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Thursday, June 07, 2007

FederalNewsRadio Op-Ed: Back of the Class

A heavyweight Office of Management and Budget official got an earful from the CIO of a "very small agency," as she described it.

The topic of a morning conference was shared services. That is, my agency uses your agency's shop for performing some function that's crucial but non-mission, like payroll or accounting.

Brief background: Departments have been operating shared services centers, and other departments and agencies using them, for decades. But in the last couple of years, the pressure from OMB to use shared services for a series of so-called lines of business has been on hyperdrive. All leavened, of course, with the additional mandate to consider use contractor-operated shared services.

One rationale for use of shared services is that it ought to lower costs. After all, a place that specializes in a function can offer bulk pricing, so to speak. Or so asserted Jeff Koch, the OMB point man on lines of business.

But the small agency CIO fairly fumed that shared service prices are "outrageous" and that her agency can handle its financial needs in-house, thank you very much. Of shared services she said, "I don't think it works."

Now, that's something you don't hear very often. An in-the-ranks federal career official dressing down a mighty OMB overseer. Not that Koch backed down, replying that it is "provable" that shared services are less costly.

Who knows. There are a lot of ways to calculate cost, so the arguments tend to devolve into the philosophical.

-Tom Temin, FederalNewsRadio.com

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