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NEWS ROOM   |   Press Releases

For immediate release: August 1, 2012
Contact:
Shawn Vaughn

Leaving Performance Bonds at the Door for Improved IT Procurement

LEXINGTON, Ky., Wednesday, August 1 — Finding a proper balance for performance bond requirements for vendors is a way states can improve and lower costs for IT procurement, according to the latest issue brief, “Leaving Performance Bonds at the Door for Improved IT Procurement,” released today by the National Association of State Chief Information Officers (NASCIO). The report is available for download on NASCIO’s website at www.nascio.org/publications.  

Not all states are required to have performance bonds for IT projects, but in several instances it has led to significantly limited competition for those that do. In addition, inflated costs of obtaining a bond in the wake of several high-visibility bankruptcies in the early 2000s has only led to those costs being passed on to the states – in some instances that cost has been 40 times higher. Federal procurement trends have done away with performance bonds and NASCIO believes that states should also leverage other contractual protections in lieu of performance bonds.

“Weighing non-performance, existing protections, and the benefits of robust competition is a balancing act that no longer leans towards the use of performance bonds,” said Carlos Ramos, California state chief information officer and member of the NASCIO State IT Procurement Modernization Committee. “State CIOs recognize that states need the flexibility to best determine how to protect itself from risk. In California, the State Assembly has unanimously passed legislation that helped lower performance bond requirements from 50 percent to a more feasible 10 percent.”

NASCIO would also like to thank the members of the State IT Procurement Modernization Committee, including contributions from TechAmerica and the National Association of State Procurement Officials (NASPO), for the valuable insight while formulating the first in a series of guidance briefs.

About NASCIO
The National Association of State Chief Information Officers is the premier network and resource for state CIOs and a leading advocate for technology policy at all levels of government. NASCIO represents state chief information officers and information technology executives from the states, territories, and the District of Columbia. The primary state government members are senior officials who have executive level and statewide responsibility for information technology leadership. State officials who are involved in agency level information technology management may participate as state members. Representatives from other public sector and non-profit organizations may also participate as associate members. Private sector firms may join as corporate members and participate in the Corporate Leadership Council. For more information about NASCIO visit www.nascio.org.

AMR Management Services provides NASCIO’s executive staff. For more information about AMR visit www.AMRms.com/.

Contacts:

Chad Grant, Senior Policy Analyst
National Association of State Chief Information Officers
(859) 514-9148
cgrant@AMRms.com

Shawn Vaughn, Membership and Communications Coordinator
National Association of State Chief Information Officers
(859) 514-9156
svaughn@AMRms.com
www.NASCIO.org  

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