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The Five Initatives

Steady Progress

The most recent scorecards indicate that the majority of PMA agencies are on course in their efforts to improve commercial operations through the use of competition. Agencies are focused on achieving a better return for the taxpayer dollar and identifying the public or private source that can best bring about this result.

  • The Department of Energy (DOE) recently conducted a competition to lower the cost and improve the quality of financial services that support the Department's operations. Through competition, DOE concluded that the best option was to restructure the in-house organization that currently provides financial services. DOE projects that the restructuring will save taxpayers $31 million over five years.
  • The Small Business Administration decided to convert clerical services supporting its disaster loan program from in-house to contractor performance after determining through public-private competition that this action will reduce costs by $1.2 million over a five-year period when compared to continued in-house performance.
  • The National Institutes of Health (NIH) chose to rely on the continued performance of its in-house providers of real property management and extramural activities. In two separate competitions, the in-house sources demonstrated their value by focusing on increased efficiency, in part by consolidating like activities to gain economies of scale, and re-engineering. NIH estimates that these "most efficient organizations" will generate annual savings of approximately $39 million.
  • The Treasury Department's Bureau of Engraving and Printing decided to use the private sector, rather than its in-house staff, to handle various tour operations, after analysis showed that contractor performance will save money.

Recent announcements of new competitions indicate that agencies are looking for competitive sourcing to stimulate improvements for some of their most significant operations. This past quarter, the Federal Aviation Administration (FAA) and the Department of Homeland Security (DHS) announced the two largest non-Defense public-private competitions undertaken since the PMA was launched in 2001.

  • After extensive planning, FAA announced that it would compete its air flight service station function, involving approximately 2,750 positions. These employees are responsible, among other things, for pilot weather briefings, assisting aircraft that are lost or in emergency situations, and providing search and rescue services to users of the National Airspace System. FAA is counting on the competition to facilitate the modernization of current operations and will give significant consideration during the evaluation process to factors such as improved performance through the introduction of new or modified equipment.
  • The Department of Homeland Security (DHS) announced a competition involving 1,143 positions from its U.S. Citizenship and Immigration Service (CIS). The competition will enable DHS to identify the best public or private source to provide customer service at CIS offices.

On the Path to Green

Experience over the past two and one-half years shows that taxpayers will win -- regardless of who performs the work -- when a manager uses competitive sourcing in a considered fashion. For this reason, no agency may achieve or maintain a "green" status rating on the PMA scorecard unless the agency has a reasonable long-range competition plan that has been tailored to fit the agency's mission.

In December, OMB issued guidance to assist agencies in developing appropriate long-range visions for their respective agencies that will allow both careful and regular consideration of competitive sourcing. The guidance emphasizes the need for agencies to explain how functions are generally selected for competition, how consistency is achieved between competitive sourcing and the human capital initiative, what mechanisms are used to incorporate lessons learned from past actions, and what steps are being taking to minimize potential constraints.

Plans are just one key to the long-term success of competitive sourcing. Having data to evaluate results is equally critical. Accordingly, OMB will soon launch a database that tracks the results of competition. The database will enable Congress, managers, employees, vendors, and taxpayers to evaluate the effect of competitive sourcing as a management tool. Hard data and trend analysis will replace anecdotes to demonstrate the value of competition and to prompt corrective action when weaknesses are identified.

Rob Burton
Associate Administrator

The Five Initatives:

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