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Contractors to compete for financial management work.

Federal agencies will be required to allow contractors to compete for the operation of financial management systems.

The Bush administration has told agencies they must turn over some financial management functions either to contractors or to one of several "shared service centers," specialized government financial offices serving multiple agencies. The purpose is to avoid duplication of financial systems and improve efficiency.

For offices with more than 10 employees, the Office of Management and Budget said the competitions will be conducted under OMB Circular A-76. For those with 10 or fewer employees, agencies are permitted to issue a solicitation under the Federal Acquisition Regulation.

In a May 22 memorandum, OMB said, "At a minimum, agencies must consider pursuing hosting and application management shared services. However, agencies may also consider other shared services, such as accounting or transaction processing." (Emphasis in the original.)

The memo added, "The routine use of competition ... will help agencies to maximize value by considering alternative solutions in a reasoned and structured manner to select the best available public or private provider of financial management."

OMB said agencies should move forward on converting their financial systems "in the earliest possible timeframes."

GSA's Financial Systems Integration Office, the co-leader of the Financial Management Line of Business initiative, has issued draft guidance and invited comments. The guidance is available at

So far OMB has designated four government offices as shared service centers that are eligible provide financial services to other agencies: Interior's National Business Center; the Bureau of Public Debt's Administrative Resource Center; GSA's External Services Division; and the Transportation Department's Enterprise Service Center.
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Publication:Set-Aside Alert
Date:Jun 2, 2006
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