Maryland shouldn’t step backwards on state IT contracts

Late last year, as a result of an open process designed to streamline and improve Maryland’s information technology (IT) procurement process, the state’s Department of Information Technology (DoIT) issued a revised set of  standard contractual terms and conditions for IT goods and services. The IT Alliance for Public Sector (ITAPS) encouraged state officials  to align their terms and conditions with  commercial contract practices in order to benefit the state and its taxpayers through robust competition by the most capable IT service and solution providers.

Unfortunately DoIT’s final version largely ignored these recommendations and instead, the state’s new contract template now in effect continues broad exposure of risk in terms of limitations of liability and indemnification provisions and overreaching language regarding intellectual property rights.  

More specifically, Maryland unfortunately rejected ITAPS’ recommendation that the state’s proposed standard IT contract should limit its indemnification requirements to third party claims. Our recommendation was to limit it to personal injury damage to real property, and tangible personal property, only when there is intentional misconduct, reckless acts, or gross negligence or omissions by the contractor and its subcontractors. It also dismissed our suggestion that indemnification should not be applicable where the claim arises from the acts or omissions of the agency; the state or its officers; employees; or agents. Likewise, our urging that all documents and materials prepared by the contractor should not be deemed “works made for hire” with all rights and interests granted to the state were also put aside – despite ITAPS offering the more workable alternative approach of applying a governmental use license in its stead.    

“Business as usual” does not bode well for IT vendors seeking to do business in Maryland nor does it bode well for the state.  We urge the new Hogan Administration to revisit this decision and redirect Maryland’s IT initiatives to ensure there is a better balance of risk between the state and its IT vendors.  A rethinking of the approach taken during the final days of the O’Malley Administration is particularly important because DoIT recently announced its next step is to develop an “as a service” sample contract in the near future.  

Without terms and conditions that better reflect commercial marketplace realities, the state –as well as cities and counties – won’t see an uptick in cloud deployment and the ensuing constituent capabilities and financial benefits that derive from this more innovative approach to procuring IT services.  

More information on DoIT’s 2014 actions and 2015 plans can be found here.  

 

Public Policy Tags: Public Sector

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