Forest Service Outsourcing Plan Produces Big Losses

Forest Service Outsourcing Plan Produces Big Losses
Claimed "On the Books" Savings Swamped by "Off the Books" Costs


WASHINGTON - MAY 22 - The U.S. Forest Service ended up costing itself more than nine times what it claims to have saved by streamlining its information technology operation, according to figures jointly released by the National Federation of Federal Employees (NFFE) Forest Service Council and Public Employees for Environmental Responsibility (PEER). Facing another busy fire season, the cash-strapped Forest Service devoted $292 million more last year to perform basic IT functions than was previously required.

This perverse result springs from President Bush’s so-called competitive sourcing initiative, which requires all agencies to put a high proportion of their positions out to bid against private contractors. Under what is called the “A-76” process (named for a particular Office of Management & Budget circular), federal employees reorganize themselves into quasi-contractual entities called Most Efficient Organizations (MEO) to perform the targeted agency operations. A MEO, like a government contractor, is not directly answerable to agency line-management, but only to the terms of its contract.

The Forest Service reorganized its IT infrastructure into an MEO in 2005, reducing the number of staff handling computer and communications work. Based on this downsizing, the agency claimed “on the books” savings of $35.2 million during FY 2005 and 2006. However, according to agency documents, the restructuring resulted in many more Forest Service employees outside the MEO spending substantially more time performing IT tasks, costing the agency $327 million – a net operational loss of $292 million. Among the factors contributing to these “off the books” costs were –

* Lost productivity due to significantly longer delays in getting computer breakdowns resolved; and
* Creation of shadow IT units, pulling technically competent staff off of their regular duties. This “burden shift” costs the Forest Service significantly as highly paid non-IT employees spend up to 20 percent of their time dealing with IT issues.


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