PWC returns to federal fray

Two years after selling their systems integrator business to IBM, PricewaterhouseCoopers (PWC) officials are rebuilding a federal practice to provide advisory services to agencies.

Called the Washington Federal Practice, the group provides project oversight, risk management, governance, ethics, compliance, privacy, business process, security and data management services, among others.

The group's managing partner, Carter Pate, is also tapping the firm’s commercial health care expertise to give the federal practice a presence in government health organizations, including the Department of Veterans Affairs.

But the practice will not compete with systems integrators, Pate said.

That’s partly because of a noncompete clause with IBM and partly because he believes that providing objective management of major information technology projects will be a significant market for the practice.

Recent major systems failures at the VA and other agencies reflect a need for someone other than the systems integrator to provide project oversight, he said.

It is difficult for the company responsible for doing the work to provide objective assessments of their own outcomes, he said.

Like the other three of the Big Four accounting firms — KPMG, Deloitte Touche Tohmatsu and Ernst & Young — PWC's foundation is auditing, Pate said.

"We are auditors in our hearts," he said. "We give straight opinions. Who better to hire as project manager than people who for a living give straight opinions and then have to stand behind their opinions?"

Robert McFarland, the VA's new chief information officer, hired Pate’s group to evaluate the failed Core Financial and Logistics System.

"We pulled the plug on the pilot back in July of last year," McFarland said. "It became obvious to us that the pilot wasn’t working out as expected."

The PWC team's report isn't due until June, but they have already answered some questions, McFarland said. Company employees are assessing the VA’s financial practices, which differ from one facility to another. To make them suitable for easy automation, VA officials need to standardize them, he said.

An auditor with no interest in pushing agency officials toward any one integrator or vendor is important, said McFarland, who was a vice president at Dell before joining the VA in early 2004.

"I think it's imperative," he said. "I wouldn’t want to do it any other way. To me, it's an important division of labor. You can’t have people come in and evaluate your project if they have a solution in the back of their mind, predetermined."

PWC will face a new competitive landscape, said Chip Mather, senior vice president of Acquisition Solutions. Agencies are increasingly hiring systems integrators to serve in an oversight role but with the kind of division that Pate advocates.

"Their strategy is to get a true systems integrator in place who will not be doing the work themselves," Mather said. "I'm seeing [that] more and more."