Labor Back-Pedaling from Financial Management Shared Services for the Short Term

Published: June 22, 2016

DOLShared Services

The Department of Labor plans to bring its financial management system back in-house for the short term, according to FedBizOpps sole source justification.

Labor was forced to move its New Core Financial Management System (NCFMS) to the Department of Transportation’s Enterprise Service Center (ECS) in 2014 when its contractor Global Computer Enterprises (GCE) unexpectedly went out of business.

According to Labor’s justification, “DoL continues to move forward with efforts to transition to a shared service provider for financial management services. Continued operation of NCFMS is required until the transition to a SSP is completed.”

Labor will be awarding at $74.2 million three year task order to Booz Allen Hamilton under GSA Schedule 70 to provide operational support services for NCFMS. BAH is currently providing support via the ECS.  Labor believes it will be more cost effective and efficient to contract with BAH directly.

Labor is committed to transitioning to federal shared services.  In 2014, Labor moved to the Treasury Department-supported HR Connect and WebTA systems. The goal is to move financial management services to a shared service provider by 2019.

The Labor IG has repeatedly expressed concerns about NCFMS and its oversight.  In the most recent IG memo, Labor IG Scott Dahl stated, “We continue to have significant concerns about the financing arrangement and the Department of Labor's (DOL) oversight relating to the transition of the New Core Financial Management System (NCFMS) from Global Computer Enterprises (GCE) to the Department of Transportation's Enterprise Services Center (DOT), which primarily uses a contractor to operate this program.”  The IG believed that Labor needed to strengthen its oversight in order to control costs.

Labor told Federal News Radio that it paid $18 million to transition the data and system from GCE to ECS. 

In the sole source justification Labor wrote, “By contracting directly with BAH to perform the same work, DoL will gain greater oversight and flexibilities in management of the contract and contract administration. In addition, DoL expects to have greater cost certainty than previously realized as elements of this proposed award to BAH will be firm-fixed price. DoL expects to gain $2.6 million in contract efficiency as compared to the DoT/ESC actual costs for the operation and maintenance from April 2015 through March 2016.”