Evans: Service centers may bear transition costs

The Office of Management and Budget wants three major departments to migrate to a shared service provider for financial management during the next fiscal year, said Karen Evans, OMB’s administrator for e-government and information technology.

“That’s the goal,” she said, speaking today at an Association for Federal Information Resources Management lunch event in Washington, D.C. She did not specifically name the three departments.

Financial management is one of six administrative areas OMB is urging agencies to stop doing themselves. Instead, they should buy services from a third-party provider, whether from government or the private sector. Those consolidation efforts will save the government at least $5 billion dollars in coming years, Evans said.

Agencies are concerned about the potential of a third-party provider returning unsatisfactory results. They have protested that they should not be expected to bear the transition costs for switching if service quality declines or prices become too expensive.

OMB is considering a policy that would require service providers to bear the costs of transition “if it’s based on a lack of performance issue,” Evans said.

Under that proposal, service-level agreements may anticipate the potential cost of switching a dissatisfied customer. That would require advance planning of service requirements and metrics, Evans said.

Evans also said private-sector companies will have to begin reorganizing to sell products to the government on a governmentwide basis. The government doesn’t want agencies to buy products individually. “We are considering ourselves a federal enterprise, and [companies] are still considering us” as individual departments, she said.

“We’re asking you guys to take a look at your internal organization,” she said. Private-sector companies should examine the business reference model portion of the federal enterprise architecture and perhaps align themselves around its lines of business, she added.