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Financial Line of Business questioned

Formal guidance says too little for critics

By Michael Hardy
Published on June 19, 2006

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The first formal guidance for the Financial Management Line of Business offers too little help for agencies and contractors trying to plan for the program, some analysts say.

The guidance came from the Financial Systems Integration Office — part of the General Services Administration — with assistance from the Office of Management and Budget. Issued in May, it was a draft document. A final version is expected soon.

Input released a report earlier this month stating that the guidance relies heavily on the standard A-76 process to govern competitions under the line of business, in effect telling officials little they did not already know.

“We were expecting, along with the rest of the vendor community, more in the way of actual guidance,” said James Krouse, acting director of public-sector market analysis at Input. “To fall back and say that in a lot of cases A-76’s standing rules will apply, that’s fine, but you could have told us that a year ago. What’s new?”

The line of business initiative is an OMB effort to consolidate financial management systems, using some agencies as service providers. As agencies upgrade their financial management systems, they should seek to become a shared service provider, migrate their financial management systems to an agency that already has that status or contract with a qualified vendor. The A-76 provisions kick in when agencies go outside their organizations for the services.

The use of A-76 suggests that agencies would have an advantage. Under normal A-76 rules, private-sector competitors must show they can save 10 percent or $10 million to unseat an agency’s employees.

If the competition involves another agency that does not have to show those savings, companies are at a decided disadvantage, according to the Input analysis.

The guidance makes it feasible for agencies to take as long as a decade to determine if they will migrate their operations, making the potential market for a shared service provider unpredictable, according to Input.

In the long term, Krouse said, it is unclear whether the lines of business initiatives will amount to much. The 10-year time frame is a long period for a political initiative, he said.



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