A-76 to play larger role in FMLOB

Draft guidance requires agencies to compete systems with private, public shared-services providers

The Office of Management and Budget has added an unexpected and somewhat confusing twist to the Financial Management Line of Business initiative, especially for agencies with large, in-house legacy systems.

Agencies or bureaus with 10 or more employees operating financial systems that do not comply with Financial System Integration Office requirements must now compete for, at minimum, the hosting and application management of their financial systems. The competitions would be with public and private-sector shared-services providers under OMB Circular A-76.

In a memo, OMB said that with limited exceptions, an agency can rely on its in-house FM system only if officials can demonstrate that it represents “best value and lower risk.”

The draft migration guidance issued last month requires agencies to release a single request for proposals for both public and private shared-services providers to respond to, publish it on FedBiz-Opps.gov and follow the Federal Acquisition Regulations as much as possible.

The guidance also includes a competitive framework, template for migration project plan, change management best practices and a menu of services that financial management shared-service providers can deliver. Agencies and vendors have until June 12 to comment.

Agencies with fewer than 10 employees running their financial- management systems or those that already have outsourced their applications to the private sector would go through the normal FAR process.

But the decision to use A-76 has left some shared-services providers unclear. “We don’t know what this means for us,” said one federal SSP manager, who requested anonymity. To date, A-76 competitions primarily have involved head-to-head competitions between agency organizations and vendors. Now, OMB wants to bring in a third player, or more—as shared-services providers—to compete for another agency’s jobs.

“We’ve done our own A-76, but in terms of competing for agency business as part of an A-76 study, I can’t point to a time when we’ve been involved in a competition. This is a confusing area in terms of what the expectations are and what the procedures are,” the SSP manager said. “A-76 calls for either keeping the work in-house or outsourcing. Where do we fit in as a shared-services provider in this equation?”

The manager added that the guidance is a good start and clarified some questions, but not everything.

During a March hearing on the FM Line of Business, Rep. Todd Platts (R-Pa.), chairman of the Government Reform Subcommittee on Government Management, Finance and Accountability, questioned OMB on whether A-76 would need to be modified to be used for lines of business. Mike Hettinger, the subcommittee staff director, said the guidance offered some clarification, but that there needs to be more.

“A-76 will play more of a role than people thought,” he said. “I was a little bit surprised by the extent OMB appears to be utilizing A-76 for these. How it will work remains to be seen.”

The subcommittee will take a closer look during a hearing with the General Services Administration’s chief financial officer and inspector general June 7, Hettinger said. GSA is a financial- management SSP.

“We heard from a lot of people that there wasn’t enough guidance, so with this guidance, we have made some serious strides,” Hettinger said.

Granular EA

Mary Mitchell, GSA’s FM LOB program manager and deputy associate administrator for e-government and technology, said the program also will develop a more granular enterprise architecture over the next few months.

The program’s working group will try to finish standardizing about 80 percent of the business rules and data models that fall under payables, receivables, standard reporting and funds executions and they will try to tackle other areas such as costing. The group also will tackle funds coding so they mean the same thing to all agencies.

Mitchell said the initial final version of the guidance should be released around Sept. 30, but the document will be continually updated.

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