OMB names agencies as shared-services providers

The Office of Management and Budget has given two groups of agencies initial approval to become shared-services providers under the Lines-of-Business e-government initiative.

In fiscal 2006 budget documents recently sent back to agencies, OMB told nine agencies their financial or human re- sources programs had passed preliminary muster to become centers of excellence, federal sources told GCN. The designation means the agencies will be able to vie for work providing financial and HR processing services to users throughout government.

“The first case has been made, and agencies must now substantiate their ability to meet agency needs,” said a source who re- quested anonymity because the budget information is not final. “They will have to do it through current and possibly new relationships.”

Although the list of chosen agencies does not become official until the president issues his 2006 budget request in February, it is unlikely OMB will change its decisions.

Sources said OMB reiterated its requirement that agencies planning to spend money on development, modernization and enhancement of new financial or hu- man resources systems must first consider using a shared-services center.

Reducing duplication

By promoting the use of shared-services centers, OMB is attempting to reduce agencies’ spending on core financial and back-office HR systems. OMB estimated that agencies asked for more than $2.6 billion in duplicative spending for these services in 2004.

Agencies interested in becoming shared-services centers submitted business cases in September. OMB evaluated the documents and identified those it considered capable of providing cross-agency services.

The chosen agencies must now prove their worth during the next year by signing up other agencies as customers.

Sources said OMB will re-evaluate the agencies’ progress in 2006, reviewing the number of customers and how well the centers met their customers’ needs.

Delayed migration

Most large agencies will not migrate to the shared-services centers in the coming year, but many smaller agencies need financial and human resources services immediately.

OMB also will let companies compete for work, but contracting for the jobs likely would not go through a request for proposals process. Sources said OMB is leaning toward asking vendors who use government-approved financial systems to apply to be shared-services centers.

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