Panel: Financial accountability critical for interagency service agreements

The success of the Bush administration's plan to consolidate common agency business processes will depend largely on establishing rules to determine financial responsibility for broken service agreements, a General Services Administration official said Wednesday.

The Office of Management and Budget's lines of business initiative, launched in March 2004, is an effort to eliminate duplicative business processes across agencies by establishing standard service providers. As part of the effort, the OMB-approved governmentwide providers, also known as "centers of excellence," compete to supply services in certain areas, such as grants management and cybersecurity, to other agencies.

Last year, agencies began competitively selecting providers for their human resources management and financial management services. Once migration to the new systems is complete, existing legacy agency systems will be shut down, according to OMB. Agencies volunteering to act as service providers would most likely bear the cost of a customer agency wanting out of the agreement, OMB officials have said.

"The one that I think is maybe causing a lot of concerns when [people] hear about lines of business is how do you manage when things go wrong," said G. Martin Wagner, acting commissioner of GSA's Federal Acquisition Service. "When we deal with contractors … we know how to deal with a default or a termination fee. When you're depending on another agency, there is a lot of uncertainty."

Wagner, a panelist at a luncheon co-hosted by Government Executive and the National Academy of Public Administration, said agencies have established thousands of "slightly different" ways of doing the same thing and need to move toward standard methods of performing routine processes.

Financial management processes are a prime area for the lines of business initiative, Wagner said.

In a broader sense, competition for the work performed by federal employees is "alive and well as far as the eye can see," said Clarence Crawford, chief financial officer at the Office of Personnel Management and another panel participant.

"We've talked to [federal employees] from the standpoint of competitiveness," Crawford said. "I don't see the next presidential election changing that issue much one way or another. They may have a different name for it, but I think it's going to be the same kind of issue."

The emphasis on reducing costs through these initiatives is misplaced, said David S.C. Chu, Defense undersecretary for personnel and readiness and the Pentagon's chief human capital officer. Rather, the primary goal should be achieving better results, he said.

"I think we do ourselves a disservice when we put the cost and [management] layering issue at the top of the list . . . because it diverts our attention from the primary outcome," Chu said.

Chu said the Pentagon has completed two-thirds of a review that will determine which positions -- traditionally deemed exclusively for military personnel -- could be performed by civilian personnel from either the department or the private sector.

Clay Johnson, OMB's deputy director for management, said the lines of business initiative will be successful "because we have deemed that it will be so."

"We have said this is the way that we're going to run the federal government and that's the way we're going to run it," Johnson said. "This makes really good sense from a service standpoint."

Johnson said the initiative is one of the many tools being used under the President's Management Agenda, but without transparency within the agencies, the entire effort is worthless.

"If you have all the tools, but don't shine the light of day on how you're using those tools . . . [they] are worthless," Johnson said. "It allows you to hold [Defense] Secretary [Donald] Rumsfeld accountable for improving the way the Defense Department works. It allows us to hold [Interior Department] Secretary [Gale] Norton accountable."