#hbitsny

The landscape of government contracting and IT staffing is undergoing a seismic transformation. At the center of this shift stands HBITS NY — New York State's Hourly Based IT Services program — which has long served as the backbone of how state agencies procure technology talent. Now, with generative AI reshaping virtually every corner of the tech industry, the program faces both extraordinary opportunities and significant challenges that demand careful navigation.

Understanding the HBITS NY Framework

Before diving into the AI dimension, it's essential to understand what HBITS NY represents. The program is a competitively awarded contract vehicle that allows New York State agencies to engage IT professionals across dozens of labor categories — from project managers and systems architects to cybersecurity analysts and data scientists. Vendors compete for placement on the contract, and agencies then use it to quickly source skilled technology workers without going through a full competitive procurement each time.

The program has historically been celebrated for its flexibility and speed. It reduces administrative burden while giving agencies access to a broad, pre-qualified talent pool. However, the rise of generative AI is prompting a rethinking of what "skilled IT talent" actually means — and whether the existing labor categories and rate structures adequately reflect today's market realities.

New Roles Emerging from Generative AI

Generative AI has given birth to an entirely new class of IT roles that simply did not exist a few years ago. Prompt engineers, AI model trainers, LLM fine-tuning specialists, retrieval-augmented generation (RAG) architects, and AI ethics auditors are just a sampling of the positions now in high demand across state agencies. These roles sit at the intersection of data science, software engineering, and domain expertise — a combination that traditional labor classifications struggle to accommodate.

For HBITS NY to remain a relevant and effective procurement vehicle, it must evolve to incorporate these emerging titles. Agencies piloting generative AI tools for citizen services, document automation, and fraud detection need contract structures that reflect the nuanced skills required. Without updated labor categories, agencies may be forced into misclassifying contractors or pursuing alternative procurement routes — both of which introduce inefficiencies and compliance risks.

Challenges in Rate Structures and Talent Competition

One of the most pressing challenges is compensation. Generative AI specialists command premium salaries in the private sector, and government rate structures have historically lagged behind market rates. If the hourly billing rates within the HBITS framework cannot keep pace with commercial compensation expectations, the state risks being unable to attract top-tier AI talent to critical public sector projects.

Vendors participating in the program must also grapple with the rapid pace of skill obsolescence. A professional certified in a particular AI platform today may find those skills outdated within 18 months as the technology evolves. This creates pressure on both vendors and agencies to build continuous learning expectations into their engagements — a concept that traditional staffing contracts are ill-equipped to handle.

Governance, Ethics, and Accountability

Perhaps the most complex challenge lies in governance. When AI systems make or inform decisions affecting citizens — from benefit eligibility to public safety — questions of accountability become paramount. State agencies deploying generative AI through contractors sourced via HBITS NY must clearly define who is responsible when an AI system produces biased, erroneous, or harmful outputs. The contract language, deliverable definitions, and performance metrics used in traditional IT staffing do not naturally extend to AI-driven outcomes.

New York State has already begun exploring AI governance frameworks, and HBITS-sourced contractors are increasingly expected to work within these evolving guidelines. This includes adhering to data privacy regulations, documenting AI model decisions for audit purposes, and ensuring that AI tools meet accessibility standards required under state law. Vendors must proactively build these compliance capabilities into their teams.

The Path Forward

Adapting to the generative AI era requires proactive collaboration between the Office of General Services (OGS), state agencies, and participating vendors. Key steps include modernizing labor category definitions to include AI-specific roles, conducting regular market rate analyses to maintain competitive compensation ceilings, and developing clear ethical and legal guidelines for AI deployments sourced through the contract.

Training and upskilling must also become a shared priority. Agencies should consider building professional development clauses into task orders, encouraging contractors to maintain current AI certifications throughout their engagements. Similarly, vendors should invest in AI literacy across their workforce — not just among specialists, but across all IT roles, as generative AI tools increasingly augment everyday technology work.

Conclusion

For businesses looking to grow their government contracting footprint in New York State, understanding how to maximize revenue on HBITS NY is one of the most important steps they can take. The Hourly Based Information Technology Services contract is a statewide procurement vehicle managed by the Office of General Services (OGS), and it connects qualified IT vendors directly with hundreds of state agencies, public authorities, and local governments. Yet simply being on the contract is not enough. Generating consistent, meaningful revenue requires a strategic approach that combines relationship building, smart bidding, and a deep understanding of how the platform works.

The first thing any vendor must recognize is that HBITS NY operates on a competitive mini-bid system. When a state agency needs IT services, they issue a mini-bid to all vendors who are eligible under a particular labor category. This means that your proposal, your pricing, and your ability to demonstrate relevant experience are constantly being evaluated against other approved contractors. Many vendors make the mistake of treating the initial contract award as the finish line. 

One of the most effective strategies for increasing revenue is to stay active across multiple labor categories. HBITS NY offers a wide range of IT service classifications, from project management and cybersecurity to application development and data analytics. Vendors who position themselves across several categories automatically increase the number of mini-bids they are eligible to respond to. This broader exposure significantly improves the chances of landing contracts with multiple agencies, which in turn leads to more stable and diversified revenue streams over time.

Responsiveness is another factor that many vendors underestimate. State agencies work within tight timelines, and mini-bids often have short windows for response. Vendors who reply quickly, thoroughly, and professionally build a reputation for reliability. Over time, this reputation becomes one of your most valuable assets. Program managers and procurement officers remember the vendors who show up, who communicate clearly, and who deliver what they promised. Building that trust directly influences how often you get called upon for future work, both through formal mini-bids and through smaller engagements that agencies may route your way.

Pricing strategy also plays a central role in revenue maximization. While it can be tempting to submit the lowest possible rate to win work, this approach often backfires. Agencies are not simply looking for the cheapest option. They are looking for the best value, which means competitive pricing paired with clearly demonstrated expertise and a track record of successful delivery. Understanding the market rate for each labor category, and pricing your services thoughtfully within that range, gives you the best chance of winning bids at margins that actually support your business growth.

Networking within the state government ecosystem is equally important. Attending OGS events, agency outreach sessions, and public procurement forums gives vendors the opportunity to meet agency representatives in person. These connections often translate into a better understanding of what agencies need before a mini-bid is even posted. Vendors who invest time in these relationships are better positioned to tailor their proposals to real agency priorities, which makes their bids far more compelling.

Finally, do not overlook the power of past performance documentation. Every successfully completed project under HBITS NY should be thoroughly documented, including scope, deliverables, timelines, and client outcomes. This library of evidence becomes the backbone of every future proposal you submit. Agencies want proof that you can deliver, and concrete examples from past state contracts carry far more weight than generic capability statements.