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Tuesday, September 26, 2006

Guidelines for financial consolidation draw fire

"Recently released final planning guidance for the Bush administration's effort to consolidate agency financial management systems has generated opposition from a labor union and skepticism from congressional overseers.

The union's concerns center on the instructions for agencies that opt to outsource their financial systems to the private sector. Congressional overseers are concerned that the final guidance, while an improvement over previous editions, lacks clarity.

The effort is part of the Office of Management and Budget's broader lines of business project to streamline IT systems. The final guidelines for financial management systems came out last week.
The American Federation of Government Employees called the guidelines anti-competitive and said they violate 2003 revisions to Circular A-76, the rule book agencies use when they open federal jobs to bids from the private sector.

Agencies that want to change or upgrade their financial management systems now must, with limited exceptions, either move to an agency-run shared service provider or to a qualified private sector provider.

OMB selected four federal agencies as financial management service providers in February 2005. To select a private sector provider in lieu of one of the federal options, agencies must put the companies through a competitive process.

Under last week's final rules, agencies must use Circular A-76 to govern that competitive process when the work is performed by more than 10 full-time federal employees. In situations with fewer than 10 full-time employees, agencies must still conduct a public-private competition, but they do not have to adhere to A-76 rules. OMB can grant exceptions to these requirements.

Union officials said the guidance will allow contractors to take work away from federal employees without conducting fair public-private competitions.

John Threlkeld, legislative representative for the American Federation of Government Employees, said the guidance contradicts OMB's public-private competition rules by failing to require that agencies follow Circular A-76 for activities involving 10 or fewer full-time employees.

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