REE Commercial Services Management Program
50 years ago, President Eisenhower established a policy requiring federal agencies to determine whether the commercial activities performed by their employees could be provided more efficiently by the private sector.
This policy was followed by the issuance of “OMB Circular A-76, Performance of Commercial Activities” which provides guidance on how to identify federal work functions as inherently governmental, commercial, etc. and how to conduct competitive sourcing studies on commercial type functions performed by federal employees.
Over the years, federal civilian agencies have been inconsistent in their pursuit of this policy. However, USDA is more actively pursuing the President’s Management Agenda initiative that involves “Competitive Sourcing” as a result of the current Administration.
USDA, like other federal agencies, created longer-range “Green” plans to institutionalize the practice of identifying suitable functions for competition by weighing potential performance improvements and projected cost savings against the investment costs and risks associated with competition.
The Office of Management and Budget (OMB) has supported the philosophy of federal agencies taking a “reasoned and reasonable approach” to ensure sound planning and any decision to pursue competition.
REE is still in the process of determining whether it would be economically feasible to conduct an A-76 competition for any of its commercial “IT” functions.
OMB has outlined two different methods that can be used in conducting a competitive sourcing action: Standard Competition and Streamlined Competition. These terms are explained in the Definitions section. These methods provide management with some options as to how to approach conducting a competitive sourcing study. The specific method used will depend on various criteria that management must consider for each study.
Our employees are our most valued resource. USDA is implementing the Competitive Sourcing process in accordance with the August 2001 President’s Management Agenda in order to explore the potential for further improving citizen service and effectiveness. Every effort will be expended to ensure REE employees receive fair and equitable treatment during competitive sourcing reviews. The President has emphasized the importance for government to change with the times.
The REE agencies are always looking for ways to provide better value to our customers. Competitive sourcing is a management tool to help improve the delivery of our services in a more cost efficient and effective way.
The focus of competitive sourcing is the efficient and effective delivery of services or products to the customer. Competitive sourcing is a process that implements change. One aspect of an organization that might change is the amount of staff needed to deliver the service or product. The scope and nature of the changes required are a result of the process and are not to be guided by any predetermined expectations.
Individual jobs are not specifically identified in the FAIR Act Inventory. Activity functions and the associated FTE’s are reviewed by management officials in REE. Factors to be considered when making competitive sourcing decisions include such things as: are there unusually large numbers of vacancies projected for this activity, has the activity already been successfully outsourced within the agency or the Federal government, do private sector sources exist to perform the activity, does the agency currently have a skills gap, technology gap or staffing shortage in the activity, and do budget constraints make outsourcing the activity favorable.
Yes. The Office of the Chief Financial Officer, USDA, is responsible for assuring that USDA is actively pursuing competitive sourcing in the management of its programs. This is not just an “REE” initiative.
No. Competitive Sourcing is one of the President’s five management initiatives. It has the full backing of the President and is supported by the Secretary of Agriculture. OMB has staff to implement this initiative and the Office of Chief Financial Officer in USDA is also recently staffed with a group specifically charged with carrying out USDA’s Competitive Sourcing Program.
No. Even though the Administrator of the Office of Federal Procurement Policy (OFPP)/OMB is managing this initiative, it is definitely not a procurement initiative. It is a management initiative that is an operational responsibility. Human resources, procurement, finance and budget and other disciplines are all needed to assist the agency in conducting its competitive sourcing activities and it is the responsibility of agency managers to assure this program is implemented.
No. Competitive sourcing makes sense for a multitude of reasons. Federal government experience indicates that competition saves an average of 30% of the cost of providing commercial activities. Successful organizations have been those who concentrate on their core missions and competencies.
Last updated: 09/24/07