1. 1 expect the best www.vita.virginia.gov Finance Officers Briefing July 14, 2006 VITA – Northrop Grumman Transition/Transformation

2. expect the best www.vita.virginia.gov In the Beginning … VITA Creation – 2003 –Infrastructure (in-scope) –Individual agency applications (out-of-scope) –367 FTE –Three agencies/organizations Integration – 2004 – 2005 –90 Executive Branch agencies PPEA – Unsolicited Proposals – Received 2004 –Infrastructure track –VITA - Northrop Grumman –Enterprise Applications track –Secretaries Administration & Finance

3. expect the best www.vita.virginia.gov Scope Desktops: 69,323 Servers: 3,099 Telecommunications: 15,441 Peripherals: 72,778 1,100 Employees 90 Executive Branch Agencies

4. expect the best www.vita.virginia.gov Public/Private Partnership – IT Infrastructure Northrop Grumman Selection –Model: Utility/unit cost vs. direct bill –Infrastructure and service delivery = 875 FTE –Contract administration, governance, E-911, GIS, Security, other Retained agency = @200 FTE (350 to 1,100 to 200) Service Commencement - July 1, 2006 –Transitional service improvements, equipment replenishment in years 1-3 Contract Base Funding – Not to Exceed 2005 Levels Across the Enterprise –<15% economic contingency –VITA retained except for cost-of-living also capped for current workload

5. expect the best www.vita.virginia.gov Select Partnership Milestones Employee Offer Letters – May 2006 Begin Desktop Refresh –March 2007 New Data Center – July 2007 (Full Operation Late in 2007) Statewide Help Desk – September 2007 Computer Security Incident Response Center – October 2007 Complete Agency Desktop Refresh – March 2009 Enterprise-wide Messaging – June 2009 Server Consolidation Complete – June 2009

6. expect the best www.vita.virginia.gov Response to Employment Offers from Northrop Grumman 846 VITA Employees Received Offer Letters 65.2% (553) Accepted in First Wave 15.8% (128) Declined (to be “managed”) Offer Expires September 12

7. expect the best www.vita.virginia.gov Current Rates Direct Service - Operations –Legacy (Telecom, computer, direct service) enterprise shared unit costs –Direct Bill: Cost + 5.52% - move to agency specific unit cost Transition MOU Process (amendments as needed) Goal: SINGLE enterprise shared service rates in 2008 Governance –Security Management Product/service specific rate –Project Management Project specific rate

8. expect the best www.vita.virginia.gov Why Move from Direct Bill Interim JLARC Approval Rate for Two Years to Support Integration began FY04-05 Allows/Improves Capacity Planning and Usage Reduces Large Swings in Budgeting and Expenditures Eliminates Annual Agency Administrative Hoops to Get Dollars for IT Caps VITA’s Cost for Current Services at 2005 Expenditure Levels Cost Model Will Provide Consistent Service, Consistent Planning at a Predictable Cost

9. expect the best www.vita.virginia.gov The Challenge – Service and Financing Direct Bill Moves to Agency-Specific Services Rates Based on Asset Categories (Charge-Back Model) –Maintains current levels of service Implement July 2006 for Up to Two Years –Base: Not to exceed cost before NG partnership (2005) $100 million legacy (telco/mainframe existing) Agency Based Support –$52 million labor (executed) –$75 million non-labor (in process) »MOU amendment Challenges –Enterprise view –Variable agency spending patterns Budgets vs. actual expenditures, year-end balances –Small/medium agencies budgets –Federal/audit allowable costs & documentation –Tracking Assets (new & refresh)

10. expect the best www.vita.virginia.gov Enterprise Shared Services Rates – Phase III GOALS –Enterprise-Wide shared service rates based on asset categories Customers choose service levels Consistent service levels at consistent costs –Implement by July 1, 2008 Aligns with NG contract –Challenge Will cause increases or decreases to base funding depending upon service levels selected Eliminates need for one-time investments

11. expect the best www.vita.virginia.gov What We Need Help With Understanding of the Enterprise Rate Structure Objective Understanding That VITA is Working with the Agencies to Agree on Real, Acceptable Numbers Commitment to Help Manage Change with Agencies MOU Process – Under Way –Collaborative meetings with agencies, based on records of actual agency spending/financial data and plans –Asking for consistent monthly spend on non-personal/ equipment based on the real numbers NG Partnership Success Depends on COV Enterprise Cooperation and Support

12. expect the best www.vita.virginia.gov Key Milestones To improve communication and coordination between the Commonwealth and Federal agencies To position agencies to move to service- based rates More details will be provided on specific milestones as they become available