OMB details approach for HR Line of Business migrations

OMB’s HR LOB competition framework

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The Officer of Management and Budget late last week gave agencies the how-to guide for moving to a human resources shared service provider.

The much-anticipated directive tries to answer questions regarding how OMB Circular A-76 fits into the HR Line of Business initiative as well as step-by-step directions for evaluating offers and competing work only with private-sector or public-sector providers.

In a memo to agency deputy secretaries, Clay Johnson, OMB’s deputy director for management, said the framework establishes a competitive selection process, and the opportunity to improve cost, quality and performance of shared services.

OMB also reiterated its policy that agencies should migrate to a shared service provider instead of upgrading or modernizing their current HR system.

The framework comes on the heels of the General Services Administration and the Office of Personnel Management releasing the request for proposals to add HR services to the GSA schedule.

“The guidance is designed to ensure agencies preparing to modernize HR systems consider both public and private shared service centers with demonstrated capability, conduct competition between SSCs in an impartial, structured and transparent manner and hold the selected SSCs accountable for results through an appropriate implementation structure,” wrote OPM Director Linda Springer and Johnson in an attached memo to agency chief information officers, chief financial officers, chief human capital officers and chief acquisition officers.

OMB and OPM said agencies will use the framework for hosting, application management and other services that are performed by 10 or fewer employees. That is the cutoff under A-76 where agencies can use the competition process described in the Federal Acquisition Regulations, instead of holding a more formal public/private competition using A-76 rules.

“If an agency wishes to pursue a migration involving more than 10 [positions], the agency shall consult with OMB,” the guidance states.

Agencies also must consult with OMB if they choose not to ask vendors on the GSA schedule to bid on their work, and if they want to have limited competition—either just public-sector or just private-sector providers.

For either noncompetitive migrations or private-sector only competitions, the agency must justify its decision which must be approved by the chief human capital officer, the CIO, CFO and the chief acquisition officer, the guidance states.

Finally, the guidance details the type of agreements that agencies must enter into with either private- or public-sector providers. With private-sector SSCs, the contract will be administered under the FAR rules. For public-sector SSCs, the agencies will enter into an interagency agreement identifying workload, performance levels and cost.

Both agreements need to include performance metrics, standards and the length of performance.

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