So what’s wrong with state and local IT contracting today? Approximately 85 percent of state and local government IT projects end up going over budget at completion, or exceed scheduled target delivery dates, or both. Acquisition experts like Robert Knauer, President of the Acquisition Institute Incorporated says, “There are ways to curb large scale procurement risks, by using fully functioning integrated acquisition and program management software that applies Earned Value Management to programs to make sure that both government officials and IT vendors are sufficiently aware of project requirements prior to signing on to any complex long-term contract of any kind. Mr. Knauer went on to say, “that Government can use a two-phased RFP process (which the federal government has been using for many years) or known as “multi-stage” contracting below the federal level. It involves the government soliciting vendors and going through a “down-select” process to select certain qualified finalists that will go into phase two. Those selected in the phase one down-select can either obtain “seed money” from the government for the project to develop a run-off prototype or demo (contracts may also be reimbursed for their actual expenses). During the phase-two stage of the competition, a live demonstration is performed, enabling government source selection officials to review the prototypes or best demo, and select the best-value winner. This can be a lengthy and somewhat arduous process. Other ways exist to shorten the acquisition timeline and promote best-value that are truly performance based. Some state and local governments they think they are reducing risk by adding damage clauses to contracts, but such liquidated damage clauses only serve to increase the competitive price of any project, and further end up being very litigious in nature. It is often interesting that what state and local governments do is nearly 20 years behind that of the Department of Defense and the rest of the federal government said Mr. Knauer. He went on to say, “a better practices to make IT contracts performance based, is to provide performance based payments as part of the contract by attaching payments to completion milestones of the IT project, and requiring the team that presents a proposal to be the actual key-team that deploys it.” In the design of any complex performance based project whether for IT services and IT integration, or some other form of complex acquisition, it is important to use the Seven Step process to performance based acquisition which starts out with forming an Integrated Process or Solutions Team (IPT or IST) that is composed of well-trained (SME) personnel, but not necessarily high ranking officials from key functions within an agency (IT, Legal, contracting, finance, Management, etc), who take part in the planning and RFP development process. AS in the federal government, for each and every complex program, there would be a senior designated Program Manager, or PM. The PM and his/her team should have a review board and have monthly status reports for department members with a stake in the project. As projects progress, all the facets of Earned Value Management need to occur, and agencies should only re-baseline if in the best interest of all parties, with valid reason, and only if agreed by all parties and the PM. With any acquisition program, it is most important to make sure that daily, weekly and monthly performance monitoring occurs with the contractor to ensure project metrics are being met and conform to established service level objectives for the project. This is why so many program simply fail.