1. Tammy Shelton Acting Associate Staff Chief, HROD ORD Manager’s Meeting January 24, 2006 The Competitive Sourcing Challenge

2. Presentation Objectives Overview of competitive sourcing initiative and process Raise awareness and add basic knowledge about the process Update current status of competitive sourcing activities Provide reassurance – the Government is winning over 90% of the competitions 2

3. Presentation Limitations (The Official Disclaimer) Will not answer all of your questions Will not provide specific information on which positions will be competed Will not provide a list of employees whose jobs are included in competitive sourcing studies Will not tell you whether your job is going to be studied 3

4. Competitive Sourcing – Basics 4 One of 5 initiatives in the August 2001 President’s Management Agenda Based on OMB Circular A-76; first developed during the Eisenhower Administration Competitive process to determine whether a commercial function is performed more cost efficiently by the private sector. Two types of studies: streamlined and standard Ensures that customers, stakeholders, and citizens are provided services at the best possible value

5. Standard Competitions - highlights Private Sector proposals are requested Government develops a ‘most efficient organization’ proposal that is compared with private sector bids  In most cases, Government organizations are reorganizing and downsizing functions to be competitive More than 35 positions are typically involved Government is winning 90% of standard competitions Study Duration: 12 months (can be extended to 18 months with OMB approval) 5

6. Streamlined Competitions - highlights 6 Streamlined process allows Government to compete ‘as is’ and compare costs against current Agency contract price schedules:  Public announcement is made – without request for proposal  Bid determination is completed in-house Can only use if competing less than 35 positions Government is winning 97% of these competitions Study Duration approximately: 90 - 120 days

7. FY05 Status of Competitive Sourcing Activities 7 ORD successfully completed 5 streamlined competitions Studied 22 clerical support positions (GS-7 and below) in DC, RTP and Cincinnati All work was retained in-house Quarterly performance reporting on work generated by these positions began January 1, 2006

8. Agency-wide Competitive Sourcing Activities FY06 – FY08 2006: Studies of up to 325 Information Technology services positions will be initiated - 170 positions in HQ - includes some ORD positions - 155 positions in Regions – studies of 43 positions is underway 2007: 25 Financial Services positions will be studied - All in OCFO 2008: 450 Administrative Services positions will be studied - ORD will receive credit for clerical support positions studied in 2005 8

9. Next Steps: Close Horizon Approach for IT competitions will be determined by EPA Competitive Sourcing Executive Council (DAA/ARA) – most likely on FEB 21 Questions to be answered by the Competitive Sourcing Executive Council:  Conduct nationwide studies?  Regions study individually?  All Program Offices included in one large study?  Geographically based studies? 9

10. Other Options/ Decisions to be Made Competitive Sourcing Executive Council may decide to allow EPA organizations to build “High Performing Organization” submissions in lieu of competitive sourcing studies EPA would have to get to “green” on the President’s Management Agenda for Competitive Sourcing before Dave O’Connor may authorize this approach 10

11. Questions? Alka-Seltzeror Tums anyone? 19

12. Preliminary Planning Steps Scope: Determine the activities and FTE positions to be competed Grouping: Conduct preliminary research to determine the appropriate grouping of activities as business units (e.g., consistent with market and industry structures) Workload Data and Systems: Assess the availability of workload data, work units, quantifiable outputs of activities or processes, agency or industry performance standards, and other similar data. Establish data collection system as necessary Baseline Costs: Determine the activity’s baseline costs as performed by the incumbent service providers 12

13. Preliminary Planning Steps (continued) Type of Competition: Determine the use of a streamlined or standard Schedule: Develop preliminary competition and completion schedules Roles and Responsibilities: Determine roles and responsibilities of participants in the process and their availability for the duration of the streamlined competition. Work Statement and Agency Cost Estimate: Develop performance work statement, private sector proposal evaluation & agency cost estimate Inform: Inform incumbent service providers (employees) & union representatives 13

14. Standard Competitions Announcement: Announcement in FedBizOps (initiates start) Finalization: Finalize performance work statement (PWS) and quality assurance surveillance plan Cost Estimation: Develop cost of agency performance by building a Most Effective Organization (MEO) response to the PWS – completed by a separate team from those building the performance work statement Private Sector Proposals: Government MEO package including costing must compete against private sector proposals to complete the same work. 14

15. Standard Competitions (cont.) Cost Estimate Firewalls: Ensure agency cost estimate preparation and determination of private sector costs are done by different people and that no sharing of information takes place Public Announcement: Public announcement in FedBizOps of winner (stops process) Challenges: Results of a standard competition may be challenged with appropriate justification Award: Award contract in accordance with FAR Execute: Execute letter of obligation to official responsible for performing the activity – Government or private firm Transition: There is a period of transition as the work transfers from current Government organization to the new Most Efficient Organization (MEO) or from the Government to private sector 15

16. Streamlined Competitions Announcement: Announcement in FedBizOps (initiates start) – no “requests for proposal” are allowed Finalization: Finalize performance work statement and quality assurance surveillance plan Cost Estimation: Develop cost of agency performance based on either “as-is” or Most Effective Organization (MEO) Conduct Realism Analysis: Contracting Officer performs cost realism analysis Private Sector Performance Estimation: Cost of private sector performance based on documented market research or past solicitation 16

17. Streamlined Competitions (cont.) Cost Estimate Firewalls: Ensure agency cost estimate preparation and determination of private sector costs are done by different people and that no sharing of information takes place Public Announcement: Public announcement in FedBizOps of results (stops process) No Challenges: Results of streamlined competitions may not be challenged Award: Award contract in accordance with FAR Execute: Execute letter of obligation to official responsible for performing the activity – Government or private firm Transition: There is a period of transition as the work transfers from current Government organization to the new Most Efficient Organization (MEO) 17

18. Post-Award Activities (both competitions) Track actual costs and performance against estimated costs and performance standards Quarterly reports are provided to EPA Office of Competitive Sourcing for submission to OMB 18

19. What does it take to get a competitive sourcing study completed? 11