OMB guidance leaves tech industry with questions

Trey Hodgkins, vice president for procurement policy at the industry group TechAmerica, said member companies are concerned the administration may decide to cancel some or all of the projects, which in total cost $3 billion annually.

Hodgkins said the stop on new task orders and the phrasing of the memo indicates that companies will eventually have to stop work on the projects. Once that happens, he said, it would be very costly and time-consuming to re-assemble the contracting teams and re-start work on the projects. There is also a risk of technology becoming outdated while OMB completes its review, Hodgkins said.

The move could result in a “long-term increased cost for the taxpayer,” Hodgkins said. “Those skill sets won’t sit on the shelf while the government conducts its review. Those companies will move them to other existing programs or look to try and add those people to potential new contracts.”

Hodgkins acknowledged that companies have struggled to successfully upgrade agencies’ financial systems, but said there are a number of reasons that they are not easily fixed. The systems must often incorporate thousands of disparate legacy financial management programs, hundreds of thousands of users and a variety of data formats. He said inadequate funding also prevents agencies from successfully reaching their goals.

“The problems are persistent across the federal government,” Hodgkins said. “These systems are complex. The government doesn’t know what it’s getting into and they don’t know what they’re going to discover when they get there. That frequently leads to higher costs and delays.”

David Lucas, chief strategy officer at Global Computer Enterprises, disagreed that federal financial management represents an insurmountable hurdle. As a shared service provider for the Department of Labor, GCE competes to provide agencies with financial management services. He said OMB’s focus on splitting the projects into more manageable chunks would make it easier for small businesses to compete for the contracts that were previously limited to large companies.

“OMB wants to make sure that success is defined by operational capability,” Lucas said. “It’s not enough to go through the process. They want modern tools in the hands of federal agencies that manage billions of dollars for the taxpayer.”

Lucas said small businesses are capable of providing the innovation and attention to detail needed to successfully complete the smaller projects expected to emerge. He also praised OMB for emphasizing standards to ensure the new systems would be interoperable.