Competitive Sourcing: Greater Emphasis Needed on Increasing Efficiency and Improving Performance
GAO-04-367
Published: Feb 27, 2004. Publicly Released: Feb 27, 2004.
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Highlights
In August 2001, the administration announced competitive sourcing as one of five initiatives in the President's Management Agenda. Under competitive sourcing, federal agencies open their commercial activities to competition among public and private sector sources. While competitive sourcing is expected to encourage innovation and improve efficiency and performance, it represents a major management change for most agencies. This report describes the progress selected agencies have made in establishing a competitive sourcing program, identifies major challenges these agencies are facing, and discusses strategies they are using to select activities for competition.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Office of Management and Budget | To complement efforts already underway that address funding and human capital challenges and to help agencies realize the potential benefits of competitive sourcing and ensure greater transparency and accountability, the Director of OMB should ensure greater consistency in the classification of positions as commercial or inherently governmental when positions contain a mix of commercial and inherently governmental tasks by reviewing current guidance and developing additional guidelines, as necessary, for agencies and OMB examiners. |
Closed – Implemented
On May 23, 2005, OMB released revised guidance for the workforce inventory submission process that explains how agencies can best apply classifications, such as inherently governmental, commercial or commercial-suitable for competition, to functions performed by the workforce. The guidance, OMB Memorandum M-05-12, also clarifies how to classify positions with a mix of commercial and inherently governmental tasks. It states that, except in rare instances, a position should be assigned a single function code based on the preponderance of work performed. When evaluating functions for purposes of assigning status or reason code in the inventory, the position should be categorized based on the work actually performed as part of regular duties, not based on titles or certifications. OMB worked with the Chief Acquisition Officers and agency competitive sourcing officials to revise this guidance and ensure consistency of application.
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| Office of Management and Budget | To complement efforts already underway that address funding and human capital challenges and to help agencies realize the potential benefits of competitive sourcing and ensure greater transparency and accountability, the Director of OMB should work with agencies to ensure they are more strategic in their sourcing decisions and are identifying broader functional areas and/or enterprisewide activities, as appropriate, for possible public-private competition. |
Closed – Implemented
OMB has taken steps to address this recommendation, as cited in its annual report to Congress on competitive sourcing efforts required by section 647(b) of the Transportation, Treasury, and Independent Agencies Appropriations Act, Fiscal Year 2004, Division F of the Consolidated Appropriations Act of 2004. OMB reports that it is working with agencies to ensure that they are more strategic in their competitive sourcing efforts. In addition, on February 20, 2004, the Federal Acquisition Council issued its second edition of Manager's Guide to Competitive Sourcing. This guidance identifies key factors to consider in grouping functions for competition and states that grouping by function or geographical location enables larger and therefore potentially more attractive competitions. The guidance also notes that in the long-term, as the number of positions available for competition decreases, the application and use of function codes may need to be standardized across departments.
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| Office of Management and Budget | To complement efforts already underway that address funding and human capital challenges and to help agencies realize the potential benefits of competitive sourcing and ensure greater transparency and accountability, the Director of OMB should require agencies to develop competition plans that focus on achieving measurable efficiency and performance improvement outcomes. |
Closed – Implemented
OMB has taken steps to address this recommendation, as cited in its annual report to Congress on competitive sourcing efforts required by section 647(b) of the Transportation, Treasury, and Independent Agencies Appropriations Act, Fiscal Year 2004, Division F of the Consolidated Appropriations Act of 2004. OMB reports that it has asked agencies to develop long-term plans to apply competition in a strategic manner. As part of these plans, OMB is requesting agencies to explain how functions are being selected for competition. The report notes that effective planning and strategic grouping of activities increases the likelihood that agencies will focus on activities that offer measurable efficiency and performance improvements.
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Topics
Comparative analysisCompetitionFederal procurementFederal procurement policyPersonnel managementProcurement planningSource selectionPublic-private competitionsCompetitive sourcingHuman resources management