Establishing and Managing E-Government Partnerships

OECD Good Governance for Development in Arab Countries

Tunis, TunisiaMay 28-29, 2008

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Public-Private Partnership Continuum

FM LOB

SmartBUY

HR LOB

Alliance / ConsortiaContractors Public / PrivateCompetitions

Purchase Agreements

Oversight Model Partnership Model

• Direct oversight• Contracts award

consistent with Federal Acquisition Policy

• Contracts adhere to government-defined requirements

• Software Managed and Acquired on the Right Terms (SMART Buy)

• Government-wide mandatory contracts

• Pre-negotiated lowest price

• Leverages bulk-buying of US Government

• Streamlined procurement access to software vendors

• Public – Private partnerships

• Private sector gains access to new customers

• Public sector gains improved services at low/no cost or capital investment

• Private sector leverages commercial service offerings

• Risk/Reward balance

• Public – Private Competitions

• Selections made from qualified providers (Public and Private)

• Governed through regulation, OMB Circular A-76 (partial)

Privatization

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Additional Public-Private Partnership Tools

SS E-Government Act of 2002

“Implementation Guidance for theE-Government Act of 2002”

www.egov.gov

• Contract under which a contractor provides solutions for:

1. Improving the agency's mission-related or administrative processes

2. Accelerating the achievement of agency missions

• Agency pays the contractor an amount equal to a portion of the savings derived by the agency from:

1. Improvements in mission-related or administrative processes resulting from solution implementation

2. Acceleration of achievement of agency missions

• An employee of a private sector organization assigned to an agency under the E-Gov Act is deemed, during the period of the assignment, to be on detail to the agency.

• The supervision of an employee of a private sector organization assigned to an agency under the E-Gov Act may be governed by agreement between the agency and the private sector organization concerned.

The employee:• may continue to receive pay and

benefits from the private sector organization from which he is assigned;

• is deemed to be an employee of the agency;

• may not access trade secrets or any other nonpublic information which is of commercial value to the private sector organization from which assigned

Share-In-Savings IT Exchange Program

E-Gov Act of 2002: Chapter 37Section 210, 2332, 317

E-Gov Act of 2002: Chapter 37Section 3703, 3704

Share-In-Savings & IT Exchange Programs

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Public-Private Competition: Overall Benefits

Government-Wide Benefits (FY03-07)

Cumulative estimated net savings surpassed $7 billion

Annualized expected savings exceeded $1 billion

Improved efficiency of agency operations (even when private sector provider not selected)

The benefits of public-private competitions are compelling and apply across a variety of functional areas…

Breakout by type of Competition

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Selected Agency Benefits of Competition

Reduced cyber risk and reduction in IT redundancies through consolidation of seven authentication domains, 17 separate messaging systems, and migration of desktop computers to a common operating environment. (Department of Energy)Enhanced IT security through the installation of encryption software on agency laptops (Environmental Protection Agency)Strengthened operational efficiency of enterprise application, customer service, accounting, and visual service support activities through better use of technology (Health and Human Services)More efficient and standardized Web site development operations through the migration of performance responsibilities from program offices to the Office of the Chief Information Officer (Department of Justice)Improved performance of IT functions through the realignment of human capital to match qualified employees to each position (Department of Justice)Realized greater economies of scale and reduced redundant IT activities by consolidating program facilities from 46 locations to one (Veterans Affairs)Increased cyber-security through the integration of three mainframe IT environments (Office of Personnel Management)

Numerous examples at the agency as to how competition is benefiting agency use of Information Technology…

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Administrative Case for Partnering:Lines of Business (LoB)

LoB DME Spending - FY2008

FHA5%

Other89%

FM3%

Case1%

HR2%

LoB DME Spending - FY2009

HR2%

Case1%

FM4%

Other88%

FHA6%

Line of Business DME FY08 DME FY09Financial Management (FM) 856$ 889$ Human Resources Management (HR) 508$ 442$ Case Management (Case) 128$ 149$ Grants Management (Grants)* - -Federal Health Architecture (FHA) 1,211$ 1,523$ Information System Security (ISS)* - -Other 22,649$ 21,993$ Total 25,352$ 24,995$ * - Investments in these lines of business represent "Horizonal (Cross-cutting) LoBs"

($ millions)

As common, government-wide functions, Line of Business can benefit especially from public-private partnerships & competition…

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Human Resources Management Line of Business

Federal Providers

Approved Service Approved Service CentersCenters

Department of AgricultureDepartment of the InteriorDepartment of the TreasuryDepartment of Health and Human ServicesDepartment of Defense

Service CoverageService Coverage

16 departments and large agencies serviced by a Federal Shared Service Center (SSC) 77 small entities (boards, commissions, etc.) serviced by a Federal SSC

The Human Resources Management LoB continues to make progress in standardizing and consolidating IT systems, business processes and interoperable HR solutions…

Private ProvidersCompetitively Awarded Vendors:

Accenture Allied Technology Group Carahsoft Technology IBM

Private providers will compete with Federal SSCs as agency HR legacy systems fulfill their lifecycle and migrate to a SSC

85% of Federal Employees are serviced through SSC solutions as of Q1 FY 200868% of Scorecard agencies are using Shared Service Center (SSC) solutionsDoL selected DoI as a SSC after a public-private competition – potentially saving half on annually-recurring costsHUD avoided spending $15-$18M over six years with its modernization by migrating to Treasury. Instead HUD spent less than $1M and only took 6 months to migrate

Progress to DateProgress to Date HR LOB / Enterprise Architecture (EA)HR LOB / Enterprise Architecture (EA)The HR LOB EA was leveraged to develop the HR LOB Target Requirements for SSCs, the first-ever government wide set of HR requirements. Target Requirements:

define HR business standards for the Federal Government,describe the role of the SSCs in the HR process and provide specifications for delivery of services and solutions, andform the basis of an agency’s SSC selection decision

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Financial Management Line of Business

Federal Providers

Designated Service Designated Service CentersCenters

General Services AdministrationDepartment of the InteriorDepartment of the TreasuryDepartment of Transportation

Service CoverageService Coverage6 CFO agencies or agency components are operating on Federal Shared Service Providers (SSPs)84 small agencies are operating on Federal SSPs

Private ProvidersThere are approximately 5-7 commercial entities supporting Federal agencies with the following software packages:

Peoplesoft SAP, Oracle, Savantage (FFMS), Momentum Financials, Integrated Financial Management Information System (IFMIS), iCore, mySAP, Altimate

Agencies planning to assess commercial services: Department of AgricultureDepartment of Housing and Urban DevelopmentDepartment of LaborSmall Business Administration

Collecting standardized Financial systems performance metrics from 24 CFO agenciesRevised and updated the Inventory of Government Core Financial Systems Established and continue to enrich a lexicon to normalize the terminology in the Federal Financial Management Community Initiated data harmonization effort for financial dataBegan creation of a standardized segment architecture for Federal Financial ManagementDeveloped standardized credit card data requirements for Financial Management systemsDefined the standardized financial systems business processes for payment processing, receivables and funds managementEstablished Common Government wide Accounting Code (CGAC) for all agency use

Current Status / Recent ProgressCurrent Status / Recent Progress

The Financial Management LoB continues to make progress in standardizing and consolidating IT systems and business processes…

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• Optimization requires investments• Desktop and help desk tools• Standardization of desktop management

processes• Establish common desktop environment

• Closer monitoring and governance of outsourcing

• Centralization where possible• Establish continuous improvement program• Measuring Progress over time

IT Infrastructure Line of BusinessSignificant cost savings can be generated through consolidation and standardization… a benchmarking based approaches leverages private sector best practices

DataCenters

IT Help Desks

Desktop/SeatManagement

Data/VoiceNetworks

Telecommunications

ObservationsObservations CautionsCautions• The Lowest Cost Provider may not be

optimal for meeting an agency’s mission and performance requirements

• Avoid static, long-term contracts

• Avoid independent, autonomous IT organizations

Third Factor – Risk - An example of a program where performance requirements and cost may be higher in order to lower

risk would be in our nation’s critical infrastructure.

Results - the cost and performance of Federal agencies IT infrastructures are comparable to peers in the private sector.

• Complete benchmarking studies for both telecommunications and data centers.• Complete agency five-year optimization plans by the end of March.• Conduct interagency reviews of all optimization plans.• Issue government-wide report from five-year plans in May that:

• Identifies common themes across the 23 agencies• Leads to development of government-wide communities of practice to foster cooperation among agencies• Target five observation areas identified (above)

Next StepsNext Steps

Benchmarking StudyBenchmarking Study

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ITI LoB Common Solutions

This allows a department/agency to make reasoned and analytically-derived choices among the common solution tools as well as which infrastructure areas to prioritize to achieve the goals established.

The ITI LoB approach achieves a strong degree of goal clarity and accountability for the results.

• Agencies determine own optimization strategies –may use: Shared Service Centers/Public-Private Partnerships, IT Infrastructure Library (ITIL), Capability Maturity Model (CMM), SMART Buy, consolidation, etc.

• ITI LoB is assisting agencies to share proven practices, lessons learned.

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Keys to Success

Governance

Transparency > Clarity > Accountability > Results

Defined Competition Frameworks

The keys to success are much the same as those that apply to public only efforts…

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Keys to Success – Governance

Improve Mission Performance

Increase Resource Alignment on Core Mission Activities

Realize Cost and Operational Efficiencies

Achieve Equal or Better Service Delivery

Increase Value to Citizens & Agency Stakeholders

Drive Transformation

Clear governance models – outlining roles and responsibilities – are required regardless of the players (public or private) involved

Governance Board

Advisory Board or Various Working

Groups/Sub-committees

InitiativePMO

• Strategic/ Major Decisions

• Authorize Funding/Agreements

• Program Oversight• Partner Resource Support• Help guide project direction• Project and budget planning• Tactical decision support• Program implementation• Performance measurement• Provide work products to facilitate the success of the initiative

• Daily oversight of project • Management schedule• Track/Report progress• Manage cross-project issues and risks• Establish work teams• Allocate resources across teams• Leverage best practices• Support implementation

Service Providers(public or private)

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Keys to Success – Transparency / Accountability

Implementation Plans

Performance Metrics

Earned Value ManagementMonthy Burn Rate ($)

$40,000

$50,000

$60,000

$70,000

$80,000

6-Jan

13-Ja

n20

-Jan

27-Ja

n3-F

eb10

-Feb

17-F

eb24

-Feb

3-Mar

10-M

ar17

-Mar

24-M

ar31

-Mar

7-Apr

14-A

pr21

-Apr

28-A

pr5-M

ay12

-May

19-M

ay26

-May

2-Jun

Service Level Agreements

Service Category

Metric Name

Metric Description Formula/ Calculation

Performance Category

Metric Interval Expected Service Level Objective (SLO)

IT Infrastructure Hosting and Administration

System Availability

Hours system is available, expressed as a proportion of hours the system is contractually obligated to be available.

Available hours / Obligated hours * 100

Time Monthly − 99% − Penalty =

expected SLO minus actual SLO (e.g. if actual SLO is 96%, a 3% penalty will be imposed).

PLEASE REFER TO SECTION 2.7 AND 2.8 OF THE MIGRATION PLANNIGN GUIDANCE DOCUMENT FOR POTENTIAL PERFORMANCE METRICS. NOTE THAT NOT ALL PERFORMANCE METRICS LISTED IN SECTION 2.7 AND 2.8 ARE APPLICABLE TO THE SLA.

•• Frequent and Open Frequent and Open CommunicationsCommunications

•• Relationships at All LevelsRelationships at All Levels

•• Shared Definitions of Shared Definitions of SuccessSuccess

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Keys to Success – Competition Frameworks

Key Framework ComponentsRequest For Proposal (RFP) TemplatesDue Diligence ChecklistsService Level Agreement (SLA) TemplatesPerformance Measurement ProcessesAppropriate contract structure: Firm-Fixed Price vs. Time & Materials

FRAMEWORK: Financial Management Line of Business (FM LoB)Issued by Federal Systems Integration Office (FSIO)http://www.fsio.gov/fsio/fsiodata/fsio_fmlob_mpg_v1.shtml

FRAMEWORK: Human Resources Management Line Business (HR LoB)Issued by the HR LoB through the Office of Personnel Management (OPM)http://www.opm.gov/egov/documents/MPG/index.asp

Clear guidance and well-define competitive frameworks foster full and open competitions focused on results…

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FY 2006 - 2008 Focus

FY 2006 and Prior

E-Government Initiatives: Adoption Focus

LoB Framework EstablishedE-Gov InitiativesFederal Enterprise ArchitecturePresident’s Management Agenda

LoB Migrations – Public/Private CompetitionsUtilization and Adoption of E-Gov InitiativesDevelopment of Self-Sustaining Business Models (e.g., Fee For Service)

Cost-savingsImproved Mission PerformanceGovernment-wide Adoption/Implementation

In progressNot Started Complete

FY 2008 - Beyond Focus

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Questions

For additional information, please visit www.egov.gov

Tim YoungDeputy AdministratorOffice of E-Government & Information TechnologyOffice of Management and Budget725 17th Street NWWashington DC 20503202.395.0368tkyoung@omb.eop.gov

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Appendix: FY 2009 Resources

REFERENCE LINK

The President’s Budget Fiscal Year 2009 www.budget.gov

Analytical Perspectives Volume (Crosscutting Programs, Chapter 9: Integrating Services with Technology)

www.whitehouse.gov/omb/budget/fy2009/pdf/apers/crosscutting.pdf

Table 9-1: Effectiveness of Agencies’ IT Management and E-Gov Processes www.whitehouse.gov/omb/budget/fy2009/pdf/ap_cd_rom/9_1.pdf

Table 9-2: Management Guidance www.whitehouse.gov/omb/budget/fy2009/pdf/ap_cd_rom/9_2.pdf

Table 9-3: Management Watch List for FY2008 www.whitehouse.gov/omb/budget/fy2009/pdf/ap_cd_rom/9_3.pdf

Table 9-4: High Risk IT Project List www.whitehouse.gov/omb/budget/fy2009/pdf/ap_cd_rom/9_4.pdf

Table 9-5: Agencies with Investments on the Management Watch List www.whitehouse.gov/omb/budget/fy2009/pdf/ap_cd_rom/9_5.pdf

Table 9-6: FY2009 Exhibit 300 Evaluation Criteria www.whitehouse.gov/omb/budget/fy2009/pdf/ap_cd_rom/9_6.pdf

Table 9-7 Comparison of the Management Watch List by Fiscal Year www.whitehouse.gov/omb/budget/fy2009/pdf/ap_cd_rom/9_7.pdf

Table 9-8: Number of Recurring Investments on the Management Watch List www.whitehouse.gov/omb/budget/fy2009/pdf/ap_cd_rom/9_8.pdf

Table 9-9 Lines of Business (LoB) Update www.whitehouse.gov/omb/budget/fy2009/pdf/ap_cd_rom/9_9.pdf

Table 9-10: Status of E-Government Initiatives www.whitehouse.gov/omb/budget/fy2009/pdf/ap_cd_rom/9_10.pdf

Report on Information Technology (IT) Spending for the Federal Government www.whitehouse.gov/omb/budget/fy2009/sheets/itspending.xls

Egov.gov: The Official Website of the President’s Electronic Government Initiative www.egov.gov

Results.gov www.results.gov

ExpectMore.gov www.expectmore.gov

For more information, please visit the following online resources