For Immediate Release:
Contact: Mark
Davis,
Claimed “On the Books” Savings
Swamped by “Off the Books” Costs
Washington, DC — The U.S. Forest Service ended up costing itself more than nine times what it claims to have saved by subjecting its information technology (IT) operations to an A-76 public-private competition, according to documents jointly released today by the National Federation of Federal Employees (NFFE) Forest Service Council and Public Employees for Environmental Responsibility (PEER). Since implementing this A-76 performance decision in February 2005, the cash-strapped Forest Service devoted $292 million more through Fiscal Year (FY) 2006 to perform basic IT functions than was previously required for this work.
This perverse result springs from President Bush’s so-called
competitive sourcing initiative, which requires all agencies to put a high
proportion of their positions out to bid against private contractors. Under the A-76 process, federal employees
reorganize themselves into quasi-contractual entities called Most Efficient
Organizations (MEO) to perform the targeted agency operations. A MEO, like a government contractor, is not
directly accountable to agency line-management, but only to its contract.
The Forest Service
reorganized its IT infrastructure into an MEO in 2005, reducing the number of
staff handling computer and communications work. Based on this downsizing, the agency claimed
“on the books” savings of $35.2 million during FY 2005 and 2006. However, according to agency documents, the
restructuring resulted in many more Forest Service employees outside the MEO spending
substantially more time performing IT tasks, costing the agency $327 million
and resulting in a net operational loss of $292 million. Among the factors contributing to these “off
the books” costs were –
As Tahoe National Forest
Supervisor Steve Eubanks explained in an email to agency management:
“It's
hard for me to understand how anyone with even a cursory understanding of the
impacts on field folks could suggest that competitive sourcing related to IT…has
saved any money at all… I believe it’s
relatively easy to show that burden shift, lost productivity, and real dollars
spent offset any paper savings...Overall, the huge amount of new and increased
administrative work required by employees has created a kind of ‘gridlock’ that
is really frustrating employees.”
“The Bush Competitive Sourcing program is a prime example of management by slogan,” stated PEER Executive Director Jeff Ruch. “The Forest Service experience shows how a ‘Most Efficient Organization’ masks a penny-wise and pound-foolish reality in which a public agency is rendered far less capable than it was before.”
“Even when they don’t force ill-conceived outsourcing,
Bush’s quota-driven A-76 performance decisions embed inflexible internal
contracts in the civil service – imposing extra layers of bureaucracy and
generating huge hidden inefficiencies and costs,” added
###
Look at the agency’s data on additional IT
staff time required by the reorganization
http://www.nffe-fsc.org/Documents/CSIndex/Refs_2007/FS_060620_BOTA2ReportAppendixA.pdf
See the NFFE-PEER Cost Calculations summary
http://www.nffe-fsc.org/Documents/CSIndex/PR_070522/IT_Cost_Calc.doc
View the agency’s savings claims as reported
to Congress
Read the email from
http://www.nffe-fsc.org/Documents/CSIndex/CS_Brief_2006/2006_References/FS_060301_Eubanks.doc
See the full
http://www.nffe-fsc.org/Documents/CSIndex/Refs_2007/FS_060620_BOTA2Report.pdf
View other illusory claims of savings from Competitive
Sourcing
http://www.peer.org/news/news_id.php?row_id=741