IT Spend Request Approval

WHO TO CONTACT

Each Executive Branch Department has an ETS ITG analyst assigned to work with for processing IT spend requests.

ITG ANALYSTS WITH DEPARTMENTS ASSIGNED FOR IT SPEND REQUEST REVIEWS

Analyst Email Departments
Al Bonilla [email protected] ATG, B&F, DHHL, DHRD, DLIR, DOD, DOT, TAX
Todd Ogasawara [email protected] DCCA, DHS, DOH, ETS, HDOA, OHA, PSD and DAGS, DBEDT, DLNR, GOV/LEG

The ETS Telecommunications Services Branch (TSB) receives and processes telecommunications requests.

PROJECT ADVISORY COUNCIL (PAC)

IT spend requests of $1,000,000 or more must be reviewed and approved by the PAC. The PAC voting members are the State CIO, the Department of General Services (DAGS) Comptroller, the Director of Finance (B&F), and the Director of Human Resources Development (DHRD). Other non-voting members include the Deputy Attorney General (Deputy AG) assigned to work with ETS, and other ETS staff.

PROCESS

IT spend requests can be made using the following instruments:

  1. ETS-205 Form Parts A & B (previously issued as the T-205 [pre-2004] and ICSD-205 [2004-2016]).Note: The previous forms (T-205 and ICSD-205) only allowed requests for hardware and software. The current ETS-205 Form also allows requests for services.
  2. Telecommunications Request Form (TR) – designated ETS-001. Note: This form is used to request telephones and telephone systems, radios, video, and network hardware and services.
  3. Spend Request Memorandum In general, a memorandum is used for spend requests that require signatures beyond that of the submitting Department’s Director and the State CIO. For example, if the request requires the signature of the Directory of Finance and the Governor.

B&F BUDGET EXECUTION POLICIES AND INSTRUCTIONS

Executive Memorandum 18-03 (EM 18-03) provides guidance for Fiscal year 2019 and defines ETS’ responsibilities related to IT spend requests.

EM 18-03 Attachment A

18. Information Systems Technology (IT) and Telecommunication (TC) Services, Facilities and Resources. All IT and TC services, facilities, and resources are functions of the ETS under the authority of the State Chief Information Officer (CIO).

  1. ETS shall have general supervision, oversight and control over the acquisition and utilization of IT and TC facilities and resources within the Executive Branch and may grant exemptions.
  2. Applicable statutory provisions, such as Chapters 75 and 103D, HRS, shall be observed by departments and agencies, as applicable.
  3. All Telecom Requests (Form ICSD-001), regardless of estimated costs, shall be submitted to the Telecommunications Services Branch (TSB) of ETS for technical review and approval before work can commence.
  4. All IT and TC acquisition requests with estimated costs of $100,000 or more (hardware, software, projects, maintenance contracts, renewals, consultant services, telecommunication services, IT facilities, other IT products or IT services, etc.) require the approval of the CIO or the CIO’s designated representative. All requests must be a part of or in support of the requesting department’s IT Roadmap submitted to ETS. ETS requires at least two work weeks advance time to complete its review and recommendation.
    Departments must submit the following forms and documentation regarding the proposed IT or TC expenditure to ETS, as appropriate, regardless. Of procurement method, MOF, type of cost (operating or CIP), budgeted or unbudgeted:

    • IT acquisition requests – Form T205, plus supporting documentation as required.
    • Telecommunication requests – Form ICSD-001 (Telecom Request), plus supporting documentation as required.
      Documents may be transmitted electronically to ETS at [email protected].
  5. IT and TC acquisition requests that meet the following criteria require additional review and approval by the Project Advisory Council (PAC) which meets once a month (A.D. No. 15-02, dated December 10, 2015, Program Governance Requirements for Act 119 and Enterprise Information Technology Projects):
    • All development and modernization projects specifically identified in legislation or budget bills that require additional oversight;
    • All projects that require technology resources estimated at $1,000,000 or greater; or
    • Enterprise projects identified by the CIO, typically those that will leverage business and operational efficiencies and benefits for multiple departments or agencies.
  6. Authority to approve all IT or TC acquisitions with estimated costs that are less than $100,000 is delegated to department heads and will not require CIO approval.
  7. After the fiscal year has closed, departments shall submit reports to the CIO detailing all IT and TC purchases and payments made for the fiscal year.

All IT spend requests must be submitted to ETS. However, the review and approval process differs depending on the amount of the request.

IT spend requests can be submitted at any time.

Requests that require review may take up to two weeks for review and processing. Requests that have an issue identified may take longer than two weeks. Best efforts shall be made to submit requests before two weeks preceding the end of the fiscal year.

Requests of $1M or more need the review and approval by the PAC. The PAC generally meets on the third Friday of each month. Requests that require a PAC review should be submitted no later than two weeks prior to a PAC meeting.

RETURN ON INVESTMENT (ROI)

All IT programs, projects, and investments will be evaluated and monitored to ensure they achieve intended objectives and provide return on investment (ROI) for the people of Hawai’i. Thus, every spend request should include some form of ROI. The four major categories of quantifiable ROI benefits that can be used are:

  1. Cost Reduction, e.g.:
    1. Spent less this year vs. last year for same product or service
    2. Reduced price or cost from current estimate or quote (incl. discounts, waived fees)
    3. Basket of goods/services increase for same amount of money
  2. Cost Avoidance, e.g.:
    1. Cost difference between proposed purchase and alternative course of action (difference in Total Cost of Ownership)
    2. Price increase caps on multi-year agreements
    3. Deferred purchases
  3. Productivity Increase, e.g.:
    1. Quantifiable increase in output (i.e., number of application forms completed)
    2. Quantifiable decrease in time required to process (i.e., reduction in minutes per form processing time)
  4. Revenue Increase, e.g.:
    1. Revenue stream is generated or increased

The value of an IT project may also be expressed in non-quantifiable terms. Therefore, a Public ROI which provides a text description of value a project provides to the public or to a more efficient process can be added.

IT SPEND REQUESTS LESS THAN $100,000

Requests in this category are not reviewed by ETS except under special circumstances such as a legislative request. Department ETS-205 or other supporting documents do not need to be sent to ETS for filing. However, all ICSD-01 Telecommunication Request (TR) forms must still be submitted to the ETS Telecommunications Services Branch (TSB).

IT SPEND REQUESTS BETWEEN $100,000 AND $999,999

Requests in this category are reviewed by the ETS ITG Analyst assigned to a Department. Requests of $100,000 or more require that the detailed ETS-205 Part C be completed and submitted with an ETS-205 Part A & B spend request or Telecommunications Request (TR) form. The Project Lead and Department IT lead may be asked to meet with the State CIO for clarification of a request. Requests in this category require signature approval by the State CIO.

IT SPEND REQUESTS OF $1,000,000 OR MORE

Requests are reviewed by the ETS ITG Analyst assigned to a Department. In addition to the completed detailed ETS-205 Form C, all requests of $1M or more must be reviewed and approved by the PAC. This requirement for PAC review includes:

  • A spend of $1M or more in a single year,
  • A multi-year total spend of $1M or more; for example, a request for a 3-year contract term that has spends of $350,000 each year would have a total spend of $1,050,000,
  • Where a spend request was initially approved by the CIO for less than $1M and is later found to require more than $1M; for example, actual vendor quotes or proposal costs came in at $1M or higher, or
  • Any proposed modification to a contract based on a request that was previously approved by the PAC, which would increase total contract amount.

In addition to the spend request documents, Departments shall format their spend request presentations using a PAC presentation template (MS PowerPoint), to be provided by ETS.

IT SPEND REQUESTS OF $5,000,000 OR MORE

Any spend request of $5,000,000 or more must have a Project Management Office with a charter created for it.

MAINTENANCE OR SUPPORT RENEWALS FOR ANY OF THE SPEND REQUEST CATEGORIES ABOVE

Unless already specified in the terms of an existing multi-year contract, the cost of a renewal of a service or product license must not exceed 5% or the current rate of inflation –whichever is lower. The ETS basis for U.S. inflation is derived from the U.S. Bureau of Labor Statistics CPI (Consumer Price Index)-All Urban Consumers data

Current inflation = 100 x (Current month CPI – CPI of month in previous year) / CPI of month in previous year

Example:
CPI Aug. 2017 = 245.519
CPI Aug. 2016 = 240.849
1.9389 = 100 x (245.519 - 240.849) / 240.849
Current inflation = 1.94%

If a spend request is for a new purchase that replaces a-soon-to-expire license, a renewal worksheet (ETS-205 Renewal Worksheet) or the including the renewal information in ETS-205 Part C is necessary. If an ETS-205 Part C is required as part of the renewal process, that form should include price information for the previous license period. The following information is required for license/service renewal.

  1. SKU Description
  2. Previous Quantity
  3. Previous Per Unit Extended Price
  4. Current Quantity
  5. Current Per Unit Extended Price
  6. Justification for Per Unit price increase

EM 17-04 18.g specifies that:

After the fiscal year has closed, departments shall submit reports to the CIO detailing all IT and TC purchases and payments made for the fiscal year .

The report form is available at the ETS IT spend request forms site.

RESOURCES

The various ETS IT spend request forms and instructions are found here