. You will have to live with your uninformed decisions…learn the rules…they aren’t that difficult in a CVISN context. See the list of references in the “CVISN Guide to Program and Project Planning”, especially “Innovative Contracting Practices in ITS”. You ought not assume that state procurement regulations will automatically take care of everything, and that you don’t need to take preemptive action yourself. Procurement should not be an afterthought, or done on “automatic pilot”. Rather, there should be a roadmap of sorts, that you follow for procurement. You will have to live with your uninformed decisions…learn the rules…they aren’t that difficult in a CVISN context. See the list of references in the “CVISN Guide to Program and Project Planning”, especially “Innovative Contracting Practices in ITS”.

6. 5/1/2012 5:25 AM Planning Page 7 - 6 Traditional Procurement Process Focused on Building Roads and Bridges Products have a static 30 year life Separate contracts are required for design and construction activities Designers are prohibited from participating on construction contract The use of sealed bidding could discourage communications during construction procurements Award must go to responsive and responsible low bidder Keep CVISN procurement separate from infrastructure procurement, per FHWA advisory.Keep CVISN procurement separate from infrastructure procurement, per FHWA advisory.

7. 5/1/2012 5:25 AM Planning Page 7 - 7 Deployment of Intelligent Transportation Systems Represents a New Procurement Paradigm Desired end product shifts from construction of physical infrastructure to operation of information systems Intermodalism requires collaboration among modal agencies ITS requires integrated working relationships with multiple regulatory agencies Procurement must be addressed at a program level USDOT encourages flexible and responsive CVISN deployment strategies The “one size fits all” design-bid-build approach to procurement led to disastrous results in ITS-see Procurement letter from FHWA Executive Director-(handout-1 copy per state) Many ITS procurements require a shift of focus from detailed specifications to performance specifications The “one size fits all” design-bid-build approach to procurement led to disastrous results in ITS-see Procurement letter from FHWA Executive Director-(handout-1 copy per state) Many ITS procurements require a shift of focus from detailed specifications to performance specifications

8. 5/1/2012 5:25 AM Planning Page 7 - 8 CVISN Program Has Unique ComplexitiesAccommodating Users and Technologies Involving multiple users Integrating dispersed geographical locations Deploying new digital technologies Adding new applications to existing state systems Planning migration for evolving technologies Obtaining seamless interoperability among diverse users Functionality may involve applications and users outside of your agency Functionality may involve applications and users outside of your control Potential procurement barriers often can only be resolved at the program level Your source(s) of funds may limit your procurement flexibility…rules are often “attached” to funds Some CVISN participants may have more flexibility than others If federal funds are used your CVISN program must use ITS Architecture and utilize federal evaluation procedures Functionality may involve applications and users outside of your agency Functionality may involve applications and users outside of your control Potential procurement barriers often can only be resolved at the program level Your source(s) of funds may limit your procurement flexibility…rules are often “attached” to funds Some CVISN participants may have more flexibility than others If federal funds are used your CVISN program must use ITS Architecture and utilize federal evaluation procedures

9. 5/1/2012 5:25 AM Planning Page 7 - 9 CVISN Deployment PresentsProcurement Challenges Procuring a mix of developmental and off the shelf items Finding professionals with CVISN experience Coordinating the transition from paper to digital media Describing the quality assurance and functional testing requirements

10. 5/1/2012 5:25 AM Planning Page 7 - 10 Beware the Calendar Time Involved! Procurements are formal and time-consuming. Six months to a year is not unusual. You may wish to put draft procurements “on the street” to look for interest and perform pre-qualification, with the caveat that the procurement may never actually occur (for example if the funding does not become available, or if technical needs change). Bill Honan suggests: Mention the goal of CVISN Level 1 deployment by 9/2003, and how states need to plan for the procurement time issue keeping in mind the deployment target date of 9/2003.Bill Honan suggests: Mention the goal of CVISN Level 1 deployment by 9/2003, and how states need to plan for the procurement time issue keeping in mind the deployment target date of 9/2003.

11. 5/1/2012 5:25 AM Planning Page 7 - 11 There Are Several Proven Ways to Combine or Coordinate Multi-Agency/State Procurements Performing joint strategic planning among stakeholders to achieve common goals Example: transponders along Route 95 in the northeast. Utilizing interagency contracts or agreements for goods and services Example: state agency utilizes a state university as prime contractor. Forming a mission-dedicated organization or entity with authority to utilize innovative procurement techniques Example: Colorado Intermountain Fixed Guideway Authority. Adopting open architecture and utilizing technical standards to achieve system interoperability Forming novel public-public or public-private partnering relationships to share costs, benefits and risks These CVISN workshops are a good example of joint strategic planning ITS architecture and standards have made it easier to achieve interoperability among multiple organizations and users The next 3 pages define these terms in more detail; the next viewgraph is on page 7-13. Partnering is often equated to public-private partnerships….it is important to look beyond labels and analyze rights, obligations, risk assumed, costs and benefitsThese CVISN workshops are a good example of joint strategic planning ITS architecture and standards have made it easier to achieve interoperability among multiple organizations and users The next 3 pages define these terms in more detail; the next viewgraph is on page 7-13. Partnering is often equated to public-private partnerships….it is important to look beyond labels and analyze rights, obligations, risk assumed, costs and benefits

12. 5/1/2012 5:25 AM Planning Page 7 - 12 Definitions of Collaborative Models (1 of 3) Joint Strategic Planning This approach demands that multiple agencies agree on a common mission and develop combined or coordinated business plans to support the mission of the group. An example of interagency joint strategic planning can be found in the E-ZPass InterAgency Group (IAG). The IAG is comprised of toll entities in the tri-state New York metropolitan area. The IAG was one of the earliest and most successful examples of combined or coordinated ITS procurements. E-ZPass was formed by several operating toll agencies in response to the virtual mandate from toll road users that if consumers were expected to embrace the use of ITS technologies, Electronic Traffic and Toll Management (ETTM) equipment must be compatible and inter-operable among agencies. Having a different Automated Vehicle Identification (AVI) technology reader for each agency was not a practical or desirable option. Because there was no ITS architecture or technical standards in place, the IAG collectively undertook a joint procurement to select a common vendor for their AVI technology. Utilizing a common vendor would ensure procurement of compatible and interoperable equipment. To coordinate the process the IAG formed Executive, Policy and Technical Committees comprised of members from the participating agencies. The respective committees met frequently and formulated a consensus approach in their areas of responsibility. The combined procurement was effective in utilizing the operating agency’s collective leverage to negotiate a favorable irrevocable offer for ETTM.

13. 5/1/2012 5:25 AM Planning Page 7 - 13 Definitions of Collaborative Models (2 of 3) Interagency Contracts or Agreements for Goods and Services This is a common activity among public agencies. It involves creation of contractual agreements whereby one agency contracts with another State or local government agency to provide a service to the purchasing agency’s citizens, similar to local government contracting with a private firm. Agencies often have more flexibility to enter into sole source interagency contracts without the need to conduct a time consuming third party procurement. Municipalities often contract with neighboring cities for trash pick-up, for example. For a transportation example, consider the arrangement where several municipalities individually contract with an area-wide transportation planning agency to purchase traffic signal management services along a corridor running through all of the municipalities. Form a Mission-Dedicated Organization or Entity A separate organization is jointly created which lends its services to aid all jurisdictions that are party to the agreement. An example would be HELP, Inc. HELP, Inc. was formed as a separate corporate entity by the parties to a previous Federally-funded operational test. The parties which included several State DOTs and private sector stakeholders, desired to continue Commercial Vehicle Operations (CVO) after the operational test funds were expended. The organization remains open for new participants to join.

14. 5/1/2012 5:25 AM Planning Page 7 - 14 Definitions of Collaborative Models (3 of 3) Utilization of Technical Standards The emergence of the ITS Architecture and CVISN Technical Standards reduces the need to coordinate procurements for technical compatibility and interoperability as widely accepted industry standards are incorporated into specifications. Partnering Partnering is a broad term generally used to describe a range of combined or coordinated affiliations which involve multiple parties (Private to Private, Public to Private, Public to Public) teaming to accomplish an objective while sharing resources, benefits or risks. Partnering does not require a legal relationship as any teaming approach to accomplish mutually beneficial goals and objectives can be characterized as partnering. CVISN is a good example of partnering where FHWA, State and local agencies and private parties cooperate to obtain the benefits of ITS technologies. FHWA's proactive role in facilitating these alliances and agreements is a form of partnering. 

15. 5/1/2012 5:25 AM Planning Page 7 - 15 Advantages of Multi-Agency/State Procurements Collaboration provides the ability to implement regional ITS solutions Collaboration enables sharing of financial resources and technical know-how Collaboration promotes technical interoperability Larger procurements can gain economies of scale and negotiating leverage with suppliers New participants often bring with them new ideas Prior to ITS, state agencies usually looked internally for answers which often constrained innovative thinking. When you look outside your agency or state you often find that others have encountered and resolved similar issues. CVISN pilot states have pioneered many successful techniques that can be readily adapted to the needs of your state or agency.Prior to ITS, state agencies usually looked internally for answers which often constrained innovative thinking. When you look outside your agency or state you often find that others have encountered and resolved similar issues. CVISN pilot states have pioneered many successful techniques that can be readily adapted to the needs of your state or agency.

16. 5/1/2012 5:25 AM Planning Page 7 - 16 Disadvantages of Multi-Agency/State Procurements Involving additional participants brings added complexity Joint decision making requires an agency to surrender authoritarian control over the process Partners with restrictive procurement rules and regulations can constrain procurement flexibility There is potential for clash of cultures when participants bring differing approaches Building consensus among a group can be time consuming and sometimes frustrating Ways to Mitigate: Align group goals and objectives Be flexible It’s about people…not law Separate “recommended” agency procedures from required legal requirements Look for a “procurement friendly agency” on your teamWays to Mitigate: Align group goals and objectives Be flexible It’s about people…not law Separate “recommended” agency procedures from required legal requirements Look for a “procurement friendly agency” on your team

17. 5/1/2012 5:25 AM Planning Page 7 - 17 Many Procurement Issues Must Be ResolvedAt The Program Level Procurement issues are often best addressed in the initial MOA discussions The number of participating agencies/stakeholders adds a degree of difficulty to procurement planning and implementation If not addressed early, procurement issues can become institutional barriers limiting project deployment flexibility

18. 5/1/2012 5:25 AM Planning Page 7 - 18 Incorporate CVISN Success Elements Into Your Procurement Replicate CVISN success models from other states Incorporate ITS standards Comply with ITS architecture Seek qualified suppliers with CVISN experience Review CVISN and other USDOT resources Utilize experienced implementers and consultants in an advisory role Conformance with ITS Architecture required if federal funds are involved ITS America and Johns Hopkins University Applied Physics Laboratory have extensive information regarding Commercial Vehicle Operations and CVISN Extensive CVO/CVISN information is posted on their respective websites There is an extensive listing of resources in the CVISN Guide to Program and Project PlanningConformance with ITS Architecture required if federal funds are involved ITS America and Johns Hopkins University Applied Physics Laboratory have extensive information regarding Commercial Vehicle Operations and CVISN Extensive CVO/CVISN information is posted on their respective websites There is an extensive listing of resources in the CVISN Guide to Program and Project Planning

19. 5/1/2012 5:25 AM Planning Page 7 - 19 The Typical Procurement Lifecycle(This Implements the Procurement Strategy) The role of the program manager for each of these steps are addressed in ITS/CVO Technical Project Management for Non-Technical Managers (Module V) This course is included in Johns Hopkins University Applied Physic Lab’s CVISN Tool Kit CD Procurement should be addressed at the program level Anticipate all procurement activities when formulating a procurement strategy and implementation plan The role of the program manager for each of these steps are addressed in ITS/CVO Technical Project Management for Non-Technical Managers (Module V) This course is included in Johns Hopkins University Applied Physic Lab’s CVISN Tool Kit CD Procurement should be addressed at the program level Anticipate all procurement activities when formulating a procurement strategy and implementation plan

20. 5/1/2012 5:25 AM Planning Page 7 - 20 Procurement regulations may constrain agency communications with potential suppliers as the procurement process evolves. Once a solicitation is issued, formal communications with vendors should be documented Informal communications should not be utilized to give one supplier better information or otherwise provide an unfair advantage Efforts in identification of qualified suppliers will help to promote competition in both prices and innovationProcurement regulations may constrain agency communications with potential suppliers as the procurement process evolves. Once a solicitation is issued, formal communications with vendors should be documented Informal communications should not be utilized to give one supplier better information or otherwise provide an unfair advantage Efforts in identification of qualified suppliers will help to promote competition in both prices and innovation

21. 5/1/2012 5:25 AM Planning Page 7 - 21 Prequalifying Suppliers Can Limit Quantity and Enhance Quality of Responses Received A two-step process can improves the quality of responses to solicitations for consulting services: Supplier prequalification involves requesting information regarding a firm’s interest, capability and experience Priced proposals are then evaluated/solicited from qualified suppliers A two-step process can be time consuming There is no substitute for hard work verifying a supplier's past performance by reviewing information beyond the four corners of a supplier’s written proposal A supplier may be better at writing proposals than performing the work Prequalification criteria should not exclude qualified suppliers Prequalification information and evaluation criteria should be included in a Request for Qualifications (RFQ) or a Request for Interest and Qualifications (RFIQ). Ensure a two-step process is allowed in your jurisdiction: Some require both steps to be in one RFP…i.e., evaluate qualifications and then evaluate price only of qualified firms “short-listing” is often not allowed in public sector procurementA supplier may be better at writing proposals than performing the work Prequalification criteria should not exclude qualified suppliers Prequalification information and evaluation criteria should be included in a Request for Qualifications (RFQ) or a Request for Interest and Qualifications (RFIQ). Ensure a two-step process is allowed in your jurisdiction: Some require both steps to be in one RFP…i.e., evaluate qualifications and then evaluate price only of qualified firms “short-listing” is often not allowed in public sector procurement

22. 5/1/2012 5:25 AM Planning Page 7 - 22 A Well-Planned Proposal Evaluation Process Can Enhance Procurement Effectiveness Award flexibility can be achieved by utilizing subjective evaluation criteria with objective scoring Evaluation Process and Criteria must be established in RFP and applied in a consistent manner Don’t be afraid to look outside your agency for evaluators Multi-agency evaluation panels can mitigate real or perceived internal agency biases Examples of evaluation criteria provided later: Minnesota Guidestar-Developmental example Commercial off the shelf example-USDOT Telecommunications Management System-(available for review at conference) Integrity of the procurement process is nonnegotiable…it must pass the “STINK TEST” Evaluation works hand in hand with the “award standard: Low Bid Best Value Lowest responsive and responsible bidder(more flexibility here than low bid)Examples of evaluation criteria provided later: Minnesota Guidestar-Developmental example Commercial off the shelf example-USDOT Telecommunications Management System-(available for review at conference) Integrity of the procurement process is nonnegotiable…it must pass the “STINK TEST” Evaluation works hand in hand with the “award standard: Low Bid Best Value Lowest responsive and responsible bidder(more flexibility here than low bid)

23. 5/1/2012 5:25 AM Planning Page 7 - 23 Most Common CVISN Procurement Categories Commercially available off-the-shelf (COTS) products Software development Professional services Systems integrator Communications services The next 2 pages define these terms in more detail and can be skipped. Construction has not been included but would apply to on right of way facilities (i.e. loop detectors)…traditional design-bid-build rules apply to construction and you may want to segregate these items for a separate procurement Categories are easy when isolated, more complex when commingled The next 2 pages define these terms in more detail and can be skipped. Construction has not been included but would apply to on right of way facilities (i.e. loop detectors)…traditional design-bid-build rules apply to construction and you may want to segregate these items for a separate procurement Categories are easy when isolated, more complex when commingled

24. 5/1/2012 5:25 AM Planning Page 7 - 24 Explanation of CVISN Procurement Categories (1 of 2) Commercially Available Off-the-Shelf Products (COTS) * COTS are well developed and commonly used products. The preferred procurement methodology is sealed bidding (formal advertising) with lump sum or unit pricing. Federal grant administration requirements (often replicated in state procurement codes) require that specific conditions must exist to utilize sealed bidding. Software Development * Software development for new or modified applications requires obtaining professional services to analyze software requirements, design algorithms and data structures, select tools and methodologies, write code, execute tests and provide documentation. The preferred procurement methodology is competitive negotiations with cost-reimbursable pricing. Professional Services * Professional Services contracts are contracts for professional services (e.g., consulting services) from a firm or individual. The preferred procurement methodology is competitive negotiation with cost reimbursable pricing. Unit prices or lump sum pricing may be used if the level of effort can be reasonably quantified. Under certain circumstances, sole source contracting may be appropriate. Specialized procurement procedures regarding Architect/Engineering services must be followed if the professional services involve design of physical transportation infrastructure.

25. 5/1/2012 5:25 AM Planning Page 7 - 25 Explanation of CVISN Procurement Categories (2 of 2) System Integrator * This is a type of consulting contract for professional services where a firm or individual is charged with the responsibility for delivering a complete and working functional application or system. Communication Services * Traditionally, this category referred to the transmission of analog or digital communications between dispersed locations. Due to industry deregulation, many new services related to data collection, data fusion, data storage, data dissemination may be offered by communications companies. Depending on the provider, these services can be provided on a piecemeal or turnkey basis. *Definitions of procurement terms and related requirements are presented in later slides

26. 5/1/2012 5:25 AM Planning Page 7 - 26 Formulating A Procurement Strategy

27. 5/1/2012 5:25 AM Planning Page 7 - 27 Steps to Plan and Formulatea Procurement Strategy Step 1. Identify desired procurement objectives. Step 2. Assess impact of program issues. Step 3. Identify “buy list” items for procurement. Step 4. Identify procurement categories. Step 5. Bundle procurements by logical combinations. Step 6. Identify potential suppliers. Step 7. Determine contracting approach. Broad framework for decision making…not a detailed procedureBroad framework for decision making…not a detailed procedure

28. 5/1/2012 5:25 AM Planning Page 7 - 28 Procurement Strategy Worksheet Perhaps also indicate the number of potential contractors. Identify proprietary systemsPerhaps also indicate the number of potential contractors. Identify proprietary systems

29. 5/1/2012 5:25 AM Planning Page 7 - 29 1. Examples of Desired Procurement Objectives Retain a systems integrator with CVISN experience Deploy CVISN Level 1 capabilities Upgrade existing safety information exchange legacy system to be CVISN compatible Procure commercial off the shelf software Develop/modify software for a new CVISN application Acquire CVISN system hardware Select a carrier for data transmission Comes from your CVISN “builds”Comes from your CVISN “builds”

30. 5/1/2012 5:25 AM Planning Page 7 - 30 2. Program Issues Influence Procurement Strategy Often addressed in the Memorandum of Agreement Number and types of stakeholders Amounts, categories and timing of funding Program organization for deployment Utilization of private sector cost, risk, and benefit sharing requires special handling and expertise Project management responsibilities for deployment Human, technical and financial resource constraints Issues here are often resolved at the Memorandum of Agreement negotiations among participants Are roles and responsibilities defined Who does procurement?Issues here are often resolved at the Memorandum of Agreement negotiations among participants Are roles and responsibilities defined Who does procurement?

31. 5/1/2012 5:25 AM Planning Page 7 - 31 3. Sample (partial) “Buy List” Key Questions regarding “people resources”: Do we have the people with the right skills, or should we contract for help? Even if our people have the skills and the will, do they have the time? Who is in the best position to focus quality time on the CVISN Program? That is, state personnel may have many conflicting demands due to their production responsibilities; whereas a contractor might be able to focus more intensely on just one program. On the other hand, state personnel have to live with the results.Key Questions regarding “people resources”: Do we have the people with the right skills, or should we contract for help? Even if our people have the skills and the will, do they have the time? Who is in the best position to focus quality time on the CVISN Program? That is, state personnel may have many conflicting demands due to their production responsibilities; whereas a contractor might be able to focus more intensely on just one program. On the other hand, state personnel have to live with the results.

32. 5/1/2012 5:25 AM Planning Page 7 - 32 4. Identify Procurement Categories Commercially available off-the-shelf products Software development Professional services Systems integrator Communications services Procurements may be simple with the categories are isolated. Procurements become more complex and restrictive when categories are co-mingled.Procurements may be simple with the categories are isolated. Procurements become more complex and restrictive when categories are co-mingled.

33. 5/1/2012 5:25 AM Planning Page 7 - 33 5. Bundle Procurements by Logical Combinations Put entire program under a systems integrator Group by timeframe, location or user Bundle development activities (design, procure, implement, manage) Group by project Group by procurement category There are no set rules as to separating, bundling or phasing procurements Common sense is a good guiding light If possible, consult experienced practitioners from agencies or industry. They often have a better understanding of the implications of procurement decisions made in this area and can help you avoid unanticipated adverse impacts (such as requiring a firm to provide services outside its area of expertise). Be Creative-Connecticut Statement of Work (handout): “Chunks” by responsible agency Systems integrator Piecemeal or separate (Quality Assurance must be separated) Benefits of this approach: Flexibility to proposers Choice to evaluators (build your own team) Harder to overturn in a protestThere are no set rules as to separating, bundling or phasing procurements Common sense is a good guiding light If possible, consult experienced practitioners from agencies or industry. They often have a better understanding of the implications of procurement decisions made in this area and can help you avoid unanticipated adverse impacts (such as requiring a firm to provide services outside its area of expertise). Be Creative-Connecticut Statement of Work (handout): “Chunks” by responsible agency Systems integrator Piecemeal or separate (Quality Assurance must be separated) Benefits of this approach: Flexibility to proposers Choice to evaluators (build your own team) Harder to overturn in a protest

34. 5/1/2012 5:25 AM Planning Page 7 - 34 6. Identify Potential Suppliers Many potential suppliers? (a commodity) Or just a few potential suppliers? (a specialty) Single-source? (a proprietary system, or continuity with a legacy system) Give the contracting officer a head start by identifying potential suppliers, but remain open to fresh ideas and competition. “Market” your procurement to increase competition“Market” your procurement to increase competition

35. 5/1/2012 5:25 AM Planning Page 7 - 35 7. Customize Your Contracting Approach Match contract type to statement of work A/E; non-A/E; innovative. Select contract payment method Fixed price; cost reimbursable; ID-IQ. Determine award methodology Sealed bid; competitive negotiations; sole-source. Extensive handout materials have been provided. Additional detail regarding the ITS applications of various procurement types, Payment Methods and methods of award can be found in Innovative Contracting Practices for ITS prepared for FHWA under Contract No. DTFH61-94-C-00164. It is targeted for state and local program managers, attorneys and contract professional responsible to deploy ITS applications when federal funds are involved. (#24 in planning guide) The Common Rule (codified at 49 CFR Part 18) establishes that state and local procurement procedures should be followed unless there is an overriding federal interest. A copy of 49 CFR Part 18.36 (procurement requirements) is available at the workshop for your review.Extensive handout materials have been provided. Additional detail regarding the ITS applications of various procurement types, Payment Methods and methods of award can be found in Innovative Contracting Practices for ITS prepared for FHWA under Contract No. DTFH61-94-C-00164. It is targeted for state and local program managers, attorneys and contract professional responsible to deploy ITS applications when federal funds are involved. (#24 in planning guide) The Common Rule (codified at 49 CFR Part 18) establishes that state and local procurement procedures should be followed unless there is an overriding federal interest. A copy of 49 CFR Part 18.36 (procurement requirements) is available at the workshop for your review.

36. 5/1/2012 5:25 AM Planning Page 7 - 36 What Is The Contract Type ? Architect/Engineering design services Rarely used for CVISN Traditional Construction Rarely used for CVISN Non Architect/Engineering goods and services Most common CVISN Contract Type Many variations exist in agency procurement policies Innovative Contracting (ie, non-traditional) Potential tool for CVISN solutions See definition, slide 7-38 The next 2 pages define these terms in more detail; the next viewgraph is on page 7-36. “Innovative Contracting” is a catch all and is relative to the traditional design-bid-build which is used for the design and construction of infrastructure Leasing can be considered an “innovative” contract The next 2 pages define these terms in more detail; the next viewgraph is on page 7-36. “Innovative Contracting” is a catch all and is relative to the traditional design-bid-build which is used for the design and construction of infrastructure Leasing can be considered an “innovative” contract

37. 5/1/2012 5:25 AM Planning Page 7 - 37 Contract Types (1 of 2) Architect/Engineering Design Services (A/E) A/E services involve the design of buildings, facilities and other physical transportation infrastructure. Federal agencies and most states, require conformance with appropriate regulations (Title 23 CFR Part 172). A/E contracts are not required for most CVISN activities. Traditional Construction These contracts are primarily utilized for Infrastructure Capital Improvements. Competitive sealed bidding with award of a fixed price contract to the lowest responsive bid is the primary procurement methodology. Federal procurement requirements are codified at Title 23 CFR Part 635. Construction contracts are rarely used in CVISN deployment.

38. 5/1/2012 5:25 AM Planning Page 7 - 38 Contract Types (2 of 2) Non Architect/Engineering Goods and Services This is a very broad category that applies to procurement of real property, services, goods and research. It is the most common CVISN procurement methodology that utilizes a competitive process with award to the lowest responsive bid. Many variations of this process exist. Federal Grant Administration Requirements, which have been replicated in many states, are codified at Title 49 CFR Part 18.36 Innovative Contracting Innovative contracting refers to a broad variety of contract types and award methodologies utilized to allocate roles, responsibilities, costs, benefits and risks among two or more parties in unique ways that are allowable under law, but may deviate from traditional procurement practices or procedures. The federal government has implemented several programs to encourage innovation (FHWA Special Experimental Project 14 (SEP 14)). Many states have similar programs that are authorized but may be seldom utilized. Legal review should be requested prior to deviating from traditional procurement practices. Even if legal, innovative approaches may encounter a cultural resistance to change (“we don’t do it that way”). An effective technique when seeking approval for innovative approaches is not to ask: “Can we?”…but, rather to ask: “How can we?”. This approach will encourage creative solutions. Caveat: when formulating innovative solutions the basic integrity of the procurement process must not be compromised. Call attention to the key parts of “innovative”.Call attention to the key parts of “innovative”.

39. 5/1/2012 5:25 AM Planning Page 7 - 39 Contract Types Can Be Further Classified By Payment Method (1 of 2) Fixed price contracts - should not be used for research or development activities Cost reimbursement contracts - best when scope of work is not well-defined Incentive contracts - provides rewards to promote successful performance Definite quantity contracts - scope must be well-defined Pricing risk should be borne by the person best able to control it. Putting lump sum pricing risk in a poorly written statement of work may result in higher prices due to a “risk premium” added to the base price by a contractor to protect against unfavorable interpretations Discuss federal non-allowable costs Pricing risk should be borne by the person best able to control it. Putting lump sum pricing risk in a poorly written statement of work may result in higher prices due to a “risk premium” added to the base price by a contractor to protect against unfavorable interpretations Discuss federal non-allowable costs

40. 5/1/2012 5:25 AM Planning Page 7 - 40 Contract Types Can Be Further Classified By Payment Method (2 of 2) Requirements contracts - best used when quantities are known Indefinite quantity contracts - when units can be identified but not quantified Time and material contracts - utilizes fully-loaded rates for labor-categories (e.g. “senior engineer”) Options contracts - allows flexibility to price known contingencies Effective tool to plan for CVISN applications to be deployed subject to approval of funding The next 7 pages define these terms in more detail; the next viewgraph is on page 7-45. Note that time & materials bills for generic labor category, not actual labor rate for the person doing the work – so you could end up having actual costs that are significantly different from the billed costs if the actual labor mix is significantly different. The next 7 pages define these terms in more detail; the next viewgraph is on page 7-45. Note that time & materials bills for generic labor category, not actual labor rate for the person doing the work – so you could end up having actual costs that are significantly different from the billed costs if the actual labor mix is significantly different.

41. 5/1/2012 5:25 AM Planning Page 7 - 41 Explanation of Contract Typeby Payment Method (1 of 7) Fixed-Price Contracts Fixed-price contracts may be either “firm” fixed-price contracts, or fixed-price contracts with an economic price adjustment. Highway construction is traditionally associated with fixed-price contracts, and thus “fixed-price” is the type of contract with which transportation agencies are probably most familiar. There are many variations of fixed price contracts. Firm Fixed-Price Contracts. This type of contract is used when risk is minimal or can be predicted with a good degree of certainty. In the context of CVISN, procurement of a specific quantity of a specific type of equipment, such as transponders for electronic payment of tolls, is a good candidate for a firm fixed-price contract. Because ITS technology is evolving, in some circumstances sufficient certainty for a firm fixed-price contract may not exist at the outset of an acquisition program; changing circumstances over the life of a long-term contract however may make a different contract type appropriate in later periods than that used at the outset. Other variations include: Fixed-Price Contracts With Economic Price Adjustments A “Most Favored Customer” Clause Fixed-Price With Prospective Price Reduction Fixed-Ceiling Price Contracts with Retroactive Price Redetermination Firm Fixed-Price, Level of Effort Term Contracts

42. 5/1/2012 5:25 AM Planning Page 7 - 42 Explanation of Contract Typeby Payment Method (2 of 7) Cost-Reimbursement Contracts Cost-reimbursement contracts are suitable when uncertainties involved in contract performance do not permit costs to be estimated with sufficient accuracy for a fixed-price contract. These types of contracts provide for payment of allowable incurred costs up to a ceiling that may not be exceeded without approval of the government contracting officer. Cost Contracts In this type of cost reimbursement contract, the contractor does not receive a fee. The Federal Acquisition Regulations indicates that this type of contract is appropriate for research and development work with non-profit organizations. Cost-Sharing Contracts In this case, the contractor receives no fee and is reimbursed only for an agreed-upon portion of its allowable costs. Typically this type of contract is used when the contractor is willing to absorb a portion of the costs, usually in the expectation of substantial compensating benefits.

43. 5/1/2012 5:25 AM Planning Page 7 - 43 Explanation of Contract Typeby Payment Method (3 of 7) Cost-Reimbursement Contracts (continued) Cost-Plus Fixed-Fee Contracts These contracts provide the contractor with a negotiated fee that is fixed at the inception of the contract, and reimbursement of allowable costs up to a stated ceiling. The drawback is that this type of contract provides the contractor only a minimal incentive to control costs. According to the FAR, this type of contract is suitable when the contract is for performance of research or preliminary exploration or study and the level of effort required is unknown, or the contract is for development and testing, and the cost-plus incentive fee contract is not practical. The FAR indicates that this type of contract should not be used in development of major systems once preliminary exploration, studies, and risk reduction have indicated a high probability that the development is achievable, and reasonably firm performance objectives and schedules have been established. Incentive Contracts Incentive contracts are used when a firm fixed-price contract is not appropriate; by relating the amount of profit or fee payable under the contract to the contractor’s performance, a lower price or improved delivery or technical performance may be achieved.

44. 5/1/2012 5:25 AM Planning Page 7 - 44 Explanation of Contract Typeby Payment Method (4 of 7) Incentive Contracts (continued) Fixed-Price Incentive Contracts This type of contract provides for adjusting profit and establishing the final contract price by applying a formula based on the relationship of the total final negotiated cost to the total target cost. The final price is subject to a price ceiling negotiated at the outset. This type of contact is appropriate when the contractor’s assumption of a degree of cost responsibility will provide a positive Payment Method for effective cost-control and performance. Cost-Reimbursement Incentive Contracts These contracts specify a target cost, a target fee, minimum and maximum fees and a fee adjustment formula. The fee may be adjusted up when total allowable costs are less than target costs, and down when total allowable costs exceed target costs. The increase or decrease is intended to incentivize the contractor effectively and economically. This type of contract is appropriate for development and test programs in order to motivate the contractor. A cost-reimbursement incentive may also be based on an award fee that is adjusted periodically based on the contractor’s performance.

45. 5/1/2012 5:25 AM Planning Page 7 - 45 Explanation of Contract Typeby Payment Method (5 of 7) Incentive Contracts (continued) Award Fees The “award fee” concept, which is often used in defense contracting, builds in a monetary incentive for the contractor to perform certain tasks at highest-quality levels of performance. Theoretically, if the contractor knows that some of its compensation is “discretionary,” then it will pay more attention to performance quality. Award fees are useful in creating commonality of goals between the procuring agency and the contractor. Definite Quantity Contracts This type of contract is used when it can be determined in advance that a definite quantity of supplies or services will be required during a contract period, supplies or services are readily available or will be available after a short lead time, but the exact timing and/or quantities of future deliveries is not known at the time of the contract award. This type of contract may be firm fixed-price, or fixed-price with economic price adjustment.

46. 5/1/2012 5:25 AM Planning Page 7 - 46 Explanation of Contract Typeby Payment Method (6 of 7) Requirements Contracts In a requirements contract, the government agency agrees to acquire all of its actual requirements for specific supplies or services during a specified contracting period from the contractor; and the contractor is obligated to supply all of the buyer’s requirements. Usually, the contract will state a realistic estimated total quantity likely to be purchased over the term, but such statement is not a representation or guaranty that the same will be ordered. A requirements contract may state a maximum limit on the contractor’s obligation to deliver. It is an appropriate contract type when the purchaser anticipates recurring requirements but cannot predetermine the precise quantity of supplies or services that it will need during a definite period. Indefinite Quantity Contracts In this type of contract, the contractor is required to furnish an indefinite quantity, within stated limits, of specific items during a fixed period. The purchaser is required to order at least a stated minimum quantity, and the orders cannot exceed a stated maximum. This type of contract is appropriate when the purchaser cannot predetermine its needs above a specified minimum during the contract period, and it is inadvisable for the purchaser to commit itself for more than a certain minimum quantity.

47. 5/1/2012 5:25 AM Planning Page 7 - 47 Explanation of Contract Typeby Payment Method (7 of 7) Time and Materials Contracts This type of contract provides for acquiring supplies or services on the basis of direct labor hours at specified fixed hourly rates that include wages, overhead, general and administrative expenses and profit, and materials at cost. This type of contract is appropriate when it is not possible at the time of placing the contract to estimate accurately the extent or duration of the work or to anticipate costs with a reasonable degree of certainty. Options Contracts Options provide the option holder with a unilateral right, for a specified time, to purchase additional supplies or services, or to extend the term of a contract. Options recognize the purchaser’s need in certain service contracts for continuity of operations.

48. 5/1/2012 5:25 AM Planning Page 7 - 48 What Are The Common Methods Used To Award Contracts? Sealed bid - commonly used for off-the-shelf products and services Two-step sealed bid - A technical proposal is requested followed by a pricing proposal Competitive negotiations - Commonly used for professional services Sole source contracting - Use is discouraged but may be appropriate for proprietary applications Unsolicited proposals - not favored by most agencies A call for projects gives more agency control Irrevocable offer - utilized for E Z Pass transponders Discuss federal rules for sealed bidding, competitive negotiation and sole source contracting The next several pages define these and other terms in more detail. The next viewgraph is on page 7-53.Discuss federal rules for sealed bidding, competitive negotiation and sole source contracting The next several pages define these and other terms in more detail. The next viewgraph is on page 7-53.

49. 5/1/2012 5:25 AM Planning Page 7 - 49 Methods of Awards (1 of 5) As stated in the FAR and the Common Rule, the public policy underlying the methods that may be used to award contracts is the promotion of “full and open competition” in the acquisition process. The methods of award that may be available to a transportation agency to ensure full and open competition include the following: Sealed Bids Sealed (or “competitive”) bidding is the method preferred by the Federal Government and the procurement codes of most States for civil construction and off-the-shelf supply contracts. Sealed bidding requires that contracts be awarded only on a lowest cost, responsive and responsible bidder basis: i.e., the owner is required to award the contract to the responsible, lowest price bidder whose bid meets the minimum standards. The rationale is that this approach maximizes the number of private firms competing against each other solely on the basis of price, and results in the “best buy” for the procuring agency. There are specific federal conditions on when sealed bidding can be utilized: A complete, adequate, and realistic specification or purchase description is available Two or more responsible bidders are willing and able to compete effectively and for the business; and, The procurement lends itself to a firm fixed price contract and the selection of the successful bidder can be made principally on the basis of price Most state procurement codes utilize some variation of these conditions.

50. 5/1/2012 5:25 AM Planning Page 7 - 50 Methods of Awards (2 of 5) If sealed bids are used, the federal process requires: The invitation for bids will be publicly advertised and bids shall be solicited from an adequate number of known suppliers, providing them sufficient time prior to the date set for opening of bids The invitation of bids, which will include any specifications and pertinent attachments, shall define the items or services in order for the bidder to properly respond All bids will be publicly opened at the time and place prescribed in the invitation for bids A firm-fixed price contract award will be made in writing to the lowest responsive and responsible bidder. Where specified in writing, factors such as discounts, transportation costs, and life cycle costs shall be considered in determining which bid is lowest. Payment discounts will be only used to determine the low bid when prior experience indicates that such discounts are usually taken advantage of; and, Any and all bids may be rejected if there is a sound documented reason Two-Step Sealed Bids Two-step sealed bidding is a combination of competitive practices designed to obtain the benefits of sealed bidding when adequate specifications are not available. In step one, there is a request for submission, evaluation and discussion of a technical proposal, which does not include any discussion of pricing. Step two involves the submission of fixed priced bids by those who submitted acceptable technical proposals in step one.

51. 5/1/2012 5:25 AM Planning Page 7 - 51 Methods of Awards (3 of 5) Competitive Negotiations In competitive negotiations, the procuring agency conducts an Request For Quotations/Request For Proposals procurement, and then chooses one or more of the proposers to negotiate an agreement. This is distinguishable from award based on price and other factors after discussions and Best And Final Offer in that the procuring agency may negotiate different contract terms with the selected contractor than those bid on by all of the offerors. The U.S. DOT’s manual on contracting for vehicle maintenance services recommends competitive negotiations where any of the following criteria are satisfied: (a) there is significant variation in the method that may be used to deliver a specific service; (b) there are attributes other than price that should be included as criteria for accepting a contractor; (c) there is a need for bidders to have the opportunity to revise their work plans after initial evaluation of proposals (including the price of services); (d) the award should be based on comparative evaluations; and, (e) an RFP would result in a more beneficial contract for the agency. Federal grant requirements state that competitive proposals are generally used when conditions are not appropriate for the use of sealed bids. If competitive proposals are used, the following requirements apply: Requests for Proposals will be publicized and identify all evaluation factors and their relative importance. Proposals will be solicited from an adequate number of qualified sources There must be a method for conducting technical evaluation of proposals received Awards will be made to the responsible firm whose proposal is most advantageous to the program, with price and other factors considered

52. 5/1/2012 5:25 AM Planning Page 7 - 52 Methods of Awards (4 of 5) Sole Source Contracting Sole source contracting is permitted only in limited circumstances. This method involves selection of a contractor for negotiations based on its reputation or prior relationship with the owner, without first going through a competitive selection process. Generally, sole sourcing should be used only when supplies or services required are available from only one responsible source, and no other source of supplies or services will satisfy the procuring agency’s requirements. Federal grant requirement allow sole source contracting only after there is a determination that : The item is available only from a single source The public exigency or emergency for the requirement will not permit a delay resulting from the competitive solicitation The awarding agency authorizes noncompetitive proposals; or, After a solicitation from a number of sources, competition is determined inadequate

53. 5/1/2012 5:25 AM Planning Page 7 - 53 Methods of Awards (5 of 5) Unsolicited Proposals Unsolicited proposals are initiated by the private sector. They usually cannot be for a procurement that is planned or reasonably expected as part of a known agency program. Irrevocable Offer Irrevocable offers are offers made by a supplier to one or more agencies for their subsequent negotiation and individual acceptance. There is usually a common product offered which incorporates common terms offered to all. EZ Pass utilized this technique to allow jurisdictions with restrictive contracting requirements to award their own contracts to avoid an agency internal prohibition against delegating contracting authority to others.

54. 5/1/2012 5:25 AM Planning Page 7 - 54 Other Definitions Procurement - A formal process instituted by agencies to obtain third party provided goods and services. In most agencies, a separate contracts group manages the procurement process from issuance of bid documents to contract execution. The functional group requesting third party services normally prepares the technical requirements for the procurement and administers the contract (including change orders) after execution. If a formal contract amendment is required, the procurement group will manage the negotiation and execution of the contract amendment. Contracting - Interchangeable term for procurement. The process utilized to obtain a contract for third party provided goods and services. Solicitation - The agency document describing the goods or services desired to be obtained from third parties. The solicitation is utilized to request qualifications or a formal price quotation from third parties wishing to provide the requested goods or services. Common forms are Request For Proposals (RFP), Requests for Information (RFI), Requests for Quotations (RFQ), and Invitations for Bids (IFB). Prequalification - A process that is conducted prior to a formal solicitation to identify and limit respondents to those firms who have established their qualifications and experience prior to receiving the solicitation documents. This process is useful to ensure that proposals received will be well targeted and of the highest quality. This process cannot be utilized to arbitrarily exclude otherwise qualified respondents.

55. 5/1/2012 5:25 AM Planning Page 7 - 55 Sample Evaluation Criteria for Development Projects Appropriateness of Proposed Project or Program (25 points) Consistency with the CVISN Strategic Plan; Consistency with the intent and requirements of the option being responded to; and, Applicability of proposed services to CVISN goals for this Request For Proposals. Feasibility of Proposed Project or Program (25 points) Proposed hardware, software, and/or services are proven; Theoretical basis for project is proven; Clear plan for providing hardware, software, and services; and Detailed, realistic time schedule. Technical Capabilities (15 points) Personnel qualified for the type of services being provided; Sufficient available tools and computer resources to perform the proposed services; and Location and accessibility to services in the state. Management Plan (15 points) The number of people to be made available; Capability of managing costs, schedule, and quality; and Disadvantaged Business Enterprise provisions. Cost (10 points) Realistic funding plan; and Cost to the Department Experience (10 points) Experience in providing the proposed services; and Experience in other government work, including work for the Department. This was for a “Call for Projects” requesting developmental ITS projects identified by the private sector Again, evaluation criteria work in conjunction with award standards: Low bid Best value Lowest responsive and responsible bidderThis was for a “Call for Projects” requesting developmental ITS projects identified by the private sector Again, evaluation criteria work in conjunction with award standards: Low bid Best value Lowest responsive and responsible bidder

56. 5/1/2012 5:25 AM Planning Page 7 - 56 Key Points About CVISN Procurement (1 of 2) Develop your procurement strategy early. Be objective in assessing your in-house capabilities. Buying a commercial off the shelf product (like a computer) requires different strategy than buying development services. Fixed price contracting is not appropriate for software/ system development. Be sure that the contract(s) make clear who is responsible for system integration. Be sure the contract(s) specify exactly what is to be delivered (e.g., software code vs executables, intellectual/ proprietary rights), and those deliverables are consistent with your O&M plan.

57. 5/1/2012 5:25 AM Planning Page 7 - 57 Key Points About CVISN Procurement (2 of 2) Do not underestimate the importance of testing and training. A well conceived procurement strategy and a well written statement of work are the keys to a successful procurement. Build flexibility into the process: Address procurement at the program level. Prequalification of contractors, consultants or suppliers. Utilize subjective evaluation criteria. Leave a well documented paper trail. Testing and training is not a procurement item but it is the most common subject of painful lessons learned resulting from not including, or underestimating, these elements in your statement of workTesting and training is not a procurement item but it is the most common subject of painful lessons learned resulting from not including, or underestimating, these elements in your statement of work

58. 5/1/2012 5:25 AM Planning Page 7 - 58 Questions and Discussion of Issues Refer to Volpe Institutional Lessons Learned in workbookRefer to Volpe Institutional Lessons Learned in workbook

59. 5/1/2012 5:25 AM Planning Page 7 - 59

60. 5/1/2012 5:25 AM Planning Page 7 - 60 Procurement References 1. There are numerous procurement references included in the reference list at the back of the CVISN Guide to Program and Project Planning. 2. http://www.state.ky.us/agencies/sas Website for the Commonwealth of Kentucky “Strategic Alliance Services” contracts. It proclaims “The Strategic Alliance establishes long term vendor relationships for procuring 'best practice' and 'best of the industry' information technology (IT) services to pro-actively meet Commonwealth service delivery and business needs. Such arrangements are executed in a streamlined, mutually responsive and shared risk environment where Commonwealth agencies and service providers partner to achieve and share in resulting benefits.”

61. 5/1/2012 5:25 AM Planning Page 7 - 61 ITS Procurement CourseFHWA – National Highway Institute DESCRIPTION: This seminar is intended to heighten awareness of the challenges in procuring ITS within the traditional construction project environment. It combines lectures with presentations of case studies to describe the lessons learned from past ITS projects, and explains how these can be incorporated to help ensure successful ITS procurement. Objectives Include: Explain why procuring intelligent transportation systems is different from traditional construction projects. Describe the potential barriers that may arise from procuring intelligent transportation systems within the traditional construction-oriented environment. Apply lessons learned to existing policies and procedures to achieve improvements in procuring ITS. LENGTH: 1 Day For more information: http://www.nhi.fhwa.dot.gov/137020.html Federal Highway Administration, National Highway Institute (FHWA: NHI) currently offers two ITS Procurement Courses: 1) ITS Procurement Course (above slide) and 2) ITS Software Acquisition Course (next two slides). We wanted to make the states’ CVISN teams aware of these additional resources to assist you with your Procurement Planning. If interested, work with your state’s DOT Training Coordinator or the ITS Specialist from your state’s FHWA Division office to schedule the courses for your state. Also, FMCSA can help facilitate scheduling the course. The courses provide valuable information to all the different ITS Program Areas: Metro, Rural, and ITS/CVO; work with your counterparts in the other ITS program areas to allow for their participation. Also, multiple states have attended the course together. Also, opportunities may be available for individuals to attend the courses scheduled by other states based on availability. Current course schedule information can be obtained from the hyperlinks shown on the slides. Federal Highway Administration, National Highway Institute (FHWA: NHI) currently offers two ITS Procurement Courses: 1) ITS Procurement Course (above slide) and 2) ITS Software Acquisition Course (next two slides). We wanted to make the states’ CVISN teams aware of these additional resources to assist you with your Procurement Planning. If interested, work with your state’s DOT Training Coordinator or the ITS Specialist from your state’s FHWA Division office to schedule the courses for your state. Also, FMCSA can help facilitate scheduling the course. The courses provide valuable information to all the different ITS Program Areas: Metro, Rural, and ITS/CVO; work with your counterparts in the other ITS program areas to allow for their participation. Also, multiple states have attended the course together. Also, opportunities may be available for individuals to attend the courses scheduled by other states based on availability. Current course schedule information can be obtained from the hyperlinks shown on the slides.

62. 5/1/2012 5:25 AM Planning Page 7 - 62 ITS Software Acquisition Course FHWA – National Highway Institute DESCRIPTION: This seminar provides a general understanding of the many issues involved in the ITS software development and acquisition processes. It is focused specifically on ITS software issues. Objectives Include: Describe the intellectual property rights and how they must be considered. Manage the procurement of ITS software. Write an RFP for software procurement. LENGTH: 2 Days For more information: http://www.nhi.fhwa.dot.gov/137019.html If we have the ITS Software Acquisition Course’s guides on the reference desk, we can mention that the guides are here and that they show the subject matter covered in this course. The next slide provides hyperlinks to obtain the guides and course materials of this course from the internet. If we have the ITS Software Acquisition Course’s guides on the reference desk, we can mention that the guides are here and that they show the subject matter covered in this course. The next slide provides hyperlinks to obtain the guides and course materials of this course from the internet.

63. 5/1/2012 5:25 AM Planning Page 7 - 63 ITS Software Acquisition Guides and Course Materials available on the Web "The Road to Successful ITS Software Acquisition, Executive Summary”; July 1998 -- EDL Document # 4132 http://www.itsdocs.fhwa.dot.gov/jpodocs/repts_te/36s01!.pdf "The Road to Successful ITS Software Acquisition Volume 1: Overview and Themes” ; July 1998 -- EDL Document # 4130 http://www.itsdocs.fhwa.dot.gov/jpodocs/repts_te/36q01!.pdf "The Road to Successful ITS Software Acquisition Volume 2: Software Acquisition Process Reference Guide”; July 1998 -- EDL Document # 4131 http://www.itsdocs.fhwa.dot.gov/jpodocs/repts_te/36r01!.pdf ITS Software Acquisition Course Materials: http://www.pcb.its.dot.gov/ITS_software.asp

64. 5/1/2012 5:25 AM Planning Page 7 - 64

65. 5/1/2012 5:25 AM Planning Page 7 - 65 Breakout Goals Develop a draft procurement strategy. Continue the Issues, Action Items, Decisions lists you’ll keep building throughout the workshop.

66. 5/1/2012 5:25 AM Planning Page 7 - 66 What inputs are needed?What outputs are created? Inputs: “Buy Lists” from previous breakouts Outputs: Draft Procurement Strategy Procurement Strategy Worksheet Issues, Action Items, Decisions

67. 5/1/2012 5:25 AM Planning Page 7 - 67 Sample “Buy List”

68. 5/1/2012 5:25 AM Planning Page 7 - 68 Breakout Plan60 minutes (1 of 3) NOTE: We recognize that 60 minutes is not long enough to fully develop a procurement strategy. This session is intended to give you a chance to chew on the ideas presented, talk about procurement, and begin to use the recommended tools for developing a procurement strategy. Step 1. ~5 min. Assign roles and make sure that all decisions, action items, and system change highlights will be recorded in your Action Plan, Decision Table, and State System Change Summary. Step 2. ~15 min. Discuss your plans for procurement. As a result of thinking you’ve already done, and the work on the “Buy Lists” you made in prior breakouts, you have started to formulate ideas about the kinds of procurement activities you intend to undertake. Discuss the Procurement Strategy questions (please see pages 7-65 to 7-66). Note your preliminary answer to each question.

69. 5/1/2012 5:25 AM Planning Page 7 - 69 Breakout Plan60 minutes (2 of 3) Step 3. ~25 min. Define individual procurement activities. In this step, you are going to use the Procurement Strategy Worksheet. On this worksheet, each row represents a “procurement activity.” Some examples of how you might group items from your “buy lists” into procurement activities are shown. To begin to put some specifics into your procurement strategy, begin to group the “buy items” you’ve identified into discrete procurement activities. It might be easiest to start with the “buy list” you think is most complete. As explained in the presentation (pages 7-21 to 7-33) there are several ways to group the items. The items in one procurement activity fall into one category. If you can, identify the contract type for each procurement activity. (see pages 7-34 to 7-45 in the presentation). To the extent possible, name the individual responsible for leading the procurement activity, and others who will be part of the procurement team. Note when the earliest item in the group is needed in the “Earliest Need Date” column. Start with what you feel is most complete, or easiest. The “Buy List” items become procurement activities.Start with what you feel is most complete, or easiest. The “Buy List” items become procurement activities.

70. 5/1/2012 5:25 AM Planning Page 7 - 70 Breakout Plan60 minutes (3 of 3) Step 4. ~15 min. Summarize your strategy. Using the Procurement Strategy template, summarize your thoughts about how you are going to do procurement. Describe 3-5 major procurement actions you will be taking. NOTE: You should include the results of this breakout in your final presentation. There is no “report back” session for this breakout. Be sure to save time at the end to prepare this.Be sure to save time at the end to prepare this.

71. 5/1/2012 5:25 AM Planning Page 7 - 71 Sample Presentation Outline Draft Procurement Strategy Procurement Strategy Worksheet Issues, Action Items, Decisions Tell them when to reconvene in the main meeting roomTell them when to reconvene in the main meeting room

72. 5/1/2012 5:25 AM Planning Page 7 - 72 Team Roles Facilitator _________________________ Presenter _________________________ Scribe _________________________ Time Keeper _________________________ CSA _________________________ Change the roles for each breakout session (except facilitator and CSA)

73. 5/1/2012 5:25 AM Planning Page 7 - 73 Consider These Procurement Strategy Questions (1 of 2) #1. Are you going to procure . . . The services of a systems architect? Software development services for your Credentials Project? New computers and associated commercial off the shelf (COTS) software? The services of a system integrator? What is the scope of the system integrator’s assignment? Technical assistance to develop a CVIEW-like system from scratch? Technical assistance to modify the generic CVIEW? New network communications services? Membership in an electronic screening program? Equipment & installation at a roadside site?

74. 5/1/2012 5:25 AM Planning Page 7 - 74 Consider These Procurement Strategy Questions (2 of 2) #2. Building on your answers to the first question, which of the following categories of procurement do you envision for your CVISN program and related projects? Look at the “Buy Lists” from the previous breakouts. Cross off the categories you don’t intend to use; add new categories as needed. Commercial off-the-shelf products Software development Program manager or systems integrator Professional services or consulting Communications services #3. What kinds of contracts are you most likely to use? How do your state’s business practices impact your choices and decisions?

75. 5/1/2012 5:25 AM Planning Page 7 - 75 Procurement Strategy Worksheet

76. 5/1/2012 5:25 AM Planning Page 7 - 76 Draft Procurement Strategy for [your state]