Last year, California began a process to replace their child welfare services case management system. This system is used by more than 20,000 social workers to track and manage the more than 500,000 cases of child abuse and neglect that are reported in California each year. Every year, 30,000 children are removed from their homes, which means the stakes are too high for this system to be using outdated technology to investigate and manage California’s most vulnerable youth population who may be victims of abuse. And, although the state of California runs the system, the federal government pays for 50 percent of its cost through a grant from the Department of Health and Human Services (HHS).

While drafting the request for proposal (RFP), California invited Code for America to help them rethink their procurement strategy. The original RFP followed a traditional model, seeking a single vendor to build the entire new system, with a set of predefined requirements, at a cost of hundreds of millions of dollars over the course of several years. We’ve seen this monolithic approach fail many times; the contracts are frequently late, over-budget, and at the end of the day, don’t deliver results that users of the system actually need. We offer our partners a different approach.

The team from the State of California, Code for America, and 18F at the end of day two of the workshop. The team from the State of California, Code for America, and 18F at the end of day two of the workshop.

Through a partnership with HHS, 18F was able to work on behalf of HHS with California’s Department of Social Services and Office of Systems Integration and Code for America to simplify the contracting documents and to incorporate modular contracting, agile development, user-centered design, and open source practices into their project. This project is still in the early stages, and the outcome is still uncertain, but this change in strategy has the potential to produce greater vendor competition, tremendous cost savings, a vastly improved product, and result in a better contracting experience for California’s Department of Social Services. All of this is being done to focus the valuable time of Child Welfare Professionals in California so they can spend more time helping the deeply vulnerable population of children who are the victims of abuse and neglect.

18F heads to California

In December, after a brief period of discovery and internal planning, six of us from 18F made the trip out to California to lead a structured two-day workshop, similar to our RFP ghostwriting service, with a joint team from California’s Department of Social Services, the Office of Systems Integration, HHS, and Code for America. Over two days, we led a hands-on workshop to validate a modular contracting approach to this problem.

After everyone was on board, we worked with the California team to edit their draft contracting documents to better fit an agile, modular strategy. That meant focusing the work on people who would be using the system and omitting requirements for stakeholders who were further removed from day-to-day activities. We started with a 1,500 page contracting document, and over the course of a month, trimmed down the initial modular RFPs to a 10-page Statement of Work with another 60 pages of mandatory contracting language.

Besides shifting the focus from stakeholders to users, the drastically reduced length of this document matters because it enables a larger pool of vendors to submit a bid. Few companies are set up to analyze and respond to 1,500 page documents, and many (especially small businesses) don’t want the hassle. California’s new, shorter contract also included a revised Terms and Conditions section that was more friendly to non-traditional government vendors, which should help increase competition and improve the final product.

Moving to modular contracting

California’s original approach of using a lengthy requirements document to hire a single vendor is the norm for IT contracting, but it too often results in failure. First, hiring a single vendor to complete a gigantic contract can lead to vendor “lock-in.” Even if a vendor begins to miss deadlines or underperform, the government can’t hire a new vendor because they’re too far into the project. Also, if vendors use proprietary code in their project, then the government can be tied to those companies for any future fixes or updates.

Modular contracting breaks large systems into small, independent pieces that can be built by separate vendors but come together to form a complete system. If one vendor or module fails to work, the government can easily change course to get it fixed without jeopardizing the entire system. This gives contract managers much more flexibility and drastically lowers the cost of course correction if a project begins to falter.

What’s next

California is soliciting proposals for a new automated child welfare system and expects to make an initial award on the first module in April. Until then, we won’t see the results from our workshop, but we hope to see an improved system built in the open, delivered iteratively, and based on user needs. It will still take a smart and strong contract management team to see this project through and realize this mission. But when it works, we will have done more than help the social workers and children of California. Showing that this type of procurement is possible for state projects of this magnitude and importance has huge potential to improve the cost and functionality of similar digital services in all 50 states.

And that’s why we’re working on setting up more of these types of engagements. This new model allows 18F to work with federal agencies that are providing grants to upgrade digital services at the state and local level.

Like our federal government partners, many states are facing the challenge of modernizing their digital services. As we find a good approach in one state, we can apply those same lessons to other programs in communities facing similar problems. The Congressional Budget Office projected that the federal government would spend $628 billion in federal grants to state and local governments in 2015. Applying the same cost savings that we’ve seen at the federal level to this pool of grants would save hundreds of millions of dollars.

We’re excited about this effort and will be writing more about it soon. We would like to thank our friends at Code for America, specifically Dan Hon and Jennifer Pahlka, for bringing this opportunity to our attention. Their stewardship, along with HHS taking a risk to fund our work, is going to mean huge transformation in the state of California.

Special thanks to the 18F team that worked with California and HHS on the project: Tom Black, Alan deLevie, Shashank Khandelwal, Esther Kim, Jesse Taggert, and V. David Zvenyach.