OPM to issue RFP for private-sector HR providers

Companies could compete against five agency providers

Federal HR Centers to compete against vendors:

Agriculture Department's National Finance Center

Defense Department

Health and Human Services Department

Interior Department's National Business Center

Treasury Department's HR Connect

MIGRATION. OPM's Norm Enger says he expects at least three agencies will move to COEs in 2006.

Henrik G. de Gyor

WILLIAMSBURG, VA.'An interagency task force led by the Office of Personnel Management will put interested private-sector providers through the same paces for human resources management as it did for agencies to qualify as centers of excellence under the HR Line of Business Consolidation.

The 11-agency task force's evaluation will start with a request for proposals this summer, and eventually include an analysis of past performance, security and scalability to expand the list of shared-services providers customer agencies have to choose from.

Shopping list

Once the task force approves the private-sector companies, the winning bidders and five public-sector COEs'which OPM and the Office of Management and Budget named in 2004'will be put on an HR management schedule from which agencies can purchase the services, said Norm Enger, director of e-government programs for OPM.

'Agencies will issue a statement of work against the schedule or some similar process and the COEs will bid on the work,' Enger said last week at the Interagency Resources Management Conference. 'We will define the process by early 2007.'

Enger said OPM does not have a predetermined number of private-sector COEs, only that there needs to be enough to have competition but not diminish returns.

'This would give agencies more competition,' said a government official, who requested anonymity. 'Instead of having one or two choices for a type of software, agencies will have many, and that will mean lower prices and better service.'

The official added that the schedule approach also gives agencies a level of assurance that vendors meet minimum requirements and helps move the process faster.

Enger said earlier this year that at least three agencies will move to a COE in 2006. The Labor Department is expected to be the first major agency to release an RFP this summer for HR management services.

Early adopters

The Housing and Urban Development Department became the first major agency to migrate to a HR provider last year when it moved to Treasury's HR Connect, while the Coast Guard and the Transportation Safety Administration, both part of the Homeland Security Department, are using the National Finance Center.

Lynn Eddy, Treasury associate CIO for HR Connect, one of the four HR centers of excellence, said prequalifying private-sector vendors will delay agencies' move to shared-services providers and force the public sector to understand the new competitive business model they will be faced with.

'The approval process for becoming a shared-services center was extensive for us as federal providers and may well cause a year-plus delay in implementing HR Connect at other agencies, while we wait for the private sector to become certified,' she said.

But at least one industry official questions the validity of the effort.

The official, who requested anonymity because their company partners with agencies and may bid as a COE as well, said the government isn't thinking this out well enough.

'The government can only do hosting and application maintenance,' the vendor said. 'When they do transaction processing and benefits administration, they will seek partners from the private sector, and what does the private sector do? Where do we go? Do we become their partners or become a COE?'

The vendor added that this shouldn't be an issue of public versus private because the two are so intertwined.

'This is a true commercial function, and if the government wants to get the true cost savings and efficiencies they talk about, they should just outsource it all,' the vendor said.

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