HUD buying into shared services; renewed push to merge DoD's CIO

Monday - 6/24/2013, 5:29am EDT

Jason Miller, executive editor, Federal News Radio

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"Inside the Reporter's Notebook" is a biweekly dispatch of news and information you may have missed or that slipped through the cracks at conferences, hearings and the like.

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Watch for more action around financial management shared services in the coming months.

Industry sources confirmed the Department of Housing and Urban Development will announce its decision in the coming days to move its core financial management system to the Treasury Department's Bureau of Fiscal Service. BFS, formerly the Bureau of Public Debt, provides shared services to about 40 percent of the civilian agencies, including NASA, the Social Security Administration and components of the Homeland Security Department.

Besides Treasury itself, HUD will be the largest migration to the shared service, and it could take two years, the industry source says.

Additionally, the Interior Department announced earlier this week it awarded Unisys a $44 million contract to put its Financial and Business Management System (FBMS) in the cloud.

And the Federal Trade Commission, the Coast Guard and the Commerce Department are in the discovery phase to decide whether to move to a shared service provider.

But the fact that HUD is making the move to Treasury is a significant milestone. The agency's decision has been a long-time coming. It started the process to implement a new financial management system in 2006 by releasing a request for proposals. It eventually awarded a 10-year contract to IBM in 2010 worth $129 million to implement a new system. It was a three-phased approach starting with HUD's core financial system and then pulling in other components. The project struggled and HUD, with the help of the Office of Management and Budget, revisited its plans that same year.

"I think this is a poster child for the broader discussion for problems with large financial systems and trying to do too much," said an industry expert who follows federal financial management. "I'm glad that HUD is headed in this direction of moving to a financial shared service provider. It just makes sense for most agencies to do the same."

HUD was one of several agency financial system projects OMB focused on during its 2010 effort to better oversee these programs.

On the IT Dashboard, HUD said it would spend $18 million in 2013 to support its legacy systems, and a total of $26.3 million on its core financial systems.

An email to HUD seeking comment on its decision to move to a shared service provider was not returned.

Over at Interior, Unisys will transition FBMS to a secure, cloud environment that runs SAP's Enterprise Resource Planning (ERP) software platform.

Interior uses FBMS to account for all income and expenditures.

The award to Unisys was the first task order under Interior's Foundation Cloud Hosting Services, which the agency awarded to eight companies in May.

The Senate Armed Services version of the fiscal 2014 Defense Authorization bill contained some interesting tidbits, including this provision:

"Creates an Under Secretary of Defense for Management and designates that new position as the Deputy Chief Management Officer and Chief Information Officer of DOD."

Yes, you read that correctly. The Senate Armed Services Committee wants to merge Beth McGrath, the current DCMO, and Teri Takai, the current CIO, to make one mega technology management position.

To some, this change isn't surprising.

Bob Lentz, the former DoD deputy assistant secretary of Defense for Cyber, Identity and Information Assurance (CIIA) in the Office of the Assistant Secretary of Defense, Networks and Information Integration/Chief Information Officer, and now president of Cyber Security Strategies, said he long predicted this kind of move.

"The challenge is this merger really is a massive job," he said. "One could take the position that it will diminish the importance of the CIO in a digital/net centric, information enterprise. On the other hand, one could say it creates a powerful marriage especially since in DoD the current CIO has had more of her empire eroded. I always worry (as a security guy) that the chief information security officer role be given proper authorities given Clinger Cohen/FISMA and the growing emphasis (finally) by the president and defense secretary that cybersecurity is a vital priority and one can't disconnect security from DoD governance."