Agency At Risk: Competitive Sourcing of the Forest Service

2007 Forest Service Council Congressional Briefing Paper

The administration’s “competitive” sourcing initiative is having devastating effects on the Forest Service (FS).  Extraordinary time and resources are being diverted from mission work to perform competitive sourcing and related activities.  The agency is literally reeling from the highly disruptive studies themselves and from the major organizational changes mandated by them.  Recent/ongoing reorganizations of Information Technology (IT), Financial Management (FM), and Human Capital Management (HCM) continue to significantly disrupt not only the roughly 4,000 employees (11% of the workforce) directly involved but also all agency employees who depend on these essential business functions to carry out their jobs. 

In the midst of this chaos, the agency is moving forward on additional competitive sourcing studies of essential mission functions.  These studies will directly affect many thousands more employees and continue to erode agency capacity and waste hundreds of millions of taxpayer dollars.  The administration is largely ignoring statutory requirements to moderate this program.  A strong Congressional response is urgently needed.

Arbitrary Use of A-76 Continues to Waste Money and Erode Capacity

The FS has no strategic process for selecting work for A-76 study that considers the agency’s long-term ability to effectively fulfill its essential missions.  A-76 studies are binding and they always force major redistributions of duties.  Agency documents prove that Communications activities were selected for A-76 study based solely on quotas from OMB.  Even though A-76 is ineffective at dealing with collateral duties,[1] 72% of the employees in this study perform the work under consideration only 10% or less of the time.[2]  Plans are to study two-thirds of the agency workforce for possible outsourcing by the end of FY 2009.[3]

The failure of the FS to consider adverse effects of outsourcing personnel who serve in the agency militia is especially troubling.  FS Incident teams play a key role in Homeland Security, responding not just to wildfires but to a wide variety of emergency incidents.  For members of the militia, these duties are considered collateral to their everyday jobs.  A-76 does not deal with collateral duty issues: outsource the Forest Planner and you lose the rapid responder as well.  Statutory provisions to consider these potential effects on wildfire suppression capabilities have been ignored.  Current plans put thousands of scarce and valuable rapid responders at risk.[4]

The FS continues to lack the infrastructure needed to competently perform A-76 studies.  Employees unfamiliar with the process continue to be recruited, given a week of classroom training, and put to work on a binding process that will force major agency reorganizations.  Further, standardized procedures are lacking: each team apparently makes up rules as they go along.  The Communications feasibility report was posted on the agency intranet for all to review; whereas even the recommendations of the Aviation feasibility report are top secret.

The FS fails to ensure that expected savings from competitive sourcing are actually achieved.  Savings actually achieved are not adequately tracked; thus, accountability for achieving targets is not possible.  Reported figures reflect only the “on the books” costs of the A-76 service provider, not the very substantial inefficiencies generated across the agency.  The agency reported savings of $18.4 million in FY 2006 from its A-76-reorganized IT unit; however, this figure did not reflect the $137 million in losses it was shown to have caused.[5]  Even “on the books” savings are unreliable.  The agency reported FY 2005 savings of $1.7 million from its California fleet maintenance contract; the contract was terminated for default shortly afterwards.  A Department audit later found the $1.7 million could not be substantiated.[6]

The FS continues to lack procedures to track all the costs of its competitive sourcing activities.  FY 2006 appropriations legislation requires the agency to track these costs and caps them at $3 million.  These provisions are being dodged. A FY 2006 internal memo notes the nonexistence of any formal mechanism for tracking personnel costs associated with running studies.  FY 2006 spending on competitive sourcing activities far exceeded the statutory cap.[7]

Government Accountability Office Review

A Government Accountability Office (GAO) review of the FS competitive sourcing program, slated to begin any day, will address these specific issues.  In the meantime, it makes no sense to allow this deeply flawed program to continue to waste taxpayer money and erode agency capacity.  Senators Bingaman, Kohl, and Feingold have asked to FS to suspend its outsourcing program to allow GAO to complete its work and Congress to act appropriately.[8]  However, contrary to the Senators’ request, the agency has accelerated its competitive sourcing activities.[9]

Congressional Action Requested For the same reasons as Senators Bingaman, Kohl, and Feingold, we respectfully request that Congress prohibit the use of any funds for competitive sourcing activities by the FS in FY 2008.[10]

This paper and supporting documentation are posted at www.nffe-fsc.org under “New Comp Sourcing.” For more information, contact Mark Davis, Co-Chair, NFFE Forest Service Council Legislative Committee, at 608-231-9474 or mwdavis01@fs.fed.us.


[1] See Forest Service Council brief, An Overview of Competitive Sourcing (February 19, 2007).

[2] See Forest Service Council brief, Mistakes Repeated: A-76 Study of Communications Work (February 19, 2007).

[3] See USDA Forest Service, Competitive Sourcing Green Plan for FY 2005-2009 (December 7, 2005). The Department of Agriculture has implemented a “feasibility study” policy; however, it lacks substantive guidance.  See USDA OCFO Bulletin 2004-00 (May 11, 2004).  The policy does not focus on strategic questions and the FS has not used the feasibility study process to ask them.  So far, these studies have been bureaucratic farces with foreordained outcomes.  See, for example, Mistakes Repeated: A-76 Study of Communications Work, supra note 2.

[4] See Forest Service Council brief, A-76 Collateral Damage: The Forest Service Militia (February 19, 2007).

[5] See Forest Service Council brief, Long-term Costs of Management by A-76: Information Technology (Feb. 19, 2007).

[6] See Forest Service Council brief, Outsourcing Fleet Maintenance Found to Put Safety at Risk (February 19, 2007).

[7] See Mistakes Repeated: A-76 Study of Communications Work, supra note 2.

[9] See USDA Forest Service, Competitive Sourcing Update (November 8, 2006).

[10] See Forest Service Council, Legislative Recommendations (February 19, 2007).