Thousands of tech workers at IRS could face job competitions

The IRS will consider whether to outsource roughly 2,500 information technology workers in what could become one of the most far-reaching competitive sourcing studies outside the military, IRS officials say.

Agency leaders have signed off on the first phase of the study, which will affect 250 to 300 IRS employees who provide laptop and desktop computer services, according to Bert Concklin, director of competitive sourcing at the agency. If this study goes well, the IRS could expand the competition agencywide, potentially forcing 2,500 IT workers to compete with private firms for their jobs.

"If the pilot is successful, it will be very representative of what we would need to do to expand the study across the whole IT system," Concklin said in an interview with Government Executive last month.

The pilot study will last at least one year, and monitoring whether the project has succeeded will take even longer. The IRS may seek relief from a 12-month limit that the Office of Management and Budget has proposed for all new competitive sourcing studies, Concklin said.

The seat management study is the linchpin of the agency's competitive sourcing program, widely seen as one of the most innovative in government. Even the federal union that represents IRS employees-and opposes competitive sourcing-praised the IRS program.

"The IRS model is one that I would like to see replicated at other agencies," said Colleen Kelley, president of the National Treasury Employees Union.

The hallmark of the IRS approach is to use business case studies to decide how to meet Office of Management and Budget job competition targets. If the analysis shows that public-private competition could yield savings and improve performance, the agency generally proceeds with a competition.

The studies keep the IRS from holding competitions that do not help the agency's mission, according to Concklin. "You don't want to just lurch into an A-76 [competition] and find out a third of the way through that it just doesn't make business sense," he said.

One study convinced the IRS to spare 120 logistics support workers from competition, because the workers had recently gone through a reengineering process and were performing well, according to Concklin. "It became clear that there was not going to be a payoff [from competition]," he said.

The business case studies carry a price tag. In fiscal 2002, the IRS spent about $2.5 million on six business case analyses, all performed by Booz-Allen Hamilton Inc., a management consulting firm. The Office of Management and Budget is not funding the competitive sourcing initiative, although OMB officials have said they will help agencies find resources to support the program.

Another novelty of the IRS program is Concklin himself. A former head of the IRS Business Systems Modernization Office, Concklin also once served as president of the Professional Services Council, an association of government contractors. Several observers say this background gives him a unique understanding of outsourcing issues.

"There are very few people running those programs who have that level of intuitive understanding of the entire process," said a competitive sourcing official at a civilian agency, who requested anonymity.

The IRS would not be the first agency to outsource its entire seat management operation. The General Services Administration outsourced its IT support operation in 1997, and NASA followed suit in 1998.

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