Unlocking the Potential of Unlocking the Potential of Competitive SourcingCompetitive Sourcing

Raymona L. Stickell, Director

Internal Revenue Service

November 15, 2004

A-76 as a Management Tool

Lower costs Increase efficiency Implement new

technology Streamline organizations Bring about

transformational change

Area Distribution Centers:A Case Study 3 distribution centers across US Over 1300 employees, many temps Highly seasonal work Primarily GS-3/4 Declining workload Expensive facilities Older technology

Barriers and Challenges

Union resistance Management resistance Incompatible guidance Procurement, new way of doing business Balancing resources – getting the best

resources for studies & continuing operations

FirewallsFirewalls

Agency Tender

Official (ATO)

FIREWALL

Human Resource Advisor

FIREWALL

Office of Competitive

Sourcing (OCS)

Project Manager

PWS Team Leader

PWS Team

Contracting Officer

MEO Team Leader

MEO Team

Source Selection

Evaluation Board (SSEB)

Contracting Officer

Source Selection Authority

(SSA)

Implementation Team

FIREWALL

Keys to Success

Communications Stakeholder involvement Business case analysis Functional specifications Marketing Standard templates & plans for

implementation

Importance of Communications

Mandatory

-Feasibility Study

-Competition Decision

-Award Decision

Comprehensive– Town Hall meetings

– Training & briefings

– Fact sheets

– Employee Bulletins

– Q & A logs

– Award day notifications

– Interactive video

– Stakeholder comm.

– NTEU neg. & briefings

– Media & Congress

Giving Bad News

Competitive Sourcing will result in fewer resources, so employees and managers must prepare for:– Conflicts in balancing resources (between

operations and the study)– RIF– Lower budgets

Stakeholders in the Process Communications Labor Relations HR Processing Information Systems Retirement Specialists Learning & Education Real Estate/Facilities Finance/Budget Line & Dept. Mgt.

Organization Dev. Security Employee Assistance Legislative Liaison Congress Union State DoL s Procurement Legal Publishing

Why a Business Case Analysis?

Help select the best candidate projects for public-private competition– High-potential for return on investment– Significant productivity improvements possible– Can leverage new technology

Identify potential competition

ADC Business CaseMethod Define baseline

“As Is” Market Analysis Design notional

“To Be” Cost/value analysis Go/No go decision Procurement strategy

Results Baseline w/room for

improvements Declining work and

excess capacity Older warehouse

technology used Good market

competition New ways of doing

business available

Acquisition: ADC Performance Work Statement

Specifications were “open” Defined results and performance standards Avoided “how to” PWS 25 pages plus attachments Workload defined in detail Support from IT and Facilities key Aggressive marketing

Standard Implementation Tools

Employee Career Transition Assistance CD Quality Assurance CD Implementation Plan (hundreds of action

items, MS Project) Communications Plan Q & A Process (bidders, employees) Virtual Office

ADC A-76 Results

61 perms No seasonal employees, only temp One major site Budget reduced by over half Modernized IT systems Same or improved quality

Key Points for Executives

Competitive Sourcing can be an important management tool to: increase efficiency, lower costs, infuse technology, & streamline organizations

Impacts and requires coordination with internal and external stakeholders

Results in transformational change

Internal Revenue Service: Office of Competitive Sourcing

Raymona Stickell

(202) 927-7550

Raymona.L.Stickell@irs.gov