Memorandum

To:   Department of the Interior Employees Nationwide

From: Scott J. Cameron
        Deputy Assistant Secretary for Performance,
        Accountability and Human Resources

Subject: Competitive Sourcing Update

We have successfully completed the third full year of competitive reviews under the Competitive Sourcing initiative, which is part of the President’s Management Agenda. The competitive sourcing program has resulted in $5 million in annual cost savings and improved performance. To date, out of 3,000 positions reviewed, one permanent employee has been involuntarily separated as a result of our competitive reviews.

Competitive reviews improve the quality, efficiency, and effectiveness of the services we deliver to the American people. The completed reviews this past fiscal year have projected savings of $3.155M annually, with the expectation that the annual savings will continue over at least the next five years. These savings did not result from private-sector contractors winning the competition. In all eight formal reviews completed in FY 2004, the employee Most Efficient Organization (MEO) became the winning service provider. This record reflects the efforts of dedicated employees who put together the most efficient organization to accomplish their work. In doing so, they are saving millions of dollars every year that bureaus can reinvest in accomplishing their missions.

Over the past three years, we have identified practices that improve our competitive sourcing efforts. The most important lesson is the value of adequate planning prior to formal announcement of a review. I applaud all bureaus for utilizing preliminary planning efforts outlined in OMB Circular A-76 and conducting a reasoned analysis of functions to determine their suitability and proper packaging for future studies. Of the 5,032 FTE already reviewed or under review, 1,877 FTE are currently undergoing such planning efforts. Some will result in formal reviews, others may not.

For the reviews completed in FY 2004, we have offered the option of voluntary early retirement (VERA), and “buy-outs” (VSIP) to every employee eligible in cases where the MEO resulted in a smaller organization. We will continue to seek these authorities from the Office of Personnel Management where warranted and cost effective. We are confident they will be granted promptly as the need arises.

Bureau Directors will be following up with their respective employees to share information on each bureau’s specific plans for FY 2005. Additionally, we anticipate approval of the Department’s FY 2005 – 2008 Competitive Sourcing Green Plan from OMB. The four-year plan will be released to all employees and union representatives upon approval by OMB. For your information, on March 18, 2005, the Department transmitted the Fiscal Year 2005 Competitive Sourcing Plan to our labor unions that have national consultation rights with the Department. Bureau plans that may impact bargaining unit employees should be shared with local union representatives by the bureaus, as applicable.

Thank you for your dedication, hard work and support as we continue to improve our efficiency and effectiveness to benefit the American people.