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OMB Outlines a Sweeping New Shared Services Approach

The federal government announced a new initiative on Friday that moves shared service missions into central offices, housed at designated federal organizations that are leaders in human resources, grants, finance and cybersecurity.

Acting Director of the Office of Management and Budget (OMB) Russell T. Vought announced the memorandum, establishing Quality Service Management Offices (QSMOs) at the General Services Administration (GSA), Health and Human Services Department (HHS), Homeland Security Department (DHS) and Treasury Department. These offices will procure and manage solutions that will then be spread throughout government in accordance with best practices and human capital management.

The announcement today launches an initiative that will fundamentally change the way that federal civilian agencies acquire and implement solutions, carrying with it profound impacts for compliance and data as well.

“This is not a project. It’s a fundamental change in our operating model,” Suzette Kent, Federal Chief Information Officer (CIO), said at a media availability held at GSA.

QSMOs will begin in the focus areas of human resources management, grants management, cybersecurity services and financial management – housed at GSA, HHS, DHS and the Treasury Department, respectively. Other QSMOs will be established as the project moves forward.

The aim of QSMOs is to replace redundant and duplicative processes throughout agencies. “Sharing Quality Services” was a Cross-Agency Priority (CAP) goal identified in the President’s Management Agenda. The CAP goal aims to dissolve barriers between agencies and save costs incurred by agencies when they have to procure their own services.

As it stands, federal agencies undergo long and expensive procurement processes to acquire specific solutions that replace legacy hardware. The hope from officials is that this initiative will accelerate the modernization process.

The first project to take hold is in GSA, which often serves as the test site for new technologies and federal programs. GSA’s NewPay service, a Software-as-a-Service blanket purchase agreement that has branched into civilian agencies to standardize payroll sites, is a capstone project for the administration’s goal of governmentwide priority of shared services.

“It really goes back to the mission that President Truman created for us 70 years ago – reducing duplication,” said GSA Administrator Emily Murphy.

Finance, travel and payroll functions within the federal government cost U.S. taxpayers more than $25 billion annually, according to the Office of Personnel Management. The government expects to realize 5 to 30% of financial benefits after absorbing initial costs involved in restructuring, purchasing and retooling that relate to setting up QSMOs and centralizing service acquisitions.

In crafting the memo, federal leaders took industry best practices aimed at cutting out waste and streamlining processes.

The next steps for other agencies are to be determined, but OMB advised leadership to meet with workforces that could see shifts or decreases in their current roles. Implementation is expected in 24 to 36 months.

Positions that could see significant changes are civilian agency department jobs that directly intersect with – and thus are superseded by – the new QSMO federal memo. Murphy and Kent said that the memo was not meant to reduce the federal workforce but free up resources for higher-value work.

Agencies should prepare for expected changes, but the only immediate workforce shifts will occur at GSA as it relates to the NewPay program and larger QSMO efforts. DHS will also begin to review its approach for cybersecurity-related shared services.

The memo, Kent said, set the gears into motion for agencies. A website launched Friday to inform and prepare agencies for next steps.

Photo Credit: GSA

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