Performance Review Board’s Proposed Reforms Could Save California Billions

The State of California has released a report that calls for the sweeping reorganization of state government and procurement, actions it estimates could save the state $32 billion over the next five years. The 2,500-page report, titled ” Government for the People for a Change,” was produced by the California Performance Review (CPR), a committee established by Gov. Arnold Schwarzenegger.

The CPR recommends a complete structural reorganization of California’s government, modernization of the state’s procurement system, and coordination of the state’s information technology (IT) functions.

According to J. Clark Kelso, California’s State CIO, the CPR recommendations are “a real transformation in state operations. [The actions can] revitalize, restructure, and reinvent the executive branch.”

Report recommendations include:

• Consolidating multiple IT contracts held among several state agencies with the same vendor;
• Implementing a reverse auction system to enable vendors to openly compete on pricing;
• Performance-based contracting phased in at 20, 40, and 50 percent in years two, three, and four, respectively;
• Implementing a knowledgebased procurement organization;
• Establishing a shared services organization to streamline and expedite procurement cycles;
• Delegating accountability to state departments to accomplish a more efficient procurement process;
• Developing a statewide eprocurement system that would integrate procurement, financial, and management functions;
• Establishing a statewide electronic vendor registration system to integrate with the e-procurement and payment systems.

Several of the recommended reforms would have a significant impact on vendors, including:

• A centralized, statewide vendor registration system that includes a registration fee and per-order transaction percentage fee;
• Mandated use of CAL-card for purchases less than $5,000;
• Repealed worksite and workforce bid preferences and five percent small business bid preference.

For more information, visit the California Performance Review online at www.govinfo.bz/4355-302.