EXCLUSIVE: IT budget guidance muddies OMB's shared-service plans

Tuesday - 12/13/2011, 5:27pm EST

WFED's Jason Miller on Federal Drive

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Robert Shea, principal, Grant Thornton

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This story has been updated from its original version.

The Office of Management and Budget is requiring agencies to choose two commodity technology services and move them to shared-service providers by December 2012. While giving agencies a hard deadline, OMB is telling industry the shared-services strategy released last week still is in draft form and open for public comment.

OMB circulated to agencies — not publicly — a more detailed draft shared-services strategy in November outlining specific steps agencies and OMB will take over the next year.

The shared-services requirement was one of five IT policy areas OMB highlighted in the IT budget passback, obtained by Federal News Radio.

OMB also outlined a new performance-management line of business, requirements to calculate cloud computing and data-center consolidation savings and a continued investment in the current e-government, line of business, cybersecurity, Data.gov and several other initiatives.

And within the shared-services requirement, OMB seems to be saying one thing and preparing to do another.

In the passback document, OMB states, "Agencies should complete the transition of these two areas by December 31, 2012. By March 1, 2012, agencies should provide OMB with: (1) a summary description of the two commodity IT areas; (2) justification for their selection; and (3) a quantified accounting of expected costs savings."

Federal Chief Information Officer Steven VanRoekel said last week during a conference call with reporters the shared-services strategy is in draft.

"The strategy that launches today will be open for public comment," VanRoekel said Dec. 8. "We are really encouraging federal agencies, the private sector and others to give us feedback on this approach. Is this the right approach? What shared services should we target? We think the big opportunity is in the area of commodity IT email, procurement of technology and other things. We will move on from there."

While VanRoekel said OMB wants feedback, the dates in the passback also align with the draft shared-services strategy, also obtained by Federal News Radio. The draft strategy states current shared services and line-of-business managers should develop metrics between January and March, agencies should begin migrations in May and several other date-specific deadlines.

OMB also is spearheading a shared-services working group with the General Services Administration, the Defense Department and NASA, sources said.

"There is an interpretation among some agencies that they only have to compete among government shared service centers and not with industry shared service centers," said a former government official, who requested anonymity in order to speak freely about the sensitive documents. "If agencies are going to be in this business they have to be competitive with the private sector. So the big question is how do they gain more efficiencies, which leads to questions about capital improvements and working capital funds."

Interim step to public sector SSPs?

Some in the federal community also asked whether the shared-services strategy and passback requirement is an end around to avoid competition with private sector. Congress has a moratorium on public-private competitions under OMB Circular A-76 thereby limiting the types of commodity IT services that could be sent to shared-services providers.

"While we do not comment on the deliberative budget process, I will comment on an inaccurate assertion your report makes about the broader use of shared services. It is inaccurate to suggest that the shared IT services strategy will limit industry opportunities to provide shared IT services to federal agencies," said OMB spokeswoman Moira Mack. "To the contrary, by promoting vibrant competition through the use of federal strategic sourcing procurement vehicles that leverage the federal government's buying power, agencies can utilize shared IT services from industry providers at competitive market prices and provide the best value for American taxpayers."

In many cases, such as email, vendors already are providing the services. But other areas, such as human resources and acquisition, as detailed in the draft strategy, are done by federal employees.

One source said OMB could be taking an interim step to move the government toward public sector shared-services providers and then have them move to a private-sector provider later

"The move to a government shared-service provider will save money," the source said. "The other question is how can the government maintain rules of the competition in contracting act with prohibition against A-76? OMB would have to consider moving to private sector SSPs because since many government SSPs are run by the private sector anyways, just cut out the middleman and agencies will save money just by doing that."

After VanRoekel's press conference Dec. 8, Mack said in an email the shared-services strategy provides a comprehensive approach for agencies to use in planning a shared approach to delivering commodity, support and mission IT service solutions.