By Stephen Barr
Tuesday, May 31, 2005

When it comes to the government's internal operations, "competitive sourcing" is arguably the most argumentative issue.

The underlying law that supports President Bush 's initiative uses federal jobs as the primary measuring stick, causing never-ending opposition from federal unions. Experts differ on whether the initiative saves money. Federal managers are said to dislike the process, launched in 2001, because of the workplace disruption it causes.

There's also the perception that the Office of Management and Budget pressures agencies to conduct competitive sourcing studies, which determine whether commercial activities should be kept in-house or turned over to contractors. The goal is to get the work done at less cost with no loss in the quality of services.

OMB's role has proved politically sensitive from the start, and after some wrangling on Capitol Hill, the budget office announced in July 2003 that it was dropping "numerical goals" in favor of "negotiated tailored baselines" so that agencies have some flexibility in contracting out. Rather than judge agencies based on the percentage of jobs up for bid, OMB turned to a scorecard -- green for good, yellow for mixed results and red for bad -- to track progress.

So this month the U.S. Forest Service created a small stir when an "informational update" created the impression that OMB was putting the strong arm on the Forest Service's parent, the Agriculture Department.

The Forest Service memo said OMB had told Agriculture "that it's previous 'Yellow' rating in competitive sourcing on the . . . scorecard will be changed to 'Red.' . . . It was stated that this was due to the lack of competitions, and primarily in the Forest Service."

The memo noted that "OMB has never been satisfied with the lack of competitions in the Forest Service." The memo also seemed to raise the old quota issue (using federal jargon for measuring full-time employees, or FTEs). But it also reiterated that the Forest Service has its own game plan.

"The number of FTEs studied is important, this is an accountability item for the Agency; however the number of FTEs is secondary to which work activities are selected for future competition. It is still Forest Service strategy to focus on the 'work' and then allow that to identify the numbers," the memo said.

As a result, the memo indicated, the Forest Service will look for 100 jobs in its communications office that can be put up for competition with the private sector in fiscal 2005 rather than take a one-year break from competitive sourcing.

Asked about the memo, Chris Pyron , deputy chief for business operations at the Forest Service, said it "contained a number of factual errors."

Asked if OMB was leaning on the Forest Service, Pyron quipped, "That would make a good story." He also said, "I have not had any calls from OMB telling me to do anything."

At OMB, officials were mum on the memo, referring questions to the Forest Service. The memo, issued this month, has been revised at the Forest Service to remove some references to OMB.

Bill Dougan , president of the National Federation of Federal Employees' Forest Service Council, said the original memo shows that the job competitions are "politically motivated. . . . The heat is on for more competitive sourcing."

Forest Service employees, though, appear to be holding their own in the job competitions. The Forest Service has conducted 171 job studies, and 162 of the job reviews ended with the work staying in house. "It's a testament to the quality of the workforce," Pyron said.

But the job reviews won by in-house teams also have led to downsizing.

The Forest Service, for example, studied its technology infrastructure and the way it supports desktop computers, a review that involved 1,200 agency jobs. A restructuring to be completed in 18 months should produce savings of about $30 million in annual operating costs and will lead to a cut of 292 jobs, Pyron said.

Comparable savings will result from "business process reengineering" studies of budget, finance and personnel operations, with projections showing that 502 jobs will be lost in financial management and 458 jobs in human resources.

In addition to the 100 jobs in communications this year, the Forest Service in fiscal 2006 plans to look at 65 jobs in vehicle fleet services, 88 in computer services and database management, and about 500 in mapping and charting. For 2007-08, the agency will review 460 jobs in fire prevention and protection.

"The goal is to use the most effective delivery mechanism, and you don't know if you can save money until you do studies," Pyron said.

E-mail:barrs@washpost.com