During the quarter that ended on March 31, 2004, three agencies - the Department of Energy (DOE), the Department of Health and Human Services (HHS), and the Office of Personnel Management (OPM) met all the standards necessary to achieve green status for the Competitive Sourcing Initiative.

These agencies successfully established competitive sourcing as a routine management practice to ensure that the taxpayer receives the best value for commercial services provided by the government. They pursued competitive sourcing in a reasoned manner by:

• Carefully considering their commercial functions and determining which are appropriate for competition;
• Thoughtfully pursuing competition with appropriate planning and analysis so that standard and streamlined competitions are completed in a timely fashion and few publicly announced competitions are cancelled;
• Using their past experiences to improve future competitions, resulting in further success in conducting competitions; and
• Developing long-term plans for continued, routine use of competitive sourcing as a management tool to improve mission effectiveness.

Several other agencies have made important gains in competitive sourcing and are positioned to achieve green status once they develop their long-term strategies for using competitive sourcing.

The standards for achieving green relate to the manner in which agencies approach competitive sourcing, not the outcome of particular competitions, although our experience has shown that the taxpayer benefits from the reasoned and responsible application of competitive sourcing regardless of whether the function is retained in-house or contracted out. By in large, the savings associated with these competitions are attributable to the development of Most Efficient Organizations (MEOs) within the government. Achieving green status is a beginning, not an ending, and agencies will be continually challenged to maximize the overall benefit of competitive sourcing in order to maintain this status.

Competitive sourcing is generating real savings for the federal government. This month, we will provide Congress with a comprehensive report on our competitive sourcing efforts for FY 2003. This report will include information on the number and nature of competitions conducted, as well as the associated costs and savings. We look forward to showing how investments in competitive sourcing yield real benefits for the American taxpayer.

Sincerely,
Rob Burton
Associate Administrator