OMB: Outsourcing helps savings, mission focus

Agencies continue pushing human resources duties off their list of responsibilities, meanwhile saving money to focus on their core missions.

Tim Young, the Office of Management and Budget’s associate administrator for e-government and information technology, said today at the FOSE trade show in Washington, D.C., that OMB can help agencies avoid unnecessary spending at a time when budgets are tight.

OMB e-government administrators have said that competition among federal agencies for back-office work and participation in that private-sector competition will ensure that third-party providers deliver good service.

The more options you have, the better decisions you will make in getting good service and saving money, Young said.

Jill Kidwell, vice president of Global Learning Outsourcing at IBM, agreed. Outsourcing saves money and "the bigger the company, the greater the savings," she said.

The functions set for migration involve keeping track of updates of workers’ personnel files, payroll and benefits administration. Five federal agencies can start competing this fiscal year to provide human resources back-office functions to other agencies, the Office of Personnel Management said in August 2005.

The five agencies are the Agriculture Department’s National Finance Center, the Defense Department, Department of Health and Human Services, the Interior Department’s National Business Center and the Treasury Department.

Consolidating execution of three commonly performed human resources functions within a handful of service providers will produce $1.1 billion worth of savings over 10 years, according to government officials.