Over 15 years ago, Arizona adopted a series of laws and regulations to guide oversight of state technology projects. In particular, Arizona state agencies wishing to pursue a technology project valued at over $25,000 must first receive approval from the Arizona Department of Administration (ADOA) before executing a contract. For technology projects valued at over $1M, a state agency must receive approval from the state IT Authorization Committee (ITAC). Notably, technology projects include both products and services.
Last month, the Arizona Department of Administration released a proposed rulemaking package making the agency oversight process more “efficient and transparent.” As Traversant Group learned at the public hearing yesterday, while many of the changes simply align the regulations with existing law and eliminate duplicative language (well done!), some reflect new procedures. Below are six proposed changes that could impact you:
Project Definition: Expansion of Terms
Under the new rules, ADOA has modified the definition of "Critical Information Technology Project" and "Major Information Technology Project." In the past, ADOA offered a number of factors for what constituted a critical or major IT project. For instance, a critical IT project had to be complex, involve advanced technology not previously deployed in the state agency, and require technical expertise not available in the agency. The proposed regulation simplifies the definitions by removing all qualifications. Now, the Arizona Strategic Enterprise Technology (ASET) division of ADOA would be responsible for reviewing all IT projects valued at over $25,000 in total cost and ITAC would review all projects greater than $1 million in total cost. So, if you are a technology or IT professional services firm whose proposed project will cost over $25,000 throughout the lifetime of the project, be prepared to work with your agency customer to submit the correct information to ASET or ITAC.
Project Justification Process & Procurement: Efficiency Gains
State agencies seeking ADOA approval must first complete a Project Investment Justification (PIJ) document. In the past, state agencies rarely aligned the PIJ and procurement process. As a result, project financials in the PIJ were difficult to calculate because a vendor agreement had not been reached. As agencies have gradually condensed the timeframe for procurement and PIJ approvals, ADOA saw a need to give agencies options to streamline operations. Under the new rules, an agency can enter into a vendor agreement when it receives ASET or ITAC approval or the agency can include a clause in the vendor agreement stating that the award is "contingent upon receipt of such approval." For contractors, this means that you may need to work more closely with your agency counterparts to understand the project timeline.
Suspension of IT Projects: Enhanced Scope
If a technology project is not going well, ADOA would now have the authority to not only cut funding, but also stop all “related project activities.” This change incentivizes agencies to fix identified problems quickly. Without an ability to spend funding on an IT project, delays and contract complications can multiply. Any temporary suspension of funds can only be lifted by ASET or ITAC once the cause for the suspension has been adequately rectified as determined by the sole discretion of ASET or ITAC.
IT Strategic Planning Requirements: Enterprise Thinking
For IT strategic planning, agencies are still required to submit an annual IT strategic plan to ASET by September 1. Last year, ASET estimated over 80 state agencies, boards and commissions submitted IT strategic plans, which is a dramatic increase over past years. While most of the strategic plan requirements remain the same, the new rules would require agencies to address compliance with statewide IT standards. The plans continue to remain in effect until the end of the fiscal year, like the budget. For IT contractors, make sure you understand the statewide standards.
Appeals of Negative Decisions: More Certainty
If an agency wishes to appeal a negative decision regarding an IT project, an agency still has 30-days to file a written appeal to ITAC. The new rules, however, would require ITAC to issue a decision within 90-days of the receipt of the appeal. This is an important change to bring clarity to the process.
Accessibility to IT: Compliance with Existing Law
The new rules outline IT accessibility standards that agencies must follow. Each agency would now have to have an Accessibility Compliance Representative to ensure compliance unless it poses an undue burden. And each state agency must evaluate the accessibility of any proposed IT solution prior to the expenditure of state funds. Individuals may file a complaint with an agency if an agency fails to abide by the standards, and can appeal an agency’s decision to ADOA.
Overall, ASET's work to streamline the IT regulations to make them consistent with both statute and existing business processes is a noteworthy accomplishment. The hard work of the ASET team should not be overlooked as Arizona continues to be a leader. For industry representatives who wish to comment on these regulatory changes, feel free to reach out to us for information.