Agencies earn first green lights for job competitions

Three agencies on Monday became the first ever to earn the highest possible rating in competitive sourcing on the Office of Management and Budget's traffic-light style quarterly management scorecard.

The Office of Personnel Management and the Energy and Health and Human Services departments received a "green light" for efforts to place federal jobs up for competition with the private sector. These marks reflect achievements through the second quarter of fiscal 2004, which ended on March 31.

Green lights are relatively scarce throughout the scorecard, issued by OMB every three months to assess 26 major federal agencies' progress and accomplishments in the five areas of President Bush's management agenda: human capital management, competitive sourcing, financial management, electronic government and linking performance to budgets. A green light indicates success, a yellow denotes mixed results, and a red light means an agency has an unsatisfactory performance in that area.

Until now, competitive sourcing-a controversial effort to let contractors bid on tens of thousands of federal jobs-was the only category in which all agencies remained either red or yellow. But agencies have improved considerably in this area.

On the scorecard a year ago, all 26 agencies earned red ratings on competitive sourcing. In contrast, halfway into fiscal 2004, 11 received red lights. The Treasury Department improved to a yellow mark, bringing the number of agencies in the middle category to 12.

The substantial improvement in competitive sourcing comes after OMB altered the criteria for earning top grades in that category. Administration officials announced new standards last July, and in December, issued guidelines on meeting those expectations. Under the guidelines, agencies must develop long-range plans for competing eligible jobs, and must outline competitive-sourcing strategies through 2008.

OMB asked agencies to update these plans by August of each year. The administration's previous standards weighed the completion of competitions more, and emphasized long-range preparation less. On the surface, the latest standards appear softer, and run the risk of inflating agencies achievements in competitive sourcing.

But in the opinion of John Kamensky, director of the Managing for Results Practice at IBM Business Consulting Services, the modifications simply reflect more realistic expectations. In fact, earning a green light puts agencies under greater pressure to maintain a high level of performance, said Ronald Flom, the senior procurement executive at OPM.

OPM, one of the three agencies earning a green for the first time, has completed 11 competitions encompassing 385 full-time positions and resulting in an estimated $52.4 million in projected savings over five years. Ten of the 11 contests involved fewer than 65 positions, meaning the personnel agency could follow streamlined procedures in OMB's Circular A-76, the competitive sourcing rule book.

Federal employees have prevailed in all of OPM's contests, though some lost jobs in the standard-sized competition for test administration services, completed in fall of October 2003. The job losses came when in-house workers suggested ways that they could perform the work more efficiently with a smaller staff.

Achievement of a green light in competitive sourcing is difficult but not impossible, Flom said. "It's not rocket science," he said. "It's just hard work."

OPM spent most of the second quarter of fiscal 2004 formulating a "green" competitive sourcing plan that would pass muster with OMB, Flom said. The strategy needed to include details on how the personnel agency would integrate job contests with human capital planning. "We worked pretty hard to . . . outline very clearly what we would do as an agency to take care of any people if we lost a competition or if we had to reduce the number [of federal employees performing certain jobs]."

Now that OPM has earned the highest mark possible, the agency will need to maintain that status. "OMB has already told us that they have some fairly high expectations for us," Flom said.

OPM will need to meet all the deadlines for announcing and completing competitions included in its green plan, which the agency must update by August. Officials also will need to follow up on finished contests to ensure that the in-house workers who won are performing at the level promised and achieving the level of savings predicted. "They're being evaluated almost like contractors," Flom said.

"Achieving green is one thing," he added. "I think the more difficult task is going to be maintaining it."

On three other categories of the management scorecard, agencies posted modest improvements in the second quarter. The Agency for International Development improved a notch on budget and performance integration. AID moved from a red to a yellow light in that area. NASA remains the only agency earning a green in budget and performance integration.

AID also rated higher than last quarter in e-government, earning a yellow. The State Department moved up to yellow in that category as well.

OMB, which is responsible for the scoring, moved up to a yellow light in human capital management, but remained red in the other four categories. The National Science Foundation and the Environmental Protection Agency joined OMB, moving to yellow. And the Labor Department moved to a green light on human capital management, joining NASA.

But none of the 26 agencies improved at financial management. The vast majority still receive red, the lowest mark, in that category. Of the 26, 18 received red lights in financial management. For the remaining eight, half earned green and half received yellow lights.

OMB officials did not respond to requests for comments on what is holding agencies back on those scores.

Despite slow progress at financial management, for the first time, the scorecard boasted a combined number of yellow and green lights that outnumbered red lights. The card had a total of 68 yellows and greens versus 61 reds. Over the first quarter of the fiscal year, ended Dec. 31, the agencies earned 62 yellows and greens compared with 68 reds.

OMB's first scorecard, released in February 2002, showed only one green light, 19 yellow lights and 110 red lights.