Forest Service admits flaws in job competition effort

The Forest Service has acknowledged several significant shortcomings in its competitive sourcing program that were uncovered in a congressional report, and is working with the Office of Management and Budget to correct them. In the meantime, agency officials have decided to hold off on initiating any new public-private contests in fiscal 2004.

A bipartisan congressional report issued Tuesday revealed a variety of flaws in the Forest Service's implementation of President Bush's initiative to let contractors compete for federal jobs. In fiscal 2002 and 2003, the agency ran a large number of small-job contests at a high cost, investigators from the House Appropriations Subcommittee on Interior and Related Agencies found.

These contests damaged employee morale and failed to achieve savings, at least in the short term, according to the congressional research, requested by Reps. Charles Taylor, R-N.C., and Norman Dicks, D-Wash. In a separate report detailing competitive sourcing efforts across the government, also released Tuesday, the Office of Management and Budget cited similar concerns about the Forest Service's program.

The Forest Service will compile more consistent inventories of jobs eligible for outsourcing and concentrate on larger studies, said David Heerwagen, the agency's associate deputy chief for business operations. The congressional report is accurate, he said, but doesn't reflect ongoing improvements.

"We learned a lot of things out of the first year," Heerwagen said. "We would have liked [the appropriations subcommittee] to do a review after we learned all these lessons."

Last year, the Forest Service classified 79 percent of its full-time-equivalent jobs as commercial, according to the congressional report. Under the 1998 Federal Activities Inventory Reform Act, agencies can designate some of these commercial jobs as "unsuitable" for competition. But the Forest Service did not take advantage of this flexibility in 2003, the research found.

Agency officials wanted to protect some commercial jobs from outsourcing, but "ran out of time" to justify exemptions after waiting for OMB guidelines on completing FAIR Act inventories, Heerwagen said. In the future, the agency will start compiling its annual FAIR Act list earlier, he said.

The Forest Service will also work to stay within a $5 million cost limit for competitive sourcing, imposed by Congress in the Interior department's fiscal 2004 appropriations act, Heerwagen said. The agency is focusing on completing competitions already under way and overseeing those finished, he said.

In fiscal 2002 and 2003, the Forest Service initiated 171 job competitions and spent roughly $23.6 million, the congressional investigators found. The agency has estimated about $5 million in annual savings from these efforts.

Costs outweighed savings partly because the agency initiated many small contests that failed to engender much attention from the private sector, the congressional report found. Of 169 competitions completed by February 2004, agency employees won 161, or 95 percent.

Seventy-eight of the studies finished involved fewer than two full-time equivalent positions. Of these, 36 involved only a fraction of a single full-time-equivalent position. "Forest Service officials acknowledged studying such small numbers contributed to unrealistic competitions and made it unlikely that private sector providers would submit bids," the congressional investigators reported.

The Forest Service also grouped positions together in smaller studies in a manner that made it difficult to compare the cost of keeping the work in-house to that of outsourcing it. "In some cases where work was not fragmented, private sector interest was low because the Forest Service grouped activities in ways that work would not normally be provided by the private sector," OMB officials explained in their report.

Not only were job competitions at the Forest Service expensive, but they lowered morale and distracted employees from their normal responsibilities, the congressional report concluded.

"The employees complained that the Forest Service did not do the necessary upfront planning nor provide sufficient guidance to ensure [competitive sourcing] was implemented efficiently and effectively," the report stated. "As a consequence, they noted there was frustration, duplication of efforts, and time diverted from accomplishing their work."

The agency had to postpone some projects in fiscal 2003, including a $300,000 effort to redesign Newberry National Volcanic Mountain visitor center in Oregon, partly because of the demands of competitive sourcing, according to the congressional report. "The employees also reported increased stress and more overtime, limited managerial time spent on strategic planning and oversight, as well as deferred or incomplete maintenance," the investigators noted.

"These findings absolutely concern us," said an OMB official who asked to remain anonymous. "By failing to initiate competitions in a thoughtful and reasoned fashion, the Forest Service missed opportunities to improve performance and save taxpayer dollars."