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www.vita.virginia.gov
Finance Officers BriefingJuly 14, 2006
VITA – Northrop Grumman Transition/Transformation
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In the Beginning …
• VITA Creation – 2003 –Infrastructure (in-scope)–Individual agency applications (out-of-scope)–367 FTE–Three agencies/organizations
• Integration – 2004 – 2005–90 Executive Branch agencies
• PPEA – Unsolicited Proposals – Received 2004 –Infrastructure track
–VITA - Northrop Grumman–Enterprise Applications track
–Secretaries Administration & Finance
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Scope
• Desktops: 69,323
• Servers: 3,099
• Telecommunications: 15,441
• Peripherals: 72,778
• 1,100 Employees
• 90 Executive Branch Agencies
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Public/Private Partnership – IT Infrastructure
• Northrop Grumman Selection– Model: Utility/unit cost vs. direct bill– Infrastructure and service delivery = 875 FTE– Contract administration, governance, E-911, GIS, Security,
other• Retained agency = @200 FTE (350 to 1,100 to 200)
• Service Commencement - July 1, 2006– Transitional service improvements, equipment replenishment
in years 1-3
• Contract Base Funding – Not to Exceed 2005 Levels Across the Enterprise– <15% economic contingency– VITA retained except for cost-of-living also capped for current
workload
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Select Partnership Milestones
• Employee Offer Letters – May 2006• Begin Desktop Refresh –March 2007• New Data Center – July 2007 (Full Operation Late
in 2007)• Statewide Help Desk – September 2007• Computer Security Incident Response Center –
October 2007• Complete Agency Desktop Refresh – March 2009• Enterprise-wide Messaging – June 2009• Server Consolidation Complete – June 2009
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Response to Employment Offersfrom Northrop Grumman
•846 VITA Employees Received Offer Letters
•65.2% (553) Accepted in First Wave
•15.8% (128) Declined (to be “managed”)
•Offer Expires September 12
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Current Rates
• Direct Service - Operations– Legacy (Telecom, computer, direct service)
enterprise shared unit costs– Direct Bill: Cost + 5.52% - move to agency specific
unit cost• Transition MOU Process (amendments as needed)• Goal: SINGLE enterprise shared service rates in 2008
• Governance– Security Management
• Product/service specific rate– Project Management
• Project specific rate
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Why Move from Direct Bill
• Interim JLARC Approval Rate for Two Years to Support Integration began FY04-05
• Allows/Improves Capacity Planning and Usage
• Reduces Large Swings in Budgeting and Expenditures
• Eliminates Annual Agency Administrative Hoops to Get Dollars for IT
• Caps VITA’s Cost for Current Services at 2005 Expenditure Levels
• Cost Model Will Provide Consistent Service, Consistent Planning at a Predictable Cost
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The Challenge – Service and Financing
• Direct Bill Moves to Agency-Specific Services Rates Based on Asset Categories (Charge-Back Model)– Maintains current levels of service
• Implement July 2006 for Up to Two Years– Base: Not to exceed cost before NG partnership (2005)
• $100 million legacy (telco/mainframe existing)• Agency Based Support
– $52 million labor (executed)– $75 million non-labor (in process)
» MOU amendment
• Challenges– Enterprise view– Variable agency spending patterns
• Budgets vs. actual expenditures, year-end balances– Small/medium agencies budgets– Federal/audit allowable costs & documentation– Tracking Assets (new & refresh)
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Enterprise Shared Services Rates – Phase III
• GOALS
– Enterprise-Wide shared service rates based on asset categories
• Customers choose service levels• Consistent service levels at consistent costs
– Implement by July 1, 2008• Aligns with NG contract
– Challenge• Will cause increases or decreases to base funding
depending upon service levels selected• Eliminates need for one-time investments
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What We Need Help With
• Understanding of the Enterprise Rate Structure Objective
• Understanding That VITA is Working with the Agencies to Agree on Real, Acceptable Numbers
• Commitment to Help Manage Change with Agencies
• MOU Process – Under Way– Collaborative meetings with agencies, based on records of
actual agency spending/financial data and plans– Asking for consistent monthly spend on non-personal/
equipment based on the real numbers
• NG Partnership Success Depends on COV Enterprise Cooperation and Support