Ohio dips toe into procurement overhaul with vendor pre-qual

Data analytics and artificial intelligence are on the way, but Ohio’s biggest innovation may be in how it buys those kinds of things.

An RFP released Thursday prepares the state for new projects to tackle social challenges like childhood hunger and opiate addiction. While the data analytics technologies the state is ready to procure are the “most disruptive thing we’re going to see the next 5, 10 years,” said Ohio Chief Information Officer Stu Davis, the new arrangement also prepares the state for a radical change to procurement that could extend across all future projects.

Rather than seeking vendors for a specific project, the state now seeks to pre-qualify vendors for future data analytics efforts. Ohio found more than 100 Ohio-based vendors working in the data analytics and machine learning space during its research, Davis said, and many of them have never been big enough to compete for state contracts. So the state scaled back its qualifications so it could start catching up to a private sector several years ahead of state government in the analytics space.

The state has done pre-qualification for procurement before, but never on this scale.

“All these agencies have been yelling at me for the last year and a half because I wouldn’t let them go out and purchase these analytics tools,” Davis said with a chuckle. “… I kept trying to tell them, ‘No. Infant mortality is, yes, a health issue, but Medicaid has information and so does [the Department of Job and Family Services] and so do others that will augment that information to give you a better picture and a more holistic view of the issue and how to fix it.”

Davis has been postponing data analytics in Ohio because he wanted to do ensure it was done right — across the entire organization so the information can be shared; so the results will be as accurate and comprehensive as possible; and so the state can approach projects with a nimble mindset. With a stable of pre-qualified vendors of all shapes and sizes, technology projects will no longer be held hostage by a 9,000-pound procurement process. Iterative development will become a realistic opportunity, and more competition could drive quality higher and costs lower.

“We’ll do this for data analytics, and if this works, I think you may see us do this with a lot more of some of the other projects we have going on where we pre-qualify vendors and we take it in bite-sized chunks,” Davis said. “That’s what we learned from talking with 18F in D.C. — fail early and then start over and not six or nine months down the road when you realize this is not going to work.”

Ohio officials talked to 18F — the digital services team of the federal General Services Administration — and they also talked with other states that do pre-qualification for procurement like Michigan and Indiana, Davis said. One of the suspicions Ohio reinforced through those conversations was that most small vendors would never be able to reach the terms and conditions established by the state, nor would they be able to afford the long and onerous process typical of state government IT procurement.

Eventually, the public will start asking for this data and trying to solve these problems, except they won’t get all the important data, because some of it can’t be released, Davis said, and they won’t understand some of the data as well as government does.

“I think it’s going to happen to us, and rather than letting it happen to us, let’s help drive it and steer it in the directions to do the things we need to benefit Ohio,” Davis said. “You know, it’s about time we started to reduce the cost of doing business with the state so that we get the most competitive pricing in Ohio. The usual suspects, they’ll have to adjust. I can see these hungry entrepreneurial companies going, ‘Hey, we’ll do the proof of concept for free. We’ll show you because we think we have the best thing since sliced bread.'”

Ohio is collecting proposals from vendors seeking pre-qualification until Feb. 17.