FSS to run financial software sked

The General Services Administration plans to move responsibility for its financial management software from the Federal Technology Service into the general information technology products and services schedule managed by the Federal Supply Service (FSS).

FTS officials had been working for months with the Chief Financial Officers Council to restructure the existing schedule— the mandatory source for all agencies selecting core financial software— which is due to expire in September. Users and vendors have complained that the existing program is inefficient and requires expensive and excessive testing and certification. The CFO Council had been working since last year on methods for improving it.

A GSA spokesman said the life of the current schedule will be extended one year— until Sept. 30, 1999— when FSS will take sole responsibility for the program and merge it into the Group 70 Schedule.

Bill Gormley, assistant commissioner for acquisition at FSS, said late last week he was still negotiating the terms of the transfer with FTS officials and refused to comment further. "We're not ready to announce it yet," Gormley said.

But GSA officials who spoke privately said the decision to expand the FSS schedule to include financial management software was nearly final, and both FSS and FTS were working on a timetable for the transfer.

An agency source said financial management software would be treated as a separate category under the Group 70 umbrella, much the same as Year 2000 conversion products and services were added to the schedule earlier this year. The source said officials decided to transfer the program because "most of the vendors were already there anyway."

Details were not available on how the FSS-managed schedule will address concerns of users and vendors, and officials at the CFO Council who were responsible for recommending improvements to the schedule did not return repeated phone calls.

But a group of vendors and public interest groups, formed last month to protest the government's move to change the way it buys financial management software, was quick to criticize the plan.

Michael Canning, executive director of the Coalition for Federal Financial Accountability, said the existing schedule has produced extremely reliable financial management systems within agencies.

He said the switch to FSS would force financial management software vendors into a huge program in which they would no longer be able to offer the support services available under the FTS program. "When there are a lot of different products and services on a schedule, the opportunity exists for government agencies to mix and match among programs that might not work well together," Canning said.

"The decision to go to a new schedule has been made with no notification process and no public comment process," he added. "And this is a potentially huge decision, and no one has produced a study of its ramifications."

Fear of Less Attention

An FTS source said vendors who now hold financial management software contracts— three of whom are members of Canning's coalition— fear they will not get as much attention from FSS officials.

"When they get over there, they will fall in with everybody else and not get the same level of hand-holding," the source said.

Harry Barschdorf, vice president of schedule vendor American Management Systems Inc., said he believes the move to FSS could result in higher prices to users. Barschdorf said the current contract allows every vendor on the schedule to bid on every requirement submitted to FTS.

He said the FSS program would require customers to evaluate only three bidders. Consequently, vendors holding FSS contracts will have to spend more on marketing and sales, which will translate into higher prices to the government, he said.

The switch to a nonmandatory vehicle in which vendors are not guaranteed a steady stream of customers will result in higher prices and less investment in innovations, Barschdorf said.

But Larry Allen, executive director of the Coalition for Government Procurement, said some of his member companies that do not hold FTS financial management software contracts look forward to the ability to add those products to their schedule contracts with FSS.

"By putting it on a mainline financial management [schedule within FSS], they will bring in new players, increase competition and provide federal agencies with more options," Allen said.

Allen disagreed with assertions that the FTS program has worked well. "The current offerors are not meeting agencies' needs for whatever reason," he said. "GSA is hearing from its customers that they are looking for more services they can get through an expanded schedule."

He said all financial management software vendors will benefit from the extensive marketing efforts FSS has traditionally provided for its other IT schedule products and services.

Jonathan Klem, vice president of PeopleSoft Federal, said the switch to FSS will help his company, which already holds schedule contracts with FSS but has not participated in the FTS program.

- Diane Frank contributed to this article.