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Friday, March 10, 2006

Agencies should embrace private outsourcing of HR services: panel

"Tim Young, associate administrator of E-government and IT at the Office of Management and Budget, said OMB is urging agencies to consider conducting competitions for the acquisition of IT services for HR and financial management services functions, and should consider both public- and private-sector providers to select the most cost-effective alternative.

Through its Lines of Business consolidation initiative, OMB is selecting public and private organizations to serve as centers of excellence and perform certain administrative tasks for other agencies. Young said OMB wants agencies to conduct fair and open competitions for these services so they can then focus attention on their core missions.

'We want improved focus on agency core missions,' Young said. Agencies should spend 'more time and resources on fulfilling' their own responsibilities.

While most federal agencies are familiar with the public centers of excellence under the LOB initiative, Young said they also should look outward to the private sector as well. While admitting that the public-private competitive framework 'is not the most popular model,' he said the government 'is not in a position to sustain unnecessary duplication of back office IT investments.'

OMB is employing a 'carrot and stick' approach as it encourages agencies to embrace the LOB initiative, according to Young. The carrot, he said, is that agencies will have more options, access to higher quality service, decreased overall cost and lower risk if they sign up with a public or private center of excellence.

The stick, Young said, is OMB's budget authority. When agencies submit their budget requests and business cases, if certain programs 'are not aligned in a way that supports the LOBs,' OMB will have something to say about it. “We want agencies to adopt this,” Young said.

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