Look for Major Changes in Procurement This Summer in the State of California

The biggest change the State of California has seen in a generation to how goods and services are bought from outside vendors is on tap for July.

"Transformation is coming your way if you're a supplier to the State of California," Jim Butler, the state's chief procurement officer, advised the crowd at a recent TechWire forum.

That transformation is spurred by FI$Cal, a $617 million project that's consolidating and modernizing California's entire financial management process into a single integrated system.

The state has been developing FI$Cal for a decade. The first phase was a new budget module rolled out in late 2014 - just in time for Gov. Jerry Brown's proposed 2015-16 budget, released earlier this month. That phase also included the creation of a statewide master vendor file, which has continually been updated since that time.

The State of California purchases almost $10 billion in goods and services each year. California's government IT market - state and local - is about $5 billion.

Next up for phase two: overhauling procurements.

"It's completely changing the way that we do procurements in the state," Butler said during a TechLeader.tv interview. "It affects small businesses, it affects large businesses, it affects the way the departments advertise their contracts, the way that bidding is actually conducted. It's a generational reform, and it's really our No. 1 priority."

The new FI$Cal system will replace the existing BidSync procurement system as well as website functionality through the California State Contracts Register by transforming the state's solicitation process from start to finish. That includes everything from advertising to evaluations and protests. And it will apply to all contracting methods and all classifications, from RFPs to non-competitively bid contracts, IT goods to public works.

FI$Cal aims to boost competition between vendors through a self-service portal that allows for electronic bidding, online certification and online interaction. Officials say it should speed up the procurement cycle by establishing such things as automated purchasing authority limits for state departments and easier access to leveraged procurement agreements. And with more automated processes built in, FI$Cal should get vendors paid faster, saving the state money on penalty fees.

There are numerous potential benefits, but Butler concedes the project is complex. "There are so many moving pieces and it just takes a lot of effort to nail all those down."

The state is running a long testing period for the new system.

"You'll have a lot of months to get ready for this," Butler told vendors during the forum, with staff already reaching out to contractors who currently do business with the state. "It's not going to just get dropped on you."

California has been developing and building this second wave of FI$Cal since April 2014. Testing started in December and will continue through May, with the new procurement system expected to be live by the start of July.

Until then, procurements will continue to be handled through BidSync. The state also has a contingency plan, Butler added, that will allow them to continue using BidSync down the road if any issues pop up with implementing the new FI$Cal system.

"We're not blind to the risks, and there will be snafus and issues," Butler said. "But we have a really good team, deep commitment within the government to make it work, so I'm really optimistic."

Small Business and Disabled Veteran Business Enterprise firms who have done previous work with the state will have their credentials automatically transferred to the new system. New businesses will need to register and become certified through FI$Cal before they can bid on projects.

For more details, including step-by-step directions for registering with Fi$Cal, visit fiscal.ca.gov . Questions can also be sent to fiscal.cmo@fiscal.ca.gov .

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