HR outsourcing catches on

'In our attempt to be a lean, flat organization, we are doing strategic outsourcing of a variety of functions'HR being one.'

'Patrick Schambach, TSA CIO

Henrik G. DeGyor

The Transportation Security Administration and the Coast Guard have joined several agencies that outsource their human resource operations.

TSA has contracted out all of its human resources operations for all but its executive personnel. The Coast Guard has outsourced its application management operation, affecting about 40,000 users.

The outsourcing deals follow a recent trend among agencies looking to let contractors handle administrative details while they focus on their missions. For TSA and the Coast Guard, the focus is even greater as they integrate their operations with the new Homeland Security Department, which opened its doors this month.

'In our attempt to be a lean, flat organization, we are doing strategic outsourcing of a variety of functions'HR being one,' said Patrick Schambach, the CIO of TSA.

TSA awarded a $553 million, five-year contract to CPS Human Resource Services of Sacramento, Calif., late last year. CPS will recruit TSA employees for baggage screening positions and 'anyone else below the executive level,' said Heather Rosenker, a TSA spokeswoman. The contractor also will examine applications, hire employees and determine salaries.

Contractors screen applicants, deliver candidates to TSA and conduct routine personnel administration, but TSA retains responsibility for critical functions such as reassignments and promotions, Schambach said.

State governments and the private sector are ahead of the federal government in outsourcing this work, said Nicole Gardner of IBM Corp.'s business consulting services. 'It started in Florida a couple of years ago, but in the private sector it has been going on for a while,' she said.

IBM provided consulting to TSA, the Defense Department and Office of Personnel Management on models for outsourcing. IBM used its own experience, having contracted out its entire human resource operations.

Help line

TSA also has signed a one-year deal with Accenture LLP of Chicago to do 'routine, day-to-day human resource management,' Rosenker said. The company will process new hires, and maintain their information and benefits, she said. Accenture also will man a daily employee help phone line that Rosenker likened to OPM's Employee Express, a Web site that gives federal employees access to personnel data.

Employee Express lets employees make allotments to savings bonds and the Thrift Savings Plan, choose health benefits, sign up for direct payroll deposit, and change federal and state tax withholding and home address information.

The Coast Guard is outsourcing a much smaller portion of its HR operations. Late last year, the Guard awarded RABA Technologies LLC of Columbia, Md., and subcontractor Corio Inc. of San Carlos, Calif., a contract to manage back-end personnel and payroll applications. If the Coast Guard picks up all the options, the contract would run for six years and be worth $6.1 million.

The company said the agency is migrating to applications from PeopleSoft Inc. of Pleasanton, Calif., that are compatible with OPM's HR Integration e-government initiative. The Coast Guard wants to integrate databases of personnel information on the platform.

The Coast Guard will complete its migration to a PeopleSoft system this month. A Corio representative said the company will implement and monitor the payroll system, install patches and store backup personnel data at its data centers, and put many HR functions online. Coast Guard em-ployees will be able to see their personnel files using a Web browser.

Some observers said the outsourcing moves made by TSA and the Coast Guard will be duplicated by a growing number of agencies.

Federal IT outsourcing could rise 18 percent a year over the next five years, reaching $15 billion by 2007, according to Input of Chantilly, Va.

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