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Bartley: HHS shared services center charts healthy growth

Paul Bartley has been running the Health and Human Services Department's shared services program, the Program Support Center (PSC), since 2007. The PSC has grown by roughly 10 percent annually to what is a $700 million operation of about 3,000 contractor and federal staff that provide 44 services, including acquisition and grant-related support, commuter benefits administration, health clinic staffing, publishing, financial management support and facilities maintenance, among other things. Bartley estimates that only 10 percent of the government's estimated $43 billion spend on administrative services is through shared services and tells Federal Times Editor Steve Watkins that the PSC is anticipating even more growth ahead.

Please discuss the Program Support Center, the services you offer, and how you've evolved.

The Program Support Center was started about 20 years ago now by Donna Shalala, then the head of the Department of Health and Human Services. We offer administration back-office services to agencies across government. About 40 percent of our work is within HHS, 60 percent is outside. The Program Support Center offers services in five lines of business: finance, acquisitions, health, real estate and other administrative operations.

Which are the largest lines of business?

It's over $200 million in acquisitions. We awarded about $1.4 billion in awards last year, so we're a rather large procurement shop. We offer that as a fee-for-service to any agency. HHS is a very big customer to us. We are hosted here and pay a lot of attention to our customers here, but we also offer acquisition to other agencies and departments. In fact, the Department of Defense is a very large customer of ours.

The second largest group we have is our health services. We've got health clinics around the country, 300 actually, that service agencies government-wide. Those 300 clinics offer flu shots, wellness programs, anything that an employee would need in a clinic. The second product offered by federal occupational health is the employee assistance program. We cover 1.2 million feds.

The third health service is environmental health. If your building needs an air-quality sample, we can come out and do that on a one-off basis, and it's all fee-for-service. The way to engage us is through an interagency agreement. There's no procurement time or bidding things out. We've got all the contracts in place.

What are some of your newer offerings?

We've got some really exciting products that we've come out with in the last few years. One of them is our transit benefit program. When I started eight years ago, we gave out paper vouchers in the transit benefit program. So, feds that took train, bus or ferry in would get handed a paper voucher every three months, and it was very labor intensive. We had to set up tables, get people in line, figure out how much they were supposed to get. It just took a lot of time and lot of expense.

What we've come up with since then is a credit card, and we issue that to the federal employment who then purchases the correct amount based on the formula provided by the government. And we pay that credit card issuer back, so it's very convenient. Employees don't have to wait in lines anymore. They can go online and buy their train tickets, bus tickets, etc.

Prior to the electronic way, we would hand out as many paper vouchers as would be possibly needed. So, if you were getting three months' worth, you got every single day for three months. Well, most feds have time off, they get a ride in, whatever it might be. What we've found with the electronic system is they only buy what they need, so we're seeing savings of 25 percent to 30 percent in that program alone.

So, what is the total size of your business, and what has been the trend line on that?

Our current budget at the Program Support Center is about $700 million. WAnd, we've grown about 10 percent every year that I've been here, which is the last seven or eight years. Most of it is [that] agencies come to us and realize we offer good service at a good price. And, iIt just doesn't make sense for them to stand up their own operations or bid it out as a contract.

How do you coordinate with GSA and other shared services providers that offer acquisition support?

In my estimation, 90 percent of the administrative activities are being done by agencies on their own or through contracts. And it's that vast 90 percent that we're going after. I'm not so much concerned with competing with my brother and sister shared service providers. We estimate there are about 10 major shared service providers: Interior has one, Agriculture, Treasury, FAA, NASA has a shared services center.

It's kind of like the cellphone market, maybe 30 years ago, when nobody had a cellphone. AT&T and Verizon and all their predecessors were all going after people trying to get them sign up. Now, they're in competition with each other. We're so early in this process that there's really not a lot of competition amongst the providers. We're just happy to get anybody to use one of us, much less a particular one of us.

What opportunities are on your radar?

The financial management line of business has named four official federal shared service providers. We want to be the fifth one. We are currently upgrading our Oracle financial system to Release 12. My hope is that we will take on a large federal customer to provide financial services. We already do it for a large portion of HHS, which is a great number of dollars and we're very good at it. And I think that taking on another agency and incorporating them in would be a great investment for the government, because it would reduce costs overall and help us get even better at what we do.

Another one of our services that we're marketing very hard is the transit benefit program. If your agency is giving out transit benefits on paper, I can guarantee you a 30-percent savings by moving to us. I've seen it over and over. We perform transit benefit reimbursement for all of TSA. We're taking on the Coast Guard now, and many other agencies around town are choosing us. So, that's a big growth area for us. And, it makes the government smaller. Every time somebody comes to us, it makes the PSC bigger, but the overall expenditures go down, because we're more efficient.

Paul Bartley has been running the Health and Human Services Department's shared services program, the Program Support Center (PSC), since 2007. The PSC has grown by roughly 10-percent annually to what is a $700 million operation of about 3,000 contractor and federal staff that provide 44 services, including acquisition and grant-related support, commuter benefits administration, health clinic staffing, publishing, financial management support and facilities maintenance, among other things. Bartley estimates that only 10 percent of the government's estimated $43 billion spend on administrative services is through shared services and tells Federal Times Editor Steve Watkins that the PSC is anticipating even more growth ahead.

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