Washington, D.C. - U.S. Office of Personnel Management (OPM) Director Kay Coles James today announced several important decisions impacting the future of the retirement systems modernization and competitive sourcing efforts throughout OPM.

"Over the last few months we have been studying how best to achieve the modernization required to position OPM to continue providing retirement services that meet our customers' expectations of timely and responsive service and the American peoples' expectations of accessible, efficient, and cost-effective Government," James wrote in an email distributed throughout the OPM headquarters.

"As we have already found, competition between the federal government and the private sector to perform activities not inherently governmental drives excellence." James remarked. "During 2002, we successfully competitively sourced two functions, avoiding future costs of an estimated $2.6 million. I am happy to say that OPM employees won both competitions and I am confident that OPM employees will continue to compete effectively with private sector firms for the administrative work. In addition, I'm pleased to now let you know that in the most recent competition for Test Administrator positions, OPM employees also showed they were the most competitive."

The first decision enables OPM to begin licensing technology from a world-class administrator of defined-benefits retirement systems. The system will be hosted, maintained, and enhanced by the private sector administrator reducing the risk OPM faces with the large information technology implementation needed to modernize the agency's systems. As a result, the existing retirement information technology will no longer be needed once the transition is complete, which is expected to take three years. This decision does not require employee layoffs.

The second decision concerns conducting two competitive sourcing studies at OPM. The FY 2004 plan calls for competitively sourcing 629 positions. The first study will focus on the customer service positions in the Center for Retirement and Insurance Services. This competition will include 234 positions in Washington, D.C., Boyers and Pittsburgh, Pennsylvania. The study will be conducted over a twelve-month period, after the appropriate technology has been licensed. The second set of studies will review the administrative positions throughout OPM. These studies will include about 300 positions and will be conducted in 2004. Additionally, roughly 100 positions involving network management, financial management, and mail and labor services will be included in studies during 2004.

In a speech to OPM employees in Boyers, Pennsylvania and simultaneously delivered by senior staff to OPM offices in Washington, Macon, Georgia, and Pittsburgh, James gave employees a strong message. "We have met with both Noreen Lowers and John Zottoli, [presidents of the American Federation of Government Employees Union Locals 2450 and 32, respectively] and have explained to them exactly what we are doing and hope to achieve," stated James. She thanked the unions for clearly articulating the concerns of employees who may be impacted. "I appreciate their candor and civil discussion," she said of the union leaders. The OPM Director also told the affected employees that she is confident federal workers can compete successfully with private sector employers so long as there is a level playing field. To that end, James pledged OPM's commitment to "providing you the necessary training and resources for helping develop strong proposals to assist you in this competitive process."

After meeting with Director James, John Zottoli said, "Kay Coles James has kept Local 32 informed about competitive sourcing, and she has listened to our input. So, I'm confident that we will be able to resolve the tough issues we still face - in ways that make sense for the agency, the employees and our customers."

James told employees that they will be updated regularly on the status of the competitive sourcing studies beginning Thursday with an interactive FAQ link on OPM's internal website. "In addition, the associate directors will conduct a series of meetings to help you understand better the decisions that have been made and the positions, within each organization, that will be included in the competitions. Also, we will update certain members of Congress and the media," James stated.

The competitive sourcing of agency positions reflects OPM's support of President Bush's Management Agenda which calls for a federal government that is customer-focused, citizen-centered, and results-oriented.

Our mission is to ensure the Federal Government has an effective civilian workforce. OPM supports U.S. agencies with personnel services and policy leadership including staffing tools, guidance on labor-management relations and programs to improve work force performance.