Input critiques financial management line of business

Vendors are likely to be crippled in their ability to compete for work under the Financial Management Line of Business until the Office of Management and Budget clarifies rules for Circular A-76 competitions, according to a June 7 report from Input.

Guidance that OMB issued in late May includes a competitive framework marked by standard A-76 contracting rules, which govern the process of opening agency jobs to private-sector competition. According to Input, vendors expected the guidance to offer more formal direction and procedural explanation than it does.

The heart of the issue is that under OMB policy, agencies that need to upgrade a core financial management system must either migrate to a shared service provider (SSP), become an SSP or contract with a vendor. However, according to Input, many agencies that would be competing to become SSPs face restraints from budget regulations that leave them unable to develop effective long-term proposals that cross budget cycles.

Agencies are also able to plan their migration to new systems during a 10-year period, limiting the number of customers that an SSP may expect to gain at any given time, according to the report.

The conflicting instruction brings effective competition to a standstill and calls for more clarity, according to the firm.

James Krouse, acting director for public-sector market analysis at Input, said in a written statement that the line-of-business market is not emerging as it had once seemed it might.

“When originally announced in 2004, the [line-of-business] market seemed as though it might emerge as a niche market for vendors at a time when the overall federal [information technology] market is beginning to slow,” Krouse said. “Now that idea appears less certain as vendors not only have to struggle with unclear agency timelines but with an A-76 competitive process that may prove to be favorable to government agency competitive participants going forward.”