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Shows & Panels
Treasury overhauling qualifications for financial shared services providers
Thursday - 9/26/2013, 6:07am EDT
The Treasury Department is finalizing a new set of requirements for agencies to provide financial management shared services.
It's part of a broader effort to push agencies to federally outsource financial management services over the next several years.
Treasury's Office of Financial Innovation Transformation (OFIT) issued a draft set of requirements that agencies must meet if they want to be federal shared services providers.
Industry sources, who have seen the document, say the document describes the functionality a shared service provider must have to qualify.
OMB issued something similar in 2004 called a due diligence checklist that covered everything from the type of software the shared service provider was running to their planned upgrades to their business model including their pricing structure to their corporate stability.
Sources say this new list will address similar things.
Beth Angerman, OFIT's director, said her organization has been working on these qualifications since March when Office of Management and Budget issued the memo requiring agencies to look at federal shared service providers first when they are ready to update their financial systems.
"We will be designating those federal shared service providers after an application process, which will happen this fall," Angerman said Wednesday during a panel discussion hosted by AFCEA's Bethesda Maryland chapter. "The application process will ensure that those shared service providers meet a list of mandatory criteria to be able to do that."
Angerman would not offer any more details about the draft requirements.
She said Treasury and OMB haven't decided yet how the new qualifications will impact the four current financial management shared service providers: the Interior Business Center, Treasury's ARC, the General Services Administration and the Transportation Department.
There are several options, from making the four current providers meet only the new functionality requirements to requiring them to prove their worthiness all over again. Sources say other agencies are interested in becoming a shared service provider including the Environmental Protection Agency, the Veterans Affairs Department and NASA.
Sources say the challenge for these possible new entrants into the market is a lack of past performance beyond providing services to their own agency.
Angerman also said agencies that are considered internal providers, such as NASA, which provides shared services only to other parts of the space agency, may still have to consider moving to one of the federal shared service providers.
Now to be clear, this qualification guide is just for federal shared service providers. There is no mention of private sector providers, which leaves many in the community uneasy for a number of reasons.
Private sector must wait
One industry source says there is a growing frustration with the lack of opportunity for industry in the shared services arena, especially since most federal shared services providers depend on industry for a lot of support.
Angerman said the private sector initial role in this consolidation effort will be behind the scenes.
"I think there are a lot of good opportunities for the private sector to help compliment that," she said. "There are some technologies that we need to address the technology problem. We'd love for the federal shared service providers to be offering the latest and greatest in terms of technology. There's the whole migration challenge, getting from point A to point B, and helping to lower costs."
Angerman added OFIT will develop a prices paid list for financial management services. She said it will be ready in April in PDF form.
"What we will be doing is exposing the pricing of federal shared services providers for each of those products and services in that catalog," she said. "What we think that will be doing, in the spirit of transparency, is helping to identify areas for improvement when it comes to cost. Where can we target to help these federal shared service providers to reduce cost and are there solutions to help us do that?"
As for private sector companies offering services, Angerman said there will be another phase in the future to identify those vendors, but after naming the updated group of federal shared service providers.
Beyond the question of which agencies will provide shared services for financial management, OFIT must answer several other questions, especially around governance and the process to choose and migrate from a provider.
And for some agencies, those answers can come soon enough.
Labor making plans, needs answers
Take the Labor Department. It plans on recompeting its financial management contract, making an award and possibly migrating to a new provider in 2016. GCE currently provides the agency with financial management services in the cloud.