President George W. Bush: Resources for the President's Team The White House
President George W. Bush meets with Dan Bartlett, center, and Josh Bolten in the Oval Office Jan. 9, 2003.  White House photo by Eric Draper.
The Deputy Director for Mgmt
PMA updates, best practices, and general information.
Grading Implementation of the PMA.
Human Capital
Initiative updates, best practices, and general information.
Commercial Services Management
Initiative updates, best practices, and general information.
Improving Financial Performance
Initiative updates, best practices, and general information.
Initiative updates, best practices, and general information.
Performance Improvement
Initiative updates, best practices, and general information.
Sharing Best Practices
Stories of achieving breaktrough results in government.
The Five Initatives

Commercial Services Management

The Process Isn't Pretty, But Savings Can Be Dramatic

Of all of the 5 management initiatives -- I think competitive sourcing is the most complex and challenging. And the most politicized. Without you taking the time to understand and embrace this initiative - we don't have a realistic chance of being successful.

"Make or Buy" Decisions
Competitive sourcing asks managers to make very hard management choices -- choices that effect real jobs held by very dedicated and loyal career civil servants.

As so many of us know, a key element to the success of any private sector company is the regular evaluation of whether necessary services should be provided in-house by company employees or by another company. The ultimate "make or buy" decision.

When we turn to the federal government, as of June 2000, there were 850,000 people performing jobs that are commercial in nature - jobs that people also perform in the private sector. Many of them are as basic as mowing the lawn, hanging dry wall or serving food, but not a single one has been exposed to the rigors of competition.

That's the clincher here, the taxpayer. This initiative strives to focus the federal government on its mission - delivering high quality services to our citizens at the lowest cost.

The President's Commitment
The President, during the campaign, talked about opening half, or 425,000, of all commercial jobs being performed in the federal government to competition with the private sector. He didn't put a timeframe on the goal - nor have we. There is recognition that public-private competition, on any scale of significance, is not something the civilian agencies have ever attempted. This Administration needs to build the infrastructure, knowledge, and motivation at the civilian agencies. Of course, agencies have been using contracting out methods, whether to the private sector or to other government agencies, with varying success for many years. Whether or not there is a public/private competition, the principle of competition should always be present.

We Are Making Progress
Over the past 15 months we've seen tangible progress. Departments and agencies have moved out with this initiative and are sensitive to the reaction of constituency groups. At Energy and Interior, the Competitive Sourcing plans were unveiled in comprehensive ways. At Treasury, they are looking at some major opportunities for public/private competitions. OPM is competitively sourcing facilities maintenance, financial systems programming and computer operations. FEMA is moving ahead with some innovative ideas to handle emergency disaster needs.

At Commerce, for its FY 2002 and 2003 competitive sourcing management plan, the Census is conducting a major public-private cost comparison and competition. The study began August 15, 2001, and is scheduled for completion by February 15, 2003. It will involve 225 FTE who perform a variety of clerical and administrative support functions on a temporary basis; functions such as secretarial duties, data entry, photocopying, filing, preparing mailings and similar activities. Census is using a mix of in-house and contractor resources to develop the performance work statement, management study, and necessary cost comparisons.

There are challenging workforce issues involved in competitive sourcing and we're fortunate to have OPM working side-by-side with the agencies; helping them work through their issues. Public employee unions, for example, are keenly interested, especially in light of their representation of a portion of the federal workforce, their active participation on the GAO's Commercial Activities Panel and their advocacy of competitive sourcing-related legislation. Therefore, keeping channels of communications open is key.

If given the chance, federal employees can find many ways to do their jobs more effectively and at a lower cost. This is a morale-booster, giving employees a chance to shine and deliver more, while looking for waste to be eliminated.

Savings Can Be Dramatic
We have a process for public-private competition that is equitable. Speaking of the process itself - it is often not pretty. Yet, it has worked with a lot of effort and management at the Department of Defense. For example, studies have shown that on average this process saves 30 percent. The savings to the taxpayer are dramatic. If agencies apply the savings to improving the living quarters of our servicemen and women, improving service to the most needy in society or to securing the homeland -- we all win. Adding value on behalf of the American people is the ultimate goal.

OMB Is Working On An Improved Process
But I know we need to improve the process. We recently took part in the GAO Commercial Activities Panel, which just released a report that is fair and confirms that public private competition improves government performance and saves taxpayer dollars.

Where will OMB go from here? Director Mitch Daniels wants to put a better process in place as quickly as possible. We've set up a working group to create a new integrated process. But we can't replace existing procedures right out of the box; the new system will need to be tested and evaluated.

I can make one guarantee - we aren't coming out with something unless it is easier for your agency to read, faster to use, and fairer for all than the existing process. The proposed changes will go out for notice and public comment in the very near future.

In the meantime, we continue to be available to visit your agency and speak to your team. We've been part of panel discussions, helped organize training sessions at agencies such as Agriculture, DEA, Labor, and Justice. We've also sponsored government wide-conferences.

Don't hesitate to ask me the hard questions -- just call me or my Deputy Jack Kalavritinos.


Angela Styles

The Five Initatives:
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