U.S. to Require ‘Shared Services’ As Part of Acquisitions Policy

In ‘flat-budget’ era, OMB says agencies need to take ‘standardized approach’ toward acquisitions
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In ‘flat-budget’ era, OMB says agencies need to take ‘standardized approach’ toward acquisitions

In ‘flat-budget’ era, OMB says agencies need to take ‘standardized approach’ toward acquisitions

Vendors who do business with the U.S. government will want to know that the Obama administration is going to direct its agencies to implement “shared services” polices as part of their acquisition strategies, a top administration financial official says.

To help the agencies carry out shared services, the White House Office of Management and Budget plans this year to issue a guidance to the executive agencies on how to modernize their financial systems, said Norman Dong, deputy controller, Office of Federal Financial Management, OMB.

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Agency acquisition officers and vendors need to know that given the federal financial situation, the departments are “happy to have a flat budget,” Dong told attendees of the Acquisition Excellence 2013 conference held in Washington. The reason being “a flat budget is the new up budget,” he said.

As the administration embraces shared services, he continued, “We recognize that this is not the first time that we used this concept. We’ve taken a run at this in the past.” He asked aloud why shared services have not worked, then replied, “Our observation is that the market deters it.”

“Market agencies working with federal providers haven’t always worked as well [implementing shared services] as it should have,” Dong said. And it stands to reason that in a tight fiscal climate, the government does not have the luxury of perpetuating unsound practices when it comes to funding projects. Therefore, the administration plans to “address the shortcomings of the market as we put forward this new approach.”

In addition, shared services have not always failed, he said. Smaller agencies have executed shared services, yet at larger agencies they have been untested. In order to put shared services into action successfully, he continued, issues of functionality and capacity must be addressed.

Toward that end, the administration “is drawing some lessons from, not just the private sector, but also from other governments,” Dong said. More and more states are embracing shared services as a concept, and the National Association of State Comptrollers is providing OMB with information on shared services at the state level, he said.

OMB recognizes that federal agencies believe their missions are unique, he said. But when it comes to their financial operations and systems, “we’re probably not as unique as we think we are; there is much more commonality than what we recognize in the past.”

In addition, “if we’re serious about shared services, then we need to be far more disciplined in terms of what agencies are asking for in terms of their requirements, and that they take a much more standardized approach.”

The federal agencies are not the only entities that can benefit by modifying their approach. Government Video is committed to keeping vendors informed of the government’s fiscal and acquisition policies, and in this case knowing that the government is implementing shared services policies, vendors should—when possible—consider approaches that further that effort. By doing so they could gain an edge that leads to a completed deal and a signed contract.