1. Unlocking the Potential of Competitive Sourcing Raymona L. Stickell, Director Internal Revenue Service November 15, 2004

2. A-76 as a Management Tool  Lower costs  Increase efficiency  Implement new technology  Streamline organizations  Bring about transformational change

3. Area Distribution Centers: A Case Study  3 distribution centers across US  Over 1300 employees, many temps  Highly seasonal work  Primarily GS-3/4  Declining workload  Expensive facilities  Older technology

4. Barriers and Challenges  Union resistance  Management resistance  Incompatible guidance  Procurement, new way of doing business  Balancing resources – getting the best resources for studies & continuing operations

6. Keys to Success  Communications  Stakeholder involvement  Business case analysis  Functional specifications  Marketing  Standard templates & plans for implementation

7. Importance of Communications Mandatory -Feasibility Study -Competition Decision -Award Decision Comprehensive –Town Hall meetings –Training & briefings –Fact sheets –Employee Bulletins –Q & A logs –Award day notifications –Interactive video –Stakeholder comm. – NTEU neg. & briefings –Media & Congress

8. Giving Bad News  Competitive Sourcing will result in fewer resources, so employees and managers must prepare for: –Conflicts in balancing resources (between operations and the study) –RIF –Lower budgets

9. Stakeholders in the Process  Communications  Labor Relations  HR Processing  Information Systems  Retirement Specialists  Learning & Education  Real Estate/Facilities  Finance/Budget  Line & Dept. Mgt.  Organization Dev.  Security  Employee Assistance  Legislative Liaison  Congress  Union  State DoLs  Procurement  Legal  Publishing

10. Why a Business Case Analysis?  Help select the best candidate projects for public-private competition –High-potential for return on investment –Significant productivity improvements possible –Can leverage new technology  Identify potential competition

11. ADC Business Case Method  Define baseline “As Is”  Market Analysis  Design notional “To Be”  Cost/value analysis  Go/No go decision  Procurement strategy Results  Baseline w/room for improvements  Declining work and excess capacity  Older warehouse technology used  Good market competition  New ways of doing business available

12. Acquisition: ADC Performance Work Statement  Specifications were “open”  Defined results and performance standards  Avoided “how to”  PWS 25 pages plus attachments  Workload defined in detail  Support from IT and Facilities key  Aggressive marketing

13. Standard Implementation Tools  Employee Career Transition Assistance CD  Quality Assurance CD  Implementation Plan (hundreds of action items, MS Project)  Communications Plan  Q & A Process (bidders, employees)  Virtual Office

14. ADC A-76 Results  61 perms  No seasonal employees, only temp  One major site  Budget reduced by over half  Modernized IT systems  Same or improved quality

15. Key Points for Executives  Competitive Sourcing can be an important management tool to: increase efficiency, lower costs, infuse technology, & streamline organizations  Impacts and requires coordination with internal and external stakeholders  Results in transformational change

16. Internal Revenue Service: Office of Competitive Sourcing Raymona Stickell (202) 927-7550 Raymona.L.Stickell@irs.gov