Labor looks to contractor for more help with financial management

The Labor Department plans to award a noncompetitive contract for additional help with its new financial management system to Global Computer Enterprises, a firm already supporting the modern, cloud-like setup that it installed under a $50 million deal last year.

Labor contracting officers intend to enter a fixed-price pact for assistance with Reston, Va.-based GCE, according to a Dec. 30, 2010, notice on the government procurement website FedBizOpps.gov. Industry sources familiar with GCE's original contract suspect Labor might need the vendor's assistance to fix financial management flaws, unrelated to technology, that the department's inspector general flagged in November.

The IG audit identified many material weaknesses in Labor's financial statements as of Sept. 30 2009. Due to its transition to the new system, the department was unable to provide enough information for the IG to evaluate Labor's financial state in 2010, the report added.

"As a result of the implementation, DOL encountered a significant number of data migration, posting, reconciliation and reporting issues that hindered its ability to assure the accuracy and completeness of consolidated financial statement balances and to provide data necessary for audit testing," wrote Elliot P. Lewis, Labor's assistant IG for audit.

Specifically, Labor could not offer sufficient documentation to support its fund balance with the Treasury Department, accounts receivable, and intra-governmental accounts payable as of Sept. 30, 2010.

Department officials on Monday said the Dec. 30 procurement posting is for "additional system support services" for the existing GCE system, which the company deployed under a seven-year contract awarded in June 2008.

More "services are required to meet the ongoing business needs of the government's user base and do not represent a new system or initiative," department officials said in a statement.

Other firms interested in providing the requisite assistance have until Jan. 7 to respond with information about their qualifications, according to the notice. The announcement did not include any other details about the potential deal.

In January 2010, GCE officials said they had shifted Labor's financial applications to an online environment they called cloud-based. Like other so-called cloud computing systems, the tool is accessible via any device with Internet access and required little time to deploy. Technically, the government defines cloud systems as technology that agencies pay for on demand to gain contractual flexibility.

GCE's tool tied together Labor's legacy travel, grants and procurement systems, and its financial applications in just 18 months, company executives said.

The Obama administration is demanding agencies move information technology to the cloud as part of the contracting reforms aimed at ending the typical IT development cycle where projects run behind schedule, waste billions of dollars and then don't work.

White House officials during the summer stopped work on every agency financial management project to consider scaling them back, or scuttling them altogether. Then, right before Thanksgiving, officials announced the new tactics for acquiring all major systems. The 25-point strategy concentrates on a so-called modular approach to launching applications, in which system features are available for federal personnel to use every six months instead of at the end of a multiyear development process.

Labor officials on Monday said GCE's system passed this summer's review by White House officials. The Office of Management and Budget found the project was hitting OMB's targeted time frames for financial system implementations, they noted.