Grants QSMO shifts latest attempt to modernize systems into next gear

The third attempt to bring some standardization to the technology that underpins the federal grant making progress is taking advantage of being the last shared service initiative out of the gate.

The Grants Quality Service Management Office is focused on offering the tools and services agencies need most based on their input and feedback.

Chad Clifford, the executive director of the Grants QSMO at the Department of Health and Human Services, said this simple, yet complex initiative will improve how agencies deliver almost $1 trillion in grants through more than 50 agencies and 1,500 authorized programs.

“We’re not trying to drive toward a single enterprise resource planning solution for grants. There’s a bunch of reasons why but mentioning just how complex grants systems are and even just the number of programs and agencies, there are some unique needs in the grants world, and we don’t know that existing shared services can meet everyone’s needs perfectly,” Clifford said on Ask the CIO. “That’s part of why we know we need to expand. We have to try to find ways to try to make sure we are focused on the customer and improving that customer experience and giving them the tools to help drive greater efficiencies for the agency, users and recipients.”

Grants is one of the largest expenditures in government, and only grew over the last three years because of the pandemic.

But the efforts to standardize and modernize the underlying technology to run grant making systems at more than a dozen agencies has sputtered over the last 20 years.

The Office of Management and Budget launched grants.gov in the early 2000s with a goal of developing a one-stop portal to manage the front end of the grant making process.

OMB then launched the grants line of business in the late 2000s to try to bring some standardization to the back end systems and create a shared services opportunity for modernization.

That effort struggled for various reasons, but with the introduction of the QSMO concept in 2019, OMB is hoping to breathe new life into shared services.

OMB already designed three other QSMOs: The Treasury Department is leading the one for financial management; the Cybersecurity and Infrastructure Security Agency is leading the one for cyber; and the Office of Personnel Management is leading the one for human resources.

In January 2021, OMB designated HHS to lead the Grants QSMO.

Grants system governmentwide survey

Clifford said being the last one to receive the designation has its benefits, including making the launch of the Grants QSMO marketplace last September more likely to be successful.

“This launch of that marketplace is the start. A lot of the work we’ve done to get here is important. We’ve done governmentwide surveys of grant systems at agencies, and also asked them about their anticipated needs for grants systems and for what parts of the grants management lifecycle. That’s probably the key role for the QSMO, creating and managing that marketplace,” he said. “It’s a simple innovation, but surprisingly effective is putting in one place for agency customers to see what shared services are out there. We’re providing them assurances that if they’re seeking to use different and better tools, here are some better options to consider.”

The initial marketplace includes five validated grants services, all from federal providers.

Clifford said HHS thought it was important to start with the federal providers because they already are serving several federal customers.

“We needed to understand and make sure they are still open to new customers, they want to align with us in terms of our guiding principles that we use for the Grants QSMO and help modernize and really take some ownership over how we drive improvements with the marketplace in the solutions over time,” he said. “We really want to understand how far we can go with the federal providers, and we need time to work with agency customers through surveys and one-on-one engagements to understand their needs and really try to match up can these providers provide what’s needed by those agencies.”

While the Grants QSMO finalized its official designation, Clifford said they completed what may be the first ever survey of agencies and the status of the grant systems.

“We had 10 different agencies take part in our market research and that really helped ensure the viability of some of our conclusions, and we’ve already put it into practice. Our next approach that we are thinking about is how to work with industry,” Clifford said. “What we found from surveys of agencies is there are some particular needs for small agencies with smaller budgets around the grants management lifecycle and something called the core award management. Small agencies have small budgets so they’re looking for not just cheaper systems, almost like light systems that will provide them not necessarily all the same wraparound services or functionality, but give them something cheaper because they are running today old and expensive systems.”

Three pilots with small agencies

The survey is helping the QSMO understand what the future of the shared services should look like and where industry can play a role.

“I’ve told agency executives from day one, I know that these shared services aren’t going to meet their needs all the time today. My objective is in a five-year time horizon to move forward to get to a point where we build out this marketplace and expand this marketplace in a way that we can recommend an approach to reasonably adopt a shared service with acceptable tradeoffs,” he said. “To do that, we know we’re going to need industry. We did some formal market research last year, asking industry what solutions across the grants management process and lifecycle do they have. That market research has been really helpful for us to understand what’s out there.”

Clifford added the Grants QSMO is launching three pilots with smaller agencies to test out how they can deliver some lower cost options.

“We think there’s a real value and a real customer need in that space to help drive better outcomes, just given the sheer volume of grant programs that we have across these agencies. If we can find better low costs or light solutions that we could learn from these pilots, that would be really interesting,” he said. “In terms of procurement process, they are still in control of their own procurements at this point. We are a partner, helping to learn, understand and advise them typically, as they’re developing that request for proposals.”

The second piece to the marketplace is the QSMO is providing consultant services to agencies seeking help to modernize their systems. The QSMO estimates agencies currently are managing between 150-200 different IT systems that support the grant making process.

Clifford said the QSMO has mapped the existing business framework for grants with the existing providers to give the agency customers better transparency into how they can take advantage of the marketplace.

“It’s about sharing data and information with customers in a way that helps them make better informed decisions about what to do when they have a systems need. That’s unique. That’s one of the key innovations here with the QSMO,” he said. “Our job then is to help advise them on those roles and about what tools are out there. We now better understand their needs and can help make recommendations to them about what services might be the best fit.”

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