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Unlocking the Potential of Competitive Sourcing

Unlocking the Potential of Competitive 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.

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Unlocking the Potential of Competitive Sourcing

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  1. Unlocking the Potential of Competitive Sourcing Raymona L. Stickell, Director Internal Revenue Service November 15, 2004

  2. A-76 as a Management Tool • Lower costs • Increase efficiency • Implement new technology • Streamline organizations • Bring about transformational change

  3. 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

  4. 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

  5. Keys to Success • Communications • Stakeholder involvement • Business case analysis • Functional specifications • Marketing • Standard templates & plans for implementation

  6. 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 Importance of Communications

  7. 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

  8. 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 Stakeholders in the Process

  9. 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

  10. Method 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 ADC Business Case

  11. 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

  12. 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

  13. 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

  14. 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

  15. Internal Revenue Service: Office of Competitive Sourcing Raymona Stickell (202) 927-7550 Raymona.L.Stickell@irs.gov

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