Labor’s deal could prove financial LOB’s worth

Five-year contract is first award of its kind to a major agency

The theory behind the Financial Management Line of Business Consolidation initiative is that an agency could outsource, at a minimum, the hosting of its hardware and software, save money and focus on its core mission. But until now, a major agency had yet to prove this premise.

The Labor Department became the first large agency to jump in with both feet when it awarded a five-year contract to Mythics Inc. of Virginia Beach, Va., to provide financial-management hosting, operation and maintenance services, which includes hardware, software, network and patching. The firm fixed-price contract is worth $5.3 million over the one base year and four one-year options.

“The contract includes everything up to transaction processing,” said Valerie Harris, Labor’s acting associate deputy chief financial officer. “We always had a company providing hosting services, but we are buying update and upgrading services for the hardware and software.”

Mythics beat out two other offerers, the Transportation Department and IBM Corp., Harris said.

“When we looked across the board at the three vendors’ offers, the services were equal so we looked at other issues,” Harris said. “Price then played a big role.”

Another factor was that Labor set up the service-level agreement so that if Mythics did not meet its performance metrics, it would have to rebate part of its fees.

Labor will upgrade to Oracle Corp.’s Federal Financials software from a decades-old mainframe system run by Sungard Data Systems Inc. of Wayne, Pa., Harris said. Labor will begin transitioning to the new system immediately, and officials want to be finished Sept. 30.

The department’s decision to outsource the hosting will save it a lot of money compared with similar agencies and demonstrates the value of the LOB, according to one government official familiar with the financial management LOB.

“Labor will pay less than one agency running a similar, modern financial management system in-house, even though Labor has six times the employees and 100 times the budget,” said the official, who requested anonymity. “Another larger agency also running a modern system in-house is spending 10 to 20 times what Labor will spend.”

Besides Labor, the Environmental Protection Agency will award a financial management contract to a public- or private-sector center of excellence this summer.

About the Author

Connect with the GCN staff on Twitter @GCNtech.

Featured

  • People
    Federal CIO Suzette Kent

    Federal CIO Kent to exit in July

    During her tenure, Suzette Kent pushed on policies including Trusted Internet Connection, identity management and the creation of the Chief Data Officers Council

  • Defense
    Essye Miller, Director at Defense Information Management, speaks during the Breaking the Gender Barrier panel at the Air Space, Cyber Conference in National Harbor, Md., Sept. 19, 2017. (U.S. Air Force photo/Staff Sgt. Chad Trujillo)

    Essye Miller: The exit interview

    Essye Miller, DOD's outgoing principal deputy CIO, talks about COVID, the state of the tech workforce and the hard conversations DOD has to have to prepare personnel for the future.

Stay Connected

FCW INSIDER

Sign up for our newsletter.

I agree to this site's Privacy Policy.